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Chapter Three

Differences in Culture
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Overview

• What is culture?
• Social Structure
• Religious and Ethical Systems
• Language
• Education
• Cultural Change

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What is Culture?

“That complex whole “A system of values and
which includes norms that are shared
knowledge, belief, art, among a group of people
morals, law, custom, and and that when taken
other capabilities together constitute a
acquired by man as a design for living.”
member of society.” - Hill
- Edward Tylor (adapted from Hofstede,
(19th century anthropologist) Namenwirth, and Weber)
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Components of Culture

• Values
- cultural bedrock
• Norms
- social rules that
govern interactions
• Society
- a group that shares
common values
and norms
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Folkways and Mores

Folkways Mores
• Routine conventions of • Norms that are central to
everyday life. the functioning of
- Social conventions such as society and its social life
dress codes, social - Greater significance than
manners, and neighborly folkways
behavior - Actions may be either illegal
- Demonstrate social (or (theft, adultery) or taboo
cross-cultural) competence (incest, cannibalism)
- Violations generally do not - Violators are considered
invite moral judgment (i.e. evil; violations bring serious
of good and evil) retribution
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Culture, Society, and the
Nation State

• Distinctions
- Culture: A system of values shared by a group
- Society (ethnie): A group bound by a common culture
- Nation: A self-defined cultural and social community (an
“imagined” community, Benedict Anderson)
- State: A political association with effective sovereignty over a
geographic area
• Issues
- Societies, nations and states do not always correspond
- Subcultures (often hidden) are found in many nation-states

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The Determinants and
Manifestations of Culture

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Social Structure

• Social structure refers to its basic social organization
• Two dimensions that are particularly important
include:
- The extent to which society is group or individually oriented
- Degree of stratification into castes or classes

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Individual vs. Group Orientation

• Individualistic societies tend • Collectivistic societies see
to view a person’s attributes groups as the primary unit of
and achievements as more social organization, with
important than the group’s to group membership as all
which they belong important
• Emphasis on individual • Emphasis on the group can
performance can be both be both beneficial and
beneficial and harmful harmful
- Encourages - Encourages mutual self-
entrepreneurship help and collective action
- Can lead to high degree of - Discourages individual
managerial mobility action and initiative

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Social Stratification

• Social stratification refers to the fact that all societies are
stratified on a hierarchical basis of social categories
• Strata are typically defined on the basis of characteristics such
as family background, occupation, and income
• Societies are all stratified to come degree but they differ in two
related ways
- Social mobility refers to the extent to which individuals can move
out of the strata into which they are born
- The extent to which the stratification of a society affects the
operation of business organizations, this is known as significance

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Religious and Ethical Systems

• Religion: a system of shared beliefs and rituals that are
concerned with the realm of the sacred
• Ethical systems: a set of moral principles, or values, that are
used to guide and shape behavior
- Most of the world’s ethical systems are the product of religions
• Among the thousands of religions in the world today, four
dominate in terms of numbers of adherents:
- Christianity with 1.7 billion adherents
- Islam with 1 billion adherents
- Hinduism with 750 million adherents
- Buddhism with 350 million adherents

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Religious and Ethical Systems

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Economic Implications
of Christianity

• The Protestant Work Ethic (Max Weber)
- Weber observed that in 19th century Europe the economic
“winners” (owners of capital, the professions and skilled
labor) were overwhelmingly Protestant.
- Weber argued that the “Protestant Work Ethic” was central
to their success. Protestant ethics emphasizes
• the individuals direct relation to God, and
• the importance of hard work and wealth creation (to achieve
salvation and for the glory of God) and frugality (abstinence
from worldly pleasures).
- This culture of hard work and savings generated capital
which was reinvested in further enterprise, paving the way
for the development of capitalism in the West
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Economic Implications
of Islam

• The Koran establishes some explicit economic principles,
many of which are consistent with a free market economy
and entrepreneurship
- The Koran speaks approvingly of enterprise and the
earning of legitimate profit through trade and commerce
- The protection of the right to private property is also
embedded within Islam
- Islam is critical of those who earn profit through the
exploitation of others
• Muslim countries are generally receptive to international
business so long as local values and norms are followed
• Over the past 100 years Islam has been going through a process
of reform as it adapts to modernization and globalization
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Language

• Spoken
- Verbal cues
- Language structures perception of world
• Unspoken
- Body language
- Personal space

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Education

• Formal education plays a key role in modern society
- medium through which individuals learn indispensable
language, conceptual, and mathematical skills
- supplements the family’s role in socializing the young into
the values and norms of a society
- teaches basic facts about the social and political nature of
a society and the fundamental obligations of citizenship
• Cultural norms are also taught indirectly at school
- Part of a “hidden curriculum”
- Examples of cultural norms include: respect for others,
obedience to authority, honesty, neatness, being on time
- The grading system socializes children to value of personal
achievement and competition
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Cultural Change

• Culture is not a constant; it evolves over time
- Since 1960s American values toward the role of women
have changed
- Japan moved toward greater individualism in the workplace
• Globalization will continue to have impacts on
cultures around the world
- Is the world moving toward greater cultural convergence or
divergence?
- Are the values of collectivistic culture incompatible with
economic progress and development

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Cultural Change

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Managerial Implications

• Cross-cultural literacy
- The danger of ethnocentrism
• Culture and competitive advantage
- Value systems and norms influence the cost of doing
business in a country (transaction costs)
• How determinative is culture for economic success?
• How important is culture in shaping the foreign
investment decisions of MNCs?
• Culture and business ethics

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Looking Ahead to Chapter 4

• Ethics in International Business
- Ethical Issues in International Business
- Ethical Dilemmas
- The Roots of Unethical Behavior
- Philosophical Approaches to Ethics
- Ethical Decision Making

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