2

CHAPTER TWO

CROSS-CULTURAL
BUSINESS

Copyright © 2016 Pearson Education Limited Chapter 2-1

Learning Objectives

1. Explain culture and the need for cultural knowledge.

2. Summarize the cultural importance of values and behavior.
3. Describe the roles of social structure and education in culture.
4. Outline how the major world religions can influence business.
5. Explain the importance of personal communication to
international business.
6. Describe how firms and culture interact in the global workplace.

Copyright © 2016 Pearson Education Limited Chapter 2-2

Hold the Pork, Please!

Germany-based Haribo (
www.haribo.com)
Cultural Challenge and Blunders:
Pork-based product: off-limits to
Muslims and Jews
Not meeting the needs of a globally
dispersed subculture
Potentially worth $2 billion annually
Printing on packages: Backward, but
Hebrew is read from right to left

Copyright © 2016 Pearson Education Limited Chapter 2-3

What Is Culture?
National Culture

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

______________ of people
Nation-states support and promote the concept of _________
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

Copyright © 2016 Pearson Education Limited Chapter 2-4

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

Copyright © 2016 Pearson Education Limited Chapter 2-5

What Is Culture?
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.

Copyright © 2016 Pearson Education Limited Chapter 2-6

What Is Culture?
Need for Cultural Knowledge

A visual depiction of culture would resemble an iceberg.

Avoiding _______________:
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 _______:
Cultural literacy: detailed knowledge about a culture that
enables a person to work happily and effectively within it.

Copyright © 2016 Pearson Education Limited Chapter 2-7

Discussion Question

Why should
business people
try to avoid
ethnocentricity
and develop
cultural literacy?
Copyright © 2014 Pearson Education, Inc. 2-8
Values and Behavior

Figure 2.1
Components
of Culture

Copyright © 2016 Pearson Education Limited Chapter 2-9

Values and Behavior
Values

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

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

Copyright © 2016 Pearson Education Limited Chapter 2-10

Values and Behavior
Attitudes

Attitudes reflect a people’s ____________ 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

Copyright © 2016 Pearson Education Limited Chapter 2-11

Discussion Question

Customs differ from

_______ in that they
define appropriate ways
or behaviors in specific
situations.
a. Values
b. Attitudes
c. Manners

Copyright © 2014 Pearson Education, Inc. 2 - 12

Values and Behavior
Aesthetics

Aesthetics: what a culture considers “__________” 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.

Copyright © 2016 Pearson Education Limited Chapter 2-13

Values and Behavior
Appropriate Behavior

Manners: Appropriate ways of behaving, speaking, and dressing in a

culture are called manners.
________: 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.
_________ Custom: Behavior shared by a heterogeneous group or by several
groups.
Gift Giving Customs
Proper type of gift varies
Legal and ethical rules

Copyright © 2016 Pearson Education Limited Chapter 2-14

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 _____________
• Ease with which individuals can move
Social up or down a culture’s “social ladder”
Mobility • ______ System
• Class System
Copyright © 2016 Pearson Education Limited Chapter 2-15
Education

Copyright © 2016 Pearson Education Limited Chapter 2-16

Education
The “Brain Drain” Phenomenon

Brain Drain
_________ of highly educated people from one
profession, geographic region, or nation to
another

Copyright © 2016 Pearson Education Limited Chapter 2-17

Religion
Christianity

Christianity was born in _________ around 2,000 years ago.

Christianity boasts more than 300 denominations:
Most Christians belong to the Roman Catholic, Protestant, or
Eastern Orthodox churches.
With 2 billion followers, Christianity is the world’s single largest
religion.

Copyright © 2016 Pearson Education Limited Chapter 2-18

Religion
Christianity (Cont.)

