Description
.It also explains the Strategies for Dealing With Cultural Differences and also Strategies for Instituting Change in the organization.
Cultural Environment
Contents
• • • • • • • • • • • • • • • • • • • • • Introduction Cultural Awareness Identification and Dynamics of Cultures The Nation As A Point Of Reference Cultural Formations And Dynamics Language as a Cultural Stabilizer Religion as a Cultural Stablizer Cultural Universals Behavioral Practices Affecting Business Social Stratification Systems Motivation Relationship Preferences Risk Taking Behavior Information and Task Processing Hofstede’s Cultural Typology
Refer to the ppt for further topics:
Strategies for Dealing With Cultural Differences Company and Management Orientations Strategies for Instituting Change
Introduction
• The major problems of cultural collision in international business are when
• A company implements practices that work less well that intended. • A company’s employees encounter distress because of an inability to accept or adjust to foreign behaviors.
• Business comprises of employees, employers, sellers ,buyers, regulators all of them are people. In case of international business the various business functions are subject to potential cultural problems. • An International Company must be sensitive to these cultural differences in order to predict and control its relationship and operations. • When doing business abroad, a company should first determine what business practices in a foreign country differ from those it’s used to. • Management then must decide what, if any, adjustments are necessary to operate efficiently in the foreign country.
Cultural Awareness
• Building cultural awareness is not an easy task, and no foolproof method exists for doing so. • Culture consists of specific learned norms based on attitudes ,value and beliefs, all of which exists in every nations. • There are so many cultural variation that business people cannot expect to memorize all of them for every country. • Not all companies need to have the same degree of cultural awareness. • Nor must a particular company have a consistent degree of awareness during the course of its operations.
• They may expand their cultural knowledge as they move from one to multiple foreign function or locations, from similar to dissimilar foreign environments, and from external to internal handling of their international operations. • A co. that is new to international business may need only a minimal level of cultural awareness, but a highly entrenched company needs a high level of awareness because of its multi functional operations in multiple countries. • When a company engages in few foreign functions, for example when it is just exports of its home country production. It must be aware of only those cultural factors that must influence its marketing program. • For multifunctional activities such as producing and selling a product in a foreign country, a company must be concerned with a wide array of cultural relationships. The more countries in which a company does business, the more cultural nuances it must consider.
Identification and Dynamics of Cultures
• Cultures are elusive subject of study. There is no universally satisfactory definition of the domain of a culture. • Cultures consists of people with shared attitude, values and beliefs ; • People simultaneously belong to national , ethnic, professional and organizational cultures at the same time, individual and group attitudes , values and beliefs evolve. • From the perspective of International Business , nations are useful but not the perfect reference for culture.
The Nation as a Point of Reference
• The nation provides a workable definition of a culture for international business because the basic similarity among people is both a cause and an effect of national boundaries. • The laws governing business operations also apply primarily along national lines. • Within bounds of nations are people who shares essential attributes , such as value , language and race. • Though national identity is perpetuated through rites and symbols of the country- flags, parades, rallies- and a common perception of history . • These shared attributes do not mean that everyone in a country is alike. Nor do they suggest that each country is unique in all respects.
• Nevertheless, each nation possesses certain human, demographic and behavioural characteristics that constitute its national identity and that may affect a company’s methods of conducting business affectively in that country. • Similarities can link groups from different nations more closely than groups within a nation. For instance, regardless of the nation examined, people in urban areas differ in certain attitudes from people in rural areas, and managers have different work attitudes than production workers do. • Thus managers in countries A and B hold more similar values with each other than either person holds with production workers in his or her own country.
Cultural Formation and Dynamics
• Culture is transmitted in various ways – from parent to child,teacher to pupil, social leader to follower, and one peer to another. • The parent to child route is especially important in the transmission of religious and political affiliations. Psychologists believe that by age 10, most children have their basic value systems firmly in place, after which they do not make changes easily. • However, individual and societal values and customs may evolve over time.
• Examining this evolution and its causes may reveal something about the process by which the new practices are accepted, thus aiding international companies that would like to introduce changes into the culture. • Change may come through choice or imposition. • Change by imposition is called Cultural Imperialism.
Language as Cultural Stabilizer
• In addition to national boundaries and geographical obstacles, language is a factor that greatly affects cultural stability. • A common language within countries is a unifying force • When people from different areas speak the same language, culture spreads easily. • When people speak only a language with few speakers, especially if those speakers are concentrated in a small geographic area, they tend to adhere to their culture because meaningful contact with others is difficult.
Religion as a Cultural Stabilizer
• Religion is a strong shaper of values. • The specific beliefs of religion may affect business, such as prohibiting sale of certain products or work at certain times. • For example, McDonald’s serves neither beef nor pork in India so as not to offend its Hindu and Muslim populations.
Cultural Universals
• A universal is a mode of behavior existing in all cultures. • Universal aspects of cultural environment represent opportunities for global marketers to standardize some or all elements of a marketing program. • A partial list of cultural universal includes the following :
• • • • • • • • • • • • • • • • • • • •
Athletic Sports Body Adornment Cooking Courtship Dancing Decorative art Education Ethics Etiquette Family Feasting Food taboos Marriage Meal time Medicine Mourning Music Property Rights Religious rituals Status differentiation Trade
Behavioural Practices Affecting Business
• Attitudes and values affect business behaviour. • From what products to sell to how to organize, finance, manage, and control operations. • Researchers define cultural variables differently, attaching different names to slightly different and sometimes overlapping attitudes and values. • The result is that there are thousands of possible ways of relating culture to business. • The following are the most noted influencing factors that affect the business practices from one country to another.
