Lesson 3:

Cultural Factors
Learning
Define culture and explain
Objectives 01
its elements.
Explain how global business
02 operations are affected by cultural
differences.
03 Describe the risks inherent in
cross-cultural business
transactions.
04 Explain the importance of cross-
cultural literacy for global
business.
 01
Define culture and
explain its elements.
CULTURE
is one of the environmental uncontrollables.

For anthropologists and other behavioral

scientists, culture is the full range of
learned human behavior patterns. The
term was first used in this way by the
pioneer English Anthropologist Edward B.
Tylor in his book, Primitive Culture,
published in 1871.

A culture is a way of life of a group of people--the behaviors,

beliefs, values, and symbols that they accept, generally
without thinking about them, and that are passed along by
communication and imitation from one generation to the
next.
-Hofstede, G. (1997).
The Philippines is a culture in which East meets West.
The Filipino people have a distinct Asian background,
with a strong Western tradition.
 Level of CULTURE
International Culture refers to cultural traits that extend beyond national
boundaries. These cultural traits and patterns spread through diffusion,
migration, colonization, and globalization (Kottak and Kozaitis 2012).
National Culture is the beliefs, behavior patterns, values, cultural traits,
and institutions shared within a country.
Subcultures, are smaller groups of people who share cultural traits and
patterns within
A culture the of
is a way same
life ofcountry.
a group of people--the behaviors,
Organizational Culture
beliefs, values, is defined
and symbols as the
that they underlying
accept, generallybeliefs, assumptions,
values and ways
without of about
thinking interacting that
them, and contribute
that are passedto theby
along unique social and
psychological environment
communication of an
and imitation organization.
from one generation to the
next.
-Hofstede, G. (1997).
 Culture Facts
1. The Japanese have 3 writing formats.
They read right to left.
2. The number 13 is not unlucky in Russia.
3. In South Korea, you cannot use red ink to
write a person’s name.
4. Finland associates saunas with good
business.
5. Chinese culture emphasizes great
importance on family.
The Elements of culture
• Basic Elements of Culture
• There are some basic Cultural Elements given
below:

1. Language
2. Symbols
3. Norms
4. Values
5. Beliefs
6. Cognitive Elements
The Elements of culture
• Language
• Language reflects the nature and values of
society. There may be many sub-cultural
languages like dialects which may have to be
accounted for. Some countries have two or
three languages.
• The Philippines has more than 111 dialects
spoken, owing to the subdivisions of these
basic regional and cultural groups. -GOVPH
The Elements of culture
SYMBOLS
• Culture is a system of symbols. Symbols are anything
used to represent express and stand for an event
situation. Symbols direct to guide our behavior.
• Cross - symbolizes spirituality.

• GESTURES - NONE VERBAL SYMBOLS

• A common one is shaking hands, which is done in
some societies but not in others. It commonly conveys
friendship and is used as a sign of both greeting and
departure.
 The Elements of Culture
NORMS
• Norms are the formal and informal rules regarding
what kinds of behavior are acceptable and appropriate
within a culture.
• Norms are specific to a culture, time period, and
situation.
• FORMAL NORMS - LAWS/ REGULATIONS
• EXAMPLE: traffic laws, criminal codes.
• INFORMAL NORMS - folkways and customs.
• “Po” and “Opo” when a person is talking
 The Elements of Culture
VALUES
• Anything getting importance in our daily life becomes our
values. The origin of values is not biological but it is social
production while living in society the values develop.Values are
what we like and what we say will in our society values are the
good idea and thinking of a person.

• EXAMPLE:
• Optimism, humor, and positivity are valued traits in the
Philippines.
• Time is valuable in America
• doing your best is common values in Japan
 The Elements of Culture
BELIEFS
• Every sect within a culture having some beliefs for
cultural refuge. These beliefs are responsible from the
spiritual fulfillment of needs and wants.
• Example: Muslims believe in God, Holly Prophet, The
Day of Judgment, recitation of Holly Quran, Hajj etc.
 The Elements of Culture
Cognitive Elements
• Cognitive elements of culture are those though which
an individual know how to cope with an existing social
situation. How to survive, how make shelter from
storms and other natural calamities, how to travel and
transport etc. are the practical knowledge which make
a culture. Such knowledge is carefully thought to every
generation.
• Example:
• TRANSPORTATION: Jeepney
 02
Explain how Global Business
operations are affected by
cultural differences.
 Cultural Differences
• What is Cultural DIFFERENCES?
• Cultural differences are the various beliefs, behaviors,
languages, practices and expressions considered
unique to members of a specific ethnicity, race or
national origin.

• The task of the global marketer is to find the

similarities and differences in culture and account for
these in designing and developing marketing plans.
Failure to do so can be disasterous.
NAVIGATING THE GLOBAL MARKET
to cope with potential barriers

Etiquette
Organizational Communication
hierarchy
 Cultural Differences
• NO RESEARCH ON CULTURAL DIFFERENCES
• Home Depot: The do-it-yourself (DIY) nature of the company’s brand
failed to take off in China, which appropriate research would have
predicted. If the company had investigated, it would have known that

• DIY is often viewed with disdain in China because it is seen as a sign

of poverty.

