Global Business Today 8Th Edition Hill Solutions Manual Full Chapter PDF

Chapter 04 - Differences in Culture
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Differences in Culture
Chapter Outline
OPENING CASE: Why Did Wal-Mart Fail in Germany?
INTRODUCTION
WHAT IS CULTURE?
Values and Norms

Culture, Society, and the Nation-State
The Determinants of Culture
SOCIAL STRUCTURE
Individuals and Groups

Social Stratification
Country Focus: Breaking India’s Caste System
RELIGIOUS AND ETHICAL SYSTEMS
Christianity
Islam
Country Focus: Islamic Capitalism in Turkey
Hinduism
Buddhism
Confucianism
Management Focus: DMG-Shanghai
LANGUAGE
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Spoken Language
Unspoken Language
EDUCATION
CULTURE AND THE WORKPLACE
CULTURAL CHANGE
FOCUS ON MANAGERIAL IMPLICATIONS
Cross-Cultural Literacy
Culture and Competitive Advantage
SUMMARY
CRITICAL THINKING AND DISCUSSION QUESTIONS
CLOSING CASE: Culture and Business in Saudi Arabia
Learning Objectives
1. Explain what is meant by the culture of a society.
2. Identify the forces that lead to differences in social culture.
3. Identify the business and economic implications of differences in culture.
4. Recognize how differences in social culture influence values in the workplace.
5. Demonstrate an appreciation for the economic and business implications of cultural change.
Chapter Summary
This chapter begins by introducing the concept of culture. The determinants of culture are identified,
which include religion, political philosophy, economic philosophy, education, language, and social
structure. The first half of the chapter focuses on the influence of social structure, religion, language, and
education on culture. The section on religion explains the economic implications of Christianity, Islam,
Hinduism, Buddhism, and Confucianism. In addition, Geert Hofstede’s model of how a society’s culture
impacts the values found in the workplace is presented. According to Hofstede, cultures vary along the
lines of power distance, individualism versus collectivism, uncertainty avoidance, and masculinity versus
femininity. The concept of ethnocentric behavior is introduced. Finally, the author reiterates the point
that the value systems and norms of a country influence the costs of doing business in that country.
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Opening Case: Why Did Wal-Mart Fail in Germany?
Summary
The opening case describes Wal-Mart’s experiences in Germany. Wal-Mart initially entered the market in
1997 with the acquisition of the Wertkauf chain. Wal-Mart expanded its operations in Germany in 1998
when it acquired the Spar chain of discount stores. Despite these acquisitions and the ready start they
gave the company, Wal-Mart stumbled badly in the market, and ultimately withdrew in 2007. Much of
the retailer’s troubles in the Germany appear to have been related to its apparent total lack of knowledge
of the local culture and the local way of doing business along with the seeming arrogance of CEO Rob
Tiarks and his successor, Allan Leighton. Discussion of the case can revolve around the following
questions:
Suggested Discussion Questions
QUESTION 1: What contributed to Wal-Mart CEO Rob Tairk’s failure to successfully lead Wal-Mart’s
German operations? Do you think Wal-Mart should have appointed a German citizen to run the stores in
Germany? What challenges might a German leader have faced?
ANSWER 1: Wal-Mart entered the German market with high expectations of success. The company had
acquired two German discount chains allowing it to quickly build a presence in the market. Rob Tiarks, a
U.S. citizen who had been responsible for leading some 200 supercenters in the United States was
appointed to lead the operations in Germany. Students will probably attribute many of Tiarks’ difficulties
to his arrogance and refusal to learn local customs and ways of doing business, and to his lack of
sensitivity to cultural differences. Tiarks, for example, quickly ran into trouble when he refused to learn
the local language and established English as the company language. Many students will probably agree
that a German leader may have had more success relating to employees in Germany, but would have
probably run into trouble when reporting to Wal-Mart headquarters in Bentonville, given that Wal-Mart’s
headquarters appeared to believe that it was unnecessary to be sensitive to different cultural practices and
ways of operating.
QUESTION 2: Why did Wal-Mart have such a difficult time connecting with consumers in Germany?
What could Wal-Mart have done to better meet the needs of German consumers?
ANSWER 2: Wal-Mart’s strategy of selling large quantities of inexpensive, lower quality products has
been hugely successful in both the United States and Mexico, but it seems that the company made a fatal
mistake when it believed that German consumers had needs and preferences similar to those of U.S.
consumers. For most U.S. Wal-Mart shoppers, price is a key factor in the decision to make a purchase. In
contrast, Germany consumers often place quality ahead of price, and consequently were disappointed with
the selection at Wal-Mart. In addition, German customers were offended by some of the practices such as
the use of greeters that are part of Wal-Mart’s typical business practices in the United States. Most
students will probably agree that Wal-Mart could have avoided some of its missteps and perhaps been
successful in Germany by being more knowledgeable about the local culture.
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Teaching Tip: Students can learn more about Wal-Mart’s international operations by going to the
company’s website {http://corporate.walmart.com/}.
Teaching Tip: Wal-Mart may be facing a new rival in Europe. To learn more go to
{http://www.businessweek.com/globalbiz/content/oct2009/gb20091023_414708.htm}.
Video Note: The trading relationship between China and the United States is currently changing. To learn
more consider the iGlobe U.S. China Explore Deeper Ties as Partners, Contenders.
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Chapter Outline with Lecture Notes and Teaching Tips

