EPPM2033

W2 CULTURE IN INTERNATIONAL BUSINESS

1. Objectives
• Culture and cross-cultural risk
• Key concepts of culture
• The role of culture in international business
• Subjective versus objective dimensions of culture
• Language as a key dimension of culture
• Interpretations of culture, Cultural metaphors, stereotypes, and
idioms
• Overcoming cross-cultural risk: Managerial guidelines
• Contemporary issues in culture
Hamizah Abd Hamid
02/04/2021 Faculty of Economics and Management 2
National University of Malaysia
2. Culture, cross-cultural risk

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 3
National University of Malaysia
 Hamizah Abd Hamid
02/04/2021 Faculty of Economics and Management 4
National University of Malaysia
• Culture is:
• Not right or wrong
• Culture is relative
• People from different backgrounds perceive/view the world differently
• Not about individual behaviour
• Individual behaviour – psychology
• Not inherited
• Based on the process of learning
• Socialisation

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 5
National University of Malaysia
• The best way to learn and understand culture is – to live within that
culture

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 6
National University of Malaysia
 Hamizah Abd Hamid
02/04/2021 Faculty of Economics and Management 7
National University of Malaysia
3.Key concepts of culture
• Culture:
• The learned, shared, and enduring orientation patterns in a society.
• People demonstrate their culture through values, ideas, attitudes, behaviors,
and symbols.
• In biology - Cell culture, the cultivation of cells

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 8
National University of Malaysia
• Def:
• “… a giant, extraordinarily complex, subtle computer. It’s programs guide the
actions and responses of human beings in every walk of life.” (Hall, 1990)
• “Collective mental programming… the software of the mind…” (Hofstede,
1991)
• “The way in which a group of people solves problems…” (Trompenaars, 1993)

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 9
National University of Malaysia
 • Acculturation:
• Process of adjusting and adapting to a
culture other than one’s own
• Cross-cultural risk:
• A situation or event
where a cultural miscommunication puts
some human value at stake
• It arises in environments characterized by
unfamiliar languages and unique value
systems, beliefs, and behaviors

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 10
National University of Malaysia
 • Differ:
• Geography
• Different levels – the world, the nation, the
region, cities -- elicit unique cultural
perspectives.
• Ethnicity
• For example, people of British and Japanese
heritage tend to perceive reality differently.
• Gender
• Men and women often experience the world
differently.
• Age
• Seniors, baby boomers, teenagers, and children
perceive their worlds differently.
• Language
• Language both reflects, and is reflected by,
cultural differences.
• Eg: English vs Spanish
• Occupation
• Perspectives differ among blue collar workers
(manual labour), professionals, or artists.

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 11
National University of Malaysia
 4. The role of culture in international business
• Affect tasks/operations:
• Developing products and services
• Preparing advertising and promotional
materials
• Preparing for overseas trade fairs and
exhibitions
• Screening and selecting foreign distributors
• Communicating and interacting with foreign
partners
• Negotiating and structuring ventures
• Interacting with current and potential
customers from abroad

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 12
National University of Malaysia
 Hamizah Abd Hamid
02/04/2021 Faculty of Economics and Management 13
National University of Malaysia
• Affect human resources
• Organizational structure (centralized versus decentralized;
bureaucratic versus entrepreneurial)
• Eg Japanese firms are usually more bureaucratic and centralised,
American firms are usually more decentralised
• Teamwork (MNEs require intercultural cooperation)
• Differences in language?
• Pay for performance versus merit
• Length of employment (temporary or lifetime)
• Union-management relationships
• Attitude toward ambiguity (e.g., at times, employees receive
vague or contradictory instructions)
• Some cultures are more comfortable with ambiguity

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 14
National University of Malaysia
• In entrepreneurship
• in Hong Kong, the whole family works ceaselessly to make it a success
• in the United States, friends put up their money for the entrepreneur;
• in Turkey, friends will ask the entrepreneur to hire their sons and nephews;
• in India, the administrative system will impose monumental red tape

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 15
National University of Malaysia
4.1 National culture, professional culture,
corporate culture

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 16
National University of Malaysia
• More accurate (Erez, 2004)

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 17
National University of Malaysia
 • Can all Differences be Attributed to National Culture?
• In firms with a strong organizational culture, it is hard to determine
where the corporate influence begins and the national influence ends.
• The tendency to attribute all differences to national culture is
simplistic.
• Eg: “He works hard because he is a Japanese person” -- Simplistic

