Differences in Culture Differences in Culture Societies differ

Differences in Culture

Differences in Culture Ø Ø Ø Societies’ differ along cultural dimensions What is culture? How/why do social structure, religion, language influence cultural differences? What are differences between culture and values in the workplace (corporate culture)? Culture changes over time. What are some reasons behind this? Implications for business managers

Cultural Appreciation Values Customs Aspects of culture Symbols Language

What is Culture? Ø Culture: a society’s (group’s) system of shared, learned values and norms; these are the society’s (group’s) design for living – Values: abstract ideas about the good, the right, the desirable – Norms: social rules and guidelines; guide appropriate behavior for specific situations § Folkways: norms of little moral significance dress code; table manners; timeliness § Mores: norms central to functioning of social life – bring serious retribution: thievery, adultery, alcohol

Basic U. S. Business Values

Cultural Diversity Ø Values represent personal or socially preferable modes of conduct or states of existence that are enduring. Why doesn’t Mc. Donald’s sell hamburgers in India?

Cultural Diversity Ø Customs are norms and expectations about the way people do things in a specific country. Why were 3 M executives perplexed concerning lukewarm sales of Scotch. Brite floor cleaner in the Philippines?

What is Culture? “the collective programming of the mind which distinguishes the members of one human group over another… Culture, in this sense, includes systems of values; and values are among the building blocks of culture” Geert Hofstede

National Culture “Nation” is a useful: – Definition of society l similarity among people a cause -- and effect -- of national boundaries – Way to bound and measure culture for conduct of business l l culture is a key characteristic of societ can differ significantly across national borders – also within national borders l Ø laws are established along national lines Culture is both a cause and an effect of economic and political factors that vary across national borders

Social Structure and Culture Unit of social organization: individual or group? Society may be stratified into classes or castes High-low stratification High-low mobility between strata The individual: building block of many Western societies Entrepreneurship Social, geographical and inter-organizational mobility The group: Two or more associated individuals with a shared identity Interact with each-other in specific ways on the basis of a common set of expectations.

Individual vs Group Societal Characteristics Ø Individual – Managerial mobility between companies – Economic dynamism, innovation – Good general skills – Team work difficult, non-collaborative Ø Exposure to different ways of doing business – e. g. , U. S. companies Ø Group – Loyalty and commitment to – – – company In-depth knowledge of company Specialist skills Easy to build teams, collaboration Emotional identification with group or company e. g. , Japanese companies

Religion, Ethics and Culture Religion: system of shared beliefs about the sacred 2. Ethical systems: moral principles or values that shape and guide behavior; often products of religion 3. Major religious groups and some economic implications 1. – – – Christianity Islam Hinduism Buddhism Confucianism protestant work ethic Islamic economic principles anti-materialistic, socially stratified anti-materialistic, social equality hierarchy, loyalty, honesty

Language: Culture Bound ØLanguage, spoken – “private” does not exist as a word in many languages – Eskimos: 24 words for snow – Words which describe moral concepts can be unique to countries or areas – Spoken language precision important in lowcontext cultures ØLanguage, unspoken – Context. . . more important than spoken word in high context cultures

Non-Verbal Gestures

Non-Verbal Gestures

Non-Verbal Gestures

Non-Verbal Gestures

Cultural Diversity – “Chevy Nova Award” Ø Dairy Association’s huge success with the campaign “Got Milk? ” prompted them to expand advertising to Mexico Ø It was brought to their attention the Spanish translation read, “Are you lactating? ”

Cultural Diversity – “Chevy Nova Award” Ø Clairol introduced the “Mist Stick”, a curling iron into Germany Ø Only to find out that “mist” is German slang for manure.

Cultural Diversity Chevy Nova Award When Gerber started selling baby food in Africa, they used US packaging with the smiling baby on the label. In Africa, companies routinely put pictures on labels of what’s inside, since many people can’t read.

Cultural Diversity Chevy Nova Award Pepsi’s “Come Alive With the Pepsi Generation” in Chinese translated into “Pepsi Brings Your Ancestors Back From the Grave”

Cultural Diversity Chevy Nova Award Coca-Cola’s name in China was first read as “Kekoukela”, meaning “Bite the wax tadpole” or “female horse stuffed with wax”, depending on the dialect. Coke then researched 40, 000 characters to find a phonetic equivalent “kokou kole”, translating into “happiness in the mouth. ”

Cultural Stereotypes Cultural stereotypes: values and behaviors considered typical of a culture Are they valuable? Yes, if they reduce uncertainty about what expatriate can expect. No, if used to label an individual unlike the stereotype

High/Low Context Cultures

Education and Culture Ø Education – Medium through which people are acculturated – Language, “myths, ” values, norms taught – Teaches personal achievement and competition – Critical to national competitive advantage Ø Education system may be a cultural outcome

Culture and the workplace (Hofstede) ØFinds national culture dimensions meaningful to business ØBasis: – Work related values not universal – National values may persist over MNC efforts to create corporate culture – Home country values often used to determine HQ policies – MNC may create morale problems with uniform moral norms ØPurpose: understanding of business situations across -cultures ØMUST understand own culture AND other culture(s)

Culture and the workplace Geert Hofstede – sampled 100, 000 IBM employees 1963 -1973 Ø Compared employee attitudes and values across 40 countries Ø Isolated 4 dimensions summarizing culture: Ø 1. 2. 3. 4. Power distance Individualism vs. collectivism Uncertainty avoidance Masculinity vs. feminity

Power Distance -- (Hofstede) Ø Degree of social inequality considered normal by people Ø Distance between individuals at different levels of a hierarchy Ø Scale: from equal (small power distance) to extremely unequal (large power distance)

Individualism Vs. Collectivism (Hofstede) Ø Degree to which people in a country prefer to act as individuals rather than in groups Ø Describes the relations between the individual and his/her fellows

Uncertainty Avoidance (Hofstede) Ø Degree of need to avoid uncertainty about the future Ø Degree of preference for structured versus unstructured situations – Structured situations: have tight rules may or may not be written down Ø High uncertainty avoidance: people with more nervous energy (vs easy-going), rigid society, "what is different is dangerous. "

Masculinity Vs. Femininity (Hofstede) Ø Division of roles and values in a society Ø Masculine values prevail: – assertiveness, success, competition Ø Feminine values prevail: – quality of life, maintenance of warm personal relationships, service, care for the weak, solidarity

Confucian Dynamism (Hofstede) Ø Attitudes towards – Time – Persistence – Status in society – “Face” – Respect for tradition – Gifts and favors

Cultural Change Over Time ØChange is slow and often painful ØShifts away from “traditional values” towards “secular values” ØChanges with shift from “survival values” to “selfexpression values”

Cultural Distance Ø Geographic and cultural (or pshychic) distance among countries may not be the same Ø Key concept which can affect IB strategy and conduct

Managerial Implications Ø Ethnocentrism vs Polycentrism Ø Must a company adapt to local cultures or can corporate -- often home-country dominated -- culture prevail? Ø Cross-cultural literacy essential Ø Do some cultures offer a national competitive advantage over others?

Applying Cultural Analysis 1. Describe culture using Hofstede’s Model 2. Estimate cultural impact on management • Strategic planning: Futile? How much information needed? • Employee motivation: Security or money reward? Immediate or long-term rewards • Employee monitoring and control: Rules o trust? • Decision making: overcoming problems o seizing opportunities?