4-1

chapter 4

The Role of Culture

International Business, 6th E

dition

Griffin & Pustay Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Expanding Operations Across Borders

Two distinct tasks emerge:

1. To understand cultural differences and the ways they manifest themselves

2. To determine similarities across cultures and exploit them in strategy formulation

4-2

4-3

Culture

Culture is the collection of values, beliefs, behaviors, customs, and attitudes that distinguish one society from another.

It is the way of life of a people.

A society’s culture determines the rules that govern how firms operate in the society.

4-4

Characteristics of Culture

• Learned behavior (“inter” and “intra” generationally)

• Interrelated elements (soviet pre schools, Japanese child

raising practices, life time employment)

• Adaptive (Ex: change agents)

• Shared

Ethnocentrism

Ethnocentrism is the belief in the superiority of one’s own ethnic group or culture

4-6

Figure 4.1 Elements of Culture

Culture

Language

Communication

ReligionValues/attitudes

Socialstructure

4-7

Social Structure

Individuals, families, and groups(nuclear, extended, joint families, nepotism, individual vs. collective)

Social stratification(importance in hiring etc.)

Social mobilityAbility of an individual to move from one stratum of society to another.

• Read “The Impact of Japanese Culture on Business” pp 87-88 in your textbook.

4-8

4-9

Language

• 3000+ different languages worldwide

• 10,000+ different dialects

• Primary delineator of cultural groups

• Forms of “you” in the language

• More than one language indicates diversity

4-10

Translation Disasters

• KFC’s Finger Lickin’ Good

– Eat your fingers off (China)

• Pillsbury’s Jolly Green Giant

– Intimidating green ogre (Saudi Arabia)

Language Blunders

• GM’s Chevrolet division launched “Nova”. Means “no go” in Spanish. Changed it to “Cariba” –Piranha

• San Francisco based “Evite”-e-mail invitations. French and Spanish variations of the verb “evite” means “to shun or avoid”

Backtranslation

• A good local advertising agency and market research agency can help avoid many problems.

• Backtranslation: Translating a foreign language version back to the original language by a different person than the one who made the first translation.

4-13

Caterpillar Fundamental English

•Caterpillar has developed its own simplified language instruction program.

•800 words

Language

• Lingua franca: Third or “link” language that is understood by two parties who speak different native languages.

• English

• Not knowing another language is a disadvantage.

4-15

Yes and No Across Cultures

• Latin America

– meaning of “manana”

• Japan

– meaning of “yes” versus “yes, I understand”

4-16

Nonverbal Communication

Nonverbal communication may account for 80-90 percent of all information transmitted among members of a culture by means other than language.

The sender encodes using their own cultural filters and the receiver decodes using another set of filters.

4-17

Table 4.1 Forms of Nonverbal Communication 1

• Hand gestures

• Facial expression (smile)

• Posture and stance

• Clothing/hair style

• Walking behavior

• Interpersonal distance

• Touching

• Eye contact

• Architecture/interior design

• Artifacts and non-verbal symbols

• Graphic symbols

4-18

Table 4.1 Forms of Nonverbal Communication 2

• Art and rhetorical forms (dances, parades)

• Smell (perfume, incense)

• Speech rate, pitch, inflection, volume

• Color symbolism (black, white)

• Synchronization of speech and movement

• Taste, symbolism of food, oral gratification (burping etc)

• Cosmetics

• Sound signals

• Time symbolism (punctuality)

• Timing and pauses

• Silence

4-19

Gift Giving and Hospitality

•Gift giving is an important means of communication, but what is appropriate varies.

•Gift opening

•Gift wrapping

•Entertaining (invitations) (private rooms)

•Praising

•S. Korea– delivering bad news

4-20

Religion

• Imposes constraints on roles of individuals in society

• Affects the types of products consumers may purchase

• Varies from country to country

4-21

Religion

ChristianityProtestant work ethic– Max Weber

Following?

Hinduism

Buddhism

IslamSharia law, loan interest prohibited, 5 daily prayers, Ramadaan, product adaptations (Haribo Gummi bears) Role of women

Islam

• When beef and poultry is exported to Islamic countries, the animal must be killed in the “halal” method.

• Religious restrictions on products can reveal opportunities-- Non-alcoholic beverages in the Middle East– non-alcoholic beer.

• Swedish firm contracted to construct traffic system in Mecca. Restricted access to non-muslims. So they used closed circuit TV to supervise the project.

4-23

Values and Attitudes

Values are the principles and standards accepted by the members.

Attitudes encompass the actions, feelings, and thoughts that result

from those values.

4-24

Values and Attitudes

Time(“Time is money”, how quickly you get to business in a meeting etc. or flexible)

Age(amount of deference etc.)

Education(products, personnel,

advertising etc.)

Status(Means by which it is achieved varies across cultures, inherited, group affiliation etc.)

Guide to Manners

1. Don’t rush familiarity

2. Adapt to personal space

3. Respect religious values

4. Give and receive business cards carefully.

5. Use comedy sparingly

6. Watch your body language. (Ex: Japanese “bowing etiquette”)

Manners and Customs

• Potential ways in which negotiators may not be prepared:

1. the understanding of different ways of thinking

2. attention to the necessity to “save face”

3. knowledge and appreciation of the host country’s history, culture, government etc.

