International bussiness the challenge of global competition 11e chapter 06

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

– Variation in attitudes
and values requires
firms to use different
marketing mixes
• P&G Japanese
Camay commercials
• Disneyland Paris

• Human Resource
Management
– Evaluation of
managers

• Production and
Finance
– Attitudes toward
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

6-14

Will this work?

6-15


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
• Youngest and second
largest faith
–
–

1.3 billion followers
Comparison: Christianity has 2 billion
adherents

• Muhammad is Founder
– Prophet of God and head of
state

• Holy Book Koran

–
–
–
–
–

Confession of faith

Five daily prayers
Charity
Ramadan fast
Pilgrimage to Mecca

• Jihad – holy war
• Sunni-Shia Conflict
– Conflict gives rise to violent
clashes

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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
markets.
– Can be sold or be
embodied in the
company’s products
– Can give a firm
confidence to enter a
foreign market
– Enables the firm to obtain
better than usual
conditions for a foreign
market investment

– Enables a company with
only a minority equity
position to control a joint
venture
– Can change the
international division of
labor
– Causes major firms to
form competitive alliances

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Material Culture - Technology
• Cultural Aspects
of Technology
– Includes skills in marketing,
finance, and management
– People not always ready to
adapt to changes
technology brings

• Technological
Dualism
– The side-by-side presence
of technologically
advanced and
technologically primitive
production systems

• Appropriate
Technology
– The technology (advanced,
intermediate, or primitive) that
most closely fits the society
using it

• Boomerang Effect
– Situation in which technology
sold to companies in another
nation is used to produce
goods to compete with those
of the seller of the technology.

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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

6-25