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Differences in culture, International Management Strategies, Hofstede DimensionsTRANSCRIPT
Go Global !Global Economic Environment :Global Economic Environment :Differences in CultureDifferences in Culture
By
Stephen OngStephen OngEdinburgh Napier University Business School
[email protected] Professor, College of Management, Shenzhen
University25 August 2012
AgendaAgenda
1.1. CultureCulture2.2. Hofstede’s Hofstede’s
DimensionsDimensions3.3. Managing Managing
diversitydiversity
Learning Objectives To analyse the factors
which contribute to the culture of a nation or region.
To assess research findings on culture and their relevance to international business management.
To discuss appropriate methods of preparing international managers to handle the cultural differences that they may encounter in the course of their work.
Society, Culture and Global Consumer Culture
• Culture–ways of living, built up by a group of human beings, that are transmitted from one generation to another
• Culture has both conscious and unconscious values, ideas, attitudes, and symbols
• Culture is acted out in social institutions
• Culture is both physical (clothing and tools) and nonphysical (religion, attitudes, beliefs, and values)
Social Institutions
• Family• Education• Religion• Government• Business
These institutions function to reinforce cultural norms
Material and Nonmaterial Culture
Physical Culture
– Clothing – Tools– Decorative
art– Body
adornment– Homes
Abstract Culture
– Religion– Perceptio
ns– Attitudes– Beliefs– Values
Society, Culture, and Global Consumer Culture
“Culture is the collective programming of the mind that distinguishes the members of one category of people from those of another.”
Geert Hofstede
A nation, an ethic group, a gender group, an organization, or a family may be considered as a category.
Society, Culture, and Global Consumer Culture
• Global consumer cultures are emerging– Persons who share meaningful sets of consumption-related symbols– Pub culture, coffee culture, fast-food culture, credit card culture
• Primarily the product of a technologically interconnected world– Internet– Satellite TV– Cell phones
Attitudes, Beliefs, and Values
• Attitude–learned tendency to respond in a consistent way to a given object or entity
• Belief–an organized pattern of knowledge that an individual holds to be true about the world
• Value–enduring belief or feeling that a specific mode of conduct is personally or socially preferable to another mode of conduct
Religion
• The world’s major religions include Buddhism, Christianity, Hinduism, Islam, and Judaism and are an important source of beliefs, attitudes, and values.
• Religious tenets, practices, holidays, and history impact global marketing activities.
Aesthetics
• The sense of what is beautiful and what is not beautiful
• What represents good taste as opposed to tastelessness or even obscenity
• Visual–embodied in the color or shape of a product, label, or package
• Styles–various degrees of complexity, for example, are perceived differently around the world
Aesthetics and Color
• Red–associated with blood, wine-making, activity, heat, and vibrancy in many countries but is poorly received in some African countries.
• White–identified with purity and cleanliness in the West, with death in parts of Asia.
• Gray–means inexpensive in Japan and China, but high quality and expensive in the U.S.
The Meaning of Colour
Red signifies good luck and celebration in China
Yellow indicates a merchant in India
In England and the U.S., “Something Blue” on a bride’s garter symbolizes fidelity
Dietary Preferences
Domino’s Pizza pulled out of Italy because its products were seen as“too American” with bold tomato sauce and heavy toppings.
Subway had to educate Indians about the benefits of sandwiches because they do not normally eat bread.
Language and Communication
Linguistic Category Language ExampleSyntax-rules of sentence formation
English has relatively fixed word order; Russian has relatively free word order.
Semantics-system of meaning
Japanese words convey nuances of feeling for which other languages lack exact correlations; ‘yes’ and ‘no’ can be interpreted differently than in other languages.
Phonology-system of sound patterns
Japanese does not distinguish between the sounds ‘l’ and ‘r’; English and Russian both have ‘l’ and ‘r’ sounds.
Morphology-word formation
Russian is a highly inflected language, with six different case endings for nouns and adjectives; English has fewer inflections.
Language and Communication
Pronounced “shu”Sounds like “I hope you have bad luck”.
Sounds like “break into pieces or fall apart”.
Sounds like “death” or “the end”.
In China, it is bad luck to give these three items.
