Professional Documents
Culture Documents
MNCE9
MNCE9
Socio-cultural Environment
MNCE
Socio-cultural Environment
Business is as much a socio-cultural phenomenon as it is an economic activity. Per capita income in two countries may be the same, yet the consumption patterns in these countries may differ. Socio-cultural forces have considerable impact on products people consume; designs, colors and symbols they like; dresses they wear and emphasis they place on religion, work, entertainment, family and other social relations. Socio-cultural environment influences all aspects of human behavior and is pervasive in all facets of business operations.
WHAT IS CULTURE?
The word culture comes from the Latin cultura, which is related to cult or worship. In its broadest sense, the term refers to the result of human interaction.
Culture
Culture can be defined as a "sum total of human knowledge, beliefs, art, morals, laws, customs and any other capabilities and habits acquired by humans as members of society. It is a distinctive way of life of a group of people, their complete design of living. Culture thus refers to entire human social heritage - a distinctive life style of a society and its total value system which is intricately related to the consumption pattern of the people and management philosophies and practices.
Definition of Culture
The integrated sum total of learned behavioral traits that are manifest & shared by members of a society the man-made part of our environment the distinctive life style of a people acquired thru learned behavior
WHAT IS CULTURE?
Culture is acquired knowledge that people use to interpret experience and generate social behavior. This knowledge forms values, creates attitudes, and influences behavior.
WHAT IS 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.
A Model of Culture
Iceberg Theory
Definitions
Evident Culture
.. customs, language, art, artifacts & behavior
the first cultural phenomena you recognize as a foreigner. ie siesta in Mexico, being punctual in Germany, job hopping in the U.S., driving on the left in UK, bull fights in Spain.
Deep Culture
.. the underlying aspects of a culture, i.e. values, norms, cause -effect relationships, views of the world, -- very difficult to change
fine arts literature drama classical music popular music folk-dancing games cooking dress language rituals techniques laws customs DEEP CULTURE
EVIDENT CULTURE
notions of modesty concept of beauty ideals governing child-rearing rules of descent cosmology relationship to animals patterns of superiority relations definition of sin courtship practices concept of justice incentives to work notions of leadership tempo of work patterns of group decision making concept of cleanliness attitudes toward the dependent theory of disease approaches to problem solving concept of status mobility eye behavior nature of friendship concept of self ordering of time Roles in relation to status by age, sex, class, occupation, kinship, and so forth. conversational patterns in various social contexts concept of past and future definition of insanity patterns of visual perception preference for competition or cooperation body language Social interaction rate notions of adolescence notions about logic and validity patterns of handling emotions facial expressions arrangement of physical space community sense myths values assumptions etc!
Culture
Some of the important elements to understand a country's culture are: language, aesthetics, education, religions and superstitions, attitudes and values, material culture, social groups and organizations, and business customs and practices.
Elements of Culture:
Language Aesthetics
Graphic & Structural Arts Folklore Music, Drama, Dance
Material Culture
Technology Economics
Belief Systems Humans and The Universe Social Institutions Political Structures Education Social Organization
Culture-Language
Language is an important element of culture and it is through language that most of the communications take place. When General Motors of the United States literally translated its marketing phrase 'Body by Fisher' into Flemish language, it meant 'Corpse by Fisher'. Similarly, the phrase "Come alive with Pepsi" faced problems when it was translated into German advertisements as "Come out of grave" or in Chinese as "Pepsi brings your ancestors back from the grave". When the American car called 'Nova' was introduced in Puerto Rico, sales were poor until the company realized that the word Nova was pronounced as 'No va' - which literally meant in Spanish "does not go". Sales were better when the name was changed to 'Carbie'.
LANGUAGE
Spoken Language Language does far more than just enable people to communicate with each other. The nature of a language also structures the way we perceive the world. The classic illustration of this phenomenon is that whereas the English language has but one word for snow, the language of the Inuit (Eskimos) lacks a general term for it. Instead, because distinguishing different forms of snow is so important in the lives of the Inuit, they have 24 words that describe different types of snow (e.g., powder snow, falling snow, wet snow, drifting snow). Because language shapes the way people perceive the world, it also helps define culture. Countries with more than one language often have more than one culture. Canada has an English-speaking culture and a Frenchspeaking culture.