INTRODUCTION
A) The focus of this chapter is on culture, and how the underlying characteristics of a country help define
the values and norms of a society. This affects not only how an individual from one country must adapt to
work in another country, but also how organizations, as described in the opening case, must adapt to
cultural differences across and within the countries in which they operate.
B) Two themes run through this chapter. The first theme is that operating a successful international
business requires cross-cultural literacy. By cross cultural literacy, we mean an understanding of how
cultural differences across and within nations can affect the way in which business is practiced. The
second theme is that a relationship may exist between culture and the costs of doing business in a country
or region.
WHAT IS CULTURE?
A) 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. The fundamental building blocks of culture are values (abstract
ideas about what a group believes to be good, right, and desirable) and norms (the social rules and
guidelines that prescribe appropriate behavior in particular situations). The term society refers to a group
of people who share a common set of values and norms.
Value and Norms
B) Values provide the context within which a society’s norms are established and justified and form the
bedrock of a culture. Norms are the social rules that govern the actions of people toward one another.
Norms can be further subdivided into folkways (the routine conventions of everyday life) and mores
(norms that are seen as central to the functioning of a society and to its social life).
Culture, Society, and the Nation-State
C) A society can be defined as a group of people that share a common set of values and norms; that is, a
group bound together by a common culture. But there is not a strict one-to-one correspondence between a
society and a nation-state. Nation-states are political creations. They may contain a single culture or
several distinct cultures.
The Determinants of Culture
D) The values and norms of a culture do not emerge fully formed. They are the evolutionary product of a
number of factors including prevailing political and economic philosophies, the social structure of a
society, and the dominant religion, language, and education.
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SOCIAL STRUCTURE
A) A society's social structure refers to its basic social organization. Two dimensions stand out when
explaining differences between cultures. The first is the degree to which the basic unit of social
organization is the individual, as opposed to the group. The second dimension is the degree to which a
society is stratified into classes or castes.
Individuals and Groups
The Individual
B) A focus on the individual and individual achievement is common in many Western societies. In
Chapter 2 the implications of this for political and economic systems were discussed. An emphasis on
individual achievement has positive and negative implications. On the positive side, the dynamism of the
U.S. economy owes much to the philosophy of individualism. On the other hand, individualism can lead
to a lack of company loyalty and failure to gain company specific knowledge, competition between
individuals in a company rather than team building, and can limit people's ability to develop a strong
network of contacts within a firm.
The Group
C) In sharp contrast to the Western emphasis on the individual, in many Asian societies the group (an
association of two or more individuals who have a shared sense of identity and who interact with each
other in structured ways on the basis of a common set of expectations about each other’s behavior) is the
primary unit of social organization. While in earlier times the group was usually the family or the village,
today the group may be a work team or business organization. When meeting someone she may say she
works for Sony rather than say she is an engineer that designs disk drives. The worth of an individual is
more linked to the success of the group than individual achievement. This emphasis on the group may
discourage job switching between firms, encourage lifetime employment systems, and lead to cooperation
in solving business problems. On the other hand, individual creativity and initiative is suppressed.
Social Stratification
D) All societies are stratified on a hierarchical basis into social categories, or social strata.
Social Mobility
E) Social mobility refers to the extent to which individuals can move out of the strata into which they are
born. A caste system is a form 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 usually not possible during an
individual's lifetime whereas a class system is a form of open social stratification in which the position a
person has by birth can be changed through his or her achievement or luck.
Significance
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F) A country’s social strata can have important implications for the management and organization of
businesses. In cultures where there is a great deal of consciousness over the class of others, the way
individuals from different classes work together (i.e. management and labor) may be very prescribed and
strained in some cultures (i.e. Britain), or have almost no significance in others (i.e. Japan). Class
consciousness refers to a condition where people tend to perceive themselves in terms of their class
background, and this shapes their relationships with others.
Country Focus: Breaking India’s Caste System
Summary
This feature explores India’s caste system and the implications of the system. While many urban middle
class citizens are not affected in a significant way by the caste system, for India’s rural population, the
influence of the system is readily apparent. The government is strongly encouraging private companies to
hire more individuals from lower level castes.
1. India’s castes system has been around for many years. Explain why its influence has diminished among
educated urban middle class Indians.
Discussion Points: The caste system in India was officially abolished in 1949. However, it seems that
urban citizens have benefited the most from its abolishment. For many rural Indians, the system is still
very much in effect. Educated, urban middle class Indians make up the majority of employees in India’s
high tech economy. They may work for large multinationals like Infosys and Wipro. Many students will
probably attribute the relative freedom of these individuals to the presence of these large companies, and
their need to hire the best people regardless of caste. In rural areas though, the caste system still has
significant influence in daily life. One female engineer working for Infosys notes for example that as a
member of a lower caste, she was not able to enter the homes of higher caste individuals. Yet the same
engineer, a beneficiary of an Infosys training programs, now works for Infosys in a “higher caste”
position.
2. Why are many private companies in India resisting the hiring quotas suggested by the government?
Why might it be necessary to hire lower caste individuals?
Discussion Points: The Indian government has suggested that private companies make an effort to employ
lower caste individuals. However, many companies are resisting the request using the argument that they
want to hire qualified people who want to work hard, and not people who are available simply because of
a quota system. Some companies however, recognize that there may be a place for lower caste
individuals, especially has business grows. Infosys for example, offers special training to low caste
members.
Lecture Note: For more on India’s caste system, go to