The Roman Catholic

Refrain from placing material possessions above God and others
Protestants
Salvation comes from faith in God
Hard work gives glory to God—a tenet known widely as the
“Protestant work ethic”
Development of capitalism and free enterprise in nineteenth-
century Europe
Christian organizations sometimes get involved in social causes that
affect business policy.
Copyright © 2016 Pearson Education Limited Chapter 2-19
Religion
Islam

With 1.3 billion adherents, Islam is the world’s second-largest

religion.
Islam thrives in north Africa, the Middle East, Central Asia,
Pakistan, and some Southeast Asian nations, including Indonesia.
Muslim concentrations are also found in most European and U.S.
cities.
The prophet Muhammad founded Islam around A.D. 600 in
______.

Copyright © 2016 Pearson Education Limited Chapter 2-20

Religion
Islam (Cont.)

Islam means “submission to Allah,” and Muslim means “one who

submits to Allah.”
Islam revolves around the “five pillars”:
1. Reciting the shahada (profession of faith)
2. Giving to the poor
3. Praying five times daily
4. Fasting during the holy month of Ramadan
5. Making the hajj (pilgrimage) to Mecca
Religion strongly affects the kinds of goods and services acceptable
to Muslim consumers.
Copyright © 2016 Pearson Education Limited Chapter 2-21
Religion
Hinduism

Hinduism formed around 4,000 years ago in present-day India.

More than 90 percent of Hinduism’s 900 million adherents live
India.
It is also the majority religion of Nepal and a secondary religion in
Bangladesh, Bhutan, and Sri Lanka.
Considered by some to be a way of life rather than a religion.
Hinduism recalls no founder and recognizes no central
authority or _______ leader.

Copyright © 2016 Pearson Education Limited Chapter 2-22

Religion
Hinduism (Cont.)

Hindus believe in ____________—the rebirth of the human soul at

the time of death.
Highest goal of life is moksha
Moksha: escaping from the cycle of reincarnation and entering
a state of eternal happiness called nirvana
Hindus tend to disdain materialism.
Strict Hindus do not eat or willfully harm any living creature
because it may be a reincarnated human soul.

Copyright © 2016 Pearson Education Limited Chapter 2-23

Religion
Buddhism

Buddhism was founded about 2,600 years ago in India.

Buddhism has around 380 million followers, mostly in China,
Tibet, Korea, Japan, Vietnam, and Thailand.
Unlike Hinduism, Buddhism rejects the ____________ of
Indian society.
Like Hinduism, Buddhism promotes a life centered on spiritual
rather than worldly matters.
In a formal ceremony, Buddhists take refuge in the “three jewels”:
Buddha, Dharma, and Sangha

Copyright © 2016 Pearson Education Limited Chapter 2-24

Religion
Buddhism (Cont.)

They seek nirvana through

Charity
Modesty
Compassion for others
Restraint from violence
General self-control

Copyright © 2016 Pearson Education Limited Chapter 2-25

Religion
Confucianism

Confucius began teaching his ideas in China nearly 2,500 years

ago.
China is home to most of Confucianism’s 225 million followers.

Confucian thought is also ingrained in the cultures of Japan,

South Korea, and nations with large numbers of ethnic Chinese.
South Korean business practice reflects Confucian thought in its
organizational structure.

Copyright © 2016 Pearson Education Limited Chapter 2-26

Religion
Judaism

More than 3,000 years old, Judaism was the first religion to
preach belief in a single God.
Judaism has roughly 18 million followers worldwide.
Important days in the Jewish faith:
Sabbath, Rosh Ha-Shanah, Yom Kippur, Passover, and
Hanukkah
Marketers must take into account foods that are banned among
strict Jews.

Chapter 2-27
Religion
Shinto

Shinto (meaning “way of the gods”) arose as the native

religion of the Japanese.
Shinto can claim only about 4 million strict adherents in Japan.
Shinto teaches sincere and ethical behavior, loyalty and respect
toward others, and enjoyment of life.
Shinto beliefs are reflected in the workplace.