LANGUAGE
Spoken Language English is increasingly becoming the language of international business. Most people prefer to converse in their own language, and being able to speak the local language can build rapport, which may be very important for a business deal. International businesses that do not understand the local language can make major blunders through improper translation. For example, the Sunbeam Corporation used the English words for its Mist-Stick mist-producing hair curling iron when it entered the German market, only to discover after an expensive advertising campaign that mist means excrement in German.
LANGUAGE
Unspoken Language We all communicate with each other by a host of nonverbal cues. The raising of eyebrows, for example, is a sign of recognition in most cultures, while a smile is a sign of joy. Many nonverbal cues, however, are culturally bound. While most Americans and Europeans use the thumbs-up gesture to indicate that its all right, in Greece the gesture is obscene.
LANGUAGE
Unspoken Language Another aspect of nonverbal communication is personal space, which is the comfortable amount of distance between you and someone you are talking with. In the United States, the customary distance apart adopted by parties in a business discussion is five to eight feet. In Latin America, it is three to five feet. Consequently, North Americans may feel that Latin Americans invading their personal space are being aggressive and pushy. And can be seen backing away from them during a conversation. In turn, the Latin American may interpret such backing away as aloofness. The result can be a regrettable lack of rapport between two businesspeople from different cultures.
Culture-Aesthetics
Aesthetics are of special interest to the international business executives for these govern the norms of beauty in a society and are helpful in correctly interpreting meanings of various methods of artistic expressions, colors, shapes, forms and symbols in a particular culture. Colors, for instance, mean different things to different people. The color of mourning is black in the United States, but it is white in the Far East. Green is restful color to Americans, but it is disliked by people in Malaysia where it connotes illness and death. Symbols also need to be interpreted correctly. Seven, for instance, signifies good luck in the United States but just opposite in Singapore, Ghana and Kenya. Use of number four should be avoided in Japan because it is pronounced as 'shi' which in Japanese means death.
Culture-Education
Education is generally understood as formal schooling. However, it is better to adopt a broader perspective and define education as any process, formal or informal, through which one learns skills, ideas and attitudes. Education is important as it affects not only the education levels but also the development of mental faculties and various skills. In general, educated people have been found to be more sophisticated, discriminating and receptive to new products and ideas. Availability of educated manpower like skilled labor, technicians and professionals is also dependent on the country's education level. Media to be used by a company for promoting its products and services are also dependent on education level prevailing in the country. The conventional forms of printed communications, for instance, do not work in countries where literacy rates are low.
Culture-Education
The availability of a pool of skilled and educated workers seems to be a major determinant of the likely economic success of a country. The knowledge base, training, and educational opportunities available to a country's citizens can also give it a competitive advantage in the market and make it a more or less attractive place for expanding business. In analyzing the competitive success of Japan since 1945, for example, Michael Porter notes that after the war, Japan had almost nothing except for a pool of skilled and educated human resources. The recent trend to outsource information technology jobs to India, for example, is partly due to the presence of significant numbers of trained engineers in India, which in turn is a result of the Indian education system.
Culture-Education
The general education level of a country is also a good index of the kind of products that might sell in a country and of the type of promotional material that should be used. For example, a country where more than 70 percent of the population is illiterate is unlikely to be a good market for popular books. Promotional material containing written descriptions of mass-marketed products is unlikely to have an effect in a country where almost three-quarters of the population cannot read. It is far better to use pictorial promotions in such circumstances.
Culture-Technology
Technology includes the ways and means applied in making of material goods. It is technical know-how in possession of the people of a society. Choice of technology has its repercussions on the size of investment, scale of operations as well as type and number of workers to be employed. Technology transfer has been a highly controversial issue in the past. Because of supply of obsolete or inappropriate technology, many developing countries have laid down stringent rules and regulations concerning technology imports and payments. Since transfer of new technology is often riddled with workers' resistance to change and public criticisms, multinational corporations generally have suitable action plans to counter such opposition.
