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CHAPTER TWO
CROSS-CULTURAL
BUSINESS

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What Is Culture?
National Culture

❑Culture: Set of values, beliefs, rules, and institutions held by a

specific group of people
❑Nation-states support and promote the concept of national
culture
❑Building museums and monuments to preserve the legacies of
important events and people.
❑Nation-states intervene in business to preserve treasures of
national culture
❑Regulate culturally sensitive sectors of the economy

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What Is Culture?
Subcultures

❑Subculture: a group of people who

share a unique way of life within a
larger, dominant culture
❑A subculture can differ from the
dominant culture in language, race,
lifestyle, values, attitudes, or other
characteristics
❑Subcultures sometimes exist across
national borders

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What Is Culture?
Need for Cultural Knowledge

❑A visual depiction of culture would resemble an iceberg.

❑Avoiding Ethnocentricity:
❑Ethnocentricity is the belief that one’s own ethnic group or
culture is superior to that of others.
❑Ethnocentricity can seriously undermine international
business projects.
❑Developing Cultural Literacy:
❑Cultural literacy: detailed knowledge about a culture that
enables a person to work happily and effectively within it.

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Values and Behavior

Figure 2.1
Components
of Culture

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Physical Environment

❑Land features affect personal communication in a culture.

❑Physical environment affects consumers’ product needs.
❑Climate can play a role in determining work habits.

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Values and Behavior
Values

❑Values: Ideas, beliefs, and customs to which people are

emotionally attached.
❑Values include concepts such as honesty, freedom, and
responsibility.
❑Values are important to business because they affect a people’s
work ethic and desire for material possessions.
❑The influx of values from other cultures can be fiercely resisted.

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Values and Behavior
Attitudes

❑Attitudes reflect a people’s underlying values.

❑Attitudes are positive or negative evaluations, feelings, and
tendencies that individuals harbor toward objects or concepts.
❑Attitudes are learned from role models, including parents, teachers,
and religious leaders.
❑Attitudes differ from one country to another because they are
formed within a cultural context.
❑A “European” attitude

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Values and Behavior
Aesthetics

❑Aesthetics: what a culture considers “good taste” in the arts, the

imagery evoked by certain expressions, and the symbolism of
certain colors.
❑Aesthetics includes the art, images, symbols, colors, and so on.
❑Aesthetics are important when a company does business in another
culture.
❑The importance of aesthetics is just as great when going
international using the Internet.

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Values and Behavior
Appropriate Behavior

❑Manners: Appropriate ways of behaving, speaking, and dressing in

a culture are called manners.
❑Customs: Habits or ways of behaving in specific circumstances that are
passed down through generations in a culture.
❑Folk Custom: Behavior, often dating back several generations, that is
practiced by a homogeneous group of people.
❑Popular Custom: Behavior shared by a heterogeneous group or by
several groups.
❑Gift Giving Customs
❑Proper type of gift varies
❑Legal and ethical rules

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Social Structure

• Collection of two or more people who

Social Group identify and interact with each other
Associations • Family: Nuclear vs. Extended
• Gender
• Positions within the structure
Social Status
• Social Stratification
• Ease with which individuals can move
Social up or down a culture’s “social ladder”
Mobility • Caste System
• Class System
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• Social structure embodies a culture’s fundamental organization, including its groups and institutions, its system of social positions and
their relationships, and the process by which its resources are distributed. Social structure plays a role in many business decisions,
including production-site selection, advertising methods, and the costs of doing business in a country. Three important elements of
social structure that differ across cultures are social group associations, social status, and social mobility.
• People in all cultures associate themselves with a variety of social groups—collections of two or more people who identify and interact
with each other. Social groups contribute to each individual’s identity and self-image. Two groups that play especially important roles in
affecting business activity everywhere are family and gender.
• There are two different types of family groups: The nuclear family consists of a person’s immediate relatives, including parents,
brothers, and sisters. This concept of family prevails in Australia, Canada, the United States, and much of Europe. The extended family
broadens the nuclear family and adds grandparents, aunts and uncles, cousins, and relatives through marriage. It is an important social
group in much of Asia, the Middle East, North Africa, and Latin America.
• Gender refers to socially learned habits associated with, and expected of, men or women. It includes behaviors and attitudes such as
styles of dress and activity preferences. Though many countries have made great strides toward gender equality in the workplace,
others have not.
• Another important aspect of social structure is the way a culture divides its population according to status—that is, according to
positions within the structure. Although some cultures have only a few categories, others have many. The process of ranking people into
social layers or classes is called social stratification.

