Directions: These menus come from different countries. Read each one and make your best guess as to which country it is from. Write down any clues you used to make your guesses. Be ready to share your answers and why you arrived at them.
MENU 1: Country Guess:
Main Course: Ebi (shrimp) Burger
Side Order: French Fries with Seaweed Flavoring Clues:
Beverage: Green Tea Flavored Milkshake
MENU 2: Country Guess:
Main Course: Toasted Ham and Cheese Sandwich
Side Order: French Fries with Mayonnaise Topping Clues:
AOF Business in a Global EconomyLesson 3 Cultural Factors
Student Resource 3.2
Reading: The Elements of Culture
This presentation provides an overview of culture and its elements: linguistic, organizational, and social. To be successful in global business, firms must understand at least the basics of how the cultures with which they do business communicate and function. Although cultural learning takes time, it is an essential investment that companies must make to conduct international business.
AOF Business in a Global EconomyLesson 3 Cultural Factors
Culture is the combination of learning and experiences that people in the same country or region share. Passed from generation to generation (though often changing over time), culture provides the rules and identity of a society.
Culture can be broken down into three elements. The first is linguistic, or the spoken and unspoken language of a culture. The second is organizational, or the way society is set up. The third is social, or the way people act and feel. Each of the many world cultures has its own linguistic, organizational, and social rules, which are called norms.
In international business, it is essential to understand cultural norms. They affect when, where, why, how, and with whom firms conduct business. They also affect how business transactions and processes get done. This understanding is so important that many large corporations have departments for the sole purpose of introducing, or acculturating, their international employees.
AOF Business in a Global EconomyLesson 3 Cultural Factors
The word fluency means the ability to speak or write a language smoothly and easily. It is a great benefit to a firm when their businesspeople are fluent in the language of the country in which they are doing business. (Sometimes business in a country is done in more than one language, and firms must be prepared. For example, French, German, Italian, and English are spoken in various regions of Switzerland.) Not only does the ability to speak and understand the local language help in information-gathering and interpretation—it is also a sign of respect and shows a desire to understand the unique needs of the local population.
Fluent speakers are able to understand local programs and advertising, which benefits business by providing informal and practical insights into local daily life and market conditions. For example, a businessperson in another country who is fluent in its language may notice many ads for dentists who give silver fillings for cavities and could decide to market enamel fillings there as an alternative that consumers may prefer. Only by understanding the language and reading the ads could a businessperson see this opportunity.
Firms engaged in global marketing need workers fluent in the local language because incorrect translation (of written material) or interpretations (of the spoken word) can spell disaster for certain products. Literal interpretations are sometimes disastrous, as Coca-Cola found out with its campaign slogan “Coke adds life.” In China, this slogan translates literally into “Coke brings your ancestors back from the dead.” And Chevrolet Nova sales were poor in Central America, perhaps because in Spanish “no va” means “doesn’t go.” GM had to market the car under a different name in Spanish-speaking countries.
AOF Business in a Global EconomyLesson 3 Cultural Factors
We don’t communicate just with words—we also use our bodies to express what we mean. This is called nonverbal communication, and it can tell you as much as, or often more than, verbal communication. The meaning of nonverbal communication such as gestures, proximity or nearness, and eye contact vary from culture to culture. Body language in one country can mean something very different in another, so it’s important to research acceptable and customary body language before doing business abroad. For instance, the meaning of the hand gesture in which the thumb and index finger form a circle with the other three fingers raised varies culturally from okay to obscene. In Japan it means money, so giving the gesture could be misconstrued as a bribe! And in Turkey the gesture is deeply insulting—an American who doesn’t know this could doom a deal with the wave of a hand.
Many cultures have a different idea about appropriate proximity, or personal space, than Americans. For example, in the United Arab Emirates, people stand much closer together than we are used to in the United States. This difference in proximity can be uncomfortable for Americans.
Eye contact is another form of nonverbal communication that varies from country to country. In the United States, we feel eye contact shows sincerity and forthrightness in business dealings. But in Japan direct eye contact makes many people uncomfortable. In Afghanistan, men only give eye contact to other men and never to women. Afghanis feel it is disrespectful for men to make eye contact with women.
AOF Business in a Global EconomyLesson 3 Cultural Factors
New technology influences culture, and different cultures make use of it in different ways. For example Muslim consumers have cell phones that remind them when it is time to pray. American businesspeople use cell phones in order to be available all the time. And the Internet has helped spread culture by enabling people all over the world to sell their goods in the global marketplace.
Culture may also influence attitudes toward energy. Countries in control of large amounts of natural resources, such as water, tend to see it differently from cultures without many natural resources. Americans use twice as much water as people in any other country! China, with its surge of construction and manufacturing, sees natural resources as a means of progress, not something to conserve.