Culture-Material Culture
Business implications of material culture of a society are obviously many. The goods and services that are acceptable in one market may not be acceptable in another market because of differences in material cultures of two societies. For example, sophisticated electronic appliances widely in demand in the technologically and economically advanced Western countries may not find a market in the less developed countries of Asia, Africa or Latin America.
Practices
A familiarity with business customs and practices prevalent in different countries is a must to avoid business blunders. American managers, for instance, are by nature highly work oriented and attach utmost importance to speed and punctuality in business dealings. They are, moreover, highly achievement oriented and fond of new things. Japanese, on the other hand, are also workaholics but they are very slow in decision making Latin Americans too do not believe in haste and spend considerable time in socializing and developing friendships before coming to business transactions. While in countries like the United States it is necessary to have final agreement in writing, this practice is not much appreciated in many West Asian countries where oral agreement alone is considered more than sufficient.
Subcultures
Within each culture there are many subcultures that can have business significance. Subcultures are found in all national cultures and failure to recognize them may create impressions of sameness which in reality may not exist. A single national and political boundary does not necessarily mean a single cultural entity. Canada, for instance, is divided between its French and English heritages, although politically the country is one. Because of such distinctive cultural division, a successful marketing strategy among the French Canadians might not effectively work among the English Canadians or vice-versa. Similarly a single personnel policy may not work with workers employed in two different plants if they belong to different sub cultural groups and differ in their work habits and underlying motivations.
CULTURAL CHANGE
Culture evolves over time, although changes in value systems can be slow and painful for a society. Social turmoil is an inevitable outcome of cultural change. As countries become economically stronger, cultural change is particularly common.
Values in Culture
Cultural Diversity
A supplemental way of understanding cultural differences is to compare culture as a normal distribution, as in Figure 1, and then to examine it in terms of stereotyping, as in Figure 2. French culture and American culture, for example, have quite different norms and values. So the normal distribution curves for the two cultures have only limited overlap. However, when one looks at the tail ends of the two curves, it is possible to identify stereotypical views held by members of one culture about the other. The stereotypes are often exaggerated and used by members of one culture in describing the other, thus helping reinforce the differences between the two while reducing the likelihood of achieving cooperation and communication. This is one reason why an understanding of national culture is so important in the study of international management.
Cultural Diversity
Figure 1
Cultural Diversity
Figure 2
Cultural Diversity
Cultural Diversity
Differences in work values also have been found to reflect culture and industrialization. Researchers gave a personal-values questionnaire (PVQ) to over 2,000 managers in five countries: Australia (n 281), India (n 485), Japan (n 301), South Korea (n 161), and the United States (n 833). The results showed some significant differences between the managers in each group. U.S. managers placed high value on the tactful acquisition of influence and on regard for others. Japanese managers placed high value on deference to superiors, on company commitment, and on the cautious use of aggressiveness and control. Korean managers placed high value on personal forcefulness and aggressiveness and low value on recognition of others. Indian managers put high value on the non-aggressive pursuit of objectives. Australian managers placed major importance on values reflecting a lowkey approach to management and a high concern for others. In short, value systems across national boundaries often are different.
Cultural Diversity
At the same time, value similarities exist between cultures. In fact, research shows that managers from different countries often have similar personal values that relate to success. England and Lee examined the managerial values of a diverse sample of U.S. (n 878), Japanese (n 312), Australian (n 301), and Indian managers (n 500). They found that:
1. There is a reasonably strong relationship between the level of success achieved by managers and their personal values. 2. It is evident that value patterns predict managerial success and could be used in selection and placement decisions. 3. Although there are country differences in the relationships between values and success, findings across the four countries are quite similar. 4. The general pattern indicates that more successful managers appear to favor pragmatic, dynamic, achievement-oriented values, while less successful managers prefer more static and passive values. 5. More successful managers favor an achievement orientation and prefer an active role in interaction with other individuals who are instrumental to achieving the managers organizational goals. 6. Less successful managers have values associated with a static and protected environment in which they take relatively passive roles.
