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