Chapter 2-28
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
_____________
Culture’s Body Language
Chapter 2-29
Language Blunders

An English-language sign in a Moscow hotel read, “You are welcome to visit
the cemetery where famous Russian composers, artists, and writers are buried
daily except Thursday.”
A sign for English-speaking guests in a Tokyo hotel read, “You are
respectfully requested to take advantage of the chambermaids.”
An airline ticket office in Copenhagen read in English, “We take your bags
and send them in all directions.”
A Japanese knife manufacturer labeled its exports to the United States with
“Caution: Blade extremely sharp! Keep out of children.”
Braniff Airlines’ English-language slogan “Fly in Leather” was translated into
“Fly Naked” in Spanish
Copyright © 2016 Pearson Education Limited Chapter 2-30
Culture in the Global Workplace

Perception View of Material Cultural

of Time Work Culture Change

Cultural Trait

Cultural
Diffusion
Cultural
Imperialism

Copyright © 2016 Pearson Education Limited Chapter 2-31

Culture in the Global Workplace
Studying Culture in the Workplace

Kluckhohn-Strodtbeck Framework Hofstede Framework

Relation to nature Individualism versus collectivism

Time orientation _____________
Trust and control Uncertainty avoidance
Material or spiritual Masculinity vs. femininity

Responsibility to others Long-term orientation

View of personal space Indulgence versus restraint

Copyright © 2016 Pearson Education Limited Chapter 2-32

Cultural Classification: Kluckhohn-
Strodtbeck Framework
 Relationship to nature: do people believe they control
their environment or their environment controls them?

 Time Orientation: do people focus on the past present or

future implications of actions?

 Trust and control: are people easily controlled and not to

be trusted or can they be trusted to act freely and
responsibly?
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2 - 33
Cultural Classification: Kluckhohn-
Strodtbeck Framework

Life Orientation: Do people desire accomplishments in

life, carefree lives or spiritual and contemplative lives?
Individual/Group orientation: Do people believe that
individuals or groups are responsible for their lives?
Private/Public orientation: Do people prefer to conduct
most activities in private or public?

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2 - 34

Individualism versus Collectivism

This dimension identifies the extent to which a

culture emphasises the individual versus the group.
Individualist cultures value hard work and promote
entrepreneurial risk-taking.
Collectivist cultures feel a strong association to
groups, including family and work units.

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2 - 35

Power Distance
This dimension conveys the degree to which a
culture accepts social __________ among its people.
A culture with large power distance tends to be
characterised by much inequality between superiors and
subordinates.
On the other hand, cultures with small power distance
display a greater degree of equality, with prestige and
rewards more equally shared between superiors and
subordinates.
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
. 2 - 36
Uncertainty Avoidance

This dimension identifies the extent to which a

culture avoids uncertainty and ambiguity.
A culture with large uncertainty avoidance values
security and places its faith in strong system of
rules and procedures in society.
Cultures scoring low on uncertainty avoidance
tend to be more open to change and new ideas.

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

. 2 - 37
Masculinity versus Femininity
This dimension captures the extent to which a culture
emphasises masculine traits such as personal achievement
and materialism versus feminine traits such as
relationships and quality of life.
Cultures scoring high on the masculinity index tend to be
characterised more by personal assertiveness and the
accumulation of wealth.
Cultures scoring low on this dimension generally have
more relaxed lifestyles, where people are more concerned
about caring for others.
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall
. 2 - 38
Long-Term Orientation
This dimension focuses on the degree the society
embraces, or does not embrace, long-term devotion to
traditional, forward-thinking values.
Countries ranked high on this dimension conform to the
values of long-term commitments and respect for
tradition.
A low rank on this dimension indicates that the country
does not reinforce the concept of long-term, traditional
orientation, and change can occur rapidly as long-term
traditions and commitments do not hinder change.
2 - 39
Indulgence versus restraint

This dimension captures the extent to which a society

allows free ___________.
An indulgent society (one scoring high on this
dimension) allows people to rather freely satisfy
human needs related to enjoying life and having fun.
By contrast, a restrained society uses varying degrees
of social norms to suppress the free satisfaction of
such needs.
Copyright © 2016 Pearson Education Limited Chapter 2-40
Discussion Question

Cultures with small

____________ tend to
display greater equality
and a more equal
distribution of rewards.
a. Individualism
b. Power distance
c. Uncertainty avoidance

Copyright © 2014 Pearson Education, Inc. 2 - 41