3Differences in Culture Societies’ differ along cultural dimensionsWhat is culture?How/why do social structure, religion, language influence cultural differences?What are differences between culture and values in the workplace (corporate culture)?Culture changes over time. What are some reasons behind this?Implications for business managers
6What is Culture?Culture: a society’s (group’s) system of shared, learned values and norms; these are the society’s (group’s) design for livingValues: abstract ideas about the good, the right, the desirableNorms: social rules and guidelines; guide appropriate behavior for specific situationsFolkways: norms of little moral significancedress code; table manners; timelinessMores: norms central to functioning of social lifebring serious retribution: thievery, adultery, alcohol
8Cultural DiversityValues represent personal or socially preferable modes of conduct or states of existence that are enduring.Why doesn’t McDonald’s sell hamburgers in India?
9Cultural DiversityCustoms are norms and expectations about the way people do things in a specific country.Why were 3M executives perplexed concerning lukewarm sales of Scotch-Brite floor cleaner in the Philippines?
10What is Culture?“the collective programming of the mind which distinguishes the members of one human group over another… Culture, in this sense, includes systems of values; and values are among the building blocks of culture”Geert Hofstede
11National Culture “Nation” is a useful: Definition of societysimilarity among people a cause -- and effect -- of national boundariesWay to bound and measure culture for conduct of businessculture is a key characteristic of societcan differ significantly across national bordersalso within national borderslaws are established along national linesCulture is both a cause and an effect of economic and political factors that vary across national borders
12Social Structure and Culture Unit of social organization: individual or group?Society may be stratified into classes or castesHigh-low stratificationHigh-low mobility between strataThe individual: building block of many Western societiesEntrepreneurshipSocial, geographical and inter-organizational mobilityThe group:Two or more associated individuals with a shared identityInteract with each-other in specific ways on the basis of a common set of expectations.
13Individual vs Group Societal Characteristics Managerial mobility between companiesEconomic dynamism, innovationGood general skillsTeam work difficult, non-collaborativeExposure to different ways of doing businesse.g., U.S. companiesGroupLoyalty and commitment to companyIn-depth knowledge of companySpecialist skillsEasy to build teams, collaborationEmotional identification with group or companye.g., Japanese companies
14Religion, Ethics and Culture Religion: system of shared beliefs about the sacredEthical systems: moral principles or values that shape and guide behavior; often products of religionMajor religious groups and some economic implicationsChristianity protestant work ethicIslam Islamic economic principlesHinduism anti-materialistic, socially stratifiedBuddhism anti-materialistic, social equalityConfucianism hierarchy, loyalty, honesty
15Language: Culture Bound Language, spoken“private” does not exist as a word in many languagesEskimos: 24 words for snowWords which describe moral concepts can be unique to countries or areasSpoken language precision important in low-context culturesLanguage, unspokenContext... more important than spoken word in high context cultures
20Cultural Diversity – “Chevy Nova Award” Dairy Association’s huge success with the campaign “Got Milk?” prompted them to expand advertising to MexicoIt was brought to their attention the Spanish translation read, “Are you lactating?”
21Cultural Diversity – “Chevy Nova Award” Clairol introduced the “Mist Stick”, a curling iron into GermanyOnly to find out that “mist” is German slang for manure.
22Cultural Diversity Chevy Nova Award When Gerber started selling baby food in Africa, they used US packaging with the smiling baby on the label.In Africa, companies routinely put pictures on labels of what’s inside, since many people can’t read.
23Cultural Diversity Chevy Nova Award Pepsi’s “Come Alive With the Pepsi Generation” in Chinese translated into“Pepsi Brings Your Ancestors Back From the Grave”
24Cultural Diversity Chevy Nova Award Coca-Cola’s name in China was first read as “Kekoukela”, meaning “Bite the wax tadpole” or “female horse stuffed with wax”, depending on the dialect.Coke then researched 40,000 characters to find a phonetic equivalent “kokou kole”, translating into “happiness in the mouth.”
25Cultural Stereotypes Are they valuable? Cultural stereotypes: values and behaviors considered typical of a cultureAre they valuable?Yes, if they reduce uncertainty about what expatriate can expect.No, if used to label an individual unlike the stereotype
27Education and Culture Education Medium through which people are acculturatedLanguage, “myths,” values, norms taughtTeaches personal achievement and competitionCritical to national competitive advantageEducation system may be a cultural outcome
28Culture and the workplace (Hofstede) Finds national culture dimensions meaningful to businessBasis:Work related values not universalNational values may persist over MNC efforts to create corporate cultureHome country values often used to determine HQ policiesMNC may create morale problems with uniform moral normsPurpose: understanding of business situations across-culturesMUST understand own culture AND other culture(s)
29Culture and the workplace Geert Hofstede – sampled 100,000 IBM employeesCompared employee attitudes and values across 40 countriesIsolated 4 dimensions summarizing culture:Power distanceIndividualism vs. collectivismUncertainty avoidanceMasculinity vs. feminity
30Power Distance -- (Hofstede) Degree of social inequality considered normal by peopleDistance between individuals at different levels of a hierarchyScale: from equal (small power distance) to extremely unequal (large power distance)
31Individualism Vs. Collectivism (Hofstede) Degree to which people in a country prefer to act as individuals rather than in groupsDescribes the relations between the individual and his/her fellows
32Uncertainty Avoidance (Hofstede) Degree of need to avoid uncertainty about the futureDegree of preference for structured versus unstructured situationsStructured situations: have tight rules may or may not be written downHigh uncertainty avoidance: people with more nervous energy (vs easy-going), rigid society, "what is different is dangerous."
33Masculinity Vs. Femininity (Hofstede) Division of roles and values in a societyMasculine values prevail:assertiveness, success, competitionFeminine values prevail:quality of life, maintenance of warm personal relationships, service, care for the weak, solidarity
34Confucian Dynamism (Hofstede) Attitudes towardsTimePersistenceStatus in society“Face”Respect for traditionGifts and favors
38Cultural DistanceGeographic and cultural (or pshychic) distance among countries may not be the sameKey concept which can affect IB strategy and conduct
39Managerial Implications Ethnocentrism vs PolycentrismMust a company adapt to local cultures or can corporate -- often home-country dominated -- culture prevail?Cross-cultural literacy essentialDo some cultures offer a national competitive advantage over others?
40Applying Cultural Analysis 1. Describe culture using Hofstede’s Model2. Estimate cultural impact on management • Strategic planning: Futile? How much information needed? • Employee motivation: Security or money reward? Immediate or long-term rewards? • Employee monitoring and control: Rules or trust? • Decision making: overcoming problems or seizing opportunities?