1. II Country Factors

2. Collectivism vs. Individualism
A political system that stresses the primacy of collective goals over individual goals.
Advocated by Plato in the “Republic.”
In modern times, the Socialists advocate Collectivism.

3. Socialism Trace intellectual roots to Karl Marx.
Argued that the pay of workers does not reflect the full value of their labor.
Advocated state ownership of production, distribution, and exchange (businesses), thereby ensuring that workers were fully compensated for their labor.
Two Approaches for Socialism
Communists: Socialism is achieved through violent revolution.
Social Democrats: Socialism is achieved through democratic means.

4. Individualism Opposite of Collectivism.
Individual should have freedom in political and economic pursuits.
Advocated by Aristotle: Private property is more highly productive than communal property and will thus stimulate progress.
Revived during the 16th century in England and the Netherlands.
Hume ( )
Adam Smith ( )
John Stuart Mill ( )
Embodied in the U.S. Declaration of Independence

5. Democracy and Totalitarianism
Democracy: Government by the people, exercised either directly or through elected representatives.
Totalitarianism: Government in which one person or political party exercises absolute control over all spheres of human life and opposing political parties are prohibited.

6. 4 major forms of Totalitarianism
Communism
Collectivism is achieved through total dictatorship.
Theocratic
Political power is influenced by religious principles.
Tribal
A political party representing the interests of a particular tribe monopolizes power.
Right-wing
Generally permits individual economic freedom, but restricts political freedom to prevent the rise of communism.

7. Economic Systems Market Economy:
All productive activities are privately owned.
Command Economy:
Goods and services produced, their quantity, and prices are determined by the government.
Mixed Economy:
Parts of the economy are left to private ownership and free market mechanisms while other sectors are state-owned and have government planning.
State-Directed Economy:
The state plays a significant role through its “industrial policy” and setting national goals.

8. Property rights can be violated by two ways
Legal Systems: Rules, or laws, that regulate behavior and the processes by which laws are enforced and grievances redressed.
Property Rights: the legal rights over the use of a resource and the income derived from it.
Property rights can be violated by two ways
Private Action: Theft, piracy, blackmail and the like by private individuals and groups.
Public Action and Corruption: Violation of property rights by public officials, such as politicians and government officials, by extorting income or resources from property holders.

9. What is Culture?
A system of values and norms shared among a group of people and, when taken together, constitute a design for living.
Norms:
Social rules and guidelines that prescribe appropriate behavior in particular situations.
Folkways: Routine conventions of everyday life.
Mores: Central to functioning of society and its social life.
Values:
Abstract ideas about what a group believes to be good, right, and desirable.
The bedrock of culture.
Have emotional significance: Freedom.

10. Determinants of Culture
Norms and
Value
Systems
Education
Economic
Philosophy
Political
Religion
Language
Social
Structure

11. Social Stratification
Class Consciousness:
May play a role in
a firm’s operations
Typically defined by family background, occupation, and income.
Class: some social mobility
Caste:
Virtually no mobility

12. Religion
Shared beliefs and rituals concerned with the realm of the sacred.
Ethical Systems:
Moral principles or values used to guide and shape behavior.
Shapes attitudes toward work and entrepreneurship and can affect the cost of doing business.

13. World’s Religions

14. Religion and Economic Implications
Christianity
“Protestant Work Ethic” and “The Spirit of Capitalism”.
Islam
Favors market-based systems.
No payment or receipt of interest.
Hinduism
Asceticism may have an impact.
Caste system plays a role.
Buddhism
Little emphasis on entrepreneurial behavior.
Confucianism
Loyalty, reciprocal obligations, and honesty in dealings.

15. Language Allows people to communicate.
Structures the way the world is perceived.
Directs attention to certain features of the world rather than others.
Helps define culture.
Creates separatist tendencies?

16. Spoken Language

17. Nonspoken Language Nonverbal cues: eyebrows fingers/thumbs
hand gestures
feet
personal space
body gestures

18. Hofstede
Study (IBM) is a general way to look at differences between cultures.
4 dimensions:
Power distance.
Individualism versus collectivism.
Uncertainty avoidance.
Masculinity versus femininity.
But:
Assumption of one-to-one relationship between culture and nation-state.
Research may be culturally bound.
Respondents worked within a single company.
Work is beginning to look dated ( ).

19. Work Related Values for Selected Countries

20. Hofstede later added the fifth dimension: long-term orientation.
A culture with a long-term orientation is based on stability, persistence, order & thrift.
The success of Japanese companies in 1970s to early 1990s: Focus on long-term investment, commitment to their workers, and building of relationships with their customers.
A culture with a short-term orientation will expect immediate returns and will focus on satisfaction of immediate needs and wants.
U.S. & U.K. companies are often criticized for their focus on short-term goals (maintain share prices).

21. Trompenaars’ dimensions of culture framework
It comprises three groupings of cultural factors:
Relationships with people
Time
Relating to natural (the natural environment)
Relationships with people can be considered in five subdivisions:
Universalism vs. particularism
Individualism vs. communitarianism (collectivism)
Affective vs. neutral cultures
Specific vs. diffuse relationships
Achieving vs. ascribing status

22. Organizational culture
Each organization will have its own distinctive culture or way of working.
The intangible nature of culture makes cultural change difficult to manage.
The culture of an organization is made up of the distinctive values, attitudes, beliefs and norms which influence the way in which it conducts its business.
Peters and Waterman (1982) found that organizational culture was related to performance

23. Determinants of Organizational Culture
National culture
Industry culture
Size of the organization
Organization history
Management and leadership style
Nature of the employees