Slide 5.1 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited 2010 International sociocultural environment 1

Slide 5.2 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited 2010 Definitions of culture ‘Culture should be regarded as the set of distinctive spiritual, material, intellectual and emotional features of society or a social group, and that it encompasses, in addition to art and literature, ways of living together, value systems, traditions and beliefs’ (UNESCO 2002). Culture… is that complex whole which includes knowledge, belief, art, morals, law, custom, and any other capabilities and habits acquired by man as member of society. (Encyclopædia Britannica 2000). 2

Slide 5.3 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited &list=PL636501B39E70CBA8&index=5 &list=PL636501B39E70CBA8&index=5 4 min high & low Contexts 3

Slide 5.4 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited 2010 High context cultures – Edward Hall Define personality more in terms of the group than the individual Low boundaries in terms of personal space Initiate and receive more bodily contact when talking Are polychronic, i.e. time has non-linear aspects so punctuality and scheduling are low priority. 4

Slide 5.5 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited 2010 Low context cultures – Edward Hall Are more individualistic than group High boundaries in terms of personal space Convey more information via explicit codes rather than non-verbal language Are monochronic, i.e. time is linear so punctuality and scheduling are high priority. 5

Slide 5.6 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited 2010 Hofstede’s five cultural dimensions Individualism (versus collectivism) Power distance Uncertainty avoidance Masculinity/Femininity Long-term orientation (versus short- term). 6

Slide 5.7 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited 2010 Societies - Hofstede United States, the United Kingdom, Australia, Canada, New Zealand and the Netherlands tend to be relatively individualist in their values. Mexico, Greece, Hong Kong, Taiwan, Peru, Singapore, Colombia and Pakistan tend to be relatively collectivist in their values. 7

Slide 5.8 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited 2010 Power distance - Hofstede Philippines, Mexico, Venezuela, India, Singapore, France, Spain, Japan and Brazil tend to be relatively power respecting (large power distance). Austria, Israel, Denmark, New Zealand, Ireland, Great Britain, Germany, Australia, Canada and the USA have small power distance. 8

Slide 5.9 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited 2010 Uncertainty Avoidance - Hofstede Nordic and Anglo-Saxon countries as well as most other Asian and sub-Saharan countries exhibit weak uncertainty avoidance. Latin, Mediterranean and Central and Eastern European countries, Japan, South Korea and Pakistan exhibit strong uncertainty avoidance. 9

Slide 5.10 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited 2010 Masculinity/Femininity - Hofstede Masculinity refers to cultures in which the social gender roles are clearly distinct; men are supposed to be more assertive and acquisitive, valuing material possessions and money. Femininity refers to cultures in which social gender roles overlap; both men and women are supposed to be modest, tender and concerned with the quality of life. 10

Slide 5.11 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited 2010 Long-term orientation Long-term orientation means focusing on the future, delaying immediate gratification by practising persistence and thriftiness. E.g. China, Hong Kong, Taiwan, Japan and South Korea… 11

Slide 5.12 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited 2010 Short-term orientation means a greater focus on the present and a more immediate gratification of need, such as spending to support current consumption even if this means borrowing money. E.g. Pakistan, Philippines and Bangladesh and all Western countries… 12 Short-term orientation

Slide 5.13 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited 2010 Impacts of different cultural dimensions at the workplace (1) Cultural dimensionImpacts at the workplace Individualist Same value standards apply to all: universalism Other people seen as potential resources Task prevails over relationship Calculative model of employer–employee relationship CollectivistValue standards differ for in-group and out- groups: particularism Other people seen as members of their group Relationship prevails over task Moral model of employer–employee relationship 13

Slide 5.14 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited 2010 Impacts of different cultural dimensions at the workplace (2) Cultural dimensionImpacts at the workplace Large power distance (power respect) Hierarchy reflects on existential inequality of roles Subordinates expect to be told what to do Ideal boss is a benevolent autocrat (good father) Small power distance (power tolerance)Hierarchy means an inequality of roles, established for convenience Subordinates expect to be consulted Ideal boss is a resourceful democrat 14

Slide 5.15 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited 2010 Impacts of different cultural dimensions at the workplace (3) Cultural dimensionImpacts at the workplace Weak uncertainty avoidance (uncertainty acceptance) Dislike of rules, written or unwritten Less formalisation and standardisation Readiness to accept change Strong uncertainty avoidanceEmotional need for rules, written or unwritten More formalisation and standardisation Reluctance to accept change 15

Slide 5.16 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited 2010 Impacts of different cultural dimensions at the workplace (4) Cultural dimensionImpacts at the workplace Masculinity (aggressive goal behaviour) Assertiveness appreciated Oversell yourself Stress on careers Decisiveness Femininity (passive goal behaviour)Assertiveness ridiculed Undersell yourself Stress on life quality Intuition 16

Slide 5.17 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited 2010 Power distance and international business practice E.g. a firm from a country with a small power distance, such as the UK or US when negotiating in a joint venture, may send a team of experts who are relatively junior. If this team is sent to a large power distance (power-respecting) culture, such as India, this may be viewed as an insult. st&playnext=1&list=PL636501B39E70CBA8 st&playnext=1&list=PL636501B39E70CBA8 5 min 17

Slide 5.18 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited 2010 Uncertainty avoidance and international business practice E.g. Japanese firms, such as Toyota & Honda operating in uncertainty accepting countries such as Canada and the United States have been forced to modify their pay and promotion policies because North American workers are more oriented towards an individualistic ‘pay me what I’m worth’ attitude and are less worried about job insecurity. 18

Slide 5.19 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited 2010 Interpreting high-context communications What the British sayWhat they really mean Not badGood, or very good Quite goodA bit disappointing Interesting That is interesting, or It is interesting that you think it is interesting – it seems rather boring to me! Oh, by the way,… I am about to get to the primary purpose of our discussion I hear what you sayI disagree and do not wish to discuss it any further With the greatest respect…I think that you are wrong (or a fool) Perhaps we could consider some other opinionsI don’t like your ideas 19

Slide 5.20 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited 2010 Video break ated ated 1.5 min Mistakes of Americans in Business elated elated 6 min Selling to Hispanics…Multicultural marketing elated elated 6 min 10 Tips on doing business in Arab cultures 20

Slide 5.21 Wall, Minocha and Rees, International Business, 3 rd Edition, © Pearson Education Limited 2010 Four key strategies for multicultural teams Brett et al. (2006) put forth four key strategies. Adaptation: team members adapt practices or attitudes themselves, without changing the team membership or the tasks allocated. Structural intervention; formally re-organising the team or redistributing tasks. Managerial intervention: leader(s) intervene to establish norms of behaviour and decision making which take account of the multicultural characteristics of the team. Exit: removing one or more members from the team. 21