IB311: National Differences

in Culture

Arunee Tanvisuth, Ph.D.

BBA, Thammasat Business School
Semester 1/19, 19 (#4)
Agenda for Today
What is Culture?
Determinants of Culture
Culture and the Workplace
Cultural Change
Implications for Managers

2
keep only good genes
Walmart in Germany "

cheap products → German think cheap → low quality

economy of
scale →

Walmart entered Germany by acquiring

Wertkauf (a profitable chain of 21 stores) in

retailer with 74 hypermarkets) in 1998

Mistakes of Walmart
The first CEO, Ron Tiarks did not speak German and
made no attempt to learn
He ordered that English would be the official language
in Germany at the management level
He ignored the complexities of retailing in Germany
system

with regard to the different legal and institutional

framework Greeting
Plastic
bag @ front of store

He did not understand how German shopping culture

differed from that in the U.S.
packing stuff service
to
backpack
3
Walmart in Germany (2)
With its employees singing every morning

Low base pay, practice of transferring managers after 1-2

years, frugal regulations for business trips (to share room),
conflicts with unions
German employees found the practice of Walmart chant and
stretching exercises to be embarrassing and silly
With its customers
Low-value, low-priced merchandise
greeters at the entrance customers felt being
harassed by greeters
Bagging service Germans do not want strangers handle
their groceries
After 10 difficult years in Germany, during which
time it never turned a profit, Walmart exited in
2007 4
Why fail with the Germans?
Germans are very green
they preoccupied with the sourcing of materials
Walmart depended on EoS, a powerful tools in the US

after Walmart entered the market) made it hard

for Walmart to expand
economy
German → part of

Walmart i
,

Germans resistant to the brand, even though

Walmart followed standard German labor and pay
practices
Germany tightly regulates the store hours (close by
8pm on week days)
8am 10pm) 12am
-

5
How Culture affect Business?
How people communicate The pace of business
How culture impacts how Business protocol
people view time and how to physically and
deadlines verbally meet and
How people are likely to interact
ask questions or highlight Decision making and
problems negotiating
How people respond to Managing employees
management and authority and projects
How people perceive verbal Propensity for risk
and physical taking
communications Marketing, sales, and
How people make decisions distribution
What is Culture?
A complex whole which includes knowledge,
beliefs, art, morals, law, customs, and other
capabilities acquired by man as a member of
society (Edward Tylor)
The collective programming of the mind
which distinguishes the members of one
human group from another (Geert
Hofstede)
A system of values and norms that are
shared among a group of people and that
when taken together constitute a design for
living (Charles Hill)
7
Values and Norms
Values
Abstract ideas about what a group believes to be
good, right, and desirable
Shared assumptions about how things ought to be
Form the bedrock of a culture
Includes attitudes toward concepts such as
individual freedom, truth, justice, honesty,
loyalty, social obligations, etc.
Norms
The social rules and guidelines that prescribe
appropriate behavior in particular situations
Norms can be subdivided into 2 major categories,
folkways and mores 8
Folkways
The routine conventions of everyday life
Are actions of little moral significance
Dress code, good social manners, eating with
correct utensils, neighborly behavior, etc.
Define the way people are expected to behave,
violation of them is not normally a serious matter
People who violate folkways may be thought
of as eccentric or ill-mannered, but they are
not usually considered to be evil or bad
Foreigners may initially be excused for
violating folkways
Attitudes toward time
USA, Germany, Mexico, Thailand? 9
Culture, Society, Nation-State
Society
A group of people that share a common set of
values and norms people who are bound
together by a common culture
Nation-states are political creations
They may contain a single culture or several
cultures
Canada Anglo culture, French culture, Native
American culture
Rwanda Tutsis, Hutus
America, France, Thailand?
What are cultures that embrace several
nations? 10
Determinants of Culture
Political Philosophy
Economic Philosophy
Social Structure
Religion
Language
Education

