1. Session
Cultural Environment

2. Topic Outline Geography History Culture Social Behaviour Language
Customs

3. This Session Weekly Activity: Doing Business in Another Country
Go to:
Select the country you are thinking of exporting to and go through each of the sections in “Doing Business” for that country:
background
business structure
management style
meetings
teams
communication style
women in business
business dress code
Comment on your findings.
Word Count: words

4. Cultures
National Culture
Sub Culture
Corporate Culture

5. Geography & Culture
Knowledge of a country’s geography and history are important fundamentals in understanding a society’s behaviour and basic attitudes.
Culture may be defined as a society’s program for survival and responses to external and internal events.
It is important to understand the geographic characteristics to which culture responded to and adapted.
It is appreciating the historical events that have formed the attitudes and behaviour of it’s society.

6. Activity: Geography & Culture
Consider the characteristics of the Latin American countries.
Why do they have population concentration in the major cities?
Select a South American country to research and explain your reasoning.
For geographic information on countries go to: for information.
Word limit:

7. Culture includes all that we have learned in relation to:
Values and norms
Customs and traditions
Beliefs and religions
Rituals and Artifacts
(i.e. tangible symbols of a culture, such as BOOST! or the Great Wall of China)

8. Topic Example Video
The following video explains cultural diversity and understanding its importance within intercultural communication.
Take note of the key points.

9. A Country’s Culture How would you describe it’s make-up?
It is not sufficient to simply say the ‘Economy’ or ‘Society’.
You need to outline such aspects as social institutions, education system, political structure, legal system, religion, language, etc.
This is also where a “PEST” analysis is undertaken as part of an Environmental Analysis.

10. A Country’s Culture
A country’s culture can be explained through understanding its:
Orientation
History and Ethnic Relations
Urbanism, Architecture and Use of Space
Food and Economy
Social Stratification
Political Life
Social Welfare and Change Programs
Non-Governmental and other Organisations

11. A Country’s Culture Gender Roles and Statuses
Marriage, Family and Kinship
Socialisation
Etiquette
Religion
Medicine and Health Care
Secular Celebrations
The Arts and Humanities
Physical and Social Science States.

12. Topic Explanation Video
The following video provides examples of cultural differences.
Take note of the key points.

13. Activity: Country’s Culture
Go to:
and
Look up the country you intend to export to.
Find out about their culture.
Discuss what aspects of their culture will support your decision to export to that country.
Word count: words

14. Economic Growth Unfortunately with economic growth comes pollution.
Poor hazardous waste management and the increase of industrial pollution are environmental problems for which the industrialised world and those reaching for economic development must assume responsibility.

15. Social Responsibility
Governments, organisations and businesses are becoming increasingly concerned with the social responsibility and ethical issues surrounding the problem of generating and disposing of wastes.
Responsibilty for cleaning up the environment does not rest soley with Governments.

16. Two views of social responsibility
This CTR corresponds to the material on pp Ethics is a very important element of the text and business practices in general. Students may or may not grasp the significance of ethical conduct as competitive advantage. You may wish to use examples like Johnson & Johnson’s handling of Tylenol the poisonings to illustrate how ethical conduct can even protect a company.
Two views of social responsibility
The classical view
The view that management’s only social responsibility is to maximise profits.
Two opposing views
The perspectives on the social responsibilities of businesses and management are usually contrasted as the classical and the socioeconomic views.
The classical view This perspective holds that management’s only social responsibility is to maximise profits. Its most outspoken advocate is Milton Friedman, Nobel laureate in economics. Under this perspective, the costs of doing ‘social good’ are passed on to consumer in the form of higher prices, lower wages, and lower returns for stockholders. Friedman also questions the expertise of professional managers to determine what is the social good. Friedman argues that the social good must be determined by elected officials and the body politic. As the text points out, the classical view is essentially a microeconomic one – that is, it limits the concept of costs to the finite decisions within the firm.
Discussion note: You might point out to the class that Friedman is a brilliant economist who articulates a much more enlightened view of management than many others who share the classical view. Friedman who also argues that damaging short-term profit maximisation strategies already violate many state and federal laws. The issue gets trickier though when global competition is factored in on such considerations as treatment of workers and environmental pollution.
The socioeconomic view This perspective holds that management’s responsibility extends beyond making profits and includes protecting and improving society’s welfare. Under this perspective, organisations are seen as active participants in the body politic – lobbying, taking partisan positions on political issues, and using organisational resources to affect changes in the socio-political environment. Also, this view takes a long range macroenvironmental view of costs. Maximising profits in the long run requires strategic management beyond short-term cost related decisions.
The Socioeconomic View
The socioeconomic view
The view that management’s social responsibility goes well beyond the making of profits to include protecting and improving society’s welfare.
The view that management’s social responsibility goes well beyond the making of profits to include protecting and improving society’s welfare.

