CHAPTER 7

ROLE OF CULTURE

CHAPTER OVERVIEWROLE OF CULTURE IN

INTERNATIONAL BUSINESS

ELEMENTS OF CULTURE

LANGUAGE

COMMUNICATION

RELIGION

CULTURAL DIFFERENCES AND ETHICS

CULTURAL CLUSTER

GREENFIELD INVESTMENT

CULTURAL CONVERGENCE

CONCEPT

INTRODUCTION

CHARACTERISTICS OF CULTURE

SELF REFERENCE CRITERION

CROSS CULTURAL LITERACY

ACCULTURATION

7.1 CONCEPT

7.1.1 INTRODUCTION

DEFINITION OF CULTURE

“Acquired knowledge that people use to interpret

experience and generate social behaviour, and this

knowledge form values, creates attitudes, and

influence behaviour”

“Collection of values, beliefs, behaviours, customs and

attitudes that distinguish one society from another”

7.1.2 CHARACTERISTICS OF CULTURE

Learned behaviour

Transmitted from one member of a society to another

Inter-related

Culture will also affect our way of working

Adaptive

Culture changes in response to external forces that affect the society

Shared

Culture is shared by members of the society and defines the membership of the society

7.1.2 SELF REFERENCE CRITERION

Unconscious use of one’s own culture to asses new

surroundings

Using cultural background, values, experiences

7.1.3 ACCULTURATION

Process of modification of the culture of a

group/individual as a result of contact with a

different culture

Important for home country managers who

frequently interact with host country national

7.1.4 CROSS-CULTURAL LITERACY

The first step in acculturation- process where people

not only understand a foreign culture but also

modify and adapt their behaviour to make it

compatible with that culture

CCL- “Understanding of how cultural differences

can affect the way business being practiced”

Referred to as cultural competence-language, styles,

behaviours

7.2 ELEMENTS OF CULTURE

7.2.1 SOCIAL CULTURE

Individuals with family, groups

Family

Societies involve individuals living in family units

Different family units in different cultures shape individuals

Eg: An American family and a Malaysian family. What will

happen once their son/daughter reaches 18?

Groups

Individualism and collectivism levels between western and

eastern culture

Social stratification

Rigid subdivision of a society into a hierarchy of layers,

differentiated on the basis of power, prestige, and

wealth @ how a culture divides its population

according to social layers/status

Basis- occupation, educational achievements etc

Social mobility- ability of individuals to move from one

stratum(class) to another- affecting communication

7.2.2 LANGUAGE

Primary delineator(indicator) of cultural groups- a

means of communication

Spoken and written

Roles

Information gathering and evaluation

Access to local society

Increasingly important in company communications

May influence business operations

Language as competitive weapon

For business ties

Eg Business ties between Canada, US, England were formed because of the ease of communication

Lingua franca

Predominant language is needed in business

Translation

Translators must be sensitive- to avoid marketing disasters

Saying no

Source: Google

7.2.3 COMMUNICATION

Non verbal communication

Facial expressions, hand gestures, etc

Non verbal forms of communication can lead to

misunderstandings because of differences in culture

7.2.4 RELIGION

Shapes the attitudes of its believers towards work,

consumption, future planning

Affect business environment, and types of products

to be purchased

Firms that fail to adjust to different religion-related

cultural needs may suffer from accusations of low

morale and lost sales

7.2.5 Values and attitudes

Values- principles and standards accepted by members

Often stem from deep-seated beliefs about the individual’s position in relation to his or her holy being, family and social hierarchy

Different cultures have different values on

Time

Age

Education

Status

7.3 CULTURAL DIFFERENCES AND

ETHICS

High context- low context approach

High context- In a conversation, words are less

important, greater attention must be given to

additional forms of communication- voice tone, body

language, facial expression

Eastern cultures have high context in communication

Low context- Words used by the speaker will convey

the message to the listener

Western cultures have low context when communicating

7.3.1 CULTURAL CLUSTER

Techniques for classifying and making sense of

national culture

Because similarities exist among many cultures-

reducing the need to customize business practices

Comprised of countries that share many cultural

similarities

7.3.2 GREENFIELD INVESTMENT

Method of entering a foreign market

Some countries choose greenfield investment(new

investment) as a method to enter a foreign market

because of differences in culture

7.3.3 CULTURAL CONVERGENCE

Mixing of 2 or more cultures- globalization