Chapter Differences in Culture 3

Guanxi-strength of relationship U.S. Business transactions are conducted within the framework of contract law and mechanisms for dispute resolution are in place Reciprocal networks are becoming more important but have to operate within the confines of the law Gifts may be frowned upon as bribery (Foreign Corrupt Practices Act) China Personal power and relationships or connections rather than rule of law are important in China Reciprocal relationship networks can often mean doing favors or offering bribes Establish relationships with gifts

What is culture? “A system of values and norms that are shared among a group of people and that when taken together constitute a design for living.” Hofstede, Namenwirth and Weber

Different components of culture Values and Norms Folkways and mores

Values and norms Values: Abstract ideas/assumptions about what a group believes to be good, right and desirable Norms: social rules and guidelines that prescribe appropriate behavior in particular situations

Folkways and mores Folkways: Routine conventions of everyday life. Little moral significance Generally, social conventions such as dress codes, social manners, and neighborly behavior Mores: Norms central to the functioning of society and its social life Greater significance than folkways Violation can bring serious retribution Theft, adultery, incest and cannibalism

Culture, society and nation states Society is a group of people who share a common culture No one to one correspondence between society and a nation state Nation states are political creations Many cultures can co-exist within a nation state

Determinants of culture Social structure Religion Language Education Economic philosophy Political philosophy Fig: 3.1

Social structure Two dimensions The extent to which society is group or individually oriented Degree of stratification into castes or classes Social mobility Significance to business Other influences Political philosophy Economic philosophy

Religious and ethical systems Christianity Protestant Work Ethic Islam Prayer five times per day No consumption of Alcohol or Pork Hinduism Focus on Spiritual Growth Buddhism Strong Class System Confucianism High Ethics, Loyalty

World religions Map 3.1

Language Spoken Verbal cues Language structures perception of world Unspoken Body language Personal space Fig: 3.2

Education Education can be a source of competitive advantage Example India Malaysia Singapore Japan after WWII High School Equal to College

Percentage of GNP spent on education Map 3.2

Adult Illliteracy rates Map 3.3

Culture and the workplace Study on the relationship between culture and the workplace by Geert Hofstede countries 100,000 individuals

Hofstede’s cultural dimensions Four dimensions of culture Power distance Individualism versus collectivism Uncertainty avoidance Masculinity versus femininity

Power distance Cultures are ranked high or low on this dimensions based on the particular society’s ability to deal with inequalities

Individualism versus collectivism This dimension focuses on the relationship between the individual and his/her fellows within a culture Individualistic societies: loose ties individual achievement and freedom highly valued Collectivist societies- tight ties tend to be more relationship oriented

Uncertainty avoidance This dimension measures the extent to which a culture socializes its members into accepting ambiguous situations and tolerating uncertainty

Masculinity versus femininity This dimension looks at the relationship between gender and work roles

Work related values for twenty countries

Problems with Hofstede’s findings Assumes one-to-one relationship between culture and the nation-state His research may have been culturally bound. Survey respondents were from a single industry (computer) and a single company (IBM)

Cultural change Culture is not a constant; it evolves over time Since 1960s American values toward the role of women are changing. Japan moves toward greater individualism in the workplace Effects of globalization

Changing values Fig: 3.3

Managerial implications Cross cultural literacy Culture and competitive advantage Culture and business ethics