the cultural environment: diversity and globalization the international business environment...
TRANSCRIPT
The Cultural Environment: Diversity and globalization
THE INTERNATIONAL BUSINESS ENVIRONMENT
DR(PROF) M AMBASHANKAR 1
WHAT IS CULTURE?• ‘learned, shared…set of symbols whose meanings provide a
set of orientations for members of a society’ (Terpstra and David, 1991)
• Includes: - values and beliefs, - all forms of communication - norms of behaviour - customs - art, music, literature, sport
DR(PROF) M AMBASHANKAR 2
HOW IS CULTURE RELEVANT TO BUSINESS?• National culture – a society’s shared language, religion,
history and identity• National culture exerts a strong influence – we acquire basic
values in childhood• Diversity of national cultures is a key factor for businesses
to understand in the international environment.• Ethnocentrism vs polycentrism: relating to the world in terms
of your own culture vs being open to other people’s cultures
DR(PROF) M AMBASHANKAR 3
LANGUAGES• Low-context culture - clear, direct communication, characteristic
of the US
• High-context culture - importance of relationships and indirect communication, characteristic of Asian cultures
• Sources of linguistic diversity: indigenous cultures, colonialism, immigration
• Is English the global language?
DR(PROF) M AMBASHANKAR 4
Language Percentage of global
web content English 68.4 Japanese 5.9 German 5.8 Chinese 3.9 French 3.0 Spanish 2.4 Russian 1.9 Italian 1.6 Portuguese 1.4 Korean 1.3 Other 4.6
Source: Global Reach(2004) ‘Global Internet Statistics (by Language)’ at
http://glreach.com/globstats/
Web content by language
Dr(Prof) M Ambashankar 5
Year: 1900 1970 1990
2000
Christians
558.1 (34.5%)
1,236 (33.5%)
1,747 (33.2%)
1,999 (33.0%)
Muslims 199.9 (12.3%)
553.5 (15.0%)
962.3 (18.3%)
1,188 (19.6%)
Hindus 203.0 (12.5%)
462.5 (12.5%)
685.9 (13.0%)
811.3 (13.4%)
Buddhists 127.0 (7.8%)
233.4 (6.3%)
323.1 (6.1%)
359.9 (5.9%)
Jews 12.3 (0.8%)
14.7 (0.4%)
13.1 (0.3%)
14.4 (0.2%)
Non-religious 3.0 (0.2%)
532.0 (14.4%)
707.1 (13.4%)
768.1 (12.7%)
Note: Numbers in millions, followed by percentage of the world’s population (in brackets). Source: Barrett, D., Kurian, G., and Johnson, T. (eds), (2001) World Christian Encyclopedia, 2nd edition (New York: Oxford University Press)
Growth of major world religions
Dr(Prof) M Ambashankar 6
IMPACT OF RELIGION ON BUSINESS LIFE
• Religious laws which impact on business contracts and employment laws
• Role of women
• Food and drink restrictions
• Requirements for prayer and religious observance
• Restrictions on media, e.g. output deemed to conflict with predominant religion
• Restrictions on trading hours
DR(PROF) M AMBASHANKAR 7
MULTI-CULTURAL SOCIETIES
• Assimilation – Immigrants adopt the culture and language of their new society (example: France)
• Melting pot – Society evolves its own identity and culture, based on a mixture of the different cultures which formed it (examples: ‘settler’ societies of the US and Australia)
• Cultural pluralism – Immigrants and indigenous peoples form subcultures which remain distinct - becoming more common (examples: UK and possibly US at present)
DR(PROF) M AMBASHANKAR 8
Hofstede
Theory based on cultural dimensions of national culture:
• Power distance• Uncertainty avoidance• Individualism v collectivism• Masculinity v femininity• Long-term v short-term
orientation
Trompenaars
Theory based on five relationship orientations:
• Universalism v particularism
• Individualism v collectivism
• Neutral v emotional
• Specific v diffuse
• Achievement v ascription
CULTURE THEORIES
DR(PROF) M AMBASHANKAR 9
ORGANIZATIONAL OR CORPORATE CULTURE• Dominant values, such as high product quality and customer
orientation
• Norms of behaviour among staff and between the organization and other firms
• Preference for formal or informal means of communication
• Degree of empowerment of employees
DR(PROF) M AMBASHANKAR 10
CULTURE CHANGE• Affects individuals, organizations and whole societies• Factors leading to change:
- Industrialization – transition from agricultural to industrial society
- Capitalist development – the ‘Protestant’ work ethic (based on individualism); but Asian societies, where a ‘Confucian’ ethic exists, have pursued different path
- Material well-being and prosperity
- Changes in the nature of work
DR(PROF) M AMBASHANKAR 11
CULTURAL GLOBALIZATION: MYTH OR REALITY?
• Theorists such as Ohmae have predicted the fading away of cultural differences as consumer markets become globalized.
• However, in markets for consumer products and entertainment, successful global companies find that local diversity calls for different strategies.
• Although most web content is in English, multilingual websites reach more consumers.
DR(PROF) M AMBASHANKAR 12
English35.8%
Chinese14.1% Japanese
9.6%
Spanish9.0%
Italian3.3%
Dutch1.8%
Other5.2%
Russ ian2.5%
Portuguese3.5%
French3.8%
Korean4.1%
German7.3%
Source: Global Reach 2004
Online language populations – percentages of those accessing the internet in major languages
DR(PROF) M AMBASHANKAR 13
CONCLUDING SUMMARY AND QUESTIONS• Culture refers to a society’s values, norms, language
and shared history, which impact on differing markets for consumer products and ways in which businesses operate.
• Most states are multi-cultural.• Individuals, organizations and societies undergo cultural
changes over time. Are there ‘core’ values which may remain constant despite economic changes?
• The Internet has facilitated a more connected-up world, but not as yet cultural globalization.
DR(PROF) M AMBASHANKAR 14