{http://www.npr.org/programs/specials/racism/010828.caste.html},
{http://www.npr.org/templates/story/story.php?storyId=128567642 }, and
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{http://www.npr.org/2012/04/22/150961922/india-a-country-in-the-midst-of-change}.
RELIGIOUS AND ETHICAL SYSTEMS
A) Religion can be defined as a system of shared beliefs and rituals that are concerned with the realm of
the sacred. Ethical systems refer to a set of moral principles, or values, that are used to guide and shape
behavior. The ethical practices of individuals within a culture are often closely intertwined with their
religion. While there are literally thousands of religions worldwide, four that have the largest following
are Christianity, Islam, Hinduism, and Buddhism. Confucianism, while not a religion, influences behavior
and shapes culture in many parts of Asia. Map 4.1 shows dominant religions across the world.
Christianity
B) Christianity is the largest religion and is common throughout Europe, the Americas, and other
countries settled by Europeans. About 20 percent of the world’s population is Christian. Within
Christianity there are three major branches: Protestant, Roman Catholic, and Eastern Orthodox.
Economic Implications of Christianity: The Protestant Work Ethic
C) At the turn of the century Weber suggested that is was the "Protestant work ethic" that was the driving
force of capitalism. This focus on hard work, wealth creation, and frugality encouraged capitalism while
the Catholic promise of salvation in the next world did not foster the same kind of work ethic. The
Protestant emphasis on individual religious freedom, in contrast to the hierarchical Catholic Church, was
also consistent with the individualist economic and political philosophy discussed in Chapter 2.
Islam
D) Islam has the same underlying roots of Christianity (Christ is viewed as a prophet), and suggests many
of the same underlying societal mores. Islam, however, extends this to more of an all-embracing way of
life that governs one's being. It also prescribes many more "laws" on how people should act and live that
are entirely counter the US "separation of church and state."
Islamic Fundamentalism
E) The past three decades have witnessed the growth of a social movement often referred to as “Islamic
fundamentalism.” In the West, Islamic fundamentalism is associated in the media with militants,
terrorists, and violent upheavals. However, this characterization may be misleading as the vast majority of
Muslims point out that Islam teaches peace, justice, and tolerance. Fundamentalists demand a rigid
commitment to traditional religious beliefs and rituals. Fundamentalists have gained political power in
many Muslim countries, and have tried to make Islamic law the law of the land.
Economic Implications of Islam
F) In Islam people do not own property, but only act as stewards for God and thus must take care of that
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which they have been entrusted with. They must use property in a righteous, socially beneficial, and
prudent manner; not exploit others for their own benefit; and they have obligations to help the
disadvantaged. Thus Islam is supportive of international business as long as it is carried out in a way that
reflects basic Islamic values.
Country Focus: Islamic Capitalism in Turkey
Summary
This feature examines the debate surrounding Turkey’s membership in the European Community. Turkey
has indicated that it would like to be a part of the regional bloc, but many are concerned that because the
country’s dominant religion is Islam, it would not be a good fit. Others however, argue that these fears are
unfounded. Supporters of Turkey’s membership in the European Union note that the country’s central
region is home to many thriving entrepreneurial ventures.
1. Are the concerns of those opposing Turkey’s admittance to the European Union well-founded? Can
Islam, capitalism, and globalization co-exist?
Discussion Points: Many students will probably suggest that if the country’s religious preferences are the
only issue preventing Turkey’s membership in the European Union, then indeed these fears are
unfounded. Students taking this perspective are likely to point out that Central Turkey, a region where
Islamic values are particularly strong, is also referred to as the Anatolian Tiger because it is home to so
many thriving Muslim companies, many of which are large exporters. Other students however, may note
that traditionally Islam is critical of those who earn a profit through the exploitation of others. Depending
on just how this view is defined could influence how Turkey views the economic activities of other
European Union countries.
2. Explain the concept of Islamic Calvinism. How has Islamic Calvinism helped the Kayseri region of
Turkey?
Discussion Points: Islamic Calvinism is a fusion of traditional Islamic values and the Protestant work
ethic. In the Kayseri region of Turkey, Islamic Calvinism is evident. The region is home to many thriving
businesses in a wide variety of industries that have successfully meshed traditional Islamic values with the
entrepreneurial values associated with the Protestant work ethic. Many companies set aside time for daily
prayers and trips to Mecca, most restaurants in the region do not serve alcohol and require women to
cover their heads. At the same time, businesses in the region have made it priority to make money.
Lecture Note: To get an update of Turkey’s current situation go to