17. Arguments for social responsibility
This CTR is the first of two discussion lists for and against business assuming social responsibility and corresponds to the material on pp The following CTR list the arguments against. Ask students to comment on each argument and challenge them to come up with additional arguments for both sides.
Arguments for social responsibility
1. Public expectations
2. Long-run profits
Arguments for
The major arguments supporting the assumption of social responsibility by business are:
1. Public expectations. Social expectations of business have increased dramatically since the 1960s. Public opinion supports business pursuing social as well as economic goals.
2. Long-run profits. Socially responsible businesses tend to have more secure long-run profits.
3. Ethical obligation. A business firms can and should have a conscience. Business should recognise that responsible actions are right for their own sake.
4. Public image. A good public image helps firms gain more customers, better employees, access to money markets, and other benefits.
5. Better environment. Involvement by business can help solve difficult social problems, creating a better quality of life and a more desirable community in which to attract and hold skilled employees.
6. Discouragement of further government regulation. Regulation adds to economic costs and restricts management decision making. By being socially responsible, business can expect less government regulation.
7. Balance of responsibility and power. When power is significantly greater than responsibility, the imbalance encourages irresponsible behaviour that works against the public good. Business has a large amount of power in society that requires an equally large amount of responsibility as a check.
8. Shareholder interests. Socially responsible companies are considered less risky and safer investments and so help to raise share prices.
9. Possession of resources. Business has the financial resources, technical experts, and managerial talent to provide to support public causes.
10. Superiority of prevention over cures. Early solution of social problems related to business practice is less expensive than solving crises.
3. Ethical obligations
4. Public image
5. Better environment
6. Discourage regulation
7. Responsibility and power
8. Shareholder interests
9. Possession of resources
10. Superiority of prevention

18. Arguments against social responsibility
This CTR continues the discussion of the pros and cons of social responsibility as a business goal and corresponds to the material on p. 165.
Arguments against social responsibility
1. Profit maximisation
Arguments against
The major arguments against business assuming social responsibility are:
1. Violation of profit maximisation From the classical perspective, business is most socially responsible when it attends strictly to its economic interests.
2. Dilution of purpose The pursuit of social goals dilutes business’s primary purpose: economic productivity. Society may suffer as both economic and social goals are poorly accomplished.
3. Costs Many socially responsible activities don’t pay their way. Business must absorb these costs and pass them on to the consumer.
4. Too much power Business is already one of the most powerful institutions in society. Pursuing social goals will concentrate more power in the hands of business.
5. Lack of skills The outlook and abilities of business people are essentially economic. Business people are poorly qualified to deal with social issues.
6. Lack of accountability Political representatives are held accountable for their actions. There are no direct lines of social accountability from the business sector to the public.
7. Lack of broad public support There is no broad mandate from society for business to become involved in social issues. Even favourable attitudes are general and lack consensus on specific actions business should take on social issues. Involvement under such circumstances is likely to fail.
2. Dilution of purpose
3. Costs
4. Too much power
5. Lack of skills
6. Lack of accountability
7. Lack of broad public support

19. Levels of social involvement
Social responsibility - an obligation beyond that of law and economics for a firm to pursue long term goals that are
good for society
Social obligation - obligation of
business to meet economic and
legal responsibilities
Social responsiveness - capacity of firm to adapt to changing societal conditions
Social responsibility is defined as an obligation, beyond that required by the law and economics, for a firm to pursue long-term goals that are good for society. Two key assumptions of this definition are that (1) all firms obey the law; and, (2) a company differentiates between right and wrong in determining what is good for society.
Social obligation is defined as the requirement of a business to meet its economic and legal responsibilities. This concept means that a firm does the minimum the law requires. Social goals are pursued if, and only, if they contribute to direct economic goals of the firm.
Social responsiveness is defined as the capacity of a firm to adapt to changing societal conditions. Social responsive firms identify prevailing social norms and change their involvement to respond to changing societal conditions.

