Session - Culture

Culture
Session Objectives
• Understand ways in which cultural risk poses a
challenge to the effective conduct of business
• Examine ways in which cultural knowledge can
be acquired and individuals and organizations
prepare for cultural interactions
• Define and demonstrate the effect of culture’s
dimensions on business
• In what ways do cultural differences, language
and religion influence international investment
and trade?
• What are the major models for comparison of
different cultures? 2
Snippet 1
Korean Air had many fatal accidents between
1970 and 1999, during which time it wrote off 16
aircraft in serious incidents and accidents with
the loss of 700 lives.
The last fatal accident, Korean Air Cargo Flight
8509 in December 1999 led to a review of what
was a cause of the accidents.
What was the probable cause of the accidents?
Source: Wikipedia
Session - Culture 3
Snippet 1
Korean cultural attitudes had contributed
to poor crash history. Korean Air co-pilots
and flight engineers rarely suggested
actions that would contradict the
judgements of their captains.
Challenging one’s superior in Korea was
considered culturally inadequate
behavior.
12 December 2018 Session - Culture 4
Snippet 2
Source: http://www.campaignasia.com/BlogEntry/359532,Cultural+blunders+Brands+gone+wrong.aspx
Source: http://www.campaignasia.com/BlogEntry/359532,Cultural+blunders+Brands+gone+wrong.aspx
Culture Risk
The probability that cultural forces will
negatively affect a multinational’s profit or
impede the attainment of other critical business
objectives.

• As firms expand internationally, two tasks
become necessary:
– To determine similarities across cultures and
exploit them in strategy formulation
– To understand cultural differences and the
ways they manifest themselves

Cultural Failures
• Chinese do not tolerate advertising that is not
truthful
– E.g. Toyota (on every road there is a Toyota based
on a Chinese proverb)
• German law does not allow you to imply that
other products are inferior
– Goodyear (showed chains breaking, but German
govt. objected, stating the ad depict that the
chains are inferior)
Unlike political, legal, and
economic systems, culture has
proven very difficult
to identify and analyze.
Its effects on international
business are deep and broad.

• Research shows that Management Boards
comprising of people from different cultures
perform at least 35% better than boards that are
composed of people only from one culture
• Cultural diversity increases problem solving
ability, increases creativity and innovation.
CHALLENGE:
• People from different cultures need to
communicate well
Solution
• Understanding different cultures
Changing the glasses you can change the way you interpret people
from other cultures.
Influence of culture
reaches beyond
administrative attributes
such as governmental
policies, laws and public
institutions.
CULTURE - Defined
• Culture is the visible and invisible values and
beliefs that serve as a basis of people’s behaviors
and are unique to each society. It is shared by all
or almost all members of the social group and is
often tried to pass on to younger members of the
society (Adler, 2002).

CULTURE
Culture is broadly defined as the human-made
part of the environment, including material and
subjective elements of culture (Henry Triandis,
2002)
Culture is a set of shared values, assumptions

and beliefs that are learnt through membership
in a group, and that influence the attitudes and
behaviors of group members.

• Culture is a group phenomenon, it
distinguishes one group from
another
• Culture is not obtained from birth,
but acquired through a process of
socialization
• Culture is collective programming
that determines what is considered
acceptable or attractive behavior.
Culture
“Integrated system of learned behavior
patterns that are characteristic of the
members of any given society.”
- Czinkota, Ronkainen, Moffett
It includes everything that a group thinks, says,

does and makes - its customs, language, material
artifacts and shared systems of attitudes and
feelings
It is inherently conservative, resisting change
12 December 2018
and fostering continuity 16
Culture
• The man-made part of the human environment
Herskovits, M. J. (1948).
• “The collective programming of the mind which

distinguishes the members of one human group
from another.” Hofstede, G. (1980).
• “A system of values and norms that are shared

among a group of people and that when taken
together constitute a design for living.”
Hofstede, Namenwirth and Weber
12 December 2018 17
Session - Culture
• Culture
– Impacts the way strategic moves are
presented.
– Influences decisions.
– The lens through which motivation occurs.
• Main features of culture:
– Culture is shared
– Culture is intangible
– Culture is confirmed by others

Subjective and Objective elements
of culture
• Objective or tangible aspects of culture
include tools, roads, television programming,
architecture, and other physical artifacts.
• Subjective or intangible aspects of culture

include norms, values, ideas, customs, and
other meaningful symbols.