Social Stratification Systems
• Every culture values some people more highly than others, and such distinctions dictate a person’s class or status within that culture. • In business, this might mean valuing members of managerial groups more highly than members of production groups . • However what determines the ranking or social stratification varies substantially from country to country. • A persons ranking is partly determined by individual factors and partly by person’s affiliation or membership in given groups. • Affiliations determined by birth known as ascribed group memberships include those based on gender , family , age ,caste and ethnic, racial or national origin. • Affiliations not determined by birth are called acquired group memberships and include those based on religion, political affiliation , and professional and other associations.
Motivation
• Employees who are motivated to work long and hard are normally more productive than those who are not. • On an aggregate basis, this influences economic development positively. • International companies are concerned about economic development because markets for their products grow as economies grow. • They are also interested in motivation because higher productivity normally reduces production costs.
Relationship Preferences
• We have discussed two categories of behavioural practices affecting business-social stratification systems and motivation. • Within Social Stratification Systems, not everyone within the reference group is necessarily an equal. • Further there may be strong or weak pressures for conformity within one’s group. • In both cases , there are national differences in norms that influence management styles and marketing behaviour. • We will use Hofstetes Cultural Typology to understand these differences-
Hofstede’s Cultural Typology
• As per Hofstede, the cultures of different nations can be compared in terms of following dimensions• Power Distance- Power distance is a term describing the relationship between superior and subordinates. Where power distance is high, people prefer little consultation between superiors and sub-ordinates and vice-versa. • Individualism Vs Collectivism-Studies have compared employee’s inclination toward individualism or collectivism. Attributes of individualism are low dependence on the organization and a desire for personal time, freedom and challenge.Attributes of collectivism are loyalty and dependence on organization.
• Masculinity Vs Femininity-Masculinity describes a society in which men are expected to be assertive , competitive and concerned with material success, while women fulfil the role of nurturer and are concerned with issues such as the welfare of children. • Femininity, on the other hand, describes a society in which the social roles of men and women overlap, with neither gender exhibiting overly ambitious or competitive behaviour. • Uncertainty Avoidance - In countries characterized by high uncertainty avoidance, employees prefer set rules that are not to be broken, they plan to work for a longer period with the same company, few consumers are prepared to take the risk of trying a new product first. • This is very important when it comes time for firms to introduce new products.
Strategies for Dealing With Cultural Differences
• After a company has identified cultural differences in the foreign country where it intends to do business, it can adopt any or all of the following strategies to get host culture to accept the innovations it would like to introduce.
Making little or no adjustment
• International co.s have sometime succeeded in introducing new products, technologies and operating procedures to foreign countries with little adjustment.Thats because some of these introductions have not run counter to deep rooted attitudes or because the host societyis willing to accept foreign customs as a tradeoff for other advantages.
Communications
• Spoken and Written Language-Translating one language directly to another can be difficult, making international business communication difficult. • Good international managers use rules such as the following• Get references on the people who will do the translation with good technical vocabulary of business. • Using simple words whenever possible. • Avoiding Slang etc.
• Silent Language- Spoken and written language is not the only means of communication. Messages can be exchanged through a host of non verbal cues that form a silent language. • Use of colour of the product. • Another aspect of silent language is distance between people during conversation. People's sense of appropriate distance is learned and differs among societies. • Body Language, Perception of time and punctuality are another unspoken cues that differs by context and may differ across cultures.
Company and Management Orientations
• Polycentrism-In polycentrism organizations the control is decentralized so that management is free to conduct business in his or her manner. • Ethnocentrism-Ethnocentrism is a belief that one’s own culture is superior to others. In international business it describes a company or individual to believe that what worked at home will work abroad. • Geocentrism-Between the extremes of Polycentrism and Ethnocentrism are business practices that are hybrid of the two.
Strategies for Instituting Change
• Companies may need to transfer new products or operating methods from one country to another if they are to have competitive advantages. How they make such introductions is important for assuring success. • Value system-it is much easier to adapt to things that do not challenge our value systems than to things that do. • Cost benefit of change.-Some adjustments to foreign culture are costly to undertake, whereas others are inexpensive.
• Resistance to too much change-Excessive change in the outlook and practices must be avoided. • Participation-One way to avoid problems that could result from change is to discuss a proposed change with the stakeholders in advance. • Reward Sharing-Sometimes a proposed change may have no foreseeable benefit for the people who must support it. • Opinion Leaders-By discovering the local channels of influence, an international company may locate opinion leaders who can help up acceptance of change. • Timing.Many good businesses may fall flat because they are ill timed. • Learning Abroad.As companies operate abroad, they affect the host society and are affected by it.The company may learn things that will be useful in its home country or in other operations.
doc_968280544.pptx
.It also explains the Strategies for Dealing With Cultural Differences and also Strategies for Instituting Change in the organization.
Cultural Environment
Contents
• • • • • • • • • • • • • • • • