1. 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)

2. 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)

3. 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

4. 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

5. 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.

6. 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

7. 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

8. 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