Topic 2 - Culture Influence On Global Business

Chapter 2
Culture Influence on Global Business

What is Culture?
 Culture: Set of values, beliefs, rules, and institutions held by a

specific group of people.
 Subculture: a group of people who share a unique way of life
within a larger, dominant culture.
 Need for Cultural Knowledge:
- Avoiding Ethnocentricity
- Developing Cultural Literacy
Components of Culture
Values and Behavior
 Values: are abstract ideas about what a group believes to be good,
right, and desirable.
 Attitudes: reflect a people’s underlying values. Attitudes are
positive or negative evaluations, feelings, and tendencies that
individuals harbor toward objects or concepts
 Aesthetics: what a culture considers “good taste” in the arts, the
imagery evoked by certain expressions, and the symbolism of
certain colors.
Values and Behavior
 Appropriate Behavior
- Manners: Behavior which is socially acceptable.
Example: Look people in the eye when you
speak(show respect), say thank you (shows
appreciation).
- Customs: A custom (also called a tradition) is a common way

of doing things.
Example: In Japan people greet each other by
bowing, take off shoes before entering Muslim house.
Values and Behavior
 Appropriate Behavior
- Folk Custom: Practiced by a homogeneous group of people; reflect the

life of the people -- their habits and customs, ideologies, beliefs, and
social activities.
Example: Lion dance is performed during the Chinese New Year to bring
good luck and drive away evil spirits
- Popular Custom: Behavior shared by a heterogeneous group or by
several groups.
Example: People in Asia accepting Western-style fast food – ‘burgers and
fries’.
Social Structure
 Social groups—collections of two or more people who identify and
interact with each other.
- Family: Nuclear vs. Extended
- Gender
 Social Status
- Positions within the structure
- Social Stratification
Social Stratification
 Social mobility is the ease with which individuals can move up or

down a culture’s “social ladder”.
 A society is stratified into classes or castes.
 Caste System: A caste system is a closed system of social
stratification in which social position is determined by the family
into which a person is born; no opportunity for social mobility.
 Class System: A class system is an open system of social
stratification in which position a person has by birth can be changed
through achievement or luck.
Education
 Education is crucial for passing on traditions, customs, and values.
 Each culture educates its young people through schooling,
parenting, religious teachings, and group memberships.
 The quality of a nation’s education system is related to its level of
economic development.
 Education levels can be a good index for the kinds of products that
might sell in a country.
Religion
 Human values often originate from religious.
 Different religions take different views of work, savings, and
material goods.
 Four religions dominate society
1. Christianity
2. Islam
3. Hinduism
4. Buddhism
 Confucianism is also important in influencing behavior and
culture in many parts of Asia.
Personal Communication
 Communication: System of conveying thoughts, feelings, knowledge, and information
through speech, writing, and actions.
 Form of communication:
 Spoken and Written Language
- The importance of understanding local languages.
- Language blunder: translation mistakes in advertising
- Lingua franca: is language that is understood by two
parties who speak different languages. English is the
most common lingua franca in international business
 Body language or nonverbal cues
- Examples include facial expressions, eye contact, touch and hand gestures .
- Failing to understand the nonverbal cues of another culture can lead to
communication failure.
Culture in the Global Workplace
 Perception of Time
 View of Work
 Material Culture
 Cultural Change
Culture in the Global Workplace
Geert Hofstede proposed six dimensions of culture:
1. Power distance - how a society deals with unequal distribution of power and
social hierarchy.
2. Uncertainty avoidance - the extent to which different cultures socialize their
members into accepting ambiguous situations and tolerating ambiguity.
3. Individualism versus collectivism - the relationship between the individual
and his fellows.
4. Masculinity versus femininity - the distribution of roles between the gender.
5. Long-term orientation (LTO) versus short-term orientation (STO) – LTO -
respect for tradition, thrift, and perseverance. STO -
value individual stability and reputation, fulfilling social obligations, and
reciprocation of greetings and gifts.
6. Indulgence versus restraint - the extent to which a society allows free
expression.

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Chapter 2

Culture Influence on Global Business

 Culture: Set of values, beliefs, rules, and institutions held by a

- Customs: A custom (also called a tradition) is a common way

- Folk Custom: Practiced by a homogeneous group of people; reflect the

 Social mobility is the ease with which individuals can move up or

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