11
Social Structure
The basic social organization which has
two dimensions
Individual VS. Groups
Society that emphasizes individual
achievements above all else
Society that emphasizes group membership
and group achievements above all else
Social Stratification
All societies are stratified into social
strata which is based on family
background, occupation, and income
12
Caste VS. Class System
Caste System
A closed system of stratification in which social
position is determined by the family into which a
person is born, and change in that position is

Class System India

A less rigid form of social stratification in which

social mobility is possible
The position a person has by birth can be changed
through his or her own achievements or luck
Class-conscious VS. Classless Society
Social mobility and degree of stratification
13
3 Main Classes of British Society
Upper Class
Individuals whose families have wealth, prestige, and power
Middle Class
Individuals who are involved in professional, managerial, and
clerical occupations
Upper-middle, lower-middle
Working Class
Individuals who earn their living from manual occupations
How about the U.S.?
Class membership is determined to a much greater degree
by individual economic achievements, as opposed to
background and schooling
Successful individuals from humble origins are highly
respected in American society
14
Standardization of Socio-Economic Status (SES) Classification in Thailand
Market Research Industry (Jirayut Poomontree Kasemsant, Assumption
University, April 23, 2018) 15
Religion and Ethical Systems
Religion
A system of shared beliefs and rituals
that are concerned with the realm of the
sacred
Ethical Systems
I

A set of moral principles, or values, are

used to guide and shape behavior
l

the product of religions l

Christian ethics, Islamic ethics Budda
,

How about Confucianism and Confucian ethics?

16
Christianity
The most widely practiced religion in the
world
The vast majority of Christians live in
Europe and the Americas, and the numbers
are growing rapidly in Africa

ethic
Protestant ethics emphasizes the importance of
hard work and wealth creation (for the glory of
God), and frugality
According to Max Weber, this kind of value
system was needed to facilitate the development
of capitalism
17
Islam

Islam has roots in both Judaism and Christianity

Islam requires unconditional acceptance of the

uniqueness, power, and authority of God and the
understanding that the objective of life is to fulfill
the dictates of his will in the hope of admission to
paradise
According to Islam, worldly gain and temporal
power are an illusion
Islam is an all-embracing way of life governing the

Daily prayer ritual (5 times a day), no pork and alcohol

consumption
18
Hinduism
Hinduism began in the Indus Valley in India more than

Its founding is not linked to a particular person and

there is no officially sanctioned sacred book such as the
Bible or the Koran
Hindus believe in Karma, the spiritual progression of

way he/ she lives

Hindus also believe in reincarnation after death
By perfecting the soul in each new life, Hindus believe
that an individual can eventually achieve nirvana
To achieve nirvana is to lead a severe ascetic lifestyle
of material and physical self-denial, devoting life to
spiritual rather than material quest

19
Buddhism
Buddhism is a Indian Religion found
by Siddhartha Gautama after becoming
enlightened (563-483 BC)
Buddhism teaches people how to end
their suffering by cutting out greed,
hatred and ignorance
Buddhism along with other Indian
Religion believes in Karma
When people do bad things, they will get
bad consequences. When people do good
things, they will get good consequences.
20
Buddhism (2) more like
phylocopy

This cause-and-effect chain is reflected in

the endless cycles of life, death and rebirth
Buddhism believes in reincarnation (rebirth)
The ultimate goal of a Buddhist is to get
enlightenment (Nirvana) and liberate oneself
from endless reincarnation and suffering
Buddhism teaches non-harm and moderation
or balance, not going too far one way or the
other.
Some see Buddhism as a religion, others see
it is a philosophy
21
The Four Noble Truths
The truth of suffering (Dukkha)
The truth of the origin of suffering ( )
The truth of the cessation of suffering (Nirodha)
The truth of the path to the cessation of suffering
(Magga)
The Buddha is often compared to a physician. In the
first two Noble Truths he diagnosed the problem
(suffering) and identified its cause. The third Noble
Truth is the realization that there is a cure.
The fourth Noble Truth, in which the Buddha set
out the Eightfold Path, is the prescription, the way
to achieve a release from suffering.