Cross Cultural Risk
A situation or event where a cultural
miscommunication puts some human
value at stake

Cultural Orientation
• Ethnocentric orientation: Using our own culture
as the standard for judging other cultures.
• Polycentric orientation: A host-country mind set
where the manager develops a greater affinity
with the country in which she or he conducts
business.
• Geocentric orientation A global mind-set where
the manager is able to understand a business or
market without regard to country boundaries.
Culture Risk
The risk of business blunders, poor
customer relations, and wasted
negotiations that result when firms fail
to understand and adapt to the
differences between their own and host
countries’ cultures.
In international business, cultural risk is just as
real as commercial risk or political risk
Culture and International Business
• International business acts as a change agent by
introducing new products, ideas, and practices
• International business may threaten a culture’s
heritage through cultural imperialism
• Management, decision making, and negotiations
are all influenced through culture.
• Culture is what makes international business
practice difficult or easy, depending on how
similar or different cultures are.
• Culture is both divisive and unifying.
Acculturation – The process of adjusting and
adapting to a specific culture other than one’s
own
High Context Cultures – Cultures in which

behavioral and environmental nuances are an
important means of conveying information
Low Context Cultures – Cultures in which most

information is conveyed explicitly rather than
through behavioral and environmental nuances
12 December 2018
- Edward T. Hall
Session - Culture 24
High & Low Context Cultures (Adopted from Samovar & Porter, 2001,80)

Different components of culture
• Values: Abstract ideas/assumptions about what a group believes to
be good, right and desirable
• Norms: social rules and guidelines that prescribe appropriate
behavior in particular situations
• Folkways: Routine conventions of everyday life.
– Little moral significance
– Generally, social conventions such as dress codes, social
manners, and neighborly behavior
• Mores: Norms central to the functioning of society and its social
life
– Greater significance than folkways
– Violation can bring serious retribution
• Theft, adultery, incest and cannibalism
Elements of Culture
Language
Values and Aesthetics
(Verbal and Nonverbal)
Attitudes
Religion Education
Manners and Customs
Material Elements Social Structure

Values and Attitudes
Beliefs: Ideas your hold to be true
Values are shared beliefs or group norms
internalized by individuals . What is important
to you
Attitudes are evaluations of alternatives based on
values How you treat others and approach a
situation
Behavior How you act

Relationship between
values, attitudes, and behaviors
Values Attitudes Behaviors

Manners and Customs
• Understanding manners and customs is

specially important in negotiations
• Gift giving is a particularly sensitive area that
requires preparation and sensitivity
• Consumer focus groups can help avoid
problems arising from differing manners and
customs
• In-depth studies are also used to study
consumer needs across markets
Material Elements
 Material culture refers to the results of technology
and is directly related to how a society organizes its
economic activity
Economic infrastructure – Transportation, energy, and
communications
Social infrastructure – Housing, health, and educational
systems
Financial and marketing infrastructure – Provides
facilitating agencies for operation in a market
 Cultural convergence – Increasing similarities
among cultures are accelerated by technological
advances
Aesthetics
• Aesthetics - concerned with beauty or the
appreciation of beauty
– What is considered of good taste, as

expressed in the arts and symbolism of
colors, form, and music?
– There are differences in the use of gender,
meaning of colors and symbols

Social structure
• Two dimensions
– The extent to which society is group or
individually oriented
– Degree of stratification into castes or classes
• Social mobility
• Significance to business
• Other influences
– Political philosophy
– Economic philosophy

Religion
Religion refers to a specific and institutionalized
set of beliefs and practices generally agreed
upon by a number of persons or sects
• Religion contains key values and norms that are

reflected in adherents’ way of life.
• People try to adopt business practices that will
satisfy religious tenets without sacrificing
modern practices in business.
Religion
Adherents to major world religions, by geographic region, 1996
(in millions)

World religions

Education
• Education
– Educational emphasis varies by culture
– Educational levels of a culture can be assessed
using:
• Literacy rates
• Enrollment in secondary education
• Enrollment in higher education
• Education can be a source of competitive
advantage
– Example
• India, Malaysia, Singapore, Japan after WWII
Percentage of GNP spent on education

