Module II

Cross-Cultural
Business
DR. Ghada Mohamed AbdelFattah
ghada.Abdelfattah@alexu.edu.eg
What is Culture?

Set of values, beliefs, rules, and institutions held by

a specific group of people

Ethnocentricity Cultural literacy

Belief that one’s own Detailed knowledge of a
ethnic group or culture culture that enables a
is superior to that of person to function
others effectively within it

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publishing as Pearson International Business 5e Chapter 2 - 2
Culture Matters:
Creating a Global Mind-set

Cultural Bridging
Adaptability the Gap

Building Flexibility
Global Mentality Is Key

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Nations and Culture

National culture
Nation states build museums and monuments to
preserve the legacies of important events and people

Subculture
Group of people that share a unique
way of life within a larger culture
(language, race, lifestyle, attitudes, etc.)

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Components of Culture

Physical Values &

environments attitudes

Manners &
Education Culture customs

Personal
communication Social structure
Religion

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 Values and Attitudes

Values Attitudes
Positive or negative
The ideas, beliefs, and
evaluations, feelings, and
customs to which tendencies people hold
people are emotionally toward objects or concepts
attached

• Freedom • Time
• Responsibility • Work
• Honesty • Cultural change

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Manners and Customs

Manners Customs
Appropriate behavior, Traditional ways or
speech, and dressing behavior in specific
in general circumstances

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Social Structure

Social structure
Culture’s groups, institutions, social positions, and resource
distribution

Social stratification
Process of ranking people into social layers

Social mobility
Ease of moving up or down a culture's "social ladder"
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Education

Cultures pass on traditions, customs, and values through

schooling, parenting, group memberships, etc.

Education level
Well-educated attract high-paying jobs, while poorly educated
attract low-paying manufacturing jobs

Brain drain
Departure of highly educated people from one profession,
geographic region, or nation to another

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Physical and Material Culture

These influence a culture’s development and pace of change

Topography
Physical features characterizing the surface of a geographic region

Climate
Weather conditions of a geographic region

Material Culture
Technology used to manufacture goods and provide services
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International Business 5e
 Hofstede Framework

1- Individualism 2- Power
vs. collectivism distance

3- Achievement
vs. nurturing

4- Uncertainty 5- Long-term
avoidance orientation

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1- Individualism versus Collectivism: Identifies the extent to
which a culture emphasizes the individual versus the
group.

a. Individualist cultures value hard work, entrepreneurial

risk-taking, and freedom to focus on personal goals.

b. Collectivist cultures feel a strong association to groups,

including family and work units. The goal is to maintain
group harmony and work toward collective rather than
personal goals.
2- Power Distance: Identifies the degree to which a culture accepts
social inequality among its people.

a. Large power distance is characterized by inequality between

superiors and subordinates. Organizations are hierarchical, with
power derived from prestige, force, and inheritance.

b. Small power distance means equality, with prestige and rewards

equally shared between superiors and subordinates. Power
derives from hard work and is considered more legitimate.
3- Uncertainty Avoidance: Identifies the extent to which a culture avoids
uncertainty and ambiguity.

a. Cultures with large uncertainty avoidance value security and place faith
in strong systems of rules and procedures in society. Also tend to have
lower employee turnover, formal rules for employee behavior, and more
difficulty implementing change.

b. Low uncertainty avoidance cultures are more open to change and new
ideas.
4- Achievement versus Nurturing: Identifies the extent to
which a culture emphasizes personal achievement and
materialism versus relationships and quality of life.

a. Cultures scoring high are characterized by assertiveness

and the accumulation of wealth, and entrepreneurial drive.

b. Cultures scoring low have relaxed lifestyles, with more of

a concern for others than material gain.
5- Long-term Orientation: Indicates a society’s time
perspective and an attitude of overcoming
obstacles with time. It attempts to capture the
differences between Eastern and Western cultures.

a. Cultures scoring high (strong long-term orientation)

value respect for tradition, thrift, perseverance, and
a sense of personal shame.

b. Cultures scoring low are characterized by

individual stability and reputation, fulfilling
social obligations, and reciprocation of
greetings and
 Power Distance &
Individualism vs. Collectivism

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publishing as Pearson International Business 5e Chapter 2 - 17
 Power Distance &
Uncertainty Avoidance

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 Assignment II

• Search for other frameworks used to assess country culture that

might be of help to international managers.