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 18
National University of Malaysia
5. Dimensions of culture

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 19
National University of Malaysia
 • They are
• Objective
• Symbols, materials, productions, creative expressions
• Subjective
• Values, attitudes, prejudice etc

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 20
National University of Malaysia
• Covers:
• Values
• represent a person’s judgments about
what is good or bad, acceptable or
unacceptable, important or
unimportant, and normal or abnormal.
• Attitudes and preferences
• are developed based on values and are
similar to opinions, except that attitudes
are often unconsciously held and may
not have a rational basis.
• Eg: Drinks after work, in Korea? In
Malaysia?

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 21
National University of Malaysia
 • Manners and customs
• Ways of behaving and conducting oneself in public and business situations
• Manners and customs are present in
• eating habits, mealtimes, work hours and holidays, drinking and toasting, appropriate
behavior at social gatherings, role of women, etc

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 22
National University of Malaysia
 • Perceptions of time
• Time dictates expectations about planning,
scheduling, profit streams, and what constitutes
tardiness (kelewatan) in arriving for work and
meetings.
• Monochronic
• A rigid orientation to time in which the individual
is focused on schedules, punctuality, time as a
resource, time is linear, “time is money”
• Eg Germany, Canada, Switzerland
• For example, people in the U.S. are hurried and
impatient.
• Polychronic
• A flexible, non-linear orientation to time in which
the individual takes a long-term perspective;
time is elastic, long delays are tolerated before
taking action. Punctuality is relatively
unimportant. Relationships are valued.
• Eg Saudi, Egypt, Greece
Hamizah Abd Hamid
02/04/2021 Faculty of Economics and Management 23
National University of Malaysia
 • Perception of space
• Men/women space
• Personal space
• Conversational distance
• Symbolic productions
• Letters, figures, characters etc that communicate
meaning
• Eg: Arabic, and English
• ‫ما ا ْس ُمك؟‬
• What is your name?
• Material productions and creative expressions
• Artefacts
• Arts, music, dance etc
Hamizah Abd Hamid
02/04/2021 Faculty of Economics and Management 24
National University of Malaysia
 • Education
• Cultural values and ideas are passed down
• Social structure
• Pattern of social arrangements and social
relationships
• Individuals
• Reference groups
• Social stratification – social class
• Social mobility
• Eg: An American family and a Japanese
family. What will happen once their
son/daughter reaches 18?

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 25
National University of Malaysia
5.1 Language and religion
• Language
• Mirror of culture
• Linguistic proficiency is a great asset in
international business.
• Language is both verbal and nonverbal
(unspoken, facial expressions and
gestures).
• Language is a function of the environment.
• Concepts and meanings of words are not
universal, even when they can be translated
into other languages.

“Budak”
- In Bahasa Melayu?
- In Bahasa Indonesia?

“Brat” “Backpfeifengesicht”
- In English?
- In Russia?
Hamizah Abd Hamid
02/04/2021 Faculty of Economics and Management 26
National University of Malaysia
 • Religion
• A system of common beliefs or attitudes regarding
a being or system of thought that people consider sacred,
divine, or the highest truth; and the associated moral
values, traditions, and rituals.
• Influences culture, and therefore business and consumer
behavior

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 27
National University of Malaysia
• Eg religion and consumerism: Global diabetes map

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 28
National University of Malaysia
6. Interpretations and explanations of culture
• Cultural Metaphors refer to a distinctive tradition or institution
strongly associated with a society; a guide to deciphering (encoding)
attitudes, values, and behaviors.
• American football represents systematic planning, strategy, leadership, and
struggling against rivals
• The Spanish bullfight reflects the importance of ritual, style, courage, and
pride in Spain.

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 29
National University of Malaysia
• Idiom (pepatah): An expression whose symbolic meaning differs from
its literal meaning; you can’t understand it simply by knowing what
the individual words mean.

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 30
National University of Malaysia
 Hamizah Abd Hamid
02/04/2021 Faculty of Economics and Management 31
National University of Malaysia
• Stereotypes
• are generalizations that may or may not be factual and often overlook real,
deeper differences.

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 32
National University of Malaysia
6.1.1 Model - High- and Low-Context
• Low-context cultures
• rely on explicit explanations with an emphasis on spoken words.
• Such cultures emphasize clear, efficient, logical delivery of verbal
messages. Communication is direct.
• Agreements are concluded with specific, legal contracts.