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• Moving to a higher social class is easy in some cultures but difficult or impossible in others. Social mobility is
the ease with which individuals can move up or down a culture’s “social ladder.” For much of the world’s
population today, one of two systems regulates social mobility: a caste system or a class system.
• Caste System: A caste system is a system of social stratification in which people are born into a social ranking,
or caste, with no opportunity for social mobility. India is the classic example of a caste culture. Although the
Indian constitution officially bans discrimination by caste, its influence persists. Little social interaction occurs
between castes, and marrying out of one’s caste is taboo. Opportunities for work and advancement are
defined within the system, and certain occupations are reserved for the members of each caste. For example,
a member of a lower caste cannot supervise someone of a higher caste because personal clashes would be
inevitable.
• Class System: A class system is a system of social stratification in which personal ability and actions determine
social status and mobility. It is the most common form of social stratification in the world today. But class
systems vary in the amount of mobility they allow. Highly class-conscious cultures offer less mobility and, not
surprisingly, experience greater class conflict. Conversely, lower levels of class-consciousness encourage
mobility and lessen conflict. A more cooperative atmosphere in the workplace tends to prevail when people
feel that a higher social standing is within their reach.

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Education

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❑Education is crucial for passing on traditions, customs, and values.
Each culture educates its young people through schooling,
parenting, religious teachings, and group memberships. Families
and other groups provide informal instruction about customs and
how to socialize with others. In most cultures, intellectual skills
such as reading and mathematics are taught in formal educational
settings.

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Education
The “Brain Drain” Phenomenon

Brain Drain

Departure of highly educated people from one

profession, geographic region, or nation to another

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Personal Communication

❑Communication: System of
conveying thoughts, feelings,
knowledge, and information through
speech, writing, and actions
❑Forms of Communication:
❑Spoken and Written Language
❑Implications for managers
❑Language blunders
❑Lingua franca
❑Culture’s Body Language
Chapter 2-17
• People in every culture have a communication system to convey thoughts, feelings, knowledge, and information through speech,
writing, and actions. Understanding a culture’s spoken language gives us great insight into why people think and act the way they do.
Understanding a culture’s body language helps us avoid sending unintended or embarrassing messages.
• Linguistically different segments of a population are often culturally, socially, and politically distinct.
• Implications for managers:
• The importance of understanding local languages is becoming increasingly apparent on the Internet. Roughly two-thirds of all
Web pages are in English, but around three-fourths of all Internet users are nonnative English speakers.
• Language proficiency is crucial in production facilities where nonnative managers are supervising local employees.
• Marketers prize insights into the interests, values, attitudes, and habits of teenagers.
• Language blunders: Advertising slogans and company documents must be translated carefully so that messages are received precisely
as intended. If they are not carefully translated, a company can make a language blunder in its international business dealings.
• A lingua franca is a third or “link” language understood by two parties who speak different native languages.
• Body language communicates through unspoken cues, including hand gestures, facial expressions, physical greetings, eye contact, and
the manipulation of personal space. Similar to spoken language, body language communicates both information and feelings and
differs greatly from one culture to another.

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Culture in the Global Workplace

Perception View of Material Cultural

of Time Work Culture Change

Cultural Trait

Cultural
Diffusion
Cultural
Imperialism

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• Perception of Time: People in many Latin American and Mediterranean cultures are casual about their use of time. They
maintain flexible schedules and would rather enjoy their time than sacrifice it to unbending efficiency. By contrast, people in
Japan and the United States typically arrive promptly for meetings, keep tight schedules, and work long hours.
• View of Work: Some cultures display a strong work ethic; others stress a more balanced pace in juggling work and leisure.
• Material Culture: All the technology used in a culture to manufacture goods and provide services is called its material culture.
Material culture is often used to measure the technological advancement of a nation’s markets or industries.
• A cultural trait is anything that represents a culture’s way of life, including gestures, material objects, traditions, and concepts.
Such traits include bowing to show respect in Japan (gesture), a Buddhist temple in Thailand (material object), celebrating the
Day of the Dead in Mexico (tradition), and practicing democracy in the United States (concept).
• The process whereby cultural traits spread from one culture to another is called cultural diffusion. As new traits are accepted
and absorbed into a culture, cultural change occurs naturally and, as a rule, gradually. Globalization and technological advances
are increasing the pace of both cultural diffusion and cultural change. The global spread of media today along with the
expanding reach of the Internet and services such as YouTube and Facebook play a role in cultural diffusion. These forces
expose (sometimes isolated people) to the traits and ideas of other cultures.
• Cultural imperialism: the replacement of one culture’s traditions, folk heroes, and artifacts with substitutes from another.
Fears of cultural imperialism still drive some French to oppose the products of the Walt Disney Company (www.disney.com)
and its Disneyland Paris theme park. They fear “Mickey and Friends” could replace traditional characters rooted in French
culture.

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