1. Differences in Culture
International Business: An Asian Perspective
Chapter 3
Differences
in Culture
Chapter 3: Differences in Culture

2. What Is Cross-Cultural Literacy?
Cross-cultural literacy is an understanding of how cultural differences across and within nations can affect the way in which business is practiced
A relationship may exist between culture and the costs of doing business in a country or region
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3. What Is Culture?
Culture is a system of values and norms that are shared among a group of people and that when taken together constitute a design for living
where
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 refers to a group of people who share a common set of values and norms
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4. What 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 life
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5. How 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 nations
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6. What Are The Determinants Of Culture?
The values and norms of a culture evolve over time
Determinants include
religion
political and economic philosophies
education
language
social structure
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7. What Is A Social Structure?
Social structure refers to 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 castes
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8. How 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
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 firm
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9. How 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 initiative
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10. What Is Social Stratification?
All societies are stratified on a hierarchical basis into social categories, or social strata
Must consider
The degree of 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 luck
The significance attached to social strata in business contacts
Class consciousness is a condition where people tend to perceive themselves in terms of their class background, and this shapes their relationships with others
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11. How Do Religious And Ethical Systems Differ?
Religion is a system of shared beliefs and rituals that are concerned with the realm of the sacred
Religion and ethics are often closely intertwined
Four religions dominate society
Christianity
Islam
Hinduism
Buddhism
Confucianism is also important in influencing behavior and culture in many parts of Asia
Ethical systems are a set of moral principles, or values, that are used to guide and shape behavior
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12. How Do Religious And Ethical Systems Differ?
World Religions
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13. What 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 capitalism
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14. What Is Islam? Islam the world’s second largest religion
extends the underlying roots of Christianity to an all-embracing way of life that governs one's being
Islamic fundamentalism is associated in the Western media with militants, terrorists, and violent upheavals, but in fact Islam teaches peace, justice, and tolerance
fundamentalists, who demand rigid commitment to religious beliefs and rituals, have gained political power in many Muslim countries, and blame the West for many social problems
people do not own property, but only act as stewards for God
people must take care of that which they have been entrusted with
supportive of business, but the way business is practiced is prescribed
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15. What Is Hinduism? Hinduism
practiced primarily on the Indian sub-continent
focuses on the importance of achieving spiritual growth and development, which may require material and physical self-denial
Hindus are valued by their spiritual rather than material achievements
promotion and adding new responsibilities may not be important, or may be infeasible due to the employee's caste
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16. What Is Buddhism? Buddhism has about 350 millions followers
stresses spiritual growth and the afterlife, rather than achievement while in this world
does not emphasize wealth creation
entrepreneurial behavior is not stressed
does not support the caste system, individuals do have some mobility and can work with individuals from different classes
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17. What Is Confucianism? Confucianism ideology practiced mainly in China
teaches the importance of attaining personal salvation through right action
high morals, ethical conduct, and loyalty to others are stressed
three key teachings of Confucianism - loyalty, reciprocal obligations, and honesty - may all lead to a lowering of the cost of doing business in Confucian societies
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18. What Is The Role Of Language In Culture?
Language - the spoken and unspoken (nonverbal communication such as facial expressions, personal space, and hand gestures ) means of communication
One of the defining characteristics of culture
countries with more than one language often have more than one culture
English is the most widely spoken language in the world
Chinese is the mother tongue of the largest number of people
English is also becoming the language of international business
knowledge of the local language is still beneficial, and in some cases, critical for business success
failing to understand the nonverbal cues of another culture can lead to communication failure
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19. Case discussion Hitler clothing shop in Israel Swastika – Nazi symbol?
(Aug. 31)
(Sep. 4)
Swastika – Nazi symbol?
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20. What Is The Role Of Education In Culture?
Formal education is the medium through which individuals learn many of the language, conceptual, and mathematical skills that are indispensable in a modern society
important in determining a nation’s competitive advantage
general education levels can be a good index for the kinds of products that might sell in a country
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21. How Does Culture Impact The Workplace?
Management processes and practices must be adapted to culturally-determined work-related values
Geert Hofstede identified four dimensions of culture
Power distance - how a society deals with the fact that people are unequal in physical and intellectual capabilities
Uncertainty avoidance - the relationship between the individual and his fellows
Individualism versus collectivism - the extent to which different cultures socialize their members into accepting ambiguous situations and tolerating ambiguity
Masculinity versus femininity -the relationship between gender and work roles
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22. National cultural dimension: PDI
Power distance - expresses the degree to which the less powerful members of a society accept and expect that power is distributed unequally.
Low power distance
100
High power distance
Denmark (18)
Israel (13)
Sweden (31)
India (77)
China (80)
Indonesia (78)
Panama (95)
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23. National cultural dimension: UAI
Uncertainty avoidance -  the degree to which the members of a society feel uncomfortable with uncertainty and ambiguity. 
Low uncertainty avoidance
100
High uncertainty avoidance
Denmark (23)
Sweden (29)
Argentina (86)
France (86)
Japan (92)
Korea (85)
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24. National cultural dimension: IDV
Individualism versus collectivism- a preference for a loosely-knit social framework versus a preference for a tightly-knit framework in society
Collectivism
100
Individualism
Indonesia (14)
Panama (11)
Korea (18)
China (20)
Turkey (37)
Australia (90)
Canada (80)
Great Britain (89)
United States (91)
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25. National cultural dimension: MAS
Masculinity versus femininity - a preference in society for achievement, heroism, assertiveness and material reward for success. versus a preference for cooperation, modesty, caring for the weak and quality of life.
Femininity (concensus-oriented)
100
High masculinity (competitive)
Sweden (5)
Netherlands (14)
Denmark (16)
Japan (95)
China (66)
Mexico (69)
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26. National cultural dimension: LTO
Long-term (Confucian dynamism) versus short-term orientation-  dealing with society’s search for virtue.
Short-term
+100
Long-term
United States (29)
Sweden (20)
Great Britain (25)
China (118)
Hong Kong (96)
South Korea (75)
Japan (80)
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28. How Does Culture Impact The Workplace?
Work-Related Values for 22 Countries
In this Table, you can see work-related values for twenty countries.
Korea 50 85 18 39
China 80 30 20 66
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29. Was Hofstede Right?
Hofstede later expanded added a fifth dimension called Confucian dynamism
captures attitudes toward time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favors
Hofstede’s work has been criticized because
made the assumption there is a one-to-one relationship between culture and the nation-state
study may have been culturally bound
used IBM as sole source of information
culture is not static – it evolves
But, it is a starting point for understanding how cultures differ, and the implications of those differences for managers
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30. Does Culture Change? Culture evolves over time
changes in value systems can be slow and painful for a society
Social turmoil - an inevitable outcome of cultural change
as countries become economically stronger, cultural change is particularly common
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31. What Do Cultural Differences Mean For Managers?
It is important to develop cross-cultural literacy
companies that are ill informed about the practices of another culture are unlikely to succeed in that culture
managers must beware of ethnocentric behavior, or a belief in the superiority of one's own culture
There is a connection between culture and national competitive advantage
suggests which countries are likely to produce the most viable competitors
has implications for the choice of countries in which to locate production facilities and do business
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32. What Do Cultural Differences Mean For Managers?
Case discussion: McDonald’s in India
Read case of McDonald’s in India (p. 104)
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