Module 2 in International Business and Trade

Title: Cross-Cultural Business

Content/Discussion

What is Culture?

When travelling in other countries, we often perceive differences in the way people live and
work. In the United States, dinner is commonly eaten around 6 p.m., and most people shop
in large supermarkets once or twice a week; in Spain dinner is not served until 8 or 9 p.m.,
while Italians tend to shop in smaller grocery stores nearly every day. Essentially, we are
experiencing differences in culture – the set of values, beliefs, rules, and institutions
held by a specific group of people.

Subcultures

A group of people who share a unique way of life within a larger, dominant culture is called
a subculture. A subculture can differ from the dominant culture in language, race, lifestyle,
values, attitudes, or other characteristics. Although subcultures exist in all nations, they are
often glossed over by our impressions of national cultures. For example, the portrait of
Chinese culture ignores the fact that China’s population includes more than 50 distinct
ethnic groups. Decisions regarding product design, packaging, and advertising should
consider each group’s distinct culture. Marketing campaigns also need to recognize that
Chinese dialects in the Shanghai and Canton regions differ from those in the country’s
interior; not everyone is fluent in the official Mandarin dialect.

Ethnocentricity

It is the belief that one’s own ethnic group or culture is superior to that of others. It can
seriously undermine international business projects. It causes people to view other
cultures in terms of their own and disregard the beneficial characteristics of other cultures.

Cultural literacy

It is the detailed knowledge about a culture that enables a person to work happily and
effectively within it. Cultural literacy improves people’s ability to manage employees,
market products, and conduct negotiations with other countries. For example, Procter &
Gamble, and Apple may have a competitive advantage because consumers know and
respect these highly recognizable brand name. Globalization is causing cultures to
converge to some extent. For example, the successful TV show American Idol, where
aspiring singers compete for a chance to become celebrity, is one example of global pop
culture. The U.S. show is one of 39 clones around the world based on the original British
show, Pop Idol.

Components of Culture

1. Values - are ideas, beliefs, and customs to which people are emotionally attached.
Values include concepts such as honesty, freedom, and responsibility. Values are
important to business because they affect people’s work ethic and desire for
material possessions. For example, people in Singapore value hard work and
material success, people in Greece value leisure and a modest lifestyle, the United
Kingdom and the United States value individual freedom, whereas Japan and South
Korea value group consensus.
The influx of values from other cultures can be fiercely resisted. Many Muslims
believe drugs, alcohol, and certain kinds of music will undermine conservative
values. In Bahrain, the local version of Big Brother was canceled after people
objected to the program’s format, which involved young unmarried adults of both
sexes living under the same roof. And Indonesia’s National Police denied Lady
Gaga a permit to perform despite her concert being sold out. She is the first foreign
artist ever to be denied a permit by authorities there. Conservative Muslim groups
accused Gaga of “being vulgar, corrupting the morals of the country’s youth, and
worshiping Satan”.

2. Attitudes – are positive or negative evaluations, feelings, and tendencies that

individuals harbor toward objects or concepts. For example, a Westerner would be
expressing an attitude if he were to say “ I do not like the Japanese purification ritual
because it involves being naked in a communal bath”. Here, the Westerner might
value modesty and hold conservative beliefs regarding exposure of the body.
Attitudes are more flexible. They are learned from role models, including parents,
teachers, and religious leaders. Attitudes also differ from one country to another
because they are formed within a cultural context.

3. Aesthetics – what a culture considers “good taste” in the arts (including music,
painting, dance, drama, and architecture), the imagery evoked by certain
expressions, and the symbolism of certain colors is called aesthetics. The selection
of appropriate of colors for advertising, product packaging, and even work uniforms
can improve the odds of success. For example, companies take advantage of a
positive emotional attachment to the color green across the Middle East by
incorporating it into a product, its packaging, or its promotion. Across much of Asia,
green is associated with sickness. In Europe, Mexico, and the United States, the color
of death and mourning is black; in Japan and most of Asia, it’s white.
 4. Manners – are appropriate ways of behaving, speaking, and dressing in a culture.
For example, conducting business during meals is common practice in the U.S., in
Mexico, however, it is poor manners to bring up business at meal time unless the
host does so first. Business discussions in Mexico typically begin when coffee and
brandy arrive.

5. Customs – when habits or ways of behaving in specific circumstances are passed

down through generations, they become customs. Customs differ from manners in
that they define appropriate habits or behaviors in specific situations. For example,
celebrating the Dragon Boat Festival in China and the art of belly dancing in
Turkey are both folk customs. A popular custom – is behavior shared by a
heterogeneous group or by several group. Wearing blue jeans and playing golf are
both popular customs across the globe.

6. Social structure – embodies a culture’s fundamental organization, including its

groups and institutions. It plays a role in many business decisions, including
production-site selection, advertising methods, and the costs of doing business in a
country. Three important elements of social structure that differ across cultures are
a.) Social group associations, b.) Social status, and c.) Social mobility.

Social group associations

Social groups – are collections of two or more people who identify and interact with
each other. Two groups that play important roles in affecting business activity
everywhere are family and gender.
There are two different types of family groups:
● The Nuclear family – consists of a person’s immediate relatives, including
parents, brothers, and sisters. This concept of family prevails in Australia,
Canada, the United States, and much of Europe.
● The extended family – broadens the nuclear family and adds grandparents,
aunts and uncles, cousins, and relatives through marriage. It is an important
social group in much of Asia, the Middle East, North Africa, and Latin America.