{http://www.mfa.gov.tr/default.en.mfa}.
Teaching Tip: To extend the discussion of this feature, consider
{http://www.npr.org/2011/04/14/135407687/turkish-democracy-a-model-for-other-countries}.
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Hinduism
G) Hinduism, practiced primarily on the Indian sub-continent, focuses on the importance of achieving
spiritual growth and development, which may require material and physical self-denial.
Economic Implications of Hinduism
H) Since Hindus are valued by their spiritual rather than material achievements, there is not the same work
ethic or focus on entrepreneurship found in some other religions. Likewise, promotion and adding new
responsibilities may not be the goal of an employee, or may be infeasible due to the employee's caste.
Buddhism
I) Buddhists also stress spiritual growth and the afterlife, rather than achievement while in this world.
Buddhism, practiced mainly in South East Asia, does not support the caste system, however, so
individuals do have some mobility not found in Hinduism and can work with individuals from different
classes.
Economic Implications of Buddhism
J) Because Buddhists do not support the caste system, and do not practice the extreme ascetic behavior of
Hinduism, entrepreneurial activity is possible.
Confucianism
K) Confucianism, practiced mainly in China, teaches the importance of attaining personal salvation
through right action. Unlike religions, Confucianism is not concerned with the supernatural and has little
to say about the concept of a supreme being or an afterlife. The need for high moral and ethical conduct
and loyalty to others is central in Confucianism.
Economic Implications of Confucianism
L) Three key teachings of Confucianism - loyalty, reciprocal obligations, and honesty - may all lead to a
lowering of the cost of doing business in Confucian societies. The close ties between Japanese auto
companies and their suppliers, which has been an important ingredient in the Japanese success in the auto
industry, are facilitated by loyalty, reciprocal obligations, and honesty. In countries where these
relationships are more adversarial and not bound by these same values, the costs of doing business are
probably higher.
Management Focus: DMG-Shanghai
Summary
This feature explores guanxi, or the relationships and connections that are so important in the Chinese
business world. The notion of guanxi comes from the Confucian philosophy of valuing social hierarchy
4-10
and reciprocal obligations. Dan Mintz, founder of DMG, one of China’s fastest growing advertising
agencies, credits guanxi for his success. Mintz established connections with two Chinese individuals with
access to high ranking government officials. Through these guanxiwang, or connections, Mintz has been
able to get permission to shoot advertisements in locations that are usually closed to foreigners.
1. Explain the concept of guanxi. How did Mintz’s guanxiwang help his company becomes so successful?
Discussion Points: Guanxi literally means relationships, although in business settings in can better be
understood as “connections.” The concept of guanxi is deeply rooted in Chinese culture and
Confucianism. The Chinese will often cultivate a guanxiwang, or “relationship network,” for help. In
China, there is a tacit acknowledgement that if you have the right guanxi, legal rules can be broken or
bent. Mintz made connections with two Chinese men who had access to high ranking government
officials. Through these men, Mintz was able to secure permission to film commercials in locations that
are normally closed to outsiders.
2. Compare the difference between doing business in the West and doing business in China.
Discussion Points: A basic difference between doing business in the West and doing business in China
involves how legal agreements are handled. In the advanced economies of the West, business transactions
are conducted and regulated by the centuries-old framework of contract law, which specifies the rights and
obligations of parties to a business contract and provides mechanisms for seeking to redress grievances
should one party in the exchange fail to live up to the legal agreement. China does not have the same
infrastructure. Personal power and relationships or connections (guanxi), rather than the rule of law, have
always been the key to getting things done in China.
LANGUAGE
A) One obvious way in which countries differ is language. By language, we mean both the spoken and
the unspoken means of communication. Language is one of the defining characteristics of culture. It not
only allows a society to communicate, but also directs the attention of people towards certain features of
the world and human interactions.
Teaching Tip: For individuals with a particular interest in language, iLoveLanguages

