chapter six

Sociocultural Forces

McGraw-Hill/Irwin
International Business, 11/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Learning Objectives

 Explain the significance of culture for international

business

 Identify the sociocultural components of culture

 Discuss the significance of religion to businesspeople

 Explain the cultural aspects of technology

 Discuss the pervasiveness of the Information

Technology Era
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 Learning Objectives

 Explain the importance of the ability to speak the

local language

 Discuss the importance of unspoken language in

international business

 Discuss the two classes of relationships within a

society

 Discuss Hofstede’s four cultural value

dimensions
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Rules of Thumb for Cross Culture Business

• Be prepared
• Slow down
• Establish trust
• Understand the importance of language
• Respect the culture
• Understand the components of culture

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 What is Culture

• The sum total of beliefs, rules,

techniques, institutions, and artifacts
that characterize human populations
– Learned
– Interrelated
– Shared
– Defines the boundaries

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 Ethnocentricity

• Ethnocentricity
– Belief in the superiority of one’s own
ethnic group

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 Living with Other Cultures

• Realize that there are many different

cultures

• Learn the characteristics of those

cultures
– Spend a lifetime in a country
– Do training program

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Culture Affects All Business Functions

• Marketing • Human Resource

– Variation in attitudes Management
and values requires – Evaluation of
firms to use different managers
marketing mixes

• P&G Japanese • Production and

Camay commercials Finance
– Attitudes toward
• Disneyland Paris
authority
– Attitudes toward
change

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 Sociocultural Components

• Culture is:
– Aesthetics
– Attitudes and beliefs
– Religion
– Material Culture
– Language
– Societal organization
– Legal characteristics
– Political structures
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 Aesthetics

• Culture’s sense of beauty and good taste

– Art conveys meaning
• Colors, symbols, numbers--Nike air
• Architectural style differences
• feng shui

• Music and Folklore

– Musical tastes vary
– Folklore discloses way of life
• Cowboys in Chile or Argentina
• Mexican singing cricket
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 Attitudes and Beliefs

• Attitudes Toward Time

– Vary across cultures
– Difficult area for some
Americans
– Directness and drive
• Perceived to be rudeness
– Deadlines
• Liability abroad

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Attitudes Toward Achievement and
Work
• Germans put leisure first and work
second
• The demonstration effect
– Result of having seen others with desirable
goods
• Job Prestige
– The distinction between blue-collar workers
and office employees

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 Religion

• Responsible for many of the attitudes

and beliefs affecting human behavior
– Work Ethic
• Protestant work ethic
– Duty to glorify God by hard work and the
practice of thrift
• Confucian work ethic
– Drive toward hard work and thrift; similar to
Protestant work ethic

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Will this work?

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 Primary Asian Religions

Hinduism
– Caste system
• entire society is divided into four groups (plus the outcasts) and
each is assigned a certain class of work

• Buddhism
– Reform of Hinduism

• Jainism (Mahavira a contemporary of Buddha)

– Nonviolence a major principle

• Sikhism
– Bridge between Hinduism and Islam

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Primary Asian Religions, cont’d.

• Confucianism
– Inseparable from Chinese culture

• Taoism
– Lao Tzu, contemporary of Confucius

• Shintoism
– Indigenous to Japan

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 Islam

• Five Pillars of Faith

– Confession of faith
• Youngest and second – Five daily prayers
largest faith – Charity
– 1.3 billion followers – Ramadan fast
– Comparison: Christianity has 2 billion
– Pilgrimage to Mecca
adherents

• Muhammad is Founder • Jihad – holy war

– Prophet of God and head of
state • Sunni-Shia Conflict
– Conflict gives rise to violent
clashes
• Holy Book Koran

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Religious Population of the World

Insert Figure 6.1

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 Animism

• Spirit worship, incl. magic, witchcraft

• Everything in nature has its own spirit or

divinity

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 Material Culture

• Material Culture
– All human-made objects
– concerned with how people make things
(technology) and
– who makes what and why (economics)