Introduction
Culture refers to the learned norms based on values, attitudes, and beliefs of a group of people
Culture is an integral part of a nation’s operating environmentevery business function is subject to
potential cultural differences
Introduction
Cultural Factors Affecting International Business Operations
Introduction
Companies need to decide when to make cultural adjustments
Fostering cultural diversity can allow a company to gain a global competitive advantage by bringing together people of diverse backgrounds and experience
Introduction
But, cultural collision can occur when a company implements practices that are less effective or when employees encounter distress because of difficulty in accepting or adjusting to foreign behaviors
Cultural Awareness
Problem areas that can hinder managers’ cultural awareness…Subconscious reactions to circumstances
The assumption that all societal subgroups are similar
Managers that educate themselves about other cultures have a greater chance of succeeding abroad
Culture and the Nation-State
The nation is a useful definition of society because similarity among people is a cause and an effect of national boundaries
laws apply primarily along national lines
language and values are shared within borders
rites and symbols are shared along national lines
Culture and the Nation-State
Country-by-country analysis can be difficult because subcultures exist within nations
similarities link groups from different countries
Need to focus on relevant groups
Characteristics of Culture
Primary Characteristics
Learned Interrelated
SharedAdaptive
How Cultures Form and Change
Cultural value systems are established early in life but may change through
choice or imposition
cultural imperialism
contact with other cultures
cultural diffusion
creolization
Elements of Culture
Social Structure
The Roles The Roles of of
Individuals Individuals in Societyin Society
Social Social StratificatioStratificatio
n and n and MobilityMobility
Behavioural Practices Affecting Business : Social Stratification
Social ranking is determined by
an individual’s achievements and qualifications
an individual’s affiliation with, or membership in, certain groups
Family StructureFamily StructureIndividualismIndividualismGroup Service Group Service
Individuals, Families, and Groups
Social StratificationSocial Stratification Group affiliations can be
Ascribed group memberships
based on gender, family, age, caste, and ethnic, racial, or national origin
Acquired group memberships
based on religion, political affiliation, professional association
Two other factors that are important education and social connections
Language: Cultural Diffuser and Stabilizer
A common language within a country is a unifying force
A shared language between nations facilitates international businessNative English speaking countries account
for a third of the world’s production
English is the international language of business
Language: Cultural Diffuser Language: Cultural Diffuser and Stabilizerand Stabilizer
Distribution Of The World’s Major LanguagesDistribution Of The World’s Major Languages
Language: Cultural Diffuser and Stabilizer
Major Language Groups: Population and Output
Functions of LanguageFunctions of Language
Delineates Cultural Groups
Thought Patterns
Cultural Values
Acculturation
Diversity
Cultural Aspects of Language
CompetitiveAdvantage
Lingua Franca
Saying “Yes” or “No”
Translation
Effects of Religion and Values on International Businesses
Religion
Impact of Religion on International Business
Legal SystemHomogeneityTolerance
Copyright © 2013 Pearson Education, Inc. publishing as
Prentice HallChapter 4 - 41
TimeTime
StatusStatusEducationEducation
AgeAge
Values and Attitudes
Religion: Cultural StabilizerReligion: Cultural Stabilizer
Religion impacts almost every business function
Centuries of profound religious influence continue to play a major role in shaping cultural values and behaviourmany strong values are the result of a
dominant religion
Religion: Cultural Stabilizer
Distribution Of The World’s Major ReligionsDistribution Of The World’s Major Religions
Work Motivation
The motivation to work differs across cultures Studies show
the desire for material wealth is a prime motivation to work
promotes economic development people are more eager to work when the rewards for success
are high
masculinity-femininity index
high masculinity score prefers “to live to work” than “to work to live”
Work Motivation
Hierarchy of needs theoryfill lower-level needs before moving to higher level needs
The ranking of needs differs among cultures
Work Motivation
The Hierarchy of Needs and Need-Hierarchy ComparisonsThe Hierarchy of Needs and Need-Hierarchy Comparisons
Relationship Preferences
Relationship preferences differ by culture
Power distance high power distance implies little superior-
subordinate interaction
autocratic or paternalistic management style
low power distance implies consultative style
Individualism versus collectivismhigh individualism – welcome challenges
high collectivism – prefer safe work environment
Risk Taking Behaviour
Risk taking behavior differs across cultures Uncertainty avoidance
handling uncertainty Trust
degree of trust among peopleFuture orientation
delaying gratificationFatalism
attitudes of self-determination
Information and Task Processing
Cultures handle information in different waysPerception of cues
Obtaining information
low context versus high context cultures
Information processing
Monochronic versus polychronic cultures
Idealism versus pragmatism
Communication
ExpressionsExpressionsGesturesGesturesIntonationIntonationEye ContactEye ContactBody Body
LanguageLanguage
Nonverbal Forms
Gifts and Hospitality
EtiquetteEtiquette CustomsCustoms
CommunicationsCommunicationsCross border communications do not
always translate as intended
Spoken and written language
Silent languageColour
Distance
Time and punctuality
Body language
Prestige
Communications
Body Language Is Not A Universal Language
Cultural Clusters and International Management
Marketing’s Impact on Culture
• Universal aspects of the cultural environment represent opportunities to standardize elements of a marketing program
• Increasing travel and improved communications have contributed to a convergence of tastes and preferences in a number of product categories
Hall’s Cultural Context Approach
HighHighContextContext
LowLowContextContext
High- and Low-Context Cultures
• High Context– Information resides in
context– Emphasis on
background, basic values, societal status
– Less emphasis on legal paperwork
– Focus on personal reputation
Saudi Arabia, Japan
• Low Context– Messages are explicit
and specific– Words carry all
information– Reliance on legal
paperwork– Focus on non-personal
documentation of credibility
Switzerland, U.S., Germany
High- and Low-Context Cultures
Cultural ClustersCultural Clusters
Similarities and Business Practices
Internationalization Strategies
Foreign Market Entry Methods
Hofstede’s Findings on Differences in Cultural Values
Hofstede’s Cultural Typology
• Power Distance
• Individualism/Collectivism
• Masculinity
• Uncertainty Avoidance
• Long-term Orientation
Self-Reference Criterion and Perception
• Unconscious reference to one’s own cultural values; creates cultural myopia
• How to Reduce Cultural Myopia:– Define the problem or goal in terms of home country cultural traits– Define the problem in terms of host-country cultural traits; make no
value judgments– Isolate the SRC influence and examine it– Redefine the problem without the SRC influence and solve for the host
country situation
The Five Dimensions
Individual Collective
Respect
Accepting
Aggressive
Long-Term
Tolerance
Avoiding
Passive
Short-Term
Power OrientationPower Orientation
Uncertainty OrientationUncertainty Orientation
Social OrientationSocial Orientation
Goal OrientationGoal Orientation
Time OrientationTime Orientation
Social Orientation
•CollectivismCollectivism•IndividualismIndividualism
Power Orientation
•RespectRespect•ToleranceTolerance
Uncertainty Orientation
•AcceptanceAcceptance•AvoidanceAvoidance
Goal Orientation
•PassivePassive•AggressiveAggressive
Time Orientation
Short Short TermTerm
Long Long TermTerm
International Management and Cultural Differences
Diffusion Theory: Diffusion Theory: The Adoption Process
The mental stages through which an individual passes from the time of his or her first knowledge of an innovation to the time of product adoption or purchase
• Awareness• Interest• Evaluation• Trial• Adoption
Diffusion Theory:Characteristics of Innovations
• Innovation is something new; five factors that affect the rate at which innovations are adopted include:– Relative advantage
– Compatibility
– Complexity
– Divisibility
– Communicability
Diffusion Theory:Adopter Categories
Marketing Implications
• Cultural factors must be considered when marketing consumer and industrial products
• Environmental sensitivity reflects the extent to which products must be adapted to the culture-specific needs of different national markets
Environmental Sensitivity
Environmental Sensitivity
• Independent of social class and income, culture is a significant influence on consumption and purchasing
• Food is the most culturally-sensitive category of consumer goods
– Dehydrated Knorr Soups did not gain popularity in the U.S. market that preferred canned soups
– Starbucks overcame cultural barriers in Great Britain and had 466 outlets by 2005
Dealing with Cultural DifferencesDo managers have to alter their customary
practices to succeed in countries with different cultures?
Must considerHost society acceptanceDegree of cultural differences
cultural distanceAbility to adjust
culture shock and reverse culture shock
Company and management orientation
Dealing with Cultural Differences Three company and management orientations
Polycentrism
business units abroad should act like local companies
Ethnocentism
home culture is superior to local culture
overlook national differences Geocentrism
integrate home and host practices
Strategies for Instituting Change
Value Systems
Cost-Benefit Analysis of change
Resistance to too much change
Participation
Reward Sharing
Opinion Leadership
Timing
Learning Abroad
The Future of National CulturesScenario 1:
New hybrid cultures will develop and personal horizons will broaden
Scenario 2: Outward expressions of national culture will continue
to become homogeneous while distinct values will remain stable
Scenario 3: Nationalism will continue to reinforce cultural
identity
Scenario 4: Existing national borders will shift to accommodate
ethnic differences
ConclusionConclusion
“To eat with feeling in France is to eat with your head, your spirit, your nose, your eyes, and your ears…”
Jacqueline Friedrich
Casestudy : Changan-FORDCasestudy : Changan-FORD
1.1. Read and prepare the Read and prepare the Casestudy on Changan-Casestudy on Changan-FORD (Johnson, Whittington FORD (Johnson, Whittington & Scholes (2011)) for & Scholes (2011)) for discussion and discussion and presentation next week. presentation next week.
2.2. Identify and evaluate the Identify and evaluate the challenges facing the challenges facing the Changan-FORD joint Changan-FORD joint venture by conducting venture by conducting External Environment, External Environment, Industry, Competitor Industry, Competitor analysis, SWOT and analysis, SWOT and Hofstede’s Dimensions.Hofstede’s Dimensions.
Core ReadingCore Reading
Juleff, L, Chalmers, A.. and Harte, P. (2008) Juleff, L, Chalmers, A.. and Harte, P. (2008) Business Economics in a Global Environment, Business Economics in a Global Environment, Napier University EdinburghNapier University Edinburgh
Daniels, J.D., Radebaugh, L.H. and Sullivan, D.P. Daniels, J.D., Radebaugh, L.H. and Sullivan, D.P. (2012) International Business: Environments and (2012) International Business: Environments and Operations. 14Operations. 14thth edition, Pearson edition, Pearson
Griffin, R.W. and Pustay, M.W. (2013) Griffin, R.W. and Pustay, M.W. (2013) International Business, 7International Business, 7thth edition, Pearson edition, Pearson
Keegan, W.J. and Green, M.C. (2013) Global Keegan, W.J. and Green, M.C. (2013) Global Marketing, 7Marketing, 7thth edition, Pearson edition, Pearson