{http://www.ilovelanguages.com/index.php} is a comprehensive catalog of language-related Internet
resources. There are more than 2,400 links available at this site include links to other Internet sites that
focus on online language lessons, translating dictionaries, native literature, translation services, software,
and language schools.
Spoken Language
B) While English is clearly the language of international business, knowing at least some of the local
language can greatly help when working in another country. In some situations knowing the local
language can be critical for business success.
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Unspoken Language
C) Unspoken language can be just as important for communication. Using a few facial expressions and
hand gestures to the class can illustrate the point. The fact that these can have different interpretations in
different cultures, and that many of these actions may be automatic or reflexive, obviously complicates
international communication. Not only may the person you are dealing with be unintentionally sending
non-verbal signals that you do not comprehend, or are misunderstanding, you may be unconsciously
sending your own signals.
EDUCATION
A) Formal education plays a key role in a society. Formal education is the medium through which
individuals learn many of the language, conceptual, and mathematical skills that are indispensable in a
modern society.
B) The knowledge base, training, and educational opportunities available to a country's citizens can also
give it a competitive advantage in the market and make it a more or less attractive place for expanding
business. In nations that have a ready trained workforce for particular types of jobs, it is easier to start
operations than in nations where an investor will also have to undertake time-consuming and costly
training.
CULTURE AND THE WORKPLACE
A) For an international business with operations in different countries, a important question is how a
society's culture impacts values found in the workplace. The question points to the need to vary
management process and practices, and to take different culturally determined work-related values into
account.
B) The most famous study of how culture relates to values in the workplace was undertaken by Geert
Hofstede. Hofstede isolated four dimensions that he claimed summarized different cultures. These were:
power distance, individualism versus collectivism, uncertainty avoidance, and masculinity versus
femininity where
Power Distance is focused on how a society deals with the fact that people are unequal in physical and
intellectual capabilities,
Individualism Versus Collectivism is focused on the relationship between the individual and his or her
fellows,
Uncertainty Avoidance measures the extent to which different cultures socialize their members into
accepting ambiguous situations and tolerating ambiguity, and
Masculinity Versus Femininity looks at the relationship between gender and work roles.
C) Hofstede's results are interesting for what they tell us in a general way about differences between
cultures. However, because of methodological issues, one should be careful about reading too much into
Hofstede's research.
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D) Hofstede expanded his original research to include a fifth dimension, Confucian dynamism, which
captures attitudes toward time, persistence, ordering by status, protection of face, respect for tradition, and
reciprocation of gifts and favors.
Lecture Note: For more discussion of Hofstede and his research go to {http://geert-hofstede.com/l}.
CULTURAL CHANGE
A) Culture evolves over time, although changes in value systems can be slow and painful for a society.
Social turmoil is an inevitable outcome of culture change. The text provides several examples of cultural
change and its impact on the society.
B) As countries become economically stronger and increase in the globalization of products bought and
sold, cultural change is particularly common.
Video Note: Technology is changing India for some, while leaving other relatively untouched. The
iGlobe High-Tech India Contrasts with Rural Ways explores the nature of the change and its implications.
FOCUS ON MANAGERIAL IMPLICATIONS
A) The material discussed in this chapter has three important implications for international business.
First, there is a need to develop cross-cultural literacy. Second, there is a connection between culture and
national competitive advantage. Third, there is a connection between culture and ethics in decision
making.
Cross-Cultural Literacy
B) Individuals and firms must develop cross-cultural literacy. International businesses that are ill
informed about the practices of another culture are unlikely to succeed in that culture. One way to
develop cross-cultural literacy is to regularly rotate and transfer people internationally.
C) One must also beware of ethnocentrism, or a belief in the superiority of one's own culture.
Individuals who are ethnocentric frequently demonstrate disregard for other cultures.
Lecture Note: It can often be difficult to recognize cultural behaviors in one’s own culture. To get an
inside look at the American culture go to {http://www.edupass.org/culture/}.
Culture and Competitive Advantage
D) For the international business, the connection between culture and competitive advantage is important
for two reasons. First, the connection suggests which countries are likely to produce the most viable
competitors. Second, the connection between culture and competitive advantage has important
implications for the choice of countries in which to locate production facilities and do business.
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Teaching Tip: Executive Planet {http://www.executiveplanet.com/index.php?title=Main_Page} provides

guidelines for doing business in different countries.
Critical Thinking and Discussion Questions

1. Outline why the culture of a country might influence the costs of doing business in that country.
Illustrate your answer with examples.
Answer: Since in a sense the entire chapter is about this question, there can be numerous reasons and
examples of how culture influences the costs of doing business. Several are highlighted in the following
sentences, but there could be numerous others. When there are simply different norms between how
individuals from different countries interact, the costs of doing business rise as people grapple with
unfamiliar ways of doing business. For example, while in the US we may get down to business first, and
then get to know each other socially later, in many South American countries it is important develop a
good social relationship before trying to discuss business issues. Different class structures and social
mobility also raise the costs of doing business. If there are inhibitions against working with people from
different classes, then the efficiency with which information can flow may be limited and the cost of
running a business increased. A country's religion can also affect the costs of business, as religious values
can affect attitudes towards work, entrepreneurship, honesty, fairness, and social responsibility. In Hindu
societies where the pursuit of material well-being can be viewed as making spiritual well being less likely,
worker productivity may be lower than in nations with other religious beliefs. Finally, a country's
education system can have important implications for the costs of business. In countries where workers
receive excellent training and are highly literate, the need for specific worker training programs are
decreased and the hiring of additional employees is facilitated.
2. Do you think business practices in an Islamic country are likely to differ from business practices in the
United States? If so, how?
Answer: There are various cultural differences between an Islamic country and the United States that
could impact business practices. The role of women, for example, or appropriate etiquette (including
simple things like not passing papers with the left hand), holidays, and wining and dining can all differ.
But beyond these types of example is the fact that the underlying philosophy and role of business can be
very different. Since Muslims are stewards of property for God, rather than owners, they are more likely
to use their resources carefully and may be less likely to give up or sell something to a person who may
not practice the same stewardship. The importance of fairness to all parties in relations means that over-
aggressiveness in self-interest may not be well received, and breaking an agreement, even if
technically/legally permissible may be viewed as very inappropriate. Finally, the prohibitions on interest
payments in some Islamic countries means that the wording of the terms of an agreement must be done
carefully so that "fair profits" are not construed as being "interest payments."
3. What are the implications for international business of differences in the dominant religion or ethical
system of a country?
Answer: Differences in the dominant religion of a country and/or its ethics can affect relationships,
attitudes toward business, and overall economic development. Differences in religion require inter-
cultural sensitivity. This sensitivity requires things like simply knowing the religious holidays, accepting
that some unexpected things may happen "because of Allah's will," or understanding how interpersonal
4-14
relationships may be different between "believers" and "non-believers." (Hence non-believers may be
treated differently.) Religious beliefs can significantly affect a country’s attitude toward business, work,
and entrepreneurship. In one country successfully beating a competitor may be considered a great
achievement while in another it may be thought of as showing a lack of compassion and could be
disruptive to the society and persons involved. Likewise, hard work may be either rewarded positively or
viewed as something of secondary importance to spiritual peace and harmony. Different dominant
religions and ethical values can also affect the overall competitiveness and potential for economic growth
of a nation, and hence attractiveness of a country for international business. Students might suggest for
example, that Venezuela’s high level of corruption make it a less attractive destination for foreign
companies.
4. Choose two countries that appear to be culturally diverse. Compare the culture of those countries and
then indicate how cultural differences influence (a) the costs of doing business in each country, (b) the
likely future economic development of that country, and (c) business practices.
Answer: Responses to this question will obviously vary based on the countries chosen by the students and
their knowledge of the countries. Hopefully students can present some information on the dimensions of
culture including values, norms, social structure, religion, language, and education of the countries and
also describe the key differences and similarities of the countries along these dimensions. Relating the
differences between the countries along these dimensions to differences in the costs of doing business, the
potential for economic development, and business practices would fully answer the question. (While it
may be more difficult for students to come up with really good examples relative to business practices, the
costs and prospects for economic development should be quite feasible.)
5. Reread the Country Focus on Islamic Capitalism in Turkey. Then answer the following questions:
a) Can you see anything in the value of Islam that is hostile to business?
b) What does the experience of the region around Kayseri teach us about the relationship between Islam
and business?
c) What are the implications of Islamic values towards business for the participation of a country like
Turkey in the global economy?
Answer: When responding to this question, many students will probably focus on three key areas. First,
they may note that Islam is firmly against making a profit by exploiting others. Depending on just how
one defines exploitation, this could be a problem. For example, do commercials for sugary cereal that are
traditionally shown during children’s television programs count as exploitation? A second area that
students may explore is the role of women in business. In Islamic countries, women make up only a very
small part of the workforce. This traditional Islamic value could also present a problem. Third, students
may note that the Koran condemns interest as exploitative and unjust. This could present a problem for
the financial industry, and also for companies needing loans. Despite these concerns, however, many
students will probably suggest that Turkey’s central region clearly demonstrates that the country can
indeed function successfully in the global economy.
Teaching Tip: To extend the discussion of this feature, consider

{http://www.npr.org/2011/04/14/135407687/turkish-democracy-a-model-for-other-countries}.
4-15
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Chapter 04 - Differences in Culture

Solution Manual for Global Business Today 8th Edition by Hill

Solution manual: https://testbankpack.com/p/solution-manual-for-global-business-today-

OPENING CASE: Why Did Wal-Mart Fail in Germany?

Values and Norms

Individuals and Groups

RELIGIOUS AND ETHICAL SYSTEMS

CULTURE AND THE WORKPLACE

FOCUS ON MANAGERIAL IMPLICATIONS

CRITICAL THINKING AND DISCUSSION QUESTIONS

CLOSING CASE: Culture and Business in Saudi Arabia

2. Identify the forces that lead to differences in social culture.

3. Identify the business and economic implications of differences in culture.

4. Recognize how differences in social culture influence values in the workplace.

Opening Case: Why Did Wal-Mart Fail in Germany?

Suggested Discussion Questions

Chapter Outline with Lecture Notes and Teaching Tips

Value and Norms

Culture, Society, and the Nation-State

The Determinants of Culture

Individuals and Groups

Country Focus: Breaking India’s Caste System

Suggested Discussion Questions

Lecture Note: For more on India’s caste system, go to

RELIGIOUS AND ETHICAL SYSTEMS

Economic Implications of Christianity: The Protestant Work Ethic

Economic Implications of Islam

Country Focus: Islamic Capitalism in Turkey

Suggested Discussion Questions

Lecture Note: To get an update of Turkey’s current situation go to

Economic Implications of Hinduism

Economic Implications of Buddhism

Economic Implications of Confucianism

Management Focus: DMG-Shanghai

Suggested Discussion Questions

Teaching Tip: For individuals with a particular interest in language, iLoveLanguages

CULTURE AND THE WORKPLACE

FOCUS ON MANAGERIAL IMPLICATIONS

Culture and Competitive Advantage

Teaching Tip: Executive Planet {http://www.executiveplanet.com/index.php?title=Main_Page} provides

Critical Thinking and Discussion Questions

Teaching Tip: To extend the discussion of this feature, consider

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