4. recognition of the decision-making process and the role of personal relations and personalities

5. the allocation of time for negotiations

Manners and Customs

• Do not assume cross border similarities, even when many of the indicators converge.

Ex. Per capita jam consumption in Brazil 1/10 that of Argentina’s. Custom of tea time, production of wheat and consumption of bread.

• Conrad Hotel (International division of Hilton Hotels) low initial occupancy in new Hong Kong facility. “Fung Shui” man made changes. Occupancy increased.

• Real estate company in the USA.

4-28

Theories of Culture

• Hall’s Low-Context, High-Context Approach

• Cultural Cluster Approach

• Hofstede’s Five Dimensions

4-29

Hall’s Low-Context High-Context Approach

• An approach to understanding communication based on the relative emphasis on verbal and nonverbal cues to transmit meaning.

Hall’s Low-Context High-Context Approach

• In a low context culture, the words used by the speaker explicitly convey the speaker’s message to the listener.

• In a high context culture, the context in which the conversation occurs is just as important as the words that are actually spoken and cultural cues are important in understanding what is being communicated.

4-30

4-31

Figure 4.2 High- and Low-Context CulturesG

erm

an

Sw

iss

Sca

ndin

avia

n

U.S

./ C

anad

ian

Brit

ish

Ital

ian

Spa

nish

Gre

ek

Ara

b

Vie

tnam

ese

Japa

nese

Kor

ean

Chi

nese

LowContext

HighContext

4-32

The Cultural Cluster Approach

An approach to understanding communication based on meaningful

clusters of countries that share similar cultural values

4-33

Map 4.4 A Synthesis of Country Clusters

4-34

Hofstede’s Five Dimensions

Social Orientation

Power Orientation

Uncertainty Orientation

Goal Orientation

Time Orientation

The Results of Hofstede’s Study

Source: “Global Business Today” 5th edition, Charles Hill

4-36

Social Orientation

Individualism Collectivism

Relative importance of theinterests of the individual versus

interests of the group (Refer to the Japanese concept of “Wa”)

4-37

Power Orientation

Power Respect Power Tolerance

Belief about the appropriateness of power/authority within organizations

4-38

Figure 4.4 Social Orientation and Power Orientation Patterns

4-39

Uncertainty Orientation

Uncertainty Uncertainty Acceptance Avoidance

Emotional response to uncertainty and change

4-40

Goal Orientation

Aggressive Passive(high premium on material (High value on socialpossessions, wealth, relationships, quality and assertiveness.) of life and concern for others)

What motivates people to achieve different goals

4-41

Time Orientation

Long-term Short-termoutlook outlook

The extent to which members of a culture adopt a long-term or a short-term outlook

on work and life

Acculturation and Cross-Cultural Literacy

•Acculturation is the process of adjusting and adapting to a specific culture other than one’s own. It is one of the keys to success in international business operations.

Cross-Cultural Literacy : An understanding of how cultural differences across and within nations can affect the way in which business is practiced.

4-43

Understanding New Cultures

Self-referencecriterion

AcculturationCultural literacy

Web Site Guidelines

• Choose colors carefully

• Select numbers with care. Chinese speaking cultures– 4 unlucky, 8 and 9 symbolize prosperity. Watch website address and phone number selection.

• Watch the clock. 24 hour clock (military time) or other. “Call between….”

• Avoid slang- Chances of misunderstanding increase.

• Wave the flag cautiously. Ex. US flag symbol for English language may irk British customers.

• Do the math. Provide currency conversions.

• Get feedback.

How To Do Business In Russia

1. Practice authoritative, not authoritarian, leadership.

2. Build a strong organizational culture with visible foreign elements.

3. Work to create an empowered organization, step-by-step.

4. Respect local rules, but play your own game.

5. Stand firm on major goals and be flexible on details.

6. Learn to live and manage in a crisis.

7. Recognize that corruption is omnipresent in Russia and must be managed.

8. Cultivate relationships with government agencies at all levels.

4-45

Doing Business in China

• WTO member, actively trading.

• Experienced travelers report that the primary criterion for doing business in China is technical competence. Exact information, how machines work, repairs, technology. Sellers must be prepared to answer in precise details. Send seasoned engineers and technical people. Knowledge and experience.

• Punctual. Be on time.

• Nodding usually means they understand, or are being polite. Not agreement.

Doing Business in China

• Patience critically important. Several trips may be needed. Sometimes meetings unilaterally cancelled at the last minute. Rescheduled.

• “Guanxi” – “good connections”. Lowers cost of doing business, more information, higher sales , greater opportunities.

• Be a good listener. Proud of their economic accomplishments.

• Collective society.

Doing Business in China

• Less animated. Avoid displays of affection, do not slap each other on the back. No loud , boisterous behavior. They maintain a greater physical distance than in the West.

• Business meetings typically start with pleasantries such as tea, and general conversations about the guest’s trip, accommodations, etc.

• Once the Chinese decide who and what is best, generally stick to the decisions. Initially slow. Negotiations should be viewed with a long term perspective.

Doing Business in China

• Because negotiations can involve a loss of “face” it is common to find Chinese carrying out the whole process through intermediaries. Allows them to convey their ideas without fear of embarrassment.

4-50

• All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

• Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall