Cultural And International

Business
Presented Ɓy
 Fatimah Raja
 Nida Mukhtar
 Aiman Afzal
 Ayesha
 Rubab
 Aneela Ijaz
What Is Culture
Culture
 Culture represents the specific learned norms of a
society, based on attitudes, values and beliefs. Major
problems of cultural collision may occur because a firm
implements practices that do not reflect local customs
and values and/or its employees are unable to accept or
adjust to foreign behaviors.
IDENTIFICATION AND DYNAMICS
OF CULTURES
 Cultures consist of people who share attitudes, values
and beliefs. Cultures are dynamic; they evolve over
time.
A. The Nation as a Point of Reference
B. Cultural Formation and Dynamics
C. Language as a Cultural Stabilizer
D. Religion as a Cultural Stabilizer
A-The Nation as a Point of Reference
Similarity among people is both a cause and an effect of
national boundaries; in addition, laws apply primarily
along national lines. National identity is perpetuated
through the rites and symbols of a country and a common
perception of history. At the same time, various
subcultures and ethnic groups may transcend national
boundaries. In some instances, similarities may link
groups across different nations more closely than certain
groups within a nation.
The Nation as a Point of Reference
B-Cultural Formation and Dynamics
 Culture is transmitted in a variety of ways, but by age
10 most children have their basic value systems firmly
in place. Nonetheless, individual and societal values
and customs often evolve in response to changing
economic and social realities. Change brought about by
imposition is known as cultural imperialism. The
introduction of certain elements of an outside culture
may be referred to as creolization,
indigenization, or cultural diffusion.
Language as a Cultural Stabilizer
C-Language as a Cultural Stabilizer
 While a common language within a country serves as a
unifying force, language diversity may undermine a
firm’s ability to conduct business on a national level.
Isolation from other groups, especially because of
language, tends to stabilize cultures. Some countries
see language as such an integral part of their cultures
that they attempt to regulate the use or inclusion of
foreign words.
D-Religion as a Cultural Stabilizer
 Religion can be a strong shaper of values and beliefs
and is a major source of both cultural imperatives and
taboos. Still in all, not all nations that practice the same
basic religion place identical constraints on business.
Historically, violence among religious groups has
disrupted local and international business activities in
both home and host country firms.
Religion as a Cultural Stabilizer
Religions in world
BEHAVIORAL PRACTICES
AFFECTING BUSINESS
A. Social Stratification Systems
B. Motivation
C. Relationship Preferences
D. Risk-taking Behavior
A. Social Stratification Systems
 People fall into social stratification systems according
to group memberships that in turn determine a
person’s degree of access to economic resources,
prestige, social relations and power. Ascribed group
memberships are defined at birth and are based on
characteristics such as gender, family, age, caste and
ethnic, racial, or national origin. Acquired group
memberships are based on one’s choice of affiliations,
such as political party, religion and professional
organizations. Social stratification affects both
business strategy and operational practices.
Social Stratification Systems (cont.,)

1- Role of Competence
2- Gender Based Group
3- Age Based Group
4-Family Based Group
5-Occupation
1.Role of Competence
Some nations base a person’s eligibility for jobs
and promotions primarily on competence, but in
others, competence is of secondary importance. In
more egalitarian societies, group membership is
less important, but in more closed societies, group
membership may dictate one’s access to education,
employment, etc.
2-Gender-Based Groups
There are strong country-specific
differences in attitudes toward males
and females, as well as vast
differences in the types of jobs
regarded as male or female.
Nonetheless, barriers to employment
based on gender are easing in many
parts of the world.
3-Age-Based Groups
Many cultures assume age and
wisdom are correlated; thus, they
usually have a seniority-based system
of advancement. In others, there is an
emphasis on youth, particularly in the
realm of marketing. All in all, age
represents a complex, dynamic issue.
4-Family-Based Groups
In societies where there is low trust
outside the family (e.g., China and
southern Italy), small family-run
companies are generally more successful
than large firms. However, this may
impede the economic development of
the country if large-scale operations are
necessary to compete globally.
5-Occupation
In every society certain occupations are perceived
as having greater economic and social prestige than
others. Although some perceptions are universal,
there are significant national and cultural attitudes
about the desirability of specific occupations as
well as the desire to work as an entrepreneur rather
than as an organizational employee
Occupations
B. Motivation
 Employees who are motivated to work long and hard
are generally more productive than those who are not.
On an aggregate basis, this will have a positive effect
on economic development and national
competitiveness
B. Motivation
1-Materialism and Leisure
2-Expectation of Success and Reward
3-Masculinity Index
4-Need Hierarchy
1-Materialism and Leisure

 People are motivated to work for various reasons,

including the desire for achievement. In some societies,
people desire less leisure time than others. In 1904
sociologist Max Weber claimed that predominantly
Protestant Western economies were the most
economically developed because of the emphasis on hard
work and investment. Weber identified this view of work
as a path to salvation as the Protestant ethic.
 In rural India, however, where minimal material
achievement is a desirable end, added productivity will
likely be taken in the form of leisure, rather than income.
2-Expectation of Success and Reward

