CHAPTER IV: Country Differences

Culture is a system of values and norms that are shared among a group of people and that when taken
together constitute a design for living

Differences in Cultures

 different ways of looking at things;

 different ways of dressing; and
 different ways of expressing personality/goodness.

Some examples of cultural differences in a workplace:

 employees who you are younger or older than their co-workers;

 employees who hold higher degrees than others in the workplace; and
 individuals who grew up in either metropolitan areas or small towns

Importance of Knowing Cultural Differences:

 it helps us understand different perspectives within the world in which we live;

 It helps dispel negative stereotypes and personal biases about different groups; and
 Cultural diversity helps us recognize and respect “ways of being” that are not necessarily our
own.

High Context vs. Low Context

A low context culture is one in which things are fully spelled out. Things are made explicit, and there is
considerable dependence on what is actually said or written.

A high context culture is one in which the communicators assume a great deal of commonality of
knowledge and views, so that less is spelled out explicitly and much more is implicit or communicated in
indirect ways.

In a low context culture, more responsibility is placed on the listener to keep up their knowledge base
and remain plugged into informal networks.

Implications

 Interactions between high and low context people can be problematic

 Low context cultures are vulnerable to communication breakdowns when they assume more
shared understanding than really is. This is especially true in an age of diversity. Low context
cultures are not known for their ability to tolerate or understand diversity, and tend to be more
insular.

Monochronic vs. Polychronic

Polychronic- doing multiple things at the same time // multitasker

Monochronic- do one thing at a time.

Future vs Present vs Past Orientation

Past-oriented societies are concerned with traditional values and ways of doing things. They
tend to be conservative in management and slow to change those things that are tied to the past. Past-
oriented societies include China, Britain, Japan and most Spanish-speaking Latin American countries.

Present-oriented societies include the rest of the Spanish-speaking Latin American countries.
They see the past as passed and the future as uncertain. They prefer short-term benefits.

Future-oriented societies have a great deal of optimism about the future. They think they
understand it and can shape it through their actions. They view management as a matter of planning,
doing and controlling (as opposed to going with the flow, letting things happen). The United States and,
increasingly, Brazil, are examples of future-oriented societies.

Quantity of Time

In some cultures, time is seen as being a limited resource which is constantly being used up. It’s
like having a bathtub full of water which can never be replaced, and which is running down the drain.
You have to use it as it runs down the drain or it’s wasted. In other cultures, time is more plentiful, if not
infinite. In old agricultural societies, time was often seen as circular, renewing itself each year.

Power Distance

The extent to which people accept differences in power and allow this to shape many aspects of
life. Is the boss always right because he is the boss, or only when he gets it right?

Individualism vs Collectivism

Individualism

- individualist cultures, individual uniqueness, self-determination is valued

- is more admirable if they are “self-made man” or “makes up their own mind”

Collectivism

- expect people to identify with work well in groups protect them in exchange for loyalty and
compliance.

B. ETHICS IN INTERNATIONAL BUSINESS AND TRADE

Ethics- is an accepted principle of right and wrong that govern the conduct of a person, the
members of a profession, or the actions of an organization.

Business Ethics- are the accepted principles of right or wrong governing the conduct of business
people.

Ethical Strategy- is a strategy or course of action that does not violate these accepted principles.

Ethical behavior- combined with skills and professionalism is able to ensure sustainable
development, rather than a short-term profit, which brings terrible results after a certain period of time.
 Some of the most common ethical issues in international business include outsourcing, working
standards and conditions, workplace diversity and equal opportunity child labor, trust and integrity,
supervisory oversight, human rights, religion, the political arena, the environment, bribery and
corruption.

Why do Ethical Issues arise in International Business?

As political, legal, economic, and cultural norms vary from nation, various ethical issues rise with
them. In an international business, the most important ethical issues involve employment practices,
human rights, environmental norms, corruption, and the moral obligation of international corporations.

Why is Ethics in Business Important?

Customers, management, and employees all appreciate honest and ethical practices. Business
ethics are vital because they help maintain a great reputation, help avoid significant financial and legal
issues, and they ultimately benefit everyone involved.

First, ethical behavior combined with skills and professionalism is able to ensure sustainable
development, rather than a short-term profit, which brings disastrous results after a certain period.
Ethical behavior ensures awareness and concern for the future and for the right way of action in each
particular situation.

Secondly, ethical behavior establishes a healthy and pleasant cooperation climate for all the
parties involves in a deal, making them feel comfortable with each other.

Thirdly, acting in accordance with moral values is crucial for deserving clients’ attention and
support and achieving a significant competitive advantage in a particular market segment.

The Roots of Ethical/Unethical Behavior

 Organization Culture
 Leadership
 Personal Ethics
 Decision making process
 Unrealistic performance expectations
 Societal culture
Ethical Issues in International Business

The most common ethical issues in business involve:

1. Differences in Employment Laws

2. The Challenges of Corruption
3. Human Rights Laws
4. Pollution and Environment Concerns

Fundamentals Ethical Issues

Diversity and the Respectful Workplace

Decision-Making Issues

Compliance and Governance Issues

How to Address Differences in Ethical Standards and International Business?

1. Keep the unique ethical climate of each market in mind when crafting your code of ethics to
ensure that it is relevant to the international arena. Make adherence to the code a priority
among executives and management to set an example for the rest of the organization.
2. Follow local customs and traditions at your discretion. Decide on a case-by-case basis which
local customs to follow and which to avoid when it comes to victimless issues. Use your
code of ethics when dealing with humanitarian and environmental issues, such as child labor
or deforestation, and use your discretion in issues such as bribery or wage considerations.
3. Apply your standards equally in all markets, and among all subsidiaries. Stick to your
standards, whatever they are. If you have a policy of following your home country’s ethical
standards around the world, be prepared to turn down opportunities in markets with
unfavorable ethical climates. Respond courteously and respectfully if you do have turn down
an opportunity.
4. Make company-wide ethics training a regular activity, in addition to administering
comprehensive ethics training programs for new hires. Use training sessions to highlight
actual areas of concern in your organization, citing specific examples as often as possible.

CORPORATE CODE OF ETHICS

CODE OF CONDUCT. Intent of affect the behavior of international business entities within
society in order to enhance corporate responsibility, internal code of conduct. What Makes a Good
Internal Code of Conduct? It sets global policies with which everyone working anywhere for the
company must comply. It communicates company policies not only to all employees but to all suppliers
and sub-contractors as well. It ensures that the policies laid out in the code are carried out. It reports
the results to external stakeholders.
A. Why is it necessary to study the values and norms of other countries before entering
International Business?
B. If you are the businessman, how can you handle the culture of other country?
C. What are the beliefs in our country that can affect business?