Banking and research and development (R&D) are also influenced by culture. Islamic banking, which is prevalent in many Muslim countries, generally disallows charging interest to borrow money. Alternative banking methods have been devised for those countries in which banks earn income in other ways. Institutions doing business with Muslim countries must understand Islamic practices and how they can affect the market.
Lastly, attitudes toward R&D are determined by culture to a certain degree due to differing beliefs about science and the role of humans in it. Stem cell research is one example of a business undertaking that is affected by cultural beliefs.
AOF Business in a Global EconomyLesson 3 Cultural Factors
Business dealings in many countries rely on family ties and trust among people who know each other. The same used to be true for the United States. But as societies grow more complex, our economic ties have shifted to rely on institutions and formal contracts rather than kinship and trust.
Although it might not seem so on the surface, the religion of a country often contributes greatly to a country’s approach to doing business. In Muslim countries, businesspeople must show respect to the culture by knowing that the faithful stop to pray five times a day whether there’s a meeting in progress or not. In India, residents celebrate the coming of spring by pelting each other with brightly colored powders—not a good day to wear a business suit.
The role of family also affects business. In Egypt, the family is the most important social unit. To Egyptians, giving a job or a promotion to a family member instead of a stranger is a positive thing, because it promotes the family. We call it nepotism and see it as unfair.
The importance cultures place on educational systems also influence how they approach business dealings. India has a well-educated workforce that includes many English speakers. It has been able to take advantage of globalization to employ its educated citizens and create even more opportunities.
AOF Business in a Global EconomyLesson 3 Cultural Factors
Attitudes toward time, aesthetics, and gender roles vary by culture. In many regions—northern Italy, for example—punctuality is important and lateness for a meeting is considered rude. By contrast, in southern Italy it’s common for attendees to arrive an hour late or more. Knowing about a culture’s perception of time helps firms avoid giving offense.
Aesthetics, or perceptions of beauty, vary by culture in ways that can impact business dealings. For instance, color means different things to different cultures. Gold ink is seen as the most prosperous color to print on a business card, but other cultures find it too flashy.
Attitudes toward women in the workforce vary by culture. Saudi Arabian women, for example, are not allowed to drive cars. They need the permission of the closest male relative to travel. Until recently, foreign women could not stay in a Saudi hotel without a male escort. While a Westerner may sees these practices as gender bias, some traditionally minded Saudis see them as a form of respect. Either way, this cultural norm presents a quandary to American companies. Should managers send a female employee to Saudi Arabia to do her job? Or should they send a male employee in her place? How will the decision affect the business relationship? The female employee?
AOF Business in a Global EconomyLesson 3 Cultural Factors
Stratification means to form into layers. Social stratification occurs when a society thinks of its members as falling into rigidly defined social classes that are difficult to change. India’s caste (or class) system has recently been abolished in the sense that the law no longer permits discriminatory practices (for example, in employment or education) based on a person’s caste. Globalization may well have accelerated this change through greatly increased international travel, communication, and trade. Now educational opportunities, the influx of foreign companies, and modern practices by domestic Indian companies (and the growing number of India-based multinational corporations) enable members of lower castes to earn salaries that would have been well out of reach a generation ago. The habits of the traditional caste-based prejudices can be hard to change, however. One manager at a US laboratory reports that he assigns his Indian scientists to different teams because one scientist, who is in a higher caste than the others, treats his lower caste colleagues as subordinates, although in the work environment they are equals.
The manners and customs of most societies are often derived from concepts, beliefs, habits, and rituals that develop in a culture over long periods of time. These manners and customs in the workplace vary from country to country, and in some cultures they can be very subtle or elaborate. In Japan, for example, the bow is very important and highly ritualized. Who bows first and how deeply depends on a combination of respect, age, hierarchy, relationship, and other complex factors. Foreign businesspeople working in Japan would put themselves at a serious disadvantage by not learning about this custom.
AOF Business in a Global EconomyLesson 3 Cultural Factors
The manners and customs of most societies are often derived from concepts, beliefs, habits, and rituals that develop in a culture over long periods of time. These manners and customs in the workplace vary from country to country, and in some cultures they can be very subtle or elaborate. In Japan, for example, the bow is very important and highly ritualized. Who bows first and how deeply depends on a combination of respect, age, hierarchy, relationship, and other complex factors. Foreign businesspeople working in Japan would put themselves at a serious disadvantage by not learning about this custom.
Manners matter greatly in business. In some countries, everyone must use the right hand because the left hand’s purpose is for removal of bodily waste. Left-handed business people unaware of this cultural norm risk offending colleagues or even causing business deals to collapse.