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 Technology

• Technology
– Mix of usable knowledge that society
applies and directs toward attainment of
cultural and economic objectives

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 Importance of Technology

– Enables a firm to be
competitive in world – Enables a company with
markets. only a minority equity
– Can be sold or be position to control a joint
venture
embodied in the
company’s products – Can change the
international division of
– Can give a firm labor
confidence to enter a – Causes major firms to
foreign market form competitive alliances
– Enables the firm to obtain
better than usual
conditions for a foreign
market investment

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 Material Culture - Technology

• Cultural Aspects of • Appropriate

Technology Technology
– Includes skills in marketing, – The technology (advanced,
finance, and management intermediate, or primitive) that
– People not always ready to most closely fits the society
adapt to changes using it
technology brings
• Boomerang Effect
• Technological – Situation in which technology
Dualism sold to companies in another
nation is used to produce
– The side-by-side presence
goods to compete with those
of technologically of the seller of the technology.
advanced and
technologically primitive
production systems

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 Information Technology

• Information Technology Era

– As early as 2000 the Internet economy
• had reached $850 billion
• exceeded the size of the life insurance and real
estate industries

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 Spoken Language

• Most apparent cultural distinction

• Spoken languages demarcate cultures
– Switzerland: four separate cultures
• Many languages can exist in a single
country, but one usually serves as
communication vehicle
– Lingua franca or link language
– English primary language of business

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 Language

• Translation
– The ability to speak the language well does
not eliminate the need for translator

• Back Translation
– To avoid translation problems
• Japanese hotel: “You are invited to take
advantage of the chambermaid.”
• Bangkok dry cleaner: “Drop your trousers
here for best results.”
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 Language Issues

• Technical words do not exist in all

languages
– Usually use English

• Many cultures avoid saying anything

disagreeable

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 Unspoken Language

• Nonverbal communication
– Gestures vary tremendously from one region to
another
– Closed doors convey different meanings
– Office size has difference meanings in various
cultures
– Conversational distance small in East
– Gift giving has specific etiquette in each culture
• Gift or bribe?
• Questionable Payments

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2003 Corruption Index Scores and
Ranking

6-30
 Societal Organization

• Kinship

– Extended Family
• includes blood and marriage relatives

– Member’s responsibility
• Although the extended family is large, each member’s feeling
of responsibility to it is strong

• Associations

– Social units based on age, gender, or common interest, not on

kinship

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 Societal Organization

• Associations
– Age is important market segment criterion
– Gender
• As nations industrialize, more women enter the
job market and assume greater importance in
the economy
– Free association
• people joined together by a common bond:
political, occupational, religious or recreational

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Understanding National Cultures

• Hofstede’s Dimensions of Culture

• Individualism versus Collectivism

• Large versus Small Power Distance

• Strong versus Weak Uncertainty Avoidance

• Masculinity versus Femininity

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Scores for Hofstede’s Value
Dimensions

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Individualism versus Collectivism

• Collectivistic cultures
– people belong to groups that are supposed
to look after them in exchange for loyalty

• Individualistic cultures
– People look after only themselves and the
immediate family

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Large versus Small Power Distance

• Power distance
– the extent to which members of a society
accept the unequal distribution of power
among individuals
• In large-power-distance societies
– employees believe their supervisors are
right; employees do not take any initiative in
making non-routine decisions

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Strong versus Weak Uncertainty
Avoidance
• Uncertainty avoidance
– Degree to which members of a society feel
threatened by ambiguity and are rule-oriented
– Employees in high uncertainty-avoidance cultures
tend to stay with their organizations
• Japan, Greece, and Portugal
– Those from low uncertainty-avoidance nations are
more mobile
• United States, Singapore, and Denmark

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Plot of Nations: Power distance and
Uncertainty Avoidance

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Plot of Nations: Individualism and
Power Distance

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 Masculinity versus Femininity

• the degree to which the dominant values

in a society emphasize assertiveness,
acquisition of money and status
– Masculinity
• achievement of visible and symbolic
organizational rewards
– Femininity
• emphasize relationships, concern for
others, and the overall quality of life

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