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International Business

Part Two
Comparative Environmental
Frameworks
Chapter Two
The Cultural Environments Facing
Business
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Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
Chapter Objectives
• To understand methods for learning about
cultural environments
• To analyze the major causes of cultural
difference and change
• To discuss behavioral factors influencing
countries’ business practices
• To understand cultural guidelines for
companies that operate internationally
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Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
The People Factor
• Culture refers to learned norms based on
the values, attitudes, and beliefs of a
group of people
• Cultural diversity
• Cultural collision
• Sensitivity and Adjustment
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Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
Cultural Awareness
• There is no foolproof way to build your
awareness of culture
• Hard to isolate culture from economic and
political conditions
• Education about a culture helps
• Studies of cultures have shortcomings
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Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
The Nation as a Point of Reference
• National boundaries act as proxy for
culture
• Not everyone in a country shares the
same culture
• Certain cultural attributes may link groups
from different nations more closely than
certain groups within nations

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How Cultures Form and Change
• Cultural values set early in life
• Changes occur from:
 Choice
 Imposition

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Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
Language as a Cultural Stabilizer
• When people from different areas speak the
same language, culture spreads more easily
• Among nations that share a same language,
commerce is easier
• Isolation from other groups, especially because
of language, tends to stabilize cultures.
• Some countries see language as being so
important that they regulate the inclusion of
foreign words and/or mandate the use of the
country’s official language for business
purposes.
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Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
Religion as a Cultural Stabilizer
• Centuries of profound religious influence
continue to play a major role in shaping
cultural values
• Many religions influence specific beliefs
that may affect business
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Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
Issues in Social Stratification
• Ascribed group memberships are determined at
birth
• Acquired group memberships are based on
one’s choice of affiliation
• Performance orientation of the society
• Open vs. Closed society
• Attitude towards gender
• Attitude towards age
• Importance of family group
• Prestige of occupation
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Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
Issues in Work Motivation
• Materialism and Motivation
• Expectation of Success and Reward
• Assertiveness: The Masculinity–Femininity
Index
• Hierarchies of Needs

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Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
Factors Affecting Relationship
Preferences
• Power distance: general relationship
between superiors and subordinates.
• Individualism vs. collectivism: degree of
dependence on organization
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Factors Affecting Risk-taking
Behavior
• Uncertainty avoidance
• Trust
• Future orientation
• Fatalism
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Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
Factors Affecting Information and
Task Processing
• Perception of cues
• Obtaining Information: Low-Context versus
High-Context Cultures
• Information Processing

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Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
Factors Affecting the
Communication Process
• Spoken and Written language
• Silent language:
 color associations
 conversational distance
 perception of time and punctuality
 body language and gestures
 prestige
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Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall
Dealing with Cultural Differences
• Accommodation
• Cultural distance
• Culture shock
• Company and Management orientations
 polycentric
 ethnocentric
 geocentric
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Factors Affecting Strategies for
Instituting Cultural Change
• Value systems
• Cost/benefits of change
• Resistance to too much change
• Participation
• Reward sharing
• Opinion leadership
• Timing
• Learning abroad