20. The ‘greening’ of management
The recognition of the
close link between an
organisation’s decisions
and activities and its
impact on the natural
environment
Until the late 1960’s people (and organisations) paid little attention to the environmental consequences of their decisions and actions.
As a result of a number of ecological problems and environmental disasters, a new awareness and spirit of environmentalism began to emerge amongst individuals groups and organisations.
This recognition of the close link between an organisation’s decisions and activities and its impact on the natural environment is referred to as the greening of management.

21. Global Issues Affecting the Environment
Global problems management must address to
‘go green’
Natural Resources
Global Warming
Pollution
Industrial Accidents
Toxic Waste
Global Issues
Affecting the
Environment
The “Greening”
of Management
There are a number of issues that managers need to consider when they ‘go green’.
One major green issue that managers must deal with as they become more involved in preserving the natural environment is recognising the main global environmental problems and how these problems are changing.
The list of global problems is extensive. This CTR identifies some of the major one which include natural resource depletion, global warming, pollution, industrial accidents and toxic wastes.
Global environmental problems can be expected to worsen however many organisations have accepted their responsibility to respect and protect the natural environment.

22. Social Responsibility
Social responsibility of the marketer pertains to:
Employment practices and policies
Consumer protection
Environmental protection
Political payments and involvement in political affairs
Basic human rights and fundamental freedoms

23. Social Responsibility Questions
Is it legal?
Is it right?
How will the public and vested stakeholders view your actions?

24. Business Ethics
What people believe is right or wrong can be different for every culture.
The standard issue related to business ethics in international marketing usually is related to bribery.
The other major issue related to ethics is socially responsible acts.

25. Topic Example Video
The following video explains business ethics as well as bribery and corruption.
Take note of the key points.

26. Activity: Social Responsibility
Who bears social responsibility?
Should it be left up to just organisations or should countries get involved?
The United Nations has a charter, part of which involves ensuring social responsibility amongst the countries of the world.
Go to: and view their various programs for:
human rights
humanitarian affairs
peace and security and
international law.

27. Social and Cultural Environments
Basic aspects of culture:
it is not innate, but learned
the various facets of culture are interrelated - touch a culture in one place and everything is affected
it is shared by group members, and defines boundaries between different groups
Edward T. Hall, Beyond Culture (1977)

28. Cultures across countries
High context culture
the meaning of individual behaviour and speech changes depending on the situation
nonverbal messages are full of important meaning (Read between the lines) e.g. Saudi Arabia and Japan
written contracts are not always enforceable as new people move into executive positions (Chile, Mexico)

29. Cultures across countries
Low context culture
intentions are expressed verbally
the situation does not change the meaning of words
e.g. India, China, Australia, New Zealand

30. Low v/s High Context Language
A low context language is one that is heavily dependent on explicit verbal expression.
Swiss, German, Scandinavian
A high context language is one that relies heavily on the context or nonverbal communications.
Japanese, Arabian, Latin American

31. (North America and much of Western Europe)
Low Context Culture
(North America and much of Western Europe)
logical, linear, individualistic, and action-oriented.  DIRECT
  Solving a problem means lining up the facts and evaluating one after another.  Discussions end with actions
Decisions are based on fact rather than intuition. . 
And communicators are expected to be straightforward, concise, and efficient in telling what action is expected. 
To be absolutely clear, they strive to use precise words and intend them to be taken literally. 
Explicit contracts conclude negotiations. 
High-context business people may even distrust contracts and be offended by the lack of trust they suggest.

32. High Context Cultures Middle East, Asia, Africa, and South America
emphasize interpersonal relationships and trust. 
Collectivist culture, preferring group harmony and consensus to individual achievement. 
less governed by reason than by intuition or feelings. 
Context over words: speaker’s tone of voice, facial expression, gestures, posture—and even the person’s family history and status.   
Flowery language, humility, and elaborate apologies are typical.

33. Topic Example Video
The following video explains the difference between low and high context communication cultures.
Take note of the key points.

