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International Business

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Presentation on theme: "International Business"— Presentation transcript:

1 International Business
Session 3

2 Culture Language Religion
The way in which a group of people solves problems and reconciles dilemmas. A code of attitudes, norms and values, our way of thinking. Determines how we see ourselves and how we see the world. Is not right or wrong; it is not inherited, but learned. Social Structure Communication Values/ Attitudes/ Beliefs

3 Artifacts and Products Norms and Values Basic Assumptions explicit

4 Cross-Cultural Proficiency is Paramount in Managerial Tasks
Developing products and services Communicating and interacting with foreign business partners Screening and selecting foreign distributors and other partners Negotiating and structuring international business ventures Interacting with current and potential customers from abroad Preparing for overseas trade fairs and exhibitions Preparing advertising and promotional materials

5 What are your top 10 values?
Age/seniority Authority Belongingness Collectiveness Competition Compromise Cooperation Devotion Directness Efficiency Equality Independence Family harmony Family security Freedom Go-between Group consensus Group harmony Independence Indirectness Individualism Hospitality Openness Parental guidance Patience Quality Self-reliance Time

6 Priorities of Cultural Values
Table 4-1 Priorities of Cultural Values: United States, Japan, and Arab Countries United States Japan Arab Countries Freedom Independence Self-reliance Equality Individualism Competition Efficiency Time Directness Openness Belonging Group harmony Collectiveness Age/seniority Group consensus Cooperation Quality Patience Indirectness Go-between Family security Family harmony Parental guidance Age Authority Compromise Devotion Patience Indirectness Hospitality Note: “1” represents the most important cultural value, “10” the least. Adapted from Table 4-1: Priorities of Cultural Values: United States, Japan, and Arab Countries

7 Culture as a normal distribution – bell curve

8 stereotypes


10 Mini-Quiz on Culture At what time should you arrive for a 10:00 meeting: in USA? China? Spain? If given a gift, should you open it: in Saudi Arabia? China? Should you give bad news in the morning: in USA? Korea? Is it a bad sign if you didn’t really speak about business in your first meeting: in UK? Japan? Should you send a young executive to a meeting: in USA? Japan?

11 How to Categorize and Understand Cultures
Key Researchers: Hofstede, Geert Hall, Edward Trumpenaars, Fons Develop Frameworks for Understanding Cultures

12 Which definition do you agree with more?
A company is…. a system designed to perform functions and tasks in an efficient way. People are hired to perform these functions with the help of machines and other equipment. They are paid for the tasks they perform. a group of people working together. They have social relations with other people and with the organization. The functioning is dependent on these relations.

13 A company is….. … a group … a system

14 Mini-Case Six months after the ABC mining company had signed a long- term contract with a foreign buyer to buy bauxite in 20 annual installments, the world price of bauxite collapsed. Instead of paying $4 a ton below world market prices, the buyer now faced paying $3 above. The buyer faxed ABC to say it wished to renegotiate. The final words of the fax stated: “You cannot expect us as your new partner to carry alone the now ruinous expense of these contract terms.”

15 Options A contract is a contract. We had a deal. We won.
A contract symbolizes the underlying relationship. Where circumstances transform the mutual spirit, the terms must be renegotiated to preserve the relationship. A contract symbolizes the underlying relationship. But such rigid terms are too brittle for turbulent environments. We need to be flexible. A contract is a contract. Had the price risen we wouldn’t have complained. We would, however, consider a second contract who’s terms would help offset their losses.

16 Hofstede’s Five Dimensions
Social Orientation Power Orientation Uncertainty Orientation Goal Orientation Time Orientation

17 Social Orientation Individualism Collectivism
Relative importance of the interests of the individual versus interests of the group

18 power/authority within
Power Orientation Power Respect Power Tolerance Appropriateness of power/authority within organizations

19 Uncertainty Orientation
Uncertainty Acceptance Uncertainty Avoidance An emotional response to uncertainty and change

20 to achieve different goals
Goal Orientation Aggressive Goal Behavior Passive Goal Behavior (masculine) (feminine) What motivates people to achieve different goals

21 Time Orientation Long-term Outlook Short-term Outlook
The extent to which members of a culture adopt a long-term or a short-term outlook on work and life

22 Other Cultural Orientations
Inner-directed vs. Outer-directed High context vs. Low context Neutral vs. Emotional Achievement vs. Ascription Achievement culture: people are accorded status based on how well they perform their jobs Ascription culture: status is attributed based on who or what the person is

23 Synthesis of Country Clusters
Adapted from Figure 4–8: A Synthesis of Country Clusters

24 Power Distance Index

25 Individualism

26 Masculinity

27 Uncertainty Avoidance Index

28 Hofstede Results Comparison

29 Hofstede’s Dimensions

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