WEEK 4
CULTURE AND ITS DIFFERENCES
INTERNATIONAL BUSINESS
MANAGEMENT
By Samra Azam Chaudhri
Culture
◦ Culture is a complex phenomenon
that includes knowledge, beliefs, art,
morals, law, customs, and other
capabilities acquired by people as
members of society. 2. Values and
norms are the central components of
a culture. Values are abstract ideals
about what a society believes to be
good, right, and desirable. Norms
are social rules and guidelines that
prescribe appropriate behavior in
particular situations
Values and Norms
◦ 3. Values and norms are influenced by
political forces, economic philosophy,
social structure, religion, language, and
education. And, the value systems and
norms of a country can affect the costs of
doing business in that country
◦ 4. The social structure of society refers to its
basic social organization. Two main
dimensions along which social structures
differ are the individual–group dimension
and the stratification dimension
Societies
In some societies, the individual is the basic building block of a social
organization. These societies emphasize individual achievements above all
else. In other societies, the group is the basic building block of the social
organization. These societies emphasize group membership and group
achievements above all else
Virtually all societies are stratified into different classes. Class-conscious
societies are characterized by low social mobility and a high degree of
stratification. Less class-conscious societies are characterized by high
social mobility and a low degree of stratification
Language and Formal Education
◦ 8. Language is one defining
characteristic of a culture. It has both
spoken and unspoken dimensions. In
countries with more than one spoken
language, we tend to find more than
one culture
◦ 9. Formal education is the medium
through which individuals learn
knowledge and skills as well as
become socialized into the values and
norms of a society. Education plays a
role in the determination of national
competitive advantage
Culture is not constant
◦ . 10. Geert Hofstede studied how culture relates to values in the
workplace. He isolated five dimensions that summarized different
cultures: power distance, uncertainty avoidance, individualism versus
collectivism, masculinity versus femininity, and long-term versus short-
term orientation
◦ 11. Culture is not a constant; it evolves, albeit often slowly. Economic
progress and globalization are two important engines of cultural change
◦ 12. One danger confronting a company that goes abroad is being ill-
informed. To develop cross-cultural literacy, companies operating
globally should consider employing host-country nationals, build a
cadre of cosmopolitan executives, and guard against the dangers of
ethnocentric behavior.
Differences in Social Cultures
◦ Forces that lead to differences in social culture. Formal
education plays a key role in a society, and it is usually the
medium through which individuals learn many of the
languages, knowledge, and skills that are indispensable in a
modern society. Formal education supplements the family’s
role in socializing the young into the values and norms of a
society.
◦ Values and norms are taught both directly and indirectly.
Schools generally teach basic facts about the social and
political nature of a society. They also focus on the
fundamental obligations of citizenship. In addition, cultural
norms are taught indirectly at school. Respect for others,
obedience to authority, honesty, neatness, being on time,
and so on are all part of the “hidden curriculum” of schools.
The use of a grading system teaches children the value of
personal achievement and competition.
International Business Perspective
◦ From an international business perspective, one
important aspect of education is its role as a determinant
of national competitive advantage.59 The availability of a
pool of skilled and knowledgeable workers is a major
determinant of the likely economic success of a country.
In analyzing the competitive success of Japan, for
example, Harvard Business School Professor Michael
Porter notes that after the last World War, Japan had
almost nothing except for a pool of skilled and educated
human resources
Changes in Value System
◦ Culture is not a constant; it evolves over time.
◦ Changes in value systems can be slow and painful for a
society. Change, however, does occur and can often be quite
profound.
◦ At the beginning of the 1960s, the idea that women might
hold senior management positions in major corporations was
not widely accepted.
◦ Today, of course, it is a natural and welcomed reality, and
most people in the United States could not fathom it any
other way
CULTURAL LITERACY AND COMPETITIVE
ADVANTAGE
◦ International business is different from national business because countries
and societies are different. Societies differ because their cultures vary. Their
cultures vary because of differences in social structure, religion, language,
education, economic philosophy, and political philosophy.
◦ Three important implications for international business flow from these
differences. The first is the need to develop cross-cultural literacy. There is a
need not only to appreciate that cultural differences exist but also to
appreciate what such differences mean for international business.
◦ A second implication centers on the connection between culture and
national competitive advantage.
◦ A third implication looks at the connection between culture and ethics in
decision making. In this section, we explore the first two of these issues in
depth. The connection between culture and ethics is explore
References
◦ International Business Competing in Global Marketing 13th Edition 2021
◦ Interactive World Maps & Economic Data Platforms
◦
◦ Gapminder.
◦ World Bank Data
Youtube: capitalism, socialism & communism explained simply
Youtube: Cross-Cultural Management
Youtube: Hofstede - Cultural Dimensions