Although the same tasks performed in different countries

will have different probabilities of success as well as
different rewards for success and different consequences
for failure, people will usually work harder at any task
when the reward for success is greater than the
consequence of failure.
The greatest enthusiasm for work exists when high
uncertainty of success is combined with the likelihood of
a very positive reward for success and little or none for
failure.
3-Masculinity Index
Hofstede’s study of employees from 50 countries defined a
high masculinity index as describing someone who holds the belief
that it is better to live to work than to work to live. However, such
attitudes, as well as a preference for promotion and profitability over
quality of life and environment, are not shared by all. Those
differences of opinion present major challenges for international
managers.
The masculinity index was conceived by
sociologist Geert Hofstede, and it describes the
degree to which masculine values like
competitiveness and the acquisition of wealth are
valued over feminine values like relationship
building and quality of life.
4-Need Hierarchy

Maslow’s hierarchy of needs states that people will try to

fulfill lower-order physiological needs before satisfying
(in order) their security, social, esteem and self-
actualization needs.
People from different countries attach different degrees of
importance to needs and may even rank some of the
higher-order needs differently
C. Relationship Preferences
In social stratification systems, not everyone within a
given reference group is necessarily an equal. In
addition, there may be strong or weak pressures for
conformity within one’s group. Both of these
differences influence management style and marketing
behavior.
1. Power Distance
2. Individualism vs. Collectivism
1. Power Distance
describes the relationship between superiors and
subordinates. When power distance is high, the
management style is generally distant, i.e., autocratic
or paternalistic; when it is low, managers tend to
interact with and consult subordinates as part of the
decision-making process. [For example, Malaysians
typically exhibit high power distance, while
Austrians typically exhibit low power distance.]
2. Individualism vs. Collectivism.
Nationalities differ as to whether they prefer an autocratic or a
consultative working relationship, whether they want set rules
and how much they compete or cooperate with fellow
workers.
Individualism is the trait that indicates a person’s desire for
personal freedom, time and challenge and one’s low
dependence on the organization; self-actualization is a prime
motivator.
On the other hand, collectivism indicates a person’s desire for
training, collaboration and shared rewards, i.e., one’s high
dependence on and allegiance to the organization. [For
example, Americans tend to be individualistic, while the
Japanese tend to be collectivist.]
D. Risk-taking Behavior

 Nationalities differ in their attitudes toward risk-

taking. Uncertainty avoidance, trust and fatalism
are examined here.
 1.Uncertainty Avoidance

2.Trust
3.Fatalism.
1.Uncertainty Avoidance
describes one’s acceptance of risk. When the score
is high, people need precise directions and long-
term assurances; when the score is low, people are
willing to accept the risk of trying new products or
moving to new jobs. [For example, Greeks tend to
exhibit high uncertainty avoidance, while Swedes
tend to be low on the scale.]
2. Trust.
Trust represents one’s belief in the
reliability and honesty of another.
Where trust is high, there tends to be a
lower cost of doing business. [For
example, Norwegians tend to exhibit a
high degree of trust, whereas
Brazilians tend to be skeptical.]
3.Fatalism.
Fatalism represents the belief that
events are predestined. Such a
belief may discourage people from
working hard to achieve an
outcome or accepting
responsibility.
No Fatalism
V. STRATEGIES FOR DEALING
WITH CULTURAL DIFFERENCES
Once a company identifies cultural differences in the


foreign countries in which it operates, must it alter its

customary practices? A. Making Little or No
Adjustment
B. Communications
C. Culture Shock
 A-Making Little or No Adjustment

Some countries are relatively similar to one another
because they share the same language, religion,
geographical location, ethnicity and/or level of
economic development. If products and operations do
not run counter to deep-seated attitudes, or if the host
country is willing to accept foreign customs as a trade-
off for other advantages, significant adjustments may
not be required. Generally, a company should expect
to have to consider fewer adjustments when moving
within a culturally similar cluster than when it moves
from one distinct cultural cluster to another.
B-Communications

Problems in communications may arise when moving

from one country to another, even though both
countries share the same official language, as well as
when moving from one language to another.

1.Spoken and Written Language

2.Silent Language
1.Spoken and Written Language
Translating one language into another can be very
difficult because
(a) some words do translate directly,
(b) the common meaning of words is constantly
evolving,
(c) words may mean different things in different
contexts and
(d) a slight misuse of vocabulary or word placement
may change meanings substantially. Poor translations
may have tragic consequences
2.Silent Language.
incorporates the wide variety of nonverbal cues through
which messages are sent—intentionally or
unintentionally. Color associations, the distance between
people during conversations, the perception of time and
punctuality, a person’s perceived status and kinesics (body
language) are all significant. Misunderstandings in any of
these areas can have a very negative impact
C . Culture Shock

 Culture shock represents the trauma one

experiences in a new and different culture because
of having to learn to cope with a vast array of new
cues and expectations. Reverse culture
shock occurs when people return home, having
accepted the culture encountered abroad and
discovering that things at home have changed
during their absence.
The Globalization of Culture