AOF Business in a Global EconomyLesson 3 Cultural Factors
When a business considers expansion into the international business arena, it must conduct cultural research to give itself the best possible chance of success. Learning about the market in which it wants to do business ensures an understanding of, and respect for, the people of the region. Culture defines who people are and what is important to them, and it varies widely across the globe. These differences make the world, and the world of international business, an exciting one but one fraught with potential for cultural misunderstandings.
AOF Business in a Global EconomyLesson 3 Cultural Factors
Student Resource 3.3
Reading: Intercultural DimensionsSince the members of every culture behave differently in different situations, international businesspeople need guidelines about how to deal successfully with all the people they do business with. The work of a Dutch social psychologist, Geert Hofstede, was groundbreaking in helping people understand the differences in work cultures of different countries.
Geert Hofstede created a model that separates the main cultural differences that affect business into six areas. These areas are Power Distance, Individualism, Masculinity, Uncertainty Avoidance, Long-Term Orientation, and Indulgence. He created a rating scale along a continuum from 0 to 100 to make it easier to see where a particular country exists along the continuum.
This model is a result of years of research. In the late 1960s and early 1970s, Hofstede conducted employee opinion surveys in over 70 subsidiaries of IBM around the globe. He also interviewed many people. This research provided information about how people behave in large organizations and how they collaborate. He also analyzed television commercials, print advertisements, consumer spending, attitudes, and behavior typical in 75 different countries.
Read on to learn more about the six dimensions and how understanding them can foster success in international business dealings. Think about the questions after each section, as you will be discussing them with a partner after you have completed this reading.
Power DistancePower Distance refers to how much the members of a society accept and expect social inequality. This inequality could be financial, social, and/or intellectual. In cultures with high power distance scores, people do not expect their place in the cultural hierarchy to change. Panama scores 95 in this dimension because Panamanians see their social status as unchangeable.
In cultures with low Power Distance scores, people try to level the playing field among all members. Therefore, these cultures emphasize opportunity and independence. Israel gets a score of 13 in this dimension. It is a country in which all members of society, regardless of their wealth, social status, or gender, must serve in the armed forces.
Would the Power Distance rating be high or low in a country where corporate executives earn 100 times what typical workers do? Why?
Individualism/CollectivismThis dimension contrasts people who focus mainly on looking after themselves and their immediate families with people who belong to broader groups based on ethnicity, class, work relationships, and other factors, and where members of the group are looked after in exchange for loyalty. People in individualistic cultures feel responsible for the people closest to them, often their nuclear family only. In collectivistic cultures, people feel a strong connection with many people beyond their families and feel close to many groups.
Cultures that rate high in the Individualism dimension value time, and the saying “time is money” is associated with individualistic cultures. In business relationships, the goal is to get to the point fast. The United States is a highly individualistic culture and received a score of 91 in this dimension. Other individualistic cultures include Germany and Norway.
In collectivist cultures, people give priority to relationships with others. Business relationships are based on established trust between parties. Social relationships are far reaching and very important. Indonesia,
AOF Business in a Global EconomyLesson 3 Cultural Factors
which scored 14 in this dimension, is highly collectivist, and people view themselves as members of many different communities. Other collectivist cultures include Colombia and South Korea.
Why do many members of collectivist cultures often stay at the same company for their entire working lives?
During the past 75 years the US population has shifted more toward urban—as opposed to agrarian—living; how do you think this has impacted its rating on the Individualism dimension?
Masculinity/FemininityThis dimension measures how differentiated gender roles are in society, including the workplace.
Masculine cultures value competitiveness and the accumulation of wealth. These cultures tend to have more defined gender roles as well. In Japan, which scores 95 in this dimension, hierarchy is strictly adhered to. Other masculine cultures include China and the United States.
In cultures that have high femininity scores, people strive for consensus. Quality of life and reaching consensus are generally considered more important than personal achievement. In these cultures, gender roles are less specific, so men and women can choose the type of work they would like to do without being limited by cultural pressure. Sweden scores 5 in this dimension because its culture differentiates gender roles very little. Costa Rica and Norway are two other countries that score low on the Masculine dimension.
What about this dimension comes from stereotypes about the traditional roles of men and women?
Uncertainty AvoidanceThis dimension measures the extent to which people fear uncertainty and try to avoid situations that produce it. People in high uncertainty avoidance cultures like to follow rules, while people in low uncertainty cultures prefer to have as few rules as possible.
In cultures with high uncertainty avoidance, people want structure. People seek out truth and depend on experts. Communication tends to be formal. Conflict and competition are seen as threatening. The rules for becoming an expert are well defined and people are expected to follow the proper paths. In France, it is considered rude to use first names in business; it scores 86 in this dimension.
