1. Differences in Political and Culture
Week 2

2. Globalization
The world is moving away from self-contained national economies toward an interdependent, integrated global economic system
Globalization refers to the shift toward a more integrated and interdependent world economy

3. Whay globalization?
The decline in barriers to the free flow of goods, services, and capital that has occurred since the end of World War II
since 1950, average tariffs have fallen significantly and are now at 4 percent
countries have opened their markets to FDI
Technological change
microprocessors and telecommunications
the Internet and World Wide Web
transportation technology

4. Political Economy
Political economy of a nation - how the political, economic, and legal systems of a country are interdependent
they interact and influence each other
they affect the level of economic well-being in the nation

5. What is Political Economy
Political system - the system of government in a nation
Assessed according to
the degree to which the country emphasizes collectivism as opposed to individualism
the degree to which the country is democratic or totalitarian

6. Link between political and economy
Political ideology and economic systems are connected
countries that stress individual goals are likely to have market based economies
in countries where state-ownership is common, collective goals are dominant

7. Political System Collectivism --> socialism Individualism Democracy
Communism
Social democrat
Individualism
Democracy
Totalitarianism

8. Economic System
Market economies
Command economies
Mixed economies

9. Legal System There are three types of legal systems
Common law - based on tradition, precedent, and custom
Civic law - based on detailed set of laws organized into codes
Theocratic law - law is based on religious teachings

10. Culture
Culture is a system of values and norms that are shared among a group of people and that when taken together constitute a design for living
where
values are abstract ideas about what a group believes to be good, right, and desirable
norms are the social rules and guidelines that prescribe appropriate behavior in particular situations
Society refers to a group of people who share a common set of values and norms

11. Determinants of Culture
Determinants include
religion
political and economic philosophies
education
language
social structure

12. Culture in Workplace
Management processes and practices must be adapted to culturally-determined work-related values
Geert Hofstede identified four dimensions of culture
Power distance - how a society deals with the fact that people are unequal in physical and intellectual capabilities
Individualism versus collectivism - the relationship between the individual and his fellows
Uncertainty avoidance - the extent to which different cultures socialize their members into accepting ambiguous situations and tolerating ambiguity
Masculinity versus femininity -the relationship between gender and work roles

13. What Do Cultural Differences Mean For Managers?
It is important to develop cross-cultural literacy
companies that are ill informed about the practices of another culture are unlikely to succeed in that culture
managers must beware of ethnocentric behavior, or a belief in the superiority of one's own culture
There is a connection between culture and national competitive advantage
suggests which countries are likely to produce the most viable competitors
has implications for the choice of countries in which to locate production facilities and do business

14. QUESTION AND ANSWER