MGMT. 416

1
MGMT. 416

• International Business II
• Assoc. Prof. Dr. Sule Aker

2
Chapter 6

• Sociocultural Forces

3
Six rules for doing business across cultures

• Be prepared
• Slow down
• Establish trust
• Understand the importance of language
• Respect the host culture
• Understand the components of culture

4
Components of culture

• Surface culture Styles, food, etc.
• Deep culture Attitudes, beliefs, values, etc.

5
What is culture?

• It is the sum total of beliefs, rules,
  techniques, institutions, and artifacts that
  characterize a human population.
• Culture consists of the learned patterns of
  behaviour common to the members of a given
  society the unique lifestyle of a particular
  group of people.

6
Cultures change

• Culture is learned, not innate.
• The various aspects of culture is interrelated.
• Culture is shared.
• Culture defines the boundaries of different groups

7
Ethnocentricity is considering ones culture as
superior to others

• To learn different cultures
• One should spend a long time living in that
  country
• One should undergo an extensive, sophisticated
  training program including learning the language

8
Components of Culture

1. Aesthetics
2. Attitudes and beliefs
3. Religion
4. Material culture
5. Education
6. Language
7. Societal organization
8. Legal characteristics
9. Political structures

9
1. Aesthetics is a cultures sense of beauty and
good taste and is expressed in its art, drama,
music, folklore, and dances.

• Art is reflected in paintings, colors, form,
  sculptures, design, architecture.
• Drama is expressed in plays, movies, shows, TV
  programs.
• Music, folklore, and dances reveal a cultures
  sentiments.

10
Attitudes and beliefs

• Importand attitudes for business people
• Attitude toward time
• Attitude toward achievement
• Attitude toward change

11
Attitude toward time

• Panctuality
• Siesta
• Directness and drive
• Deadlines

12
Attitude toward achievement and work

• Germans work 37 hours/week, and they have 6 weeks
  annual vacation.
• Americans work 44 hours/week, and they have 1
  week annual vacation.
• Demonstration effect occurs as a result of seeing
  others with desirable goods. It pushes people to
  work more.
• Job prestige is where some kinds of employment
  appear to have more prestige in different
  cultures.

13
Attitudes toward change

• Some cultures resist to change more than the
  others

14
Religion
15
Asian religions

• In India Hinduism, Buddhisim, Jainism, Sikhism
• In China Confucianism, Taoism
• Japan Shintoism

16
Hinduism

• 80 of India are Hindu.
• They believe in death and rebirth (samsura).
• State of eternal bliss (nirvana) can be achieved
  through
• Yoga (purification of mind and body)
• Devout worship of gods
• Good works and obedience to laws and customs
  (dharmas) of ones caste.

17
Caste system

• The soceity is divided between classes
• Brahmins (priests)
• Warriors, politicians, landowners
• Merchants
• Peasants
• Dalits (downtrodded, oppressed, untouchables)

18
Caste system in Japan

• In the 17th Century, Tokugawa regime imposed
  caste system in Japan. Samurai were at the top.
  Then followed farmers, artisans, and merchants.
  At the very bottom, there were people with
  occupations considered dirty and distasteful,
  like slaughterers, butchers, and tanners
  (burakumin ghetto people).

19
Buddhism

• Founded by Prince Gautama. Buddhist monks are
  also leaders in the society and they participate
  in politics.
• It teaches people to clean themselves from desire
  and material wealth.

20
Jainism

• Founded by Mahavira. They believe in nonviolence
  doctrine.
• They are against animal slaughter, wars, and any
  type of violence.

21
Sikhism

• Founded by Nanak 600 years ago. It relies on the
  brotherhood of human beings.
• It is a bridge between Hinduism and Islam. They
  believe in one god, but they also believe in
  samsura, karma, and nirvana.
• They mostly live in Punjab.

22
Confucianism

• It is widespread in China. It teaches how to live
  in peace and harmony in a society.
• Jen is unselfish love for others.
• Li emphasizes politeness, respect for elders,
  ritual courtesies, like bowing.

23
Taoism

• Founded by Lao-tzu. His philosophy was praising
  the voyage of life.
• He said that each of us mirrors the male and
  female energies (yin and yang) that govern the
  cosmos. Rituals are to connect the cosmic energy.

24
Shintoism

• It is the religion of Japan. Emperor is
  considered as divine. As a part of the World War
  II settlement, the emperor was forced to renounce
  this claim.
• Japanese have shrines and they have a corner in
  their houses for shinto shrine.

