International Business

Part Two
Comparative Environmental
Frameworks
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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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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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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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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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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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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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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10
Issues in Work Motivation

 Materialism and Motivation

 Expectation of Success and Reward
 Assertiveness: The Masculinity–Femininity Index
 Hierarchies of Needs

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Factors Affecting Relationship
Preferences

 Power distance: general relationship between superiors and

subordinates.
 Individualism vs. collectivism: degree of dependence on
organization

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12
Factors Affecting Risk-taking
Behavior

 Uncertainty avoidance
 Trust
 Future orientation
 Fatalism

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13
Factors Affecting Information
and Task Processing

 Perception of cues
 Obtaining Information: Low-Context versus High-Context
Cultures
 Information Processing

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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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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

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