• High-context cultures
• emphasize nonverbal or indirect language
• Communication aims to promote smooth, harmonious relationships.
Such cultures prefer a polite, “face-saving” style that emphasizes a
mutual sense of care and respect for others. Care is taken not to
embarrass or offend others.
Hamizah Abd Hamid
02/04/2021 Faculty of Economics and Management 33
National University of Malaysia
 Hamizah Abd Hamid
02/04/2021 Faculty of Economics and Management 34
National University of Malaysia
 • Eg: McDonalds
Japan and Germany

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 35
National University of Malaysia
6.1.2 Model - Hofstede’s Typology of
National Culture
• Between 0 (low)-100 (high), rank yourself:

Are you
comfortable
with risk?
0-Comfortable
100-
Uncomfortable
Do you think
respect comes
with age?
0-No
100-Yes
Hamizah Abd Hamid
02/04/2021 Faculty of Economics and Management 36
National University of Malaysia
 Hamizah Abd Hamid
02/04/2021 Faculty of Economics and Management 37
National University of Malaysia
6.1.3 Model - Deal vs. Relationship
Orientation
• In deal-oriented cultures,
• managers focus on the task at hand, are impersonal, typically use contracts,
and want to just “get down to business.”
• Examples: Australia, Northern Europe, and North America.
• In relationship-oriented cultures
• managers value affiliations with people, rapport, and getting to know the other
party in business interactions.
• Relationships are more important than individual deals; trust is much valued in
business agreements.
• Examples: China, Japan, Latin American countries. It took nine years for
Volkswagen to negotiate a car factory in China.

• Eg: Guanxi in China

Hamizah Abd Hamid
02/04/2021 Faculty of Economics and Management 38
National University of Malaysia
7. Managerial implications

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 39
National University of Malaysia
 • Ethnocentric orientation:
• Using our own culture as the standard for judging other
cultures
• “My culture is the best”
• Polycentric orientation:
• A mindset in which the manager develops a greater
affinity for the country in which he or she works than for
the home country.
• “This culture is better than the one from home”
• Geocentric orientation: A global mindset in which the
manager is able to understand a business or market
without regard to national boundaries.
Managers should strive for a geocentric
orientation

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 40
National University of Malaysia
7.1 Acquiring cross-cultural competence
• Reduce self-reference criterion:
• The tendency to view other cultures through the lens of one's own culture ─
understanding this is the first step.
• For example, people may make the wrong business decision in foreign country
by thinking how they would handle the same situation if they were in their
home country.

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 41
National University of Malaysia
 • Critical incident analysis: A method for
analyzing awkward situations in cross
cultural interactions by developing
empathy for other points of view.
• Identify situations where you need to be
culturally aware to interact effectively with
people from another culture.
• When confronted with “strange” or awkward
behavior, discipline yourself to not make
judgments.
• Develop your best interpretation of the
foreigner’s behavior, and formulate your
response.
• Learn from this process and continuously
improve

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 42
National University of Malaysia
• Develop cross-cultural skills
• Tolerance for ambiguity:
• Ability to tolerate uncertainty
and lack of clarity in the thinking and actions of others.
• Perceptiveness:
• Ability to closely observe and comprehend subtle information in the speech and behavior of
others.
• Valuing personal relationships:
• Ability to appreciate personal relationships, which are often more important than achieving
one-time goals or “winning” arguments.
• Flexibility and adaptability:
• Ability to be creative in
devising innovative solutions, be open-minded about outcomes, and show ‘grace under
pressure’.

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 43
National University of Malaysia
• In general,
• Acquire factual and interpretive knowledge about the other culture; try to
speak their language.
• Avoid cultural bias.
• Develop cross-cultural skills, such as perceptiveness, interpersonal skills, and
adaptability.

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 44
National University of Malaysia
8. Culture – current issues
• Cultural homogeneity (persamaan) and heterogeneity (perbezaan) are
not mutually exclusive; they generally occur together.
• But cultural flows are diverse – just as McDonald’s is popular in Japan,
so too is Vietnamese food in the United States and Japanese sushi in
Europe.
• the process can also ‘liberate’ people by providing new ideas and
challenging conformity and nationalism

Hamizah Abd Hamid

02/04/2021 Faculty of Economics and Management 45
National University of Malaysia