34. Social and cultural influences
Cultural differences
language, spoken and silent
mental processes and learning
values and norms
rewards and recognition
Type of buyer behaviour
consumer
business
government

35. Social and cultural influences
The influence of others in the buying process
decision-making unit
family
peers
STEEP influences on buyer behaviour

36. Social and cultural influences
Specific cultural influences
religion
education
family
reference groups
The influence of the market
distribution channels
manufacturer
service provider
Phillips, Doole and Lowe (1994)

37. ‘Self-Reference Criteria’
1. Define problem or goals in terms of home-country cultural traits, habits and norms
2. Define problem or goals in terms of foreign cultural traits, habits and norms
3. Isolate the SRC influence in the problem and examine it carefully to see how it complicates the problem
4. Redefine the problem without the SRC influence and solve for the foreign market
James Lee (1966)

38. English: but what does it mean?
Japanese hotel notice to guests:
‘ You are invited to take advantage of the chambermaid’
Bangkok dry cleaner to potential customers
‘Drop you trousers here for best results’
A Roman laundry innocently suggests:
‘ Ladies, leave your clothes here and spend the afternoon having a good time’
A Copenhagen Airline promises to
‘Take your bags and send them in all directions’
A Hong Kong dentist claims to extract teeth
‘By the latest Methodists’

39. Cross-cultural Analysis
Determine the relevant motivations of the culture
Determine the characteristic behaviour patterns
Determine what broad cultural patterns are relevant to this product
Determine the characteristic forms of decision making

40. Cross-cultural Analysis
Evaluate promotion methods appropriate to the culture
Determine appropriate institutions for this product in the mind of the consumer

41. Tempo and Time
Tempo is related to how you deal with time and the use of it.
How cultures handle time can be viewed in the following:
Polychronic Time (P-Time)
Monochronic Time (M-Time)

42. Topic Example Video
The following video explains through a slideshow presentation, the differences between monochronic and polychronic tempo and time between cultures.
Take note of the key points.

43. P Versus M-Time M-Time tends to focus on doing one thing at a time.
It tends to view time as linear and is usually related to low-context cultures.
P-Time tends to focus on doing many things at a time.
It tends to focus on many tasks at once and is usually seen in high context cultures.

44. Tempo Questions How does the client consider usage of time?
Are you coming off to hasty in your business dealings?
Are you losing out because you are not following the tempo of your client/customer?

45. Body Language
According the a social anthropologist, Edward T. Hall, in a normal conversation between two persons, less than 35% of the social meanings is actually transmitted by words.
So, at least 65% of it is conveyed through nonverbal channel.

46. Importance of Body Language
Mario Pei, a communications expert, once estimated that humans can produce up to 700,000 different physical signs.
Birdwhistell estimated that the face alone is capable of producing 250,000 expressions.
People in other parts of the world observe “body language” more than the Anglo Saxons do.

47. Topic Explanation Video
The following video provides examples of different body gestures.
Take note of the key points.

48. Learning a Foreign Language
“You can buy in any language, but to sell you have to speak their language”
Language can be obstacle in business. Just because someone speaks English, one should remember it never is spoken nor understood quite same way in the country it is spoken, ie. Australia, United Kingdom, Canada, New Zealand, U.S.A.

49. Useful References
Kiss, Bow, or Shake Hands: How to Do Business in 60 Countries by Terri Morrison, Wayne Conaway, George Borden, Hans Koehler, Adams Media Corp, 1995.
Japan Business : The Portable Encyclopedia for Doing Business With Japan by Christine Genzberger (editor) and Edward G. Hinkelman World Trade Press, 1994.
Mind Your Manners: Managing Business Cultures in Europe by John Mole, Nicholas Brealey Publishing,1996

50. Recap Video
The following video recaps the basic fundamentals and concepts of intercultural communication such low and high context messages and monochronic and polychronic tempo and time considerations.
Take note of the key points.

51. Next Session Weekly Activity: International Finance Go to:
World Bank website ( and
International Monetary Fund (
Obtain an overview of these institutions’ purpose and programs.
Search for criticisms of the World bank and the International Monetary Fund programs on other websites.
Prepare a brief report on the key issues.
Word Count: 300 – 500