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Global Business Environment

Lecture 3– Culture factors in Global Business

Dr ChengangWang

Germany Israel
Belgium Japan
6 7 8

Britain USA

Research by George England considers work centrality, or the importance of

work, relative to that of leisure, community, religion, and family. The higher the
mean work centrality score, the more motivated and committed workers will be.
1. What is Culture
2. Culture determinants
3. Culture impacts on the workplace
4. Implication for managers
5. Readings

Values Behaviors


Attitudes Customs
 Learned behavior
 Interrelated elements
 Adaptive
 Shared
 Culture is a system of values and norms
that are shared among a group of people
and that when taken together constitute a
design for living
◦ values are abstract ideas about what a group
believes to be good, right, and desirable
◦ norms are the social rules and guidelines that
prescribe appropriate behavior in particular
 Society refers to a group of people who
share a common set of values and norms Copyright © 2011 McGraw-
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• Social structure
 The values and norms of a culture evolve over
 Determinants include
◦ religion
◦ political and economic philosophies
◦ education
◦ language
◦ social structure

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 Social structure refers to a society’s basic
social organization
 Consider
◦ the degree to which the basic unit of social
organization is the individual, as opposed to the
◦ the degree to which a society is stratified into
classes or castes

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 Spoken
◦ Verbal cues
◦ Language structures perception of world
◦ Lingua Franca: A 3rd or “link” language” that is
understood by two people who speak different
native languages.
 Unspoken
◦ Body language
◦ Personal space
 Religion is a system of shared beliefs and rituals
that are concerned with the realm of the sacred
 Religion and ethics are often closely intertwined
 Four religions dominate society
1. Christianity
2. Islam
3. Hinduism
4. Buddhism
 Confucianism is also important in influencing
behavior and culture in many parts of Asia
 Ethical systems are a set of moral principles, or
values, that are used to guide and shape behavior

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 Formal education is the medium through
which individuals learn many of the language,
conceptual, and mathematical skills that are
indispensable in a modern society
◦ important in determining a nation’s competitive
◦ general education levels can be a good index for
the kinds of products that might sell in a country

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 Management processes and practices must be
adapted to culturally-determined work-related
 Geert Hofstede identified four dimensions of
1. Power distance - how a society deals with the
fact that people are unequal in physical and
intellectual capabilities
2. Uncertainty avoidance - the relationship between
the individual and his fellows
3. Individualism versus collectivism - the extent to
which different cultures socialize their members
into accepting ambiguous situations and
tolerating ambiguity
4. Masculinity versus femininity -the relationship
between gender and work roles
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Work-Related Values for 20 Countries

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U.S. Culture Alternative
Individual Life is preordained Planning,
influences future scheduling

The environment People adjust to Morale,

is changeable the environment productivity

Hark work leads Wisdom and luck Motivation,

to success are also needed rewards

Employment can Employment is for Promotions,

be ended a lifetime recruitment
 Hofstede later expanded added a fifth dimension
called Confucian dynamism
◦ captures attitudes toward time, persistence, ordering by
status, protection of face, respect for tradition, and
reciprocation of gifts and favors
 Hofstede’s work has been criticized because
◦ made the assumption there is a one-to-one relationship
between culture and the nation-state
◦ study may have been culturally bound
◦ used IBM as sole source of information
◦ culture is not static – it evolves
 But, it is a starting point for understanding how
cultures differ, and the implications of those
differences for managers

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 Culture evolves over time
◦ changes in value systems can be slow and painful
for a society
 Social turmoil - an inevitable outcome of
cultural change
◦ as countries become economically stronger, cultural
change is particularly common

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1. It is important to develop cross-cultural
◦ companies that are ill informed about the
practices of another culture are unlikely to
succeed in that culture
◦ managers must beware of ethnocentric
behavior, or a belief in the superiority of one's
own culture
2. There is a connection between culture and
national competitive advantage
◦ suggests which countries are likely to produce
the most viable competitors
◦ has implications for the choice of countries in
which to locate production facilities and do
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 Enssential: Main textbook Ch.3
 Extra:
 *ANON (2008), “Going global”, the Economist, Jan 17th.
 *Pothukuchi, V., F. Damanpout, J. Choi, C.C. Chen, and S.H. Park (2002),
“National and organizational culture differences and international joint
venture performance”, Journal of International Business Studies 33(2),
 *Meschi, P. and E.L. Riccio (2008), “Country risk, national cultural
differences between partners and survival of international joint ventures
in Brazil”, International Business Review 17, 250-266.
 *Griffin, R. W. and Pustay (2007), International Business, Ch4.
 *All Gamers are Not the Same: The Importance of Cultural Differences
in Gaming
 Guardian Unlimited, by Aleks Krotoski, July 27, 2006