International Business 9eChapter 4How Do Cultural Differences Affect International Business?What Is Culture?What Are Values And Norms?How Are Culture, Society, And The Nation-State Related?What Determines Culture?Slide 8What Is A Social Structure?How Are Individuals And Groups Different?Slide 11Slide 12What Is Social Stratification?Slide 14Slide 15How Do Religious And Ethical Systems Differ?Slide 17Slide 18What Is Christianity?What Is Islam?What Is Hinduism?What Is Buddhism?What Is Confucianism?What Is The Role Of Language In Culture?Slide 25What Is The Role Of Education In Culture?How Does Culture Impact The Workplace?Slide 28Slide 29Slide 30Was Hofstede Right?Does Culture Change?What Do Cultural Differences Mean For Managers?Slide 34International Business 9eBy Charles W.L. HillMcGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.Chapter 4Differences in Culture4-3How Do Cultural Differences Affect International Business? Understanding and adapting to the local cultural is important international companies cross-cultural literacy - an understanding of how cultural differences across and within nations can affect the way in which business is practiced cross-cultural literacy is important for business successA relationship may exist between culture and the costs of doing business in a country or regionMNEs can be agents of cultural changeMcDonald’s4-4What Is Culture?Culture - a system of values and norms that are shared among a group of people and that when taken together constitute a design for livingwherevalues are abstract ideas about what a group believes to be good, right, and desirablenorms are the social rules and guidelines that prescribe appropriate behavior in particular situationsSociety - a group of people who share a common set of values and norms4-5What Are Values And Norms?Values provide the context within which a society’s norms are established and justified and form the bedrock of a cultureNorms include folkways - the routine conventions of everyday lifemores - norms that are seen as central to the functioning of a society and to its social life4-6How Are Culture, Society, And The Nation-State Related?The relationship between a society and a nation state is not strictly one-to-one Nation-states are political creations can contain one or more culturesA culture can embrace several nations4-7What Determines Culture?The values and norms of a culture evolve over timeDeterminants include religionpolitical and economic philosophieseducationlanguagesocial structure4-8What Determines Culture?Determinants of Culture4-9What Is A Social Structure?Social structure - a society’s basic social organizationConsiderthe degree to which the basic unit of social organization is the individual, as opposed to the groupthe degree to which a society is stratified into classes or castes4-10How Are Individuals And Groups Different? A group is an association of two or more people who have a shared sense of identity and who interact with each other in structured ways on the basis of a common set of expectations about each other’s behaviorindividuals are involved in families, work groups, social groups, recreational groups, etc.Societies place different values on groups4-11How Are Individuals And Groups Different? In Western societies, there is a focus on the individualindividual achievement is common dynamism of the U.S. economyhigh level of entrepreneurshipBut, creates a lack of company loyalty and failure to gain company specific knowledgecompetition between individuals in a company instead of than team buildingless ability to develop a strong network of contacts within a firm4-12How Are Individuals And Groups Different? In many Asian societies, the group is the primary unit of social organization discourages job switching between firmsencourages lifetime employment systemsleads to cooperation in solving business problemsBut, might also suppress individual creativity and initiative4-13What Is Social Stratification?All societies are stratified on a hierarchical basis into social categories, or social strataindividuals are born into a particular stratumMust consider1. mobility between strata2. the significance placed on social strata in business contexts4-14What Is Social Stratification?1. Social mobility - the extent to which individuals can move out of the strata into which they are borncaste system - closed system of stratification in which social position is determined by the family into which a person is bornchange is usually not possible during an individual's lifetime class system - form of open social stratification position a person has by birth can be changed through achievement or luck4-15What Is Social Stratification?2. The significance attached to social strata in business contactsclass consciousness - a condition where people tend to perceive themselves in terms of their class background, and this shapes their relationships with othersan antagonistic relationship between management and labor raises the cost of production in countries with significant class differences4-16How Do Religious AndEthical Systems Differ?Religion - a system of shared beliefs and rituals that are concerned with the realm of the sacredFour religions dominate society1. Christianity2. Islam3. Hinduism4. Buddhism5. Confucianism is also important in influencing behavior and culture in many parts of Asia4-17How Do Religious AndEthical Systems Differ?World Religions4-18How Do Religious AndEthical Systems Differ?Ethical systems - a set of moral principles, or values, that are used to guide and shape behaviorReligion and ethics are often closely intertwinedex. Christian or Islamic ethics4-19What Is Christianity?Christianity the world’s largest religionfound throughout Europe, the Americas, and other countries settled by Europeans the Protestant work ethic (Max Weber, 1804) hard work, wealth creation, and frugality is the driving force of capitalism4-20What Is Islam?Islamthe world’s second largest religion dating to AD 610there is only one true omnipotent God an all-embracing way of life that governs one's being associated in the Western media with militants, terrorists, and violent upheavalsbut, in fact teaches peace, justice, and