Adult Illliteracy rates

Language
Language is the means by which we communicate
verbally.
• We use it for socialization and for communicating
how values and norms are expressed and
understood.
• There are approximately 20 different language
families that cut across national borders.
• Not only are words different, but also syntax and
usages are also quite different between language
families.
Language
• The artifacts that surround language:
– Linguistics – or the meanings of words
– Proxemics – or the distance that speakers stand from one
another
– Pragmatics – the cultural interpretations of words, gestures,
and nonverbals
– Nonverbals – The gestures and body language that
accompanies spoken words
• English has become the business world’s lingua franca,
and the number one foreign language taught in other
countries

Language
VERBAL NONVERBAL
• Four international • Five key topics:
business roles: – Time
– Information gathering – Space
and evaluation – Material possessions
– Access to local society – Friendship patterns
– Company – Business agreements
communications
– Interpretation of
contexts

Language
Numbers of speakers of major languages of the world

Models - Culture
• Hofstede’s Cultural Dimensions
• Globe Project Team – (Global Leadership and
Organization Behavior Effectiveness)
• Trompenaars 7d Model
• Schwartz’s Classification
• Huntington’s civilization clustering

Culture and the workplace
• Study on the relationship between culture and the

workplace by Geert Hofstede 1967-73
– 40 countries
– 100,000 individuals
Hofstede’s Dimensions of Culture
• Geert Hofstede’s cultural typology is the most often
used.
• It is based upon a study of 100,000 IBM employees who
work in IBM divisions throughout the world.
• Hofstede’s survey revealed four underlying dimensions
of culture:
– Power Distance
– Uncertainty Avoidance
– Individualism/Collectivism
– Masculinity/Femininity
– Long-Term Orientation
Source: https://www.geert-hofstede.com/

Work related values for twenty countries

Power Distance (PD)
• Power Distance is the extent to which hierarchical
differences are accepted in society and articulated in
term of deference to higher and lower social and
decision levels in organization.
• Artifacts of high PD:
– Centralization
– Org. Levels- Height
– Supervisors
– Wage Differentials
– Values, White & Blue Collar Work

• A 10 point difference in the indicator could be
felt/experienced when you go to that country
• 10 point difference can be significantly visible

Power Distance (PD)
Power distance: country examples and
organizational implications
Power Distance (PD)
Rank distinctions among the Japanese
Uncertainty Avoidance (UA)
• Uncertainty Avoidance is the extent to which
uncertainty and ambiguity are tolerated.
• Artifacts of high UA:
– Standardization
– Structured activities
– Written rules
– Specialists
– No risk tolerance
– Ritualistic behavior

Uncertainty Avoidance (UA)
Uncertainty avoidance: country examples and
Dealing with Uncertainty
• In Germany everything is forbidden, unless it
is allowed
• In the UK everything is allowed, unless it is
forbidden
• In France everything is allowed, even if it is
forbidden
• In the Netherlands everything is tolerated
even if it is forbidden
• Source: Humor and culture in international business | Chris Smit | TEDxLeuven
Individualism/Collectivism (I/C)
• I/C is the extent to which the self or the group
constitutes the center point of identification
for the individual.
• Individual self interest is pursued individually,
or as a part of a group.
• I vs We
• Artifacts of I/C
– Firm as “family”
– Utilitarian decision making
– Group performance
Individualism/Collectivism (I/C)
Individualism/collectivism: country examples
and organizational implications
Masculinity-Femininity (M/F)
• Refers to the extent to which traditional
masculine values, like aggressiveness and
assertiveness, are valued.
• Artifacts of M/F
– Sex Roles Minimized
– More Women In Jobs
– Interpersonal Skills Rewarded
– Intuitive Skills Rewarded
– Social Rewards Valued
Masculinity-Femininity (M/F)
Masculinity/femininity: country examples and
58
Long-Term Orientation (LTO)
• Originally called Confucian Dynamism
because of anchoring in the Confucian value
system.
• Represents such values as thrift, persistence,
and traditional respect of social obligations.
• Organizations likely to adopt longer planning
horizon, with individuals ready to delay
gratification.