• Subway: When the build-your-own-sandwich shop opened in China,

locals were confused about how to “build” a sandwich, didn’t believe
the tuna was really fish, and hated touching their food. Most of all, it
turned out that Chinese customers didn’t want sandwiches in the
first place, as they tend to prefer rice and pasta to bread.
 Cultural Differences
• RESEARCH ON CULTURAL DIFFERENCES
• McDonald’s: Thanks to research on Chinese consumer
habits, the fast-food chain realized that the Chinese as
a whole consume more chicken than beef. Thus, the
spicy chicken burger was offered in Chinese
McDonald’s restaurants to much success.
• KFC: When KFC looked to integrate its brand with local
tastes, the chain decided to remove coleslaw and
replace it with a localized alternative. The brand
switched coleslaw for familiar Chinese dishes such as
bamboo shoots and shredded carrots.
 Cultural Differences
• Understanding international cultural differences
in business is integral to success abroad. By
taking the time to learn about another culture,
business professionals can show respect to
their counterparts and assist in building lasting
and trusting relationships. From the ways in
which business practices differ from one
country to the next to the cultural expectations
for well-mannered behavior, learning how to
best interact with others can make all the
difference in a business transaction.
 03
Describe the risks inherent
in cross-cultural business
transactions.
 Cross-Cultural Business

• Cross culture in the business

world refers to a company's efforts
to ensure that its people interact
effectively with professionals from
other backgrounds.
 Cross-Cultural Business
• Ignorance of cultural differences can result in
weak market share, low or negative return on
investment, missed opportunities, and
reputational damage, as well as legal
challenges, productivity losses, expatriate
failure, and the premature termination of
contracts, joint ventures, and partnerships.
The misunderstandings, tensions, and biases
caused by cultural differences can even lead
to outright failure.
 THE TOP TEN CULTURAL RISKS FOR
GLOBAL BUSINESS
1. Failing to adapt global business models to
the local market
2. Failing to identify regional and subculture
differences
3. Failing to understand local business
practices
4. Failing to adapt management practices
across cultures
5. Failing to identify new opportunities
 THE TOP TEN CULTURAL RISKS FOR
GLOBAL BUSINESS
6. Failing to understand local legal and ethical
issues
7. Failing to adapt human resource
management to local markets
8. Ineffective diversity management
9. Stakeholder conflict
10. Assignment failures
 04
Explain the importance
of cross-cultural
literacy for global
business.
 Cross-Cultural Business
Cross-cultural communication is invaluable in
business. It is required for successful business
negotiations, building relationships with global
business partners and collaboration within and
outside your team. Cross-cultural
communication is not just about verbal
communication either.
 6 Tips for Improving Cross-Cultural
Business Communication
1. Develop Cultural Awareness
2. Learn a New Language
3. Choose Face-to-Face Communication
4. Open Your Mind
5. Be Flexible
6. Maintain Proper Etiquette
Thank you for
listening
References
• Hofstede, G. (1997). Cultures and Organizations: Software of the mind. New York:
McGraw Hill.
• Baidon T. et al. (1997) Global agricultural marketing management.
• https://www.fao.org/3/w5973e/w5973e00.htm#Contents

• O’Neil D., (2006).What is Culture?

• https://www2.palomar.edu/anthro/culture/culture_1.htm#:~:text=However%2C%20for
%20anthropologists%20and%20other,Primitive%20Culture%2C%20published%20in
%201871.

• https://thehaguepe.dfa.gov.ph/79-about-us/98-general-information#:~:text=The
%20Philippines%20has%20more%20than,basic%20regional%20and%20cultural
%20groups.
References
"KALAYAAN IN FULL COLOR: AN ART EXHIBITION
FEATURING FILIPINO ARTISTS IN THE NETHERLANDS”
• https://thehaguepe.dfa.gov.ph/79-about-us/98-general-
information#:~:text=The%20Philippines%20has%20more
%20than,basic%20regional%20and%20cultural%20groups.
• Elements of Culture | Basic Elements of Culture
• studylecturenotes.com/elements-of-culture-basic-elements-of-
culture/
References
How Cultural Differences in Business Impact International Affairs
https://onlinemasters.ohio.edu/blog/cultural-differences-in-business/

Why Cultural Differences in Business Matter

https://www.daytranslations.com/blog/culture-nuance-business/

THE TOP TEN CULTURAL RISKS FOR GLOBAL BUSINESS

https://cultureplusconsulting.com/2015/06/23/top-ten-cultural-risks-global-business/
LIBRE TEXT SOCIAL SCIENCES
https://socialsci.libretexts.org/Courses/HACC_Central_Pennsylvania
%27s_Community_College/ANTH_205%3A_Cultures_of_the_World_-
_Perspectives_on_Culture_(Scheib)/02%3A_What_is_Culture/
2.06%3A_Levels_of_Culture#:~:text=Anthropologists%20recognize%20three%20levels
%20of,variation%20within%20any%20given%20culture.