22
Confucianism
Founded in the 5th century B.C. by -Fu-
tzu, more generally known as Confucius
For more than 2,000 years until the 1949
Communist revolution, Confucianism was the
official ethical system of China
Many people still follow the teachings of

Though not a religion, Confucian ideology has

become embedded in the culture of these
countries over the centuries
High moral and ethical conduct and loyalty to
others are central to Confucianism
23
Confucianism (2)
Confucianism is not concerned with
the supernatural power and has little
to say about the concept of a supreme
being or an afterlife
Economic Implications of
Confucianism

regarded as a sacred duty

Reciprocal obligations (Guanxi/
relationships/ connections)
Honesty in dealing with others 24
Spoken Language
Language enables people to communicate
with each other and also structures the way
we perceive the world
The language of a society can direct the
attention of its members to certain
features of the world rather others
English language has only one word for

The Eskimos have 24 words that describe

falling snow, wet snow, drifting snow, etc.

25
Spoken Language (2)
Countries with more than one language
often have more than one culture
Canada English, French
Belgium Flemish, French
Spain Spanish, Basque
Cyprus Greek, Turkish
Language differences create differences
in culture which sometimes lead to
political tension
How about Switzerland?
26
Spoken Language (3)
The most widely spoken languages
English, French, Spanish, and Chinese
English is becoming the language of
international business
However, being able to speak the local

important for a business deal

GM and its Chevrolet Nova in Puerto Rico

va

GM later changed the name to Caribe 27

British VS/ American English
Moot
Up for debate VS. Not worth debating
Quite
Not very VS. Very
Homely
Cozy and comfortable VS. Plain and ugly
Bomb
. Failure (as

Strike
Winning (strike oil) VS. Failure (strike out)
28
Umbro, UK sports manufacturer had to withdraw its new
trainers called the Zyklon Umbro received complaints
from many organizations and individuals as it was the
name of the gas used by the Nazi regime to murder
millions of Jews in concentration camps.
29
Sharwoods, UK food manufacturer, spent £6 million on a
campaign to launch its new 'Bundh' sauces. It received
calls from numerous Punjabi speakers telling them that
"bundh" sounded just like the Punjabi word for "arse". 30
Marketing Fails
KFC
When KFC opened their first restaurant in China
-

Pepsi

Parker Pens
I

31
Which message do you believe?
Imagine your co-worker storms into her
office after lunch. She has red-faced,
tight-lipped and speaks to no one. She
throws her briefcase on the desk, plops
down in her chair and glares out the
window. You

32
Unspoken Language
Refers to nonverbal communication
A failure to understand the nonverbal cues of
another culture can lead to a communication
failure

between people that do not have a direct

verbal body movements, body
orientation, nuances of the voice, facial
expressions, details of dress, and choice and
movement of objects that communicate
Another aspect of nonverbal communication

33
34
Personal Space Study
Researchers asked 9,000 people in 42 countries
Imagine
stand to you? Does that change if the person is a close
friend? A colleague?
Argentinians and other South Americans, in general,
require less personal space than Asians.
In Saudi Arabia, people stand farther from their
friends than Argentinians do with strangers.
Cultures share some commonalities.
Women preferred more personal space from strangers
than men.
People living in warmer places tended to keep less distance
than those in colder climes.
The older you are, the farther away you stand.
35
36
10 Nonverbal Cues That Convey
Confidence At Work (Forbes)
Good eye contact Appropriate facial
A confident expressions
handshake Initiating interactions
Effective gestures Appropriate voice tone
Dressing the part Giving your full
Authoritative attention
posture and
presence nonverbal cues

37
Education
Formal education plays a key role in the society

many of the language, conceptual and

mathematical skills that are indispensable in a
modern society

in socializing the young into the values and norms

of a society
Respect for others, obedience to authority,
honesty, being on time, neatness, etc. are part of

