Exam 2 Study Guide MHR 2000 Professor Morris Chapter 6 The Cultural Environment Reading p 155 181 Key Terms Concepts Culture of one group distinguished from other groups o Culture knowledge beliefs art law morals and customs and other capabilities o Hofstede s definition collective programming of the human mind o Culture is Confirmed by others Shared Intangible o Culture is a source of cohesion and friction in international business o Does not explain everything such as economic politics social issues etc Language o Language systematic means of communicating ideas or feelings by the use of conventionalized signs gestures marks or articulate vocal sounds o Slogan and brand names can mean different things in different languages o Grammar and structural format produce differences in languages Chinese is o Lingua franca backwards from English the punch line comes last in a thought a language developed by the franks as a mixture of Arabic Italian Greek Spanish and Portuguese today denotes any knowledge shared by people of different national and linguistic origins English is the lingua franc of business Hofstede s Dimensions of Culture o Developed from a study of 100 000 IBM employees o Power Distance PD Extent to which hierarchical differences are accepted in society and articulated in the form of deference to senior echelons Do not confuse with distribution of wealth and power in nation Low Austria Israel Denmark Sweden Norway Less centralization flatter organizational pyramids fewer supervisory panel smaller wage differentials High Philippines Mexico Venezuela India Brazil Greater centralization tall organizational pyramids more supervisory panel large wage differentials o Uncertainty Avoidance Extent to which uncertainty and ambiguity are tolerated Low Denmark Sweden Great Britain US India Less structured activities fewer rules more generalists variability greater willingness to take risks less ritualistic behavior High Greece Portugal Japan Peru France Structured activities written rules specialists standardization less risks ritualistic behavior Most critical dimension for foreign investment because of its implication on risk taking and investment o Individualism Collectivism Extent to which the self or the group constitutes the center point of identification for the individual Low Venezuela Colombia Taiwan Mexico Greece Organization as family organization depends on employee interests practices based on loyalty sense of duty and group participation High US Australia Great Britain Canada Netherlands Organization is more impersonal employees defend their own self interest practices encourage individual initiative o Masculinity Femininity o Long term Orientation Extent to which traditional masculine values such as aggressiveness and assertiveness are emphasized Explains consumer behavior Low Sweden Denmark Thailand Finland Yugoslavia Sex roles minimized organizations do not interfere with personal lives women in more qualified jobs soft intuitive skills are rewarded social rewards are valued High Japan Austria Venezuela Italy Mexico Sex roles clearly defined organizations interfere to protect their interests fewer women in qualified jobs aggression competition and justice are rewarded work is valued as central life interest Originally termed Confucian dynamism Connotes underlying meaning and business ramifications High LTO cultures organization is key to long term horizon individuals delay gratification Not one of the original dimensions from Hofstede s 1980 book result of cooperation with Michael Bond who developed Chinese Values Survey China is number one in this category Individualism collectivism has most support power distance uncertainty avoidance masculinity femininity Measures data and methodology Single company Time dependent results Business culture not values Nonexhaustive don t cover entire cultural phenomenon Western bias Partial geographic coverage o Criticism Attitudinal rather than behavioral measures Ecological fallacy Rise of a minority ethnicities in the US impacts dimensions more Corporate Culture o Ethnicity subcultures o Industry High tech industry is flexible informal and innovative most global industry Profession provides important source of cultural affiliation o Demographics Education age seniority and hierarchical level strongly affect differences in values but not differences in practices New Chinese managers are more individualistic Subcultures vary geographically making country unit less homogenous and making MNE integration more complex Not stable not consistent with cultures and can vary through time and o Ideology across regions Cultural Etiquette Stereotypes o Cultural Etiquette Set of manners and behavior that are expected in a given situation Violations are highly offensive in high uncertainty avoidance countries look at the world from a perspective shaped by our own o Cultural Stereotypes Ethnocentric culture and upbringing shapes mental maps perceptions of world around us Stereotypes Auto stereotypes others beliefs about others their attitudes and behavior how we see ourselves as a group distinguished from US stereotypes Distrust in others and individual change is possible Man mastering predictable environment situations are problems to be resolved Emphasis on doing than being Present to slightly future orientation immediate gratification but change is constant Informal materialistic nondeterministic egalitarian individualistic achievement action oriented open direct practical efficient litigious culturally ignorant monolingual Convergence and Divergence Hetero stereotypes how we are seen by others o Convergence hypothesis assumes that the combination of technology and economies is making countries more alike and that with global integration of markets and the diffusion of MNC practices convergence will accelerate Proliferation of global products McDonalds Coca Cola Forces migration developments in communications transportation and travel o Divergence hypothesis assumes that countries will continue to maintain their distinctive characteristics and that those differences may even be accentuated over time Chapter 19 Social Responsibility and Corruption in the Global Marketplace Reading 513 532 Key Terms Concepts Economic Legal Political o Economic Conform to economic and social development policies Do no disturb balance of payments or currency exchange rates Cooperate with government policies about local equity participation Do not dominate
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