Differences in Culture

CHAPTER 3
DIFFERENCES IN CULTURE
LEARNING OBJECTIVES
INTRODUCTION
In this chapter, we will explore how differences in
culture across and within countries can affect
international business.
Several themes:
1. Business success in a variety of countries requires
cross-cultural literacy.
2. A relationship may exist between culture and the
cost of doing business in a country or region.
What is Culture?
VALUES AND NORMS
 Norms
• the social rules and guidelines that prescribe
appropriate behavior in particular situations.
• can be subdivided further into two major
categories:
folkways and mores.
 Folkways
CULTURE, SOCIETY, AND THE NATION-STATE
 Society - a group of people who share a common

set of values and norms.
There is not a strict one-to-one correspondence
between a society and a nation-state.
 Nation-states are political creations.
They may contain a single culture or several
cultures.
THE DETERMINANTS OF CULTURE
SOCIAL STRUCTURE
A society's social structure refers to its basic social
organization.
Two dimensions:
1. The degree to which the basic unit of social
organization is the individual, as opposed to the
group.
2. The degree to which a society is stratified into
classes or castes.
INDIVIDUALS AND GROUPS
 In many Western societies, the individual is the
basic building block of social organization.
 Group - is an association of two or more
individuals who have a shared sense of identity
and who interact with each other in structured
ways on the basis of a common set of
expectations about each other's behavior.
- it is the primary unit of social organization in many
other societies.
SOCIAL STRATIFICATION
All societies are stratified on a hierarchical basis into
social categories - that is, into social strata.
Although all societies are stratified to some degree,
they differ in two related ways:
1. They differ from each other with regard to the
degree of mobility between social strata;
2. They differ with regard to the significance attached
to social strata in business contexts.
 Social Mobility
- refers to the extent to which individuals can move
out of the strata into which they are born.
- it varies significantly from society to society.
 Caste system
- the most rigid system of stratification.
- a closed system of stratification in which social
position is determined by the family into which a
person is born, and change in that position is usually
not possible during an individual's lifetime.
Significance
From a business perspective, the stratification of a
society is significant if it affects the operation of
business organizations.
 Class consciousness - refers to a condition
where people tend to perceive themselves in
terms of their class background, and this shapes
their relationships with members of other classes.
Religious and Ethical Systems
 Religion - a system of shared beliefs and
rituals that are concerned with the realm of
the sacred.
 Ethical systems - a set of moral principles,

or values, that are used guide and shape
behavior.
 CHRISTIANITY
Islamic Fundamentalism
• The past three decades have witnessed the growth
of a social movement often referred to as Islamic
fundamentalism.
• In the west, it is associated in the media with
militants, terrorists, and violent upheavals, such as
the bloody conflict occuring in Algeria, the killing of
foreign tourists in Egypt, and the September 11,
2001 attacks on the World Trade Center and
Pentagon in the United States.
 HINDUISM
 BUDDHISM
 CONFUCIANISM
LANGUAGE
 SPOKEN LANGUAGE
EDUCATION
CULTURE AND WORKPLACE
• Hofstede's power distance dimension focused on how a
society deals with the fact that people are unequal in
physical and intellectual capabilities.
• Hofstede's uncertainty avoidance dimension measured
the extent to which different cultures socialized their
members into accepting ambiguous situations and
tolerating uncertainty.
• The individualism versus collectivism dimension
focused on the relationship between the individual
and his or her fellows.
• Hofstede's masculinity vs. femininity dimension
looked at the relationship between gender and
work roles.
CULTURAL CHANGE
CROSS-CULTURAL LITERACY
One of the biggest dangers confronting a company that
goes abroad for the first time is the danger of being ill-
informed. International businesses that are ill-informed
about the practices of another culture are likely to fail.
An international business must also be constantly on guard
against the dangers of ethnocentric behavior.
 Ethnocentrism is a belief in the superiority of one's own
ethnic group of culture.
CULTURE AND COMPETITIVE ADVANTAGE
Reporters:
Magbanua, Michelle Angielyn E.

Montenegro, Mariel Ann
Mendoza, Dianne R.

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CHAPTER 3

 Society - a group of people who share a common

 Ethical systems - a set of moral principles,

Magbanua, Michelle Angielyn E.

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