2. Culture and Differences in Culture
Chapter Three
Culture
and Differences in Culture

3. Our plan for first half of today
What is culture?
Social Structure
Culture and the Workplace
Cultural Change
Bombay Tyre case

4. Last week: Political economy
Political systems: They differ radically from one country to the next
The ease of doing business varies with the system
You have to understand the rules where you are
Level and nature of economic development also differs radically from one place to the next
Gross National Income (GNI) and Purchasing Power Parity GNI measure the differences

5. Today: Culture and cultural differences

6. What is Culture?
“The collective programming of the mind which distinguishes one human group from another” - Hofstede
Text has several definitions. And there are good reasons for being aware of several definitions, because there is no agreed on definition of culture.
A 19th century anthropologist defined culture as “that complex whole which includes knowledge, belief, art, morals, law, custom, and other capabilities acquired by man as a member of society.”
Wow! Everything!
“Culture” / values, norms vs. Institutions / rules of the game as different ways of capturing what’s going on in a society.
If you want to understand politics and economics and political/economic differences, think in terms of institutions/rules of the game. It’s an economist or political scientist’s way to analyze what’s happening. It tries to make things simple.
Culture / values, norms – a way used by some sociologists or anthropoligists. They want to acknowledge the full complexity of the human experience.

7. Components of Culture: One standard approach
Values – basic attitudes about what is important
Norms – social rules
Society
Values – core ideas – freedom in US;
group harmony in Japan
Norms – social rules that govern action –
Mores – we’ve gotten so individualistic and there are so many cultures in San Jose that it’s hard to define a more. In Japan – big companies practice lifetime employment for their elite workers.
Folkways – Our attitude towards time. I’ll let you be a minute late. I’m struggling to prevent you from being more than that. Couldn’t do that in Peru, Italy.

8. Values – assumptions about how things ought to be
Values form the bedrock of a culture
They provide the context within which a society’s norms are established and justified
They include attitudes toward
Individual freedom
Democracy
Truth
Justice
Honesty
Loyalty
Social obligations
Values are also reflected in the political and economic systems
Return

9. Norms
Norms are the social rules that govern people’s actions toward one another
Folkways – little moral significance
Americans expect you to come on time to appointments
In Italy, people weren’t usually on time
Mores
Norms seen as central to functioning of society
Marriage
Honesty

10. Culture, Society, and the Nation State
There is not a strict one-to-one correspondence between a society and a nation state
Nation State:
Is a political creation
May contain a single culture or several cultures
Canada
India
Multi-tribal African nations

11. Societies contain subcultures
ethnic cultures
business or professional cultures

12. The Determinants of Culture
The values and norms of a culture do not emerge fully formed. They are the evolutionary product of a number of factors, including the prevailing political and economic philosophies, the social structure of a society, and the dominant religion, language, and education systems as shown in this figure.
Figure 3.1 – The Determinants of Culture, p. 93

13. Social Structure
Social structure refers to its basic social organization
Two dimensions that are particularly important include:
The extent to which society is group or individually oriented
Degree of stratification into castes or classes
Group-oriented = Collectivism (Japan, China)
Stratification – India, England
not the same as gap between rich and poor, though correlated with it.
Peru, Mexico – tends to be a stratification between people associated with the old cultures from the rural areas and European-dominated elites.
In England and also in Peru, if you make money you still have to build connections in the elite if you want to be elite.
Changing with globalization?
Is globalization creating its own castes?

14. Religious and Ethical Systems
Religion: a system of shared beliefs and rituals that are concerned with the realm of the sacred
Ethical systems: a set of moral principles, or values, that are used to guide and shape behavior
Most of the world’s ethical systems are the product of religions
Among the thousands of religions in the world today, four dominate in terms of numbers of adherents:
Christianity with 1.7 billion adherents
Islam with 1 billion adherents
Hinduism with 750 million adherents
Buddhism with 350 million adherents

15. Religious and Ethical Systems
Map 3.1 The Map of World Religions, p. 97

16. Religions are hugely important, but Prof
Religions are hugely important, but Prof. Hill may not be too expert on them
I am not holding you responsible for the information about specific religions on pp
But the sidebars on ‘Islamic capitalism’ and ‘McDonald’s and Hindu culture’ illustrate well how religion interacts with business

17. Language Spoken Unspoken Verbal cues
Language structures perception of world
Unspoken
Body language
Personal space
One obvious way in which countries differ is language. By language, we mean both the spoken and the unspoken means of communication.

18. Be alert for unexpected meanings of ‘silent language’
Colors
Black symbolizes death in U.S.
White indicates death in Asia
Purple indicates death in (some situations in) Latin America
Gestures
Sideways head movement that means ‘yes’ in Greece looks like negative ‘no’ head shake in U.S.
See book p 66 for alternative readings of US ‘OK’ gesture.

20. Culture in the Workplace
Four dimensions of culture
Power distance – the extent to which people are comfortable with inequalities of power and wealth
Uncertainty avoidance - the extent to which people accept ambiguous situations and tolerate uncertainty
Individualism versus collectivism - this dimension focuses on the relationship between the individual and his/her fellows within a culture
Masculinity versus femininity - this dimension looks at the relationship between gender and work roles
Of considerable importance for an international business with operations in different countries is how a society’s culture affects the values found in the workplace. Management process and practices may need to vary according to culturally determined work related values. For example, if the cultures of the United States and France result in different work-related values, an international business with operations in both countries should vary its management process and practices to account for these differences. Probably the most famous study of how culture relates to values in the workplace was undertaken by Geert Hofstede.44 As part of his job as a psychologist working for IBM, Hofstede collected data on employee attitudes and values for more than 100,000 individuals from 1967 to These data enabled him to compare dimensions of culture across 40 countries. Hofstede isolated four dimensions that he claimed summarized different cultures—power distance, uncertainty avoidance, individualism versus collectivism, and masculinity versus femininity.

21. Work-Related Values for 20 Selected Countries
Table 3.1 – Work-Related Values for 20 Selected Countries, p. 109

22. Problems with Hofstede
Assumes one-to-one relationship between culture and the nation state
Research may have been culturally bound
Survey was of IBM employees, conducted by Europeans and Americans
Survey respondents were from a single industry (computer) and a single company (IBM)

23. Other scholars have proposed many other dimensions of culture, but none have been shown more significant than the first three Hofstede developed

25. Cultural Change Culture evolves over time
Since 1960s American values toward the role of women have changed
Japan moved toward greater individualism in the workplace
Globalization will continue to impact cultures around the world

26. Managerial Implications
Cross-cultural literacy
You need to understand differences between cultures
Culture and competitive advantage
Some cultures make business easier than others
Culture and business ethics
As we’ll see, cultural differences create big ethical issues

28. Looking Ahead to Chapter 4
Ethics in International Business
Ethical Issues in International Business
Ethical Dilemmas
The Roots of Unethical Behavior
Philosophical Approaches to Ethics
Ethical Decision Making