The use of grading system also teaches the value

of personal achievement and competition
38
Education (2)
Education is one important
determinant of national competitive
advantage
skilled and educated workforce
The general education level of a
country is also a good index of the
kind of products that might sell in a
country and the type of promotional
material that should be used

39
Culture and the Workforce
Geert study of more than
100,000 individuals across 40
countries during 1967-1973
Study how culture relates to values in the
workplace
Four Cultural Dimensions
Power Distance
Individualism VS. Collectivism
Uncertainty Avoidance
Masculinity VS. Femininity
40
Criticism of Work
4 dimension of culture

Assume one-to-one correspondence

between culture and the nation-state
The research team was composed of
Europeans and Americans cultural
biases and concerns
All informants worked for IBM
Corporate culture, unskilled workers were
excluded
The study might be outdated as
culture evolves
41
American VS.

Disorganized Boring
Un-sincere Disrespectful
Not disciplined Not creative
Not focused Too much into details
Touch you too much Bureaucratic
Arrogant and
dominating
American VS. French
Low Context High Context
Everything must be A place must be left for
clear, everything is adaptation and
in the contract interpretation, everything
Monochronic is in the relationship
Time is money, Polychronic
exactitude is Schedule independent
essential You can be late if you get
Big Bubble a better achievement
Avoid physical Small Bubble
contact Security is being part of
a group
American VS. French (2)
High

Participative, the boss is Autocratic, each one at hos

not an expert place, the boss must be an
expert

Rules and structures must

be respected
Individual performance,
materialism
-term Harmony of relations
-term
Profit oriented
Market share oriented
Working with the French
The French do not organize the meetings to

information, then the person in charge makes the

decision
The French are flexible and creative and they do
not feel bound to previous decision
-

Within the company, the French are less

constrained by social codes, they do not like to
mix corporate life and personal life
The French are much more sentimentally
attached and faithful to their company
Corporate Culture VS. Local Culture
TNT
Task-oriented, efficiency and egalitarian management
When it moved into China, it found that neither of
those values fit with local norms. Its corporate
culture gradually became more relationship oriented
and more hierarchical

Confrontation and open disagreement are a strong

part of its corporate culture
In Mexican culture, open disagreement is considered
rude, disrespectful, and too aggressive
In Indonesian culture, confrontation in a group setting
is extremely negative, because it makes the other
person lose face
Corporate Culture VS. Local Culture
Google believes that its success is largely the
result of a strong organizational culture
giving employees lots of positive feedback
the things this employee did really
List one thing this person could do to have a
bigger
In France
positive words are used sparingly and criticism is
provided more strongly
5 years at
Google France, I can tell you we are now a group of
French people who give negative feedback in a very
un-
Cultural Change
American Values
The role of women, diversity,
Japanese Values
A shift toward greater individualism
Several studies have suggested that
economic advancement and globalization may
be important factors in societal change
Economic progress is accompanied by a shift in
values away from collectivism and toward
individualism
Globalization creates conditions for the merging or
convergence of culture
48
Implications for Managers
The need to develop cross-cultural
literacy
Understand the connection between
culture and national competitive
advantage
Understand the connection between
culture and ethics in decision making
Cross-Cultural Literacy
International businesses that are ill-
informed about the practices of
another cultures are likely to fail
Doing businesses in different cultures
requires adaptation to conform with
the values and norms of that culture
The way in which deals are negotiated, the
appropriate pay system, the relations
between management and workers, the
name of products, the manner in which the
product is promoted, etc.
How to Combat the Danger of
Being Ill-Informed
Employ host-country nationals
Build a cadre of cosmopolitan
executives and transfer them
overseas
Guard against the dangers of

ethnic group or culture

Culture and Competitive Advantage
The value systems and norm of a country
influence the costs of doing business in that
country
The cost of doing business then influence
the ability of firms to establish their
competitive advantage in the global
marketplace
Why this connection is important?
Which countries are likely to produce the most
viable competitors
The choice of countries in which to locate
production facilities and do business