Chapter 03.mrm

Chapter Three Differences in Culture

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Overview

• What is culture? • Social Structure • Religious and Ethical Systems • Language • Education • Cultural Change

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What is Culture? “That complex whole which includes knowledge, belief, art, morals, law, custom, and other capabilities acquired by man as a member of society.” - Edward Tylor (19th century anthropologist) McGraw-Hill/Irwin International Business, 6/e

“A system of values and norms that are shared among a group of people and that when taken together constitute a design for living.” - Hill (adapted from Hofstede, Namenwirth, and Weber) © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.

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Components of Culture • Values - cultural bedrock

• Norms - social rules that govern interactions

• Society - a group that shares common values and norms McGraw-Hill/Irwin International Business, 6/e

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Folkways and Mores Folkways • Routine conventions of everyday life. - Social conventions such as dress codes, social manners, and neighborly behavior - Demonstrate social (or cross-cultural) competence - Violations generally do not invite moral judgment (i.e. of good and evil) McGraw-Hill/Irwin International Business, 6/e

Mores • Norms that are central to the functioning of society and its social life - Greater significance than folkways - Actions may be either illegal (theft, adultery) or taboo (incest, cannibalism) - Violators are considered evil; violations bring serious retribution © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.

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Culture, Society, and the Nation State • Distinctions - Culture: A system of values shared by a group - Society (ethnie): A group bound by a common culture - Nation: A self-defined cultural and social community (an “imagined” community, Benedict Anderson) - State: A political association with effective sovereignty over a geographic area

• Issues - Societies, nations and states do not always correspond - Subcultures (often hidden) are found in many nation-states McGraw-Hill/Irwin International Business, 6/e

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The Determinants and Manifestations of Culture

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Social Structure • Social structure refers to its basic social organization • Two dimensions that are particularly important include: - The extent to which society is group or individually oriented - Degree of stratification into castes or classes

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Individual vs. Group Orientation • Individualistic societies tend to view a person’s attributes and achievements as more important than the group’s to which they belong • Emphasis on individual performance can be both beneficial and harmful - Encourages entrepreneurship - Can lead to high degree of managerial mobility

• Collectivistic societies see groups as the primary unit of social organization, with group membership as all important • Emphasis on the group can be both beneficial and harmful - Encourages mutual selfhelp and collective action - Discourages individual action and initiative

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Social Stratification • Social stratification refers to the fact that all societies are stratified on a hierarchical basis of social categories • Strata are typically defined on the basis of characteristics such as family background, occupation, and income • Societies are all stratified to come degree but they differ in two related ways - Social mobility refers to the extent to which individuals can move out of the strata into which they are born - The extent to which the stratification of a society affects the operation of business organizations, this is known as significance Return McGraw-Hill/Irwin International Business, 6/e

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Religious and Ethical Systems • Religion: a system of shared beliefs and rituals that are concerned with the realm of the sacred • Ethical systems: a set of moral principles, or values, that are used to guide and shape behavior - Most of the world’s ethical systems are the product of religions

• Among the thousands of religions in the world today, four dominate in terms of numbers of adherents: -

Christianity with 1.7 billion adherents Islam with 1 billion adherents Hinduism with 750 million adherents Buddhism with 350 million adherents

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Religious and Ethical Systems

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Economic Implications of Christianity • The Protestant Work Ethic (Max Weber) - Weber observed that in 19th century Europe the economic “winners” (owners of capital, the professions and skilled labor) were overwhelmingly Protestant. - Weber argued that the “Protestant Work Ethic” was central to their success. Protestant ethics emphasizes • the individuals direct relation to God, and • the importance of hard work and wealth creation (to achieve salvation and for the glory of God) and frugality (abstinence from worldly pleasures).

- This culture of hard work and savings generated capital which was reinvested in further enterprise, paving the way for the development of capitalism in the West Return

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Economic Implications of Islam • The Koran establishes some explicit economic principles, many of which are consistent with a free market economy and entrepreneurship - The Koran speaks approvingly of enterprise and the earning of legitimate profit through trade and commerce - The protection of the right to private property is also embedded within Islam - Islam is critical of those who earn profit through the exploitation of others

• Muslim countries are generally receptive to international business so long as local values and norms are followed • Over the past 100 years Islam has been going through a process of reform as it adapts to modernization and globalization McGraw-Hill/Irwin International Business, 6/e

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Language • Spoken - Verbal cues - Language structures perception of world

• Unspoken - Body language - Personal space

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Education • Formal education plays a key role in modern society

- medium through which individuals learn indispensable language, conceptual, and mathematical skills - supplements the family’s role in socializing the young into the values and norms of a society - teaches basic facts about the social and political nature of a society and the fundamental obligations of citizenship

• Cultural norms are also taught indirectly at school

- Part of a “hidden curriculum” - Examples of cultural norms include: respect for others, obedience to authority, honesty, neatness, being on time - The grading system socializes children to value of personal achievement and competition

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Cultural Change • Culture is not a constant; it evolves over time - Since 1960s American values toward the role of women have changed - Japan moved toward greater individualism in the workplace

• Globalization will continue to have impacts on cultures around the world - Is the world moving toward greater cultural convergence or divergence? - Are the values of collectivistic culture incompatible with economic progress and development McGraw-Hill/Irwin International Business, 6/e

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Cultural Change

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Managerial Implications • Cross-cultural literacy - The danger of ethnocentrism

• Culture and competitive advantage - Value systems and norms influence the cost of doing business in a country (transaction costs) • How determinative is culture for economic success? • How important is culture in shaping the foreign investment decisions of MNCs?

• Culture and business ethics McGraw-Hill/Irwin International Business, 6/e

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Looking Ahead to Chapter 4

• Ethics in International Business -

Ethical Issues in International Business Ethical Dilemmas The Roots of Unethical Behavior Philosophical Approaches to Ethics Ethical Decision Making

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