25
Islam

• Islam is one of the largest religions in the
  world. Its rules also apply to everyday lives of
  the Moslems.
• It is founded by Hz. Mohammad in 640 AD.
• The basic duties of Moslems are
• Accepting the confession of faith
• Praying five times a day
• Giving charities
• Fasting during Ramazan
• Making pilgrimage to Mekka

26
Animism

• It is spirit worship, and combines Catholisizm to
  a mixture of mysticism, taboos, and fatalism.
• It is wide spread in Latin America, Africa, and
  some regions of Asia.
• It is a belief tahat many things in nature like
  trees, plants, rivers, have their own spirit.

27
Christianity

• One of the largest religion in the world.
• It has three sects Catholic, Orthodox, and
  Protestant.
• Protestant Ethic emphasizes hard work and
  practice of thrift. Luther and Calvin started
  Protestant practices. Weber argued that
  Protestant Ethic is behind the economic success
  and wealth accumulation of the Protestant
  countries. And Hinduism is behind the economic
  backwardness of India.

28
Material culture

• It refers to all man-made objects and concerns
  with how (technology) people produce and who
  makes what (economics).

29
Technology

• It is the mix of the usable knowledge that the
  soceity applies and directs toward the attainment
  of cultural and economic objectives.
• Technological superiority is the key to
  development.

30
Appropriate technology is the technolgy
(advanced, intermediate, or primitive) that must
closely fits the society using it.

• Technological dualism is the side-by side
  presence of technologically advanced and
  technologically primitive production systems.
• It is a characteristic of underdevelopment.
• Boomerang effect occurs when technology sold to
  companies in other nations is used to produce
  goods to compete with those of the seller of
  technology.

31
Education

• The educational level of a country can be
  understood from (educational yardsticks)
• literacy rate,
• kinds of schools,
• quantity of schools and their enrollment,
• amount of per capita income spent on
  education.

32
Who is literate?

• One who can read and write a short sentence on
  his/her everyday life is called a literate
  person.
• However, this definition underestimated
  apprenticeship.

33
Literacy rate is the percentage of population who
can read and write.

• Literacy rate is important for marketing people,
  because according to that they decide
• what media to employ,
• advertisements,
• labels,
• point-of purchase displays,
• owners manuals.

34
Brain drain is the emigration of highly educated
professionals to other countries.

• Reverse brain drain is the return of highly
  educated professionals back to their home
  countries.

35
Gross Enrolment Ratio () - Tertiary Education

•   1980 1997 2004
• Sub-Saharan Africa  1.7 3.9 5
• Latin America and
• the Caribbean  13.7 19.4 28.6
• East Asia and Oceania  3.8 10.8 19.6
• South Asia  4.3 7.2 9.7
• Source  World Bank EduStats

36
Education of women

• Womens educational level globally is increasing.
• There is no developed country in the world where
  women are uneducated.

37
Language

• Spoken languages demarcate cultures just as
  physical barriers do.
• Lingua Franca is a foreign language used to
  communicate among a nations diverse cultures
  that have diverse languages. Examples are English
  in Africa and India, Portugese in Angola, French
  and Belgian in Africa.

38
World language map
                                                
                                                  
                           

39
Unspoken languages

• They are nonverbal communication, such as
  gestures and body language
• Gestures,
• Gift giving,
• Gifts or bribes? Bribes are gifts or
  payments to induce the receiver to do
  something illegal for the giver.
• Extortion is payments to kepp the receiver from
  causing harm to the payer.

40
Societal organization

• It is the patterned arrangement of relationships
  defining and regulating the manner by which its
  members interface with eachother. There are two
  kinds of societal organization
• Kinship
• Free association of individuals

41
Kinship cultures

• The family is the basic unit in these societies.
• Extended family includes relatives by blood and
  by marriage.
• Members resposibility In kinship societies,
  each member feels responsible for the familiy.

42
Associations

• They are social units based on age, gender, or
  common interest, not on kinship.
• The common bond could be political, occupational,
  recreational, or religious.

43
Understanding national cultures

• Geert Hofstede, a Dutch social pychologist,
  establihed four value dimensions to distinguish
  different cultures
• Individualism versus collectivism
• Large versus small power distance
• Strong versus weak uncertainty avoidance
• Masculinity versus femininty

44
Individualism versus collectivisim

• In collectivist cultures, individuals are
  supposed to look after each other.
• In individualist cultures, people look after
  themselves.