Cultural Diversity
In Taiwan, receiving a
pineapple for a
gift is a good omen for a businessperson
What number in Chinese-speaking countries and also in Japan is as ominous as the number 13 in Western culture?
The executive of a Chinese company is celebrating their 65th birthday. Which of the following is not a appropriate gift?
A: a silk tie
B: a silver Mont Blanc pen C: a gold clock D: a crystal paperweight E: gold and jade cufflinks
The executive of a Chinese company is celebrating their 65th birthday. Which of the following is not a appropriate gift?
A: a silk tie
B: a silver Mont Blanc pen C: a gold clock D: a crystal paperweight E: gold and jade cufflinks
Youre creating a sales training manual for employees doing business in Japan. When would you tell them NOT to discuss business?
Youre creating a sales training manual for employees doing business in Japan. When would you tell them NOT to discuss business?
At a business dinner in Korea, your counterparts wine glass is halfempty. What should you do?
A: refill her glass immediately B: sit back and let her refill her own glass C: wait until her glass is empty and then refill it D: fill your own glass and replace it with hers
At a business dinner in Korea, your counterparts wine glass is halfempty. What should you do?
A: refill her glass immediately B: sit back and let her refill her own glass C: wait until her glass is empty and then refill it D: fill your own glass and replace it with hers
Red
Red represents witchcraft and death in many African countries. Red is a positive color in Denmark.
Red
China - symbol of celebration and luck, used in many cultural ceremonies that range from funerals to weddings India - color of purity (used in wedding outfits
Yellow
Yellow Asia sacred, imperial Western cultures - joy, happiness.
Blue
China - associated w/immortality. Hindus - the color of Krishna Middle East - protective color * Note: Blue is often considered to be the safest global color.
Green
China - studies indicate this is not a good color choice for packaging, green hats mean a man's wife is cheating Arab world- the color of Islam Ireland - religious significance Some tropical countries - associated with danger Western cultures - indicates environmental awareness
Dimensions of Culture
For well over two decades, researchers have attempted to cluster countries into similar cultural groupings for the purpose of studying similarities and differences. Such research also helps us to learn the reasons for cultural differences and how they can be transcended.
Edward T. Hall
M-time is one-thing-at-a-time
Monochronic cultures stress a high degree of scheduling and an elaborate code of behavior built around promptness in meeting obligations and appointments Americans are mostly monochronic
P-time is many-things-at-a-time
human relationships and interactions are valued over arbitrary schedules and appointments. Many things may occur at once (since many people are involved in everything), and interruptions are frequent. P-time is common in Mediterranean and ColonialIberian-Indian cultures.
