CHARACTERISTICS OF CULTURE

1. Culture is learned
2. Culture is shared
3. Culture is a way of life
4. Culture is integrated
5. Culture is Symbolic
6. Culture is Dynamic
7. Culture is universal
8. Culture is unconscious
DETERMINANTS OF CULTURE
THE VARIABLES OF INTERNATIONAL BUSINESS
ENVIRONMENT

 Political risks
 Economic risks

 Legal system

 National Culture

 Infrastructure and technology

BUSINESS- CULTURAL INTERFACE CAN BE UNDERSTOOD
FROM (PAGE 27):

1. Culture creates people

2. Culture and globalisation
3. Attitude to business
4. Attitude to work
5. Education
6. Family
7. Marriage
8. Cultural resources
9. Religion and business
10. Time dimension
RISKS OF SELF REFERENCE CRITERIA
 Can lead to failure of the product.
 Failing to recognize the need to take action.

 Discounting the cultural differences that exist among countries.

 Reacting to a situation in a way offensive to your hosts.

 Ethnocentrism and the SRC can influence an evaluation of the

appropriateness of a domestically designed marketing mix for a
foreign market. The most effective way to control the influence of
ethnocentrism and the SRC is to recognize their effects on our
behavior.
 Failing to react in time due to unawareness of the
importance/necessity for action.
FACTORS AFFECTING ORGANIZATIONAL CULTURE
 Organizational objectives and Goals.
 Competitive Challenge
 National variables and
 Socio cultural variables like different religion, language, education
etc.

 Also called corporate culture, it's shown in

(1) the ways the organization conducts its business, treats its employees,
customers, and the wider community,
(2) the extent to which freedom is allowed in decision making, developing
new ideas, and personal expression,
(3) how power and information flow through its hierarchy,
(4) how committed employees are towards collective objectives.
STAGES OF CULTURAL ADAPTATION
1. Honeymoon Phase
2. Cultural shock
3. Adjustment phase. This is where they learn to accept the
culture and to change their negative attitude to a positive one.
4. Acceptance and Adaptation phase. This is where they will
feel at home and become involved in activities and may enjoy
some of that countries customs.
5. Reentry shock. This is experienced upon returning to the home
country and the return may follow with initial euphoria, crisis or
disenchantment. It may be hard to readjust and may feel like
they are not accepted.
VARIOUS TRAITS OF CULTURE
 Language
Definition: The system of words or signs that people use to express
thoughts and feelings to each other
 Each country having its own spoken languages
Sign language as a way of deaf people communicating with each other.
Language being used help us communicate with each other and better
understand peoples thoughts and feelings.
 History: A chronological record of significant events often including a
explanation of their causes.
 Religious beliefs
 Education: Formal and informal
 Security and Protection
 Relationships
 Political and Social Organizations
IMPACT OF MIGRATION ON BUSINESS
 Cheap Labour:
 Skilled Labour:

 Economic growth

IMPACT OF MIGRATION ON CULTURE

 Cultural enrichment
 Cultural diversity
EMERGENCE OF BORDERLESS WORLD
Reasons:
 Technological Innovation

 Globalization

 Migration

Emergence of borderless world and global culture

 Cultural Enrichment

 Cultural Diversity

 Art and literature

 It can lead to convergence of culture.

BUSINESS IMPLICATIONS OF CULTURAL DIFFERENCES
Pros
 Cultural learning takes place, which paves way towards better
performance.
 Managing diversity: Management of team having members from
different countries.
 Innovative decision making: e.g. An American professional brings with
him a totally different idea about business to an Indian Company.
 Leads to more productivity.