Long-Term Orientation (LTO)
Country scores on Confucian dynamism (long-term orientation)

• Power distance score shows the high level of
inequalities in India.
• LTO indicates perseverant and parsimonious
• Masculinity index reflects the gap between the
genders
• UAI – the lower the ranking, the culture may be
more open to unstructured ideas and situations
• Individualism – India rates low on IDV showing
that individuals integrate into groups.
Criticism of Hofstede
Hofstede has been subject to broad criticism.
Among the criticisms:
• Single company’s data, with a large Multinational
Enterprise having a strong corporate culture.
• Time dependent results, which are an artifact of
the time of data collection and analysis.
• Business culture, not values culture, representing
a reflection of business culture at IBM and not
national culture of the countries IBM operates
within. Session - Culture 62
Criticism of Hofstede
• Non-exhaustive, doesn’t identify all the cultural
dimensions possible, but just a few.
• Partial geographic coverage, covers only a portion
of the world’s cultures and countries.
• Western bias, which values western business
ideals.
• Attitudinal rather than behavioral measures, with
no connection between employee attitudes and
employee behaviors.
• Ecological fallacy, national level data generalized
into individual behavior.
GLOBE Project Team
Identified 9 Cultural Dimensions
• Assertiveness – Degree to which individuals are
expected to be tough, confrontational and competitive
as against modest and tender
• Future Orientation – Level of importance society
attaches to future oriented behaviors, such as planning
and investing and delaying immediate gratification
• Performance Orientation – performance and
excellence in society and whether people are
encouraged to strive for continued improvement and
excellence
GLOBE Project Team
• Human Orientation – Understand the degree to
which an organization or societies encourage and reward
people for being altruistic, generous, caring and kind to
others
• Gender Differentiation – Understanding the extent to
which an organization or society resorts to role
differentiation and gender differentiation
• In-Group Collectivism – Understand the extent to
which individuals express pride, loyalty and cohesiveness
in their organizations and families

GLOBE Project Team
• Collectivism - Societal – Refers to degree to which
organizational and societal practices encourage and
reward collective distribution of resources and collective
action
• Power Distance – Degree to which organizational
members or citizens of a society expect and agree that
power should be unequally distributed
• Uncertainty Avoidance – Extent to which members of
the organization or society strive to avoid uncertainty by
relying on social norms, rituals and bureaucratic
practices, to minimize the unpredictability of future
happenings
Schwartz’s Classification
• Three polar dimensions of culture:
– Embeddedness versus Autonomy
• Embeddedness – emphasis on social relationships and
tradition
• Autonomy – finding meaning in one’s own uniqueness
– Hierarchy versus Egalitarianism
• Hierarchy – legitimacy of hierarchical role and resource
allocation
• Egalitarianism – transcendence of self-interests and
promoting others’ welfare
– Mastery versus Harmony
• Mastery – mastering the social environment via self-
assertion
• Harmony – being “at peace” with nature and society
Schwartz’s Classification
Sample country rankings on Schwartz’s dimensions

Trompenaars and Hampden-
Turner’s Classification
Consists of seven dimensions:
1. Universalism vs. particularism – rules versus
relationships
2. Collectivism vs. individualism – the group versus
the individual
3. Neutral vs. emotional
4. Diffuse vs. specific
5. Achievement vs. ascription
6. Attitudes to time
7. Attitudes toward the environment
Trompenaar’s Cultural Dimensions

