Environment & Cultural Factor in Ib

The Cultural Factors Facing Business
By: Srikanth Thumma
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Culture Learned norms based on values, attitudes, and beliefs of a group of people
Cultural Diversity A means of gaining global competitive advantage by bringing together people of diverse backgrounds and experience
Cultural Collision
Occurs in international business when: A company implements practices that are less effective Employees encounter distress because of difficulty in
accepting or adjusting to foreign behaviors 2-2
Cultural Factors Affecting International Cultural Influences on International Business Business Operations
EXTERNAL INFLUENCES PHYSICAL AND SOCIETAL FACTORS Political policies and legal practices Cultural factors Economic forces Geographical influences OPERATIONS
OBJECTIVES
COMPETITIVE ENVIRONMENT
Cultural awareness Identification and dynamics of cultures Behavioral practices affecting business Strategies for dealing with cultural differences
STRATEGY
MEANS
Cultural Awareness Problems that hinder cultural awareness Subconscious reactions to circumstances Assumption that all societal subgroups are similar Cultural awareness can be improved Research descriptions of specific cultures Observe behavior or respected foreign nationals Study foreign market directly Companys need for cultural knowledge increases as it Moves from one to multiple foreign functions Increases the number of countries in which it operates Moves from similar to dissimilar foreign environments Converts from external to internal handling of international operations
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Identification and Dynamics of Cultures

The nation as a point of reference Each nation has certain human, demographic, and
behavioral Characteristics that give it a national identity people share values, language, and race Laws governing business apply along national lines Problems using a country-by-country approach individual differences within a country similarities link groups from different countries Cultural formation and dynamics Value systems set early in life, but may change Values may change due to choice or imposition cultural imperialism IB increases change in cultures and governments
Language as a cultural stabilizer

Culture spreads rapidly when people from different
areas speak the same language Stronger adherence to a culture if it does not share its language with other peoples English, French, and Spanish are widespread most of IB conducted in English Religion as a cultural stabilizer Religion has a strong influence on values Specific beliefs may affect business not all nations that practice the same religion have the same constraints on business where rival religions vie for political control, resulting strife may disrupt business
Major Language Groups: Population and Output
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Behavioral Practices Affecting Business

Social stratification systems Every culture values some people more than others,
thereby dictating social class or status Ascribed group membership based on: gender, family, age, and caste ethnic, racial, or national origin Acquired group membership based on religion, political affiliation, and professional and other associations Characteristics that affect status differently from country to country include Competencecompetition versus cooperation gender-based groups age-based groups family-based groups occupation
Motivationcountries differ in how much people are
motivated to work and why Materialism and leisure countries differ in emphasis on materialism Protestant ethicwork a means to salvation most people consider economic achievement to be commendable, regardless of culture Expectation of success and reward people are more eager to work if: rewards for success are high same tasks performed in different countries may have different rewards for success and consequences of failure there is some uncertainty of success same task performed in different countries may have different probabilities of success
Masculinity indexdegree of admiration for success,
sympathy for unfortunate, preference for being better than others High masculinity cultures roles differentiated by gender men should dominate Low masculinity culture need for smooth social relationships employee and social welfare has higher priority than growth and efficiency Need hierarchylower-order needs must be fulfilled prior to higher-order needs Workers in poor countries motivated by lower-order needs People from different countries may rank needs differently
Relationship Preferences
Power distancedescribes relationship between superiors and subordinates Highpeople prefer little consultation autocratic or paternalistic management Lowconsultative styles preferred easier to implement worker participation Individualism versus collectivism Individualismlow dependence on organization and desire for personal time, freedom, and challenge self-actualization a prime motivator Collectivismdependence on organization value secure physical and social environments Influences how employees interact with their colleagues Influences marketing strategies
Risk-Taking Behavior
Uncertainty avoidance Highprefer set rules and lifetime employment supervisors need to be precise when issuing directives customers less willing to try new products Trust Leads to lower cost of doing business Fatalismbelief in inevitability of events rather than selfdetermination High fatalismpeople plan less for contingencies
Information and Task Processing

Perception of cues Cues perceived selectively Each culture is able to perceive some subjects more precisely than other cultures perceive them Obtaining information Low-context culturefocuses on firsthand information that bears directly on issues to be decided High-context culturefocuses on information peripheral to the issue to be decided Information processing All cultures have ordering and classifying systems Monochronicpreference for sequential work Polychroniccomfortable working on several tasks simultaneously Idealism versus pragmatism
Strategies for Dealing with Cultural Differences
Making little or no adjustment Host cultures do not always expect foreigners to adjust to them Less adjustment necessary when moving to a country with a similar culture Communications Spoken and written language Difficult to directly translate one language into another Silent language Color associations, sense of appropriate distance, time and status cues, and body language (kinesics) Culture Shock Frustration from having to learn to cope with new cultural cues and expectations

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Environment & Cultural Factor in Ib

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The Cultural Factors Facing Business

By: Srikanth Thumma

accepting or adjusting to foreign behaviors 2-2

Identification and Dynamics of Cultures

Language as a cultural stabilizer

Major Language Groups: Population and Output

Behavioral Practices Affecting Business

Motivationcountries differ in how much people are

Masculinity indexdegree of admiration for success,

Information and Task Processing

Strategies for Dealing with Cultural Differences

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