In low-context communication, listener knows very little & must be told practically everything In high-context communication listener is already 'contexted' - does not need much background information
Latin American
Spanish Italian English (UK) French
German
Swiss
Geert Hofstede
organizational psychologist
1. Power distance 2. Uncertainty Avoidance 3. Individualism 4. Masculinity 5. Time Horizon
In 1991 surveyed IBM employees & managers in 53 countries Identified 5 dimensions that national culture and explained 50% of the differences in respondents attitudes
especially significant because the type of organization is held constant
Geert Hofstede
1. Power distance
or the degree to which members of a society automatically accept a hierarchical or unequal distribution of power in organizations and the society
Hofstedes Cultural DimensionsPower distance High power distance countries: e.g., Mexico, South Korea, India Low power distance countries: e.g., Austria, Finland, Ireland
Geert Hofstede
2. Uncertainty avoidance
or the degree to which members of a given society deal with the uncertainty & risk of everyday life and prefer to work with long-term acquaintances and friends rather than with strangers
Geert Hofstede
3. Individualism
or the degree to which an individual perceives him- or her-self to be separate from a group and free from group pressure to conform
Geert Hofstede
4. Masculinity
or the degree to which a society looks favorably on aggressive and materialistic behavior
Geert Hofstede
5. Time horizon
(short term to long term)
or the degree to which members of a culture are willing to defer present gratification in order to achieve long-term goals
Individualism Index
2 3
1. Costa Rica 2. Korea & Mexico 3. Brazil & India 4. Israel & Ireland 5. Australia & U.S.A. 6. France & Italy
2 1 4 5 8
7 9
1. Norway 2. Malaysia 3. Jamaica 4. U.S.A. 5. Taiwan 6. Costa Rica 7. Australia 8. Mexico 9. Japan 10. Greece
6
Strong Uncertainty Avoidance Feminine 10
112
10 Strong Uncertainty
Avoidance Masculine 100
Masculinity Index
Case Study
Country Clusters
To date, perhaps the most integrative analysis of all available findings has been provided by Ronen and Shenkar. After conducting a thorough review of the literature, they found that eight major cluster studies had been conducted over the previous 15 years. These studies examined variables in four categories: (1) the importance of work goals; (2) need deficiency, fulfillment, and job satisfaction; (3) managerial and organizational variables; and (4) work role and interpersonal orientation. Based on careful analysis of these research efforts, Ronen and Shenkar identified eight country clusters and four countries that are independent and do not fit into any of the clusters (see Figure). Each country in Figure that has been placed in a cluster is culturally similar to the others in that cluster. In addition, the closer a country is to the center of the overall circle, the greater its per capita gross national product (GNP). Those countries with similar GNPs will not necessarily have intercluster similarity, but to the extent that GNP influences values and culture, these countries will have converging cultural values.
Country Clusters
Country Clusters
The concept of country clusters is useful to those studying multinational management as well. Ronen and Shenkar note: As multinational companies increase their direct investment overseas, especially in less developed and consequently less studied areas, they will require more information concerning their local employees in order to implement effective types of interactions between the organization and the host country. The knowledge acquired thus far can help one to understand better the work values and attitudes of employees throughout the world. American theories work very well for Western nations. Are they equally applicable in non-Western countries? Clearly, more cluster research is called for, including research in countries from all parts of the globe.
Fons Trompenaars
7 dimensions of culture
Universalism vs. Particularism
What is more important - rules or relationships?
GLOBE Results
Corresponds generally with those of Hofstede and Trompenaars. Different from Hofstede in that many more researchers with varied perspectives were involved (vs. Hofstede workng alone); studied many companies vs. Hofstedes IBM. GLOBE provides a current comprehensive overview of general stereotypes that can be further analyzed for greater insight.
GLOBE Project
GLOBE Analysis
International Blunders
To avoid making blunders, a person must be able to discern the difference between what must be done, what must not be done, and what may or may not be done. Complete knowledge and understanding of a foreign culture, however, is almost impossible to acquire. Understanding of any foreign culture requires knowledge in a great many areas. Unfortunately, even a wellintended person can commit a blunder by overlooking just one seemingly unimportant aspect of a foreign culture.
On New Years Day 1985, A former president of American Express, Japan was featured in a full-page ad in a photo of himself wearing a Japanese kimono. Apparently, no foreigner had done this before and it was suspected by many Japanese that it was intended as a joke to make fun of the local culture. Some even complained that it was an intentional attempt to humiliate the Japanese.
The peoples of each culture uniquely utilize body movements as methods of communication. The meanings of motions and signs common in one culture may relay something quite different in another. Consider, for example, the OK sign commonly used in the United States. In France it signifies zero, and in Japan it symbolizes money. In parts of South America, however, it is a vulgar gesture. One unfortunate company learned this when it had an entire catalog printed with an OK stamp on each page. Although the error was quickly discovered, it created a costly six-month delay while all of the catalogs were reprinted.