Fons Trompenaars’s 7 Dimensions
• Universalism v Particularism
– Universalism says good and bad can be defined
for all circumstances; you see the world as
being black and
– white, with few shades of grey - USA, Canada,
UK, Germany, Scandinavia, The Netherlands,
Switzerland, White South Africa, and Australia
– Particularism gives greater attention to the
obligations of relationships and unique
situations. Latin, African and Asian cultures
71
• Individualism v Collectivism
– Individualism leaves people free to contribute
to the collective as and if they wish; ultimately,
however, they are free to take their own
decisions and lead their lives as they will. E.g.
UK, USA, Netherlands, Sweden, Finland,
Australia, New Zealand
– Collectivism puts the emphasis on shared
benefits and judges individuals by what they
put in. E.g. Asian, Arab, African and Latin
cultures 72
• Neutral v Emotional
– Neutral cultures spawn business relationships which
are instrumental and focus on objectives . E.g. UK,
Sweden, Netherlands, Finland, Germany, Czech
Republic
– Emotional business dealings - involving anger, joy and
passion - are acceptable. E.g. Polish, Italian, French,
Spanish, Latin American
73
• Specific v Diffuse
– Specific behaviour puts contractual before personal concerns;
Diffuse behaviour overlaps the two sets of issues, and takes
time to weave them together
– USA, UK, Switzerland, Scandinavia, Finland, Germany, White
South Africa, Netherlands and Argentina, Spain, Russia, India,
China
• Achievement v Ascription
– Achievement-oriented attitudes judge you on what you have
recently accomplished. E.g. USA, Canada, Australia Ascription-
orientation awards status according to birth, kinship, gender,
age, connections, school. E.g. France, Italy, Japan
74
National Cultural Clustering
• The grouping of cultures based on their relative
similarity.
– Ronen and Shenkar
• A synthesis of eight earlier studies
• Eight clusters: Near Eastern, Nordic, Germanic, Anglo, Latin
European, Latin American, Far Eastern, and Arab, as well as
Independent
– Huntington
• Based on historical and political observations
• Distinguishes seven civilizations: Sinic, Japanese, Hindu,
Islamic, Western, Latin American, and African

National Cultural Clustering -
Huntington’s civilization clustering

Conclusion
• The way people communicate with each other
reflects their cultural orientation.
• It is this cultural diversity that is worth
exploring
– Smith, Bond & Kagitcibasi (2006)
Source: Everything you always wanted to know about culture, Saba Safdar,
TEDxGuelphU

Making Culture Work for
Business Success
Employ Locals to
Embrace Local Build
Gain Cultural
Culture Relationships
Knowledge
Adapt Products
Help Employees Coordinate by
and Processes to
Understand You Region
Local Markets

Strategy – Culture Fit
• Created the Veg Palate – Maharaja
• Mc Donald’s • ‘Meat prepared after halal’ is printed
on the label before exporting meat to
Saudi
• Asian Paints • Became APCO in Australia, as
Australians are averse to the term Asia
• Labels on bottles supplied to Gulf to
• Coca Cola contain ‘No Alcohol’
• Introduced Hindi SMS for Indian users
• Nokia of cell phone
• Introduced Indian curry as paste &
• Domino’s Pizza offers Tandoori Pizza
Transcreation
• Transcreation is a term used chiefly by
advertising and marketing professionals to
refer to the process of adapting a message
from one language to another, while
maintaining its intent, style, tone and context.

Relate to Culture
• Confront – Your behaviors are right
• Complain – isolate your self into bubbles
• Conform - adapting your self to the new
culture/ society

References
• High & Low Context Cultures (Samovar &
Porter, 2001,80)
• Hill and Jain, International Business, TMG
• Czinkota, Ronkainen and Moffet, International
Business, Wiley

Videos to watch
• http://www.kwintessential.co.uk/intercultural/italy-
business-etiquette.html
• http://www.kwintessential.co.uk/intercultural/vid-
cast/intercultural-awareness.html
• https://www.youtube.com/watch?v=LBv1wLuY3Ko&list=PL
TNys40NmLCx0jswe1x28eGkRyfnmQXT3 - Geert Hofstede
• https://www.youtube.com/watch?v=cVqDQ7mA2nM
• https://www.youtube.com/watch?v=wxrp7u86SGs
• https://www.youtube.com/watch?v=xANs-xE_sdE

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Culture

12 December 2018 Session - Culture 7

12 December 2018 Session - Culture 8

12 December 2018 Session - Culture 10

12 December 2018 Session - Culture 13

Culture is a set of shared values, assumptions

12 December 2018 Session - Culture 14

It includes everything that a group thinks, says,

• “The collective programming of the mind which

• “A system of values and norms that are shared

12 December 2018 Session - Culture 18

• Subjective or intangible aspects of culture

12 December 2018 Session - Culture 19

12 December 2018 Session - Culture 20

High Context Cultures – Cultures in which

Low Context Cultures – Cultures in which most

12 December 2018 Session - Culture 25

Material Elements Social Structure

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12 December 2018 Session - Culture 28

Values Attitudes Behaviors

12 December 2018 Session - Culture 29

• Understanding manners and customs is

– What is considered of good taste, as

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• Religion contains key values and norms that are

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• Study on the relationship between culture and the

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