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chapter six Sociocultural Forces McGraw-Hill/Irwin

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2 chapter six Sociocultural Forces McGraw-Hill/Irwin
International Business, 11/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

3 Learning Objectives Explain the significance of culture for international business Identify the sociocultural components of culture Discuss the significance of religion to businesspeople Explain the cultural aspects of technology Discuss the pervasiveness of the Information Technology Era

4 Learning Objectives Explain the importance of the ability to speak the local language Discuss the importance of unspoken language in international business Discuss the two classes of relationships within a society Discuss Hofstede’s four cultural value dimensions

5 Rules of Thumb for Cross Culture Business
Be prepared Slow down Establish trust Understand the importance of language Respect the culture Understand the components of culture

6 What is Culture The sum total of beliefs, rules, techniques, institutions, and artifacts that characterize human populations Learned Interrelated Shared Defines the boundaries

7 Ethnocentricity Ethnocentricity
Belief in the superiority of one’s own ethnic group

8 Living with Other Cultures
Realize that there are many different cultures Learn the characteristics of those cultures Spend a lifetime in a country Do training program

9 Culture Affects All Business Functions
Marketing Variation in attitudes and values requires firms to use different marketing mixes P&G Japanese Camay commercials Disneyland Paris Human Resource Management Evaluation of managers Production and Finance Attitudes toward authority Attitudes toward change

10 Sociocultural Components
Culture is: Aesthetics Attitudes and beliefs Religion Material Culture Language Societal organization Legal characteristics Political structures

11 Aesthetics Culture’s sense of beauty and good taste Music and Folklore
Art conveys meaning Colors, symbols, numbers--Nike air Architectural style differences feng shui Music and Folklore Musical tastes vary Folklore discloses way of life Cowboys in Chile or Argentina Mexican singing cricket

12 Attitudes and Beliefs Attitudes Toward Time Vary across cultures
Difficult area for some Americans Directness and drive Perceived to be rudeness Deadlines Liability abroad

13 Attitudes Toward Achievement and Work
Germans put leisure first and work second The demonstration effect Result of having seen others with desirable goods Job Prestige The distinction between blue-collar workers and office employees

14 Religion Responsible for many of the attitudes and beliefs affecting human behavior Work Ethic Protestant work ethic Duty to glorify God by hard work and the practice of thrift Confucian work ethic Drive toward hard work and thrift; similar to Protestant work ethic

15 Will this work?

16 Primary Asian Religions
Hinduism Caste system entire society is divided into four groups (plus the outcasts) and each is assigned a certain class of work Buddhism Reform of Hinduism Jainism (Mahavira a contemporary of Buddha) Nonviolence a major principle Sikhism Bridge between Hinduism and Islam

17 Primary Asian Religions, cont’d.
Confucianism Inseparable from Chinese culture Taoism Lao Tzu, contemporary of Confucius Shintoism Indigenous to Japan

18 Islam Five Pillars of Faith Youngest and second largest faith
1.3 billion followers Comparison: Christianity has 2 billion adherents Muhammad is Founder Prophet of God and head of state Holy Book Koran Five Pillars of Faith Confession of faith Five daily prayers Charity Ramadan fast Pilgrimage to Mecca Jihad – holy war Sunni-Shia Conflict Conflict gives rise to violent clashes

19 Religious Population of the World
Insert Figure 6.1

20 Animism Spirit worship, incl. magic, witchcraft
Everything in nature has its own spirit or divinity

21 Material Culture Material Culture All human-made objects
concerned with how people make things (technology) and who makes what and why (economics)

22 Technology Technology
Mix of usable knowledge that society applies and directs toward attainment of cultural and economic objectives

23 Importance of Technology
Enables a firm to be competitive in world markets. Can be sold or be embodied in the company’s products Can give a firm confidence to enter a foreign market Enables the firm to obtain better than usual conditions for a foreign market investment Enables a company with only a minority equity position to control a joint venture Can change the international division of labor Causes major firms to form competitive alliances

24 Material Culture - Technology
Cultural Aspects of Technology Includes skills in marketing, finance, and management People not always ready to adapt to changes technology brings Technological Dualism The side-by-side presence of technologically advanced and technologically primitive production systems Appropriate Technology The technology (advanced, intermediate, or primitive) that most closely fits the society using it Boomerang Effect Situation in which technology sold to companies in another nation is used to produce goods to compete with those of the seller of the technology.

25 Information Technology
Information Technology Era As early as 2000 the Internet economy had reached $850 billion exceeded the size of the life insurance and real estate industries

26 Spoken Language Most apparent cultural distinction
Spoken languages demarcate cultures Switzerland: four separate cultures Many languages can exist in a single country, but one usually serves as communication vehicle Lingua franca or link language English primary language of business

27 Language Translation Back Translation
The ability to speak the language well does not eliminate the need for translator Back Translation To avoid translation problems Japanese hotel: “You are invited to take advantage of the chambermaid.” Bangkok dry cleaner: “Drop your trousers here for best results.”

28 Language Issues Technical words do not exist in all languages
Usually use English Many cultures avoid saying anything disagreeable

29 Unspoken Language Nonverbal communication
Gestures vary tremendously from one region to another Closed doors convey different meanings Office size has difference meanings in various cultures Conversational distance small in East Gift giving has specific etiquette in each culture Gift or bribe? Questionable Payments

30 2003 Corruption Index Scores and Ranking

31 Societal Organization
Kinship Extended Family includes blood and marriage relatives Member’s responsibility Although the extended family is large, each member’s feeling of responsibility to it is strong Associations Social units based on age, gender, or common interest, not on kinship

32 Societal Organization
Associations Age is important market segment criterion Gender As nations industrialize, more women enter the job market and assume greater importance in the economy Free association people joined together by a common bond: political, occupational, religious or recreational

33 Understanding National Cultures
Hofstede’s Dimensions of Culture Individualism versus Collectivism Large versus Small Power Distance Strong versus Weak Uncertainty Avoidance Masculinity versus Femininity

34 Scores for Hofstede’s Value Dimensions

35 Individualism versus Collectivism
Collectivistic cultures people belong to groups that are supposed to look after them in exchange for loyalty Individualistic cultures People look after only themselves and the immediate family

36 Large versus Small Power Distance
the extent to which members of a society accept the unequal distribution of power among individuals In large-power-distance societies employees believe their supervisors are right; employees do not take any initiative in making non-routine decisions

37 Strong versus Weak Uncertainty Avoidance
Degree to which members of a society feel threatened by ambiguity and are rule-oriented Employees in high uncertainty-avoidance cultures tend to stay with their organizations Japan, Greece, and Portugal Those from low uncertainty-avoidance nations are more mobile United States, Singapore, and Denmark

38 Plot of Nations: Power distance and Uncertainty Avoidance

39 Plot of Nations: Individualism and Power Distance

40 Masculinity versus Femininity
the degree to which the dominant values in a society emphasize assertiveness, acquisition of money and status Masculinity achievement of visible and symbolic organizational rewards Femininity emphasize relationships, concern for others, and the overall quality of life

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