Cons
 Brain drain

 Cultural dilution.
 1) Language
 2) Customs and Taboos
 3) VALUES
 4) Business Norms
 5) Religious Beliefs and Celebrations
 Strategy One: One Product, One Message, Worldwide
 Strategy' Two: Product Extension—Communications Adaptation
 Strategy Three: Product Adaptation—Communications Extension
 Strategy Four: Dual Adaptation
 Strategy Five: Product Invention (Innovation)
1) Product:
 Core level
 Level two: features, design, brand name and packaging
 Level three: guarantee, warranty and instructions

2) Place
 There are many varieties of channels one can choose from to distribute one’s
products in the international marketing system. Different countries and
different industries have different system.
 In any literature on international distribution channels, Japan is widely quoted
as having one of the most complicated distribution networks in the world. Its
distribution system is rooted in the cultural history of Japan of maintaining
relationships, social equity, harmony and high quality service.
3) Pricing (10)
 Factors responsible for pricing: Cost of production and marketing, market
demand, competition, perceived value, price negotiation, exchange rates,
tariffs, tax policies, excise duties, quotas.
 Important cultural factor influencing pricing: (6)
 country of origin stereotype, festival, distribution system, brand value, brand
equity, bargaining and haggling, even value pricing

4) Promotion
 Components: Advertisement, personal selling and sales promotion
 Factors affecting global marketing
 Ethnocentrism
 Stereotypes: COO and Product Country Stereotype
 Linguistic
 Legal aspects
 Cultural diversity
 Media channels
 Spending capacity

 Explained using Hofstede's model:

 Internal layer: Values, idea and principles
 External layer: symbols, heroes, and rituals
Factors influencing IHRM

1. Culture of Host country and Parent Country

1. Hofstede’s Dimension of Culture

2. Education & skill level

3. Type of Industry
4. Economic system
5. Political and legal system
6. Organisation culture
Hall’s High Context and Low Context culture-
Communication

 High Context Culture

 communication is implicit
 Emphasis placed on interpretation of context than on words
 Emphasis on non-verbal communication
 e.g. Japan, Africa, Asian countries, South American, Latin
European
 Low Context Culture
 Communication is explicit
 Emphasis on words, whole message understood from words
 Low importance for context or non verbal communication
 E.g. US, North European, Australia, New Zealand
 EDWARD HALL MODEL
 Termed ‘silent Language’ – non verbal intercultural
communication
 Different silent languages identified
1. Language of time – Monochronic (focus one thing at a time) and
Polychronic
2. Language of Space –layout and office spaces- most important
peron has biggest office space in a company
3. Language of things – importance -possession of material things
in culture
4. Language of friendship – pattern of making friencs
5. Language of agreements- US detailed writtena greements
6. High context and low context culture
HOFSTEDE’S DIMENSION OF
CULTURE
 Individualism/ Collectivism- act as individuals
 US- highly individualistic
 Power Distance- unequal distribution of power and inequality, High
in India, low- Scandinavian countries
 Uncertainty Avoidance- how culture handles unpredictability
 Masculinity/Femininity- Achievement, competition, moneymaking
Vs value for relationships, care US-masculine, Scandinavian-
Feminine
 Long-term/Short-term Orientation- saving and future focused Vs
fullfilling present social obligations
 US- short term
 India- Long term
GLOBE (GLOBAL LEADERSHIP AND ORGANISATIONAL
BEHAVIOUR EFFECTIVENESS) CULTURAL DIMENSION

1. Assertiveness
2. Future orientation
3. Performance orientation
4. Human orientation
5. Gender differentiation
6. In-group Collectivism
7. Collectivism
8. Power distance
9. Uncertainty avoidance
KLUCKHOHN AND STRODTBECK
1. Nature of people: evil, good or mixed
2. Person’s relationship to nature: dominant, harmony, subjugation
3. Person’s relationship to others: hierarchical, individualistic,
collectivist
4. Modality of human activity: doing, being, thinking
5. Temporal focus of human activity: future, present, past
6. Conception of space: private, public, mixed
TROMPENAARS’
1. Universalism vs particularism
2. Communitarism vs individualism
3. Neutral vs emotional
4. Specific vs diffuse
5. Achievement vs ascription
6. Internal vs external
7. Sequential vs synchronic