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International Business

Environments and Operations,


13/e
Global Edition
Part Two
Comparative Environmental
Frameworks

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Copyright 2011 Pearson Education

Chapter Two
The Cultural
Environments
Facing Business

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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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Culture
Learned norms based on values,
attitudes, and beliefs of a group of
people

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Cultural Diversity

A means of gaining global


competitive advantage by bringing
together people of diverse
backgrounds and experience

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Cultural Collision
Occurs in international business when:
A company implements practices that are less
effective
Employees encounter distress because of
difficulty in accepting or adjusting to foreign
behaviors

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Cultural Factors Affecting International


Business Operations

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Cultural Awareness
Problem areas that can hinder managers
cultural awareness
Subconscious reactions to circumstances
The assumption that all societal subgroups
are similar

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The Idea of a Nation Delineating


Cultures
The nation is a useful definition of society
because:
Similarity among people is a cause and an effect
of national boundaries
Laws apply primarily along national lines

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The Nation as a Cultural Mediator


A national culture must be flexible enough to
accommodate the diversity of various
subcultures, ethnic groups, races, and classes
Yet every nation boasts certain human,
demographic, and behavioral characteristics that
constitute its national identity

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Country-By-Country Analysis
Managers find this difficult to implement
because:
Subcultures exist within nations
Similarities link groups from different countries

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How Cultures Form and Change


Change by Choice
Reaction to social and economic situations
Change by Imposition
Imposed introduction into a culture of certain
elements from an alien culture

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Language as Both a Diffuser and


Stabilizer of Culture
A common language within a
country is a unifying force

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Major Language Groups: Population and


Output

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Religion As A Cultural Stabilizer


Centuries of profound religious
influence continue to play a major
role in shaping cultural values
and behavior

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Behavioral Practices Affecting Business


Issues in Social Stratification
Social ranking is determined by:
Factors pertaining to you as an individual
Factors pertaining to your affiliation with
certain groups

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Group Affiliations Can Be:


Ascribed or Acquired
Include those based on gender, family, age,
caste, ethnic, racial, or national origin
A reflection of class and status
Include those based on religion, political
affiliation, and professional and other
associations

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Social Stratification and Employment


Practices

Performance Orientation
Open and Closed Societies
Gender-Based Groups
Age-Based Groups
Family-Based Groups

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Work Motivation
Materialism and Motivation
Expectation of Success and Reward
Performance and Achievement: The MasculinityFemininity Index
Hierarchies of Needs

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Hierarchy of Needs

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Relationship Preferences
Power Distance
Individualism Versus Collectivism

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Risk-Taking Behavior

Uncertainty Avoidance
Trust
Future Orientation
Fatalism

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Information and Task Processing


Perception of Cues
Obtaining Information: Low Context versus High
Context Cultures
Information Processing
Monochronic Versus Polychronic Cultures
Idealism Versus Pragmatism

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Communication

Spoken and Written Language


Silent Language
Distance
Time and Punctuality
Body Language
Prestige

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Body Language Is Not A Universal


Language

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Degree of Cultural Differences


Cultural Distance
When a company moves within a cluster of
culturally similar countries, it should
expect to encounter fewer cultural
differences and to face fewer cultural
adjustments.
Cultural Friction
A business interaction may be viewed
negatively because of possible changes in
power relationships and the sovereignty
that sets countries apart.
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Company and Management Orientations


Polycentrism
belief that business units in different countries should
act like local companies

Ethnocentrism
conviction that ones own culture is superior to that of
other countries

Geocentrism
requires companies to balance knowledge of their
own organizational cultures with both home and host
country needs, capabilities, and constraints

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Strategies for Instituting Change

Value Systems
Cost-Benefit Analysis of change
Resistance to too much change
Participation
Reward Sharing
Opinion Leadership
Timing
Learning Abroad

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Future: What will happen to national


cultures?
Scenario 1.
New hybrid cultures will develop and personal
horizons will broaden

Scenario 2.
Outward expressions of national culture will continue
to become homogeneous while distinct values will
remain stable

Scenario 3.
Nationalism will continue to reinforce cultural identity

Scenario 4.
Existing national borders will shift to accommodate
ethnic differences
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All rights reserved. No part of this publication may be


reproduced, stored in a retrieval system, or transmitted, in
any form or by any means, electronic, mechanical,
photocopying, recording, or otherwise, without the prior
written permission of the publisher. Printed in the United
States of America.

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