Gender – refers to socially learned habits associated with men or women. It includes
behaviors and attitudes such as styles of dress and activity preferences. It is not the same
thing as sex, which refers to the biological fact that a person is either male or female.
Social status – another important aspect of social structure is the way a culture divides its
population according to status – that is, according to positions within the structure. The
process of ranking people into social layers or classes is called social stratification. Three
factors that normally determine social status are family heritage, income, and
occupation.

Social mobility – is the ease with which individuals can move up or down a culture’s social
ladder. For much of the world’s population today, two systems regulate mobility: caste
system and class system

A caste system – is a system of social stratification in which people are born into a social
ranking, or caste, with no opportunity for social mobility. A classic example of a caste
culture is India. For example, a member of a lower caste cannot supervise someone of a
higher caste because personal clashes would be inevitable.

A class system – is a system of social stratification in which personal ability and actions
determine social status and mobility. It is the most common form of social stratification in
the world today.

7. Education. Education is crucial for passing on traditions, customs, and values. Each
culture educates its young people through schooling, parenting, religious teachings,
and group memberships. In most cultures, intellectual skills such as reading and
mathematics are taught in formal educational settings.

8. Religion – human values often originate from religious beliefs. Different religions
take different views of work, savings, and material goods. Identifying why they do so
may help us understand business practices in other cultures. Let us explore some of
them:
a. Christianity – with more than 2 billion followers, Christianity is the world’s
largest religion.
b. Islam – with more than 1.3 billion followers, the world’s second largest religion.
The prophet Muhammad founded Islam in Mecca, the holy city of Islam
located in Saudi Arabia. Islam means “submission to Allah” and revolves around
the “five pillars”: (1) reciting the Shahada (profession of faith), (2) giving to the
poor, (3) praying five times daily, (4) fasting during the holy month of Ramadan,
and (5) making the Hajj (pilgrimage) to the Arabian City of Mecca.
 c. Hinduism - was formed in India. It is also the majority religion of Nepal, and a
secondary religion in Bangladesh, Bhutan, and Sri Lanka. Hindus believe in
reincarnation – the rebirth of the human soul at the time of death. For many
Hindus, the highest goal of life is Moksha – escaping from the cycle of
reincarnation and entering a state of eternal happiness called Nirvana.

Culture in the Global Workplace

● Perception of time. People in many Latin American and Mediterranean cultures

are casual about their time. They maintain flexible schedules and would rather
enjoy their time than to sacrifice it to unbending efficiency. In contrast, people in
Japan and United States typically arrive promptly for meetings, keep tight
schedules, and work long hours. The emphasis on using time efficiently reflects
the value of hard work in these countries.

● Views of work. Some cultures display a strong weak ethic; others stress a more
balanced pace in juggling work and leisure. People in Southern France like to say
they work to live, whereas people in the United States live to work.

● Material culture. All the technology used in a culture to manufacture goods and
provide services is called material culture. It is often used to measure the
technological advancement of a nation’s markets or industries.

● Cultural trait. Anything that represents a culture’s way of life, including

gestures, material objects, traditions, and concepts. Such traits include bowing to
show respect in Japan (gesture), Buddhist temple in Thailand (material object),
celebrating the Day of the Dead in Mexico (tradition), and practicing democracy
in the United States (concept). The process whereby cultural traits spread from
one culture to another is called cultural diffusion. As new traits are accepted
and absorbed into a culture, cultural change occurs naturally and gradually.

● Cultures change companies. Culture often forces companies to adjust business

policies and practices. For example, managers from the United States often
encounter cultural differences that force changes in how they motivate
employees in other countries. Managers sometimes use situational
management – a system in which a supervisor walks an employee through
every step of an assignment or task and monitors the results at each stage. This
technique helps employees fully understand the scope of their jobs and clarifies
the boundaries of their responsibilities.
Progress Check: To be submitted in our Google classroom

Answer the following questions:

1. Define culture and discuss the need for cultural knowledge. (20 points)

2. Outline how the major world religions can influence business. (30 points)
3. Describe how firms and culture interact in the global workplace. (30 points)

4. Explain the importance of personal communication to international business. (20

points)

Self-evaluation (Group activity: Five members per group. Oral participation is required.
For the country your group is researching, integrate your answers to the following
questions:) Highest score is 50, lowest is 10

1. Asia comprises more than 60 percent of the world’s population – a population that
practices Buddhism, Confucianism, Hinduism, Islam, and numerous other religions.
Do you think it is possible to carry on a valid discussion of “Asian” values?

2. Cite several values that people hold dear.

3. What are the various ethnicities that reside in the nation?

4. How would you describe people’s perception of time and work?

5. Is the culture relatively open or closed to cultural change?

Rubrics for essay

Assessment For 20 points 30 points

Present ideas in original 5 8
manner
Strong organization of 5 7
thought
Writing shows clear 4 7
understanding
The use of nouns and verbs 3 4
make the essay very
informative
Sentence structure is evident 3 4
Total 20 points 30 points

Online Sources/References:

https://study.com/academy/lesson/ethnocentricity-definition-and-lesson.html

https://www.google.com.ph/amp/s/www.livescience.com/amp/21478-what-is-culture-de
finition-of-culture.html

Wild. J.W. (2016), International Business: The challenges of Globalization. USA: Pearson

Jeong, Garcia, Leonardo Jr. (2016), International Marketing Second Edition

Keegan, Mark C. (2015), Global Marketing Eight Edition