People in the United States shake their heads up and down to signify yes. Many British, however, make the same motions just to indicate that they hearnot necessarily that they agree. To say no, people shake their heads from side to side in the United States, jerk their heads back in a haughty manner in the Middle East, wave a hand in front of the face in the Orient, and shake a finger from side to side in Ethiopia. Asian Indians sometimes shift their heads from side to side in a slightly jerky manner to indicate interest. However, in New Zealand people suck in a bit of air to show the same interest.
During the groundbreaking ceremonies for Hitachis subsidiary, Hitachi Automotive Products (USA), Inc., the Governor of Kentucky presented the Japanese executives with a flag of the Commonwealth of Kentucky. After opening the flag for all to see, the Japanese carelessly dragged it along the ground. In Japan (and in many other countries), flags are not treated with the same respect as they are in America. The Japanese really meant no disrespect; they simply were unaware of U.S. customs about flags. However, many in the audience, especially the older Americans, were offended.
One U.S. company lost a major contract opportunity in Greece because its managers tried to impose U.S. customs on the Greek negotiators. Besides being too forthright and outspoken in the eyes of the Greeks, the Americans tried to set time limits for the meetings. The Greeks, however, considered time limits insulting and thus felt that the Americans showed a lack of finesse. The Americans also wanted the Greeks to first agree to principles and then allow their subordinates to workout all necessary details. The Greeks viewed this as a deceptive strategy; they preferred to directly handle all arrangements regardless of the time involved.
One large firm went to China with a 50-plus page legal document to license pollution control technology. The Chinese laughed at them, tossed it out, and the proposed deal would have fallen through, but because good personal relations had been established, they allowed the firm to start over. A 10-page document was then developed and accepted. A Columbus, Ohio company committed a minor error in filling out a form in Brazil. Unfortunately, this mistake resulted in the firm being unable to withdraw $200,000 in profits it eventually earned there. What was the minor error? Someone had failed to place a check in a box on the document that would have allowed the company to withdraw profits at a reasonable rate.
Protocol with regard to location is often the source of international blunders between cultures. A Chicago company was bidding on a public works project in Thailand and was waiting for the Thai contingent to arrive at their Chicago offices for the meeting. After hours of waiting, the Chicago company found out that the Thai group was still waiting to be picked up at the airport. They rescheduled a meeting for the next day, only to find out that the same communication problem existed. The Thai group waited for the Chicago company to pick them up at the hotel, while the Chicago company expected the Thai group to meet them at the Chicago office.
In France, McDonalds overlooked a cultural difference that led to years of litigation. In selecting a French partner, McDonalds examined a number of characteristics that would ensure sales. McDonalds is very good at this and, as usual, was successful. However, it did not examine carefully enough its partners attitudes about cleanliness. Because French firms sometimes place less emphasis on cleanliness than U.S. firms do, local references of the French partner did not expose this as a troublesome issue. As business in France grew, however, McDonalds soon observed hygiene habits it considered unacceptable in its U.S. outlets. These habits, though, were not viewed as negatively by the French partner or by most of the French customers, for that matter. The real problem? Many of the outlets customers were U.S. tourists expecting U.S. standards. The French outlets, there- fore, negatively impacted McDonalds global image and threatened its clean reputation at home.
A local supermarket hoping to impress Japanese visitors served sushi and tea to its guests. Unfortunately, it not only served the fish cooked when the fish should have been served raw, but the supermarket also served Chinese tea.
Even the rejection of a cup of coffee can cause major problems. While a very profitable opportunity was being negotiated, one U.S. executive innocently made the mistake of refusing a Saudi Arabians friendly offer to join him for a cup of coffee. Such a rejection is considered an affront in Saudi Arabia. Naturally, the Saudi became much less sociable, and the negotiation process was much less successful than it might have been.
Even Professors of International Business have been known to make mistakes. Indiana University, for example, hosted an important international business conference in 2002 and invited five distinguished speakers to talk about the history of international business education. Dr. John Daniels, past president of the Academy of International Business and a highly visible researcher in the field of international business, was one of the special speakers. As he was about to make his presentation, however, he saw he had a problem. Sitting in the audience was a person whom Dr. Daniels had identified in his already circulated paper as dead.