Differences in Culture Two themes: 1. International business success requires cross-cultural literacy 2. Culture affects the cost of doing business, both positively and negatively Culture: a system of values and norms shared among a group of people which, taken together, constitute a design for living “Culture is that complex whole which includes knowledge, belief, art, morals, law, customs and other capabilities acquired by man as a member of society.” Culture is - social -learned - normative - consistent (for survival)

Values - bedrock Norms - social rules exist at different levels of importance mores - central to functioning (e.g. alcohol, women, family, honour) folkways - relatively trivial (e.g. time) N.B. Boundaries of a culture and of the nation state are not always the same. Where homogeneous - relative stability where Not - instability Canada Iraq India Indonesia South Africa Mexico, Sudan etc. Culture is a collective answer to the problem of survival - environmental basis - economic basis Develop social structures to make it work - family, government, law, education Develop Religion and philosophy to justify it ( but also to be influenced by it)

Social structures: Provide linkages between the individual and the group (family, work, community) Stratification: classes / castes may be relatively closed to relatively open often associated also with profession Rulers - religion, law, medicine, teaching Ruled - agriculture, tradesmen, finance Note the practical consequences of group dominance vs. individual dominance GroupIndividual teams? Co-operationcompetitive Functions suppliers _____________________ Conformity Innovation

Social mobility is closely related to the phenomenon of social change Note the creation of a new middle class in developing countries - e.g. India, Mexico, Brazil, China There are still barriers to joining the ruling class, but increasing economic power eventually results in achieving some degree of political power. There is a similar, but more complicated, problem where race/ethnic group is closely related to class Blacks in USA Shia’a in Bahrain, Saudi Arabia French in Canada Indians in Fiji

Religion: Christian 1 billion Islam 1 billion Confucian1 1/2 billion Hindu1/2 billion Buddhist 1/4 bn None of these is homogeneous Christianity - Roman Catholic, Orthodox, Other Protestant Islam - Sunni, Shia’a Weber’s “Protestant Ethic and the Spirit of Capitalism” - Religious explanation of economic development doesn’t wash Have to generalize the notion into change coming from an alienated minority, who use economics as a way to gain self-respect.

Language - verbal - non-verbal - gestures - personal space English has become the new lingua franca - a universal language. But we have to be aware as well of the differences among its many dialects (India, Canada, South Africa, Australia, USA, etc.) Education and Literacy: Still very high levels of illiteracy in some countries Different definitions of education - rote learning vs.. critical thinking Note that North America appears to be falling behind Asia and Europe in literacy, numeracy, science

Hofstede’s Model of Dimensions of Culture 1. Power distance - a measure of hierarchy - how large is the social gap between top and bottom classes? 2. Individualism vs. collectivism - how strong are the bonds between individuals? 3. Uncertainty avoidance - What is the tolerance for ambiguity and uncertainty? 4. Masculinity vs.. femininity - macho vs. nurturing Macho - sex roles highly differentiated values achievement and effective use of power Nurturing - sex roles not strongly differentiated values co-operation, “helping”, conflict reduction

Economic Development = Cultural change All the elements of a culture have to be mutually consistent and supportive. Therefore we can’t change one aspect of a culture without some adjustment or accommodation elsewhere Questions each society must answer for itself: - What to change? - By how much? Note, too, that social change is also governed by Newton’s Second Law: For every action there is an equal and opposite reaction Thus we see fundamentalism of all kinds everywhere in the world as a reaction to change