In cultures with low uncertainty avoidance, people need fewer rules and are willing to take risks. Change is not seen as threatening. Denmark scores 23 in uncertainty avoidance and is considered by the World Bank Group to have the most flexible labor market in Europe.
How can low uncertainty avoidance foster product development?
Long-Term OrientationThis dimension attempts to measure a society’s search for virtue. Cultures with a short-term orientation generally have a strong concern with establishing the absolute truth. They exhibit great respect for traditions, a low desire to save for the future, and a focus on achieving quick results. In cultures with a long-term orientation, people believe that truth depends very much on situation, context, and time. They are able to adapt traditions to changed conditions, have a strong tendency to save and invest, value thriftiness, and display perseverance in achieving results.
AOF Business in a Global EconomyLesson 3 Cultural Factors
Do you think that the US population is more or less long-term oriented than the Chinese population? Why?
Indulgence versus RestraintTo be indulgent is to give in to a whim or a desire. Societies that accept or approve of gratifying the natural desire to enjoy life and have fun are at the indulgence end of this continuum. If a society is at the restraint end of the continuum, it suppresses this gratification and regulates it with strict social norms.
People from more indulgent societies also tend to feel that they have some control over their lives; they can find what makes them happy. They place a high value on how they spend their leisure time. People from cultures of restraint are more likely to feel that they do not have control over their lives, because society dictates what is okay or not okay. These people place less important on leisure activities.
How does this continuum affect the workplace? Employees from indulgent societies are more comfortable voicing their opinions and giving feedback; they are also more likely to leave a job in which they are unhappy. Employees from restrained societies are less comfortable with speaking up for themselves or taking the initiative to leave a job they don’t enjoy.
How do you think this dimension affects perceptions of good customer service? What kind of behavior do you think each type of culture values in a customer service representative?
AOF Business in a Global EconomyLesson 3 Cultural Factors
Student Resource 3.4
Deduction: Guess the CountryStudent Names:_______________________________________________________ Date:___________
Directions: Look at the scores each of these countries received for Geert Hofstede’s Intercultural Dimensions. Use the data in the chart to answer the questions below. Compare your answers with a partner and come to agreement. Be prepared to share your answers with the class.
Power Distance
Individualism Masculinity Uncertainty Avoidance
Long-Term Orientation
Indulgence vs Restraint
Japan 54 46 95 92 80 42
United States
40 91 62 46 29 68
China 80 20 66 30 118 24
Italy 50 76 70 75 34 30
India 77 48 56 40 61 26
Mexico 81 30 69 82 n/a 97
1. In which two countries is a businessperson required to research traditions to avoid offending colleagues? Which dimension scores led you to your answer?
2. Which two countries require business partners to establish strong relationships of trust? What dimension scores led you to choose these two countries?
3. In which three countries is it difficult to move from one social class to another? Which dimension scores led you to your answer?
4. In which three countries are people somewhat comfortable with bending the rules? Which dimension scores led you to your answer?
5. In which country do people have the strongest propensity to save and invest and place high value on thriftiness? Which dimension score led you to your answer?
6. In which country would you expect a smaller police force? In which country would you expect a higher one? Which dimension scores led you to your answer?
7. How can Hofstede’s Intercultural Dimensions ratings limit our understanding of other cultures? Why do these dimensions include few countries in Africa? What else should international business people keep in mind?
AOF Business in a Global EconomyLesson 3 Cultural Factors
Student Resource 3.5
Chart: Cultural NormsStudent Name:_______________________________________________________ Date:___________
Directions: Research the cultural norms of the country you and your group have selected. Record your findings in the third column of the chart. Use the last row (Others) for anything you uncover that doesn’t fit into the other categories. Check the following websites or others you find for information about the cultural norms in the country you are researching:
AOF Business in a Global EconomyLesson 3 Cultural Factors
Student Resource 3.6
Instructions: Cultural Awareness VlogStudent Name:_______________________________________________________ Date:___________
Directions: You and your group will be creating a 1 to 3 minute vlog that illustrates the key similarities and differences between two cultures, the United States and the country you researched in Student Resource 3.5. Use the chart you filled out (Student Resource 3.5) to help you. If there’s anything you don’t understand once you’ve read the instructions, ask your teacher for clarification.
Make sure your assignment meets or exceeds the following assessment criteria: It clearly shows the difference between the norms of the two cultures.
The culture clash is illustrated in a way that is accurate based on the norms of the two cultures.
The resolution is based on the norms of the two cultures.
The proposed resolution shows an effective way to create a positive result in overcoming the differences in cultural norms.
The language and wording used are appropriate for a business situation.
![An3 Analiza Econ Financ Probleme[1]](https://static.documents.pub/doc/80x56/5571f26449795947648c8744/an3-analiza-econ-financ-probleme1.jpg)
