chapter six

Sociocultural Forces

McGraw-Hill/Irwin International Business, 11/e

Copyright 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives Explain the significance of culture for international

business

Identify the sociocultural components of culture Discuss the significance of religion to

businesspeople

Explain the cultural aspects of technology

Discuss the pervasiveness of the Information
Technology Era
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Learning Objectives

Explain the importance of the ability to

speak the local language

Discuss the importance of unspoken

language in international business

Discuss the two classes of relationships

within a society
dimensions

Discuss Hofstedes four cultural value

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Rules of Thumb for Cross Culture Business

Be prepared Slow down Establish trust Understand the importance of language Respect the culture Understand the components of culture
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What is Culture
The sum total of beliefs, rules, techniques, institutions, and artifacts that characterize human populations
Learned Interrelated Shared Defines the boundaries

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Ethnocentricity

Ethnocentricity Belief in the superiority of ones own ethnic group

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Living with Other Cultures

Realize that there are many different cultures

Learn the characteristics of those cultures
Spend a lifetime in a country Do training program
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Culture Affects All Business Functions

Marketing
Variation in attitudes and values requires firms to use different marketing mixes
P&G Japanese Camay commercials Disneyland Paris

Human Resource Management

Evaluation of managers

Production and Finance

Attitudes toward authority Attitudes toward change
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Sociocultural Components
Culture is:
Aesthetics Attitudes and beliefs Religion Material Culture Language Societal organization Legal characteristics Political structures
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Aesthetics
Cultures sense of beauty and good taste
Art conveys meaning Colors, symbols, numbers--Nike air Architectural style differences feng shui

Music and Folklore

Musical tastes vary Folklore discloses way of life
Cowboys in Chile or Argentina Mexican singing cricket
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Attitudes and Beliefs

Attitudes Toward Time
Vary across cultures Difficult area for some Americans Directness and drive
Perceived to be rudeness

Deadlines
Liability abroad

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Attitudes Toward Achievement and Work

Germans put leisure first and work second The demonstration effect
Result of having seen others with desirable goods

Job Prestige
The distinction between blue-collar workers and office employees

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Religion
Responsible for many of the attitudes and beliefs affecting human behavior
Work Ethic Protestant work ethic
Duty to glorify God by hard work and the practice of thrift

Confucian work ethic

Drive toward hard work and thrift; similar to Protestant work ethic

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Will this work?

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Primary Asian Religions

Hinduism
Caste system
entire society is divided into four groups (plus the outcasts) and each is assigned a certain class of work

Buddhism
Reform of Hinduism

Jainism (Mahavira a contemporary of Buddha)

Nonviolence a major principle

Sikhism
Bridge between Hinduism and Islam
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Primary Asian Religions, contd.

Confucianism
Inseparable from Chinese culture

Taoism
Lao Tzu, contemporary of Confucius

Shintoism
Indigenous to Japan

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Islam
Five Pillars of Faith

Youngest and second largest faith

1.3 billion followers Comparison: Christianity has 2 billion adherents

Confession of faith Five daily prayers Charity Ramadan fast Pilgrimage to Mecca

Muhammad is Founder
Prophet of God and head of state

Jihad holy war Sunni-Shia Conflict

Conflict gives rise to violent clashes

Holy Book Koran

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Religious Population of the World

Insert Figure 6.1

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Animism

Spirit worship, incl. magic, witchcraft Everything in nature has its own spirit or divinity

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Material Culture

Material Culture
All human-made objects concerned with how people make things (technology) and who makes what and why (economics)

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Technology

Technology
Mix of usable knowledge that society applies and directs toward attainment of cultural and economic objectives

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Importance of Technology
Enables a firm to be competitive in world markets. Can be sold or be embodied in the companys products Can give a firm confidence to enter a foreign market Enables the firm to obtain better than usual conditions for a foreign market investment

Enables a company with only a minority equity position to control a joint venture Can change the international division of labor Causes major firms to form competitive alliances

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Material Culture - Technology

Cultural Aspects of Technology
Includes skills in marketing, finance, and management People not always ready to adapt to changes technology brings

Appropriate Technology
The technology (advanced, intermediate, or primitive) that most closely fits the society using it

Technological Dualism
The side-by-side presence of technologically advanced and technologically primitive production systems

Boomerang Effect
Situation in which technology sold to companies in another nation is used to produce goods to compete with those of the seller of the technology.

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Information Technology
Information Technology Era
As early as 2000 the Internet economy
had reached $850 billion

exceeded the size of the life insurance and real estate industries

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Spoken Language
Most apparent cultural distinction Spoken languages demarcate cultures
Switzerland: four separate cultures

Many languages can exist in a single country, but one usually serves as communication vehicle
Lingua franca or link language English primary language of business
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Language
Translation
The ability to speak the language well does not eliminate the need for translator

Back Translation
To avoid translation problems Japanese hotel: You are invited to take advantage of the chambermaid. Bangkok dry cleaner: Drop your trousers here for best results.
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Language Issues
Technical words do not exist in all languages
Usually use English

Many cultures avoid saying anything disagreeable

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Unspoken Language
Nonverbal communication
Gestures vary tremendously from one region to another Closed doors convey different meanings Office size has difference meanings in various cultures Conversational distance small in East Gift giving has specific etiquette in each culture Gift or bribe? Questionable Payments
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2003 Corruption Index Scores and Ranking

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Societal Organization
Kinship Extended Family includes blood and marriage relatives Members responsibility Although the extended family is large, each members feeling of responsibility to it is strong Associations Social units based on age, gender, or common interest, not on kinship

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Societal Organization
Associations
Age is important market segment criterion
Gender As nations industrialize, more women enter the job market and assume greater importance in the economy Free association people joined together by a common bond: political, occupational, religious or recreational

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Understanding National Cultures

Hofstedes Dimensions of Culture
Individualism versus Collectivism

Large versus Small Power Distance

Strong versus Weak Uncertainty Avoidance Masculinity versus Femininity
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Scores for Hofstedes Value Dimensions

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Individualism versus Collectivism

Collectivistic cultures
people belong to groups that are supposed to look after them in exchange for loyalty

Individualistic cultures
People look after only themselves and the immediate family

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Large versus Small Power Distance

Power distance
the extent to which members of a society accept the unequal distribution of power among individuals In large-power-distance societies
employees believe their supervisors are right; employees do not take any initiative in making non-routine decisions

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Strong versus Weak Uncertainty Avoidance

Uncertainty avoidance
Degree to which members of a society feel threatened by ambiguity and are rule-oriented Employees in high uncertainty-avoidance cultures tend to stay with their organizations Japan, Greece, and Portugal Those from low uncertainty-avoidance nations are more mobile United States, Singapore, and Denmark

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Plot of Nations: Power distance and Uncertainty Avoidance

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Plot of Nations: Individualism and Power Distance

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Masculinity versus Femininity

the degree to which the dominant values in a society emphasize assertiveness, acquisition of money and status
Masculinity achievement of visible and symbolic organizational rewards Femininity emphasize relationships, concern for others, and the overall quality of life

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