45
Large versus small distance societies

• It is the extend to which members of a society
  accept unequal distribution of power among
  individuals.
• In large power distance societies, individuals
  believe superiors are right and employees do not
  have too much initiative.

46
Strong versus weak uncertainty avoidance

• It is the degree to which members of a society
  feel threatened by ambiguity. Some societies are
  more rule-oriented than others.
• It is more difficult to introduce change in
  strong uncertainty avoidance societies.

47
Masculinity versus femininity

• This is the degree to which the dominant values
  in a society emphsizes assertiveness, aquisition
  of money and status, and organizational rewards.
• In the soceities where femininity is stronger,
  dominant values emphasize relationships, concern
  for others, and the overall quality of life.

48
Hofstedes value dimensions

• Power Distance Index
• Hofstedes Power distance Index measures the
  extent to which the less powerful members of
  organizations and institutions (like the family)
  accept and expect that power is distributed
  unequally. This represents inequality (more
  versus less), but defined from below, not from
  above. It suggests that a societys level of
  inequality is endorsed by the followers as much
  as by the leaders.
• For example, Germany has a 35 on the cultural
  scale of Hofstedes analysis. Compared to Arab
  countries where the power distance is very high
  (80) and Austria where it very low (11), Germany
  is somewhat in the middle. Germany does not have
  a large gap between the wealthy and the poor, but
  have a strong belief in equality for each
  citizen. Germans have the opportunity to rise in
  society.
• On the other hand, the power distance in the
  United States scores a 40 on the cultural scale.
  The United States exhibits a more unequal
  distribution of wealth compared to German
  society. As the years go by it seems that the
  distance between the have and have-nots grows
  larger and larger.

49
Country indeces

• Country PDI IDV MAS UAI LTO
• Malaysia 104 26 50 36
• Guatemala 95 63 71 01
• Panama 95 11 44 86
• Philippines 94 32 64 44 19
• Mexico 81 30 69 82
• Venezuela 81 12 73 76
• China 80 20 66 40 118
• Egypt 80 38 52 68
• Iraq 80 38 52 68
• Kuwait 80 38 52 68
• Lebanon 80 38 52 68
• Libya 80 38 52 68

50
continued

• Saudi Arabia 80 38 52 68
• United Arab Emirates80 38 52 68
• Ecuador 78 8 63 67
• Indonesia 78 14 46 48
• Ghana 77 20 46 54 16
• India 77 48 56 40 61
• Nigeria 77 20 46 54 16
• Sierra Leone 77 20 46 54 16
• Singapore 74 20 48 8 48
• Brazil 69 38 49 76 65
• France 68 71 43 86
• Hong Kong 68 25 57 29 96

51
continued

• Poland 68 60 64 93
• Colombia 67 13 64 80
• El Salvador 66 19 40 94
• Turkey 66 37 45 85
• Belgium 65 75 54 94
• Ethiopia 64 27 41 52 25
• Kenya 64 27 41 52 25
• Peru 64 16 42 87
• Tanzania 64 27 41 52 25
• Thailand 64 20 34 64 56
• Zambia 64 27 41 52 25
• Chile 63 23 28 86

52
continued

• Portugal 63 27 31 104
• Uruguay 61 36 38 100
• Greece 60 35 57 112
• South Korea 60 18 39 85 75
• Iran 58 41 43 59
• Taiwan 58 17 45 69 87
• Czech Republic 57 58 57 74
• Spain 57 51 42 86
• Pakistan 55 14 50 70
• Japan 54 46 95 92 80
• Italy 50 76 70 75
• Argentina 49 46 56 86

53
continued

• South Africa 49 65 63 49
• Hungary 46 55 88 82
• Jamaica 45 39 68 13
• United States 40 91 62 46 29
• Netherlands 38 80 14 53 44
• Australia 36 90 61 51 31
• Costa Rica 35 15 21 86
• Germany 35 67 66 65 31
• United Kingdom 35 89 66 35 25
• Switzerland 34 68 70 58
• Finland 33 63 26 59
• Norway 31 69 8 50 20

54
continued

• Sweden 31 71 5 29 33
• Ireland 28 70 68 35
• New Zealand 22 79 58 49 30
• Denmark 18 74 16 23
• Israel 13 54 47 81
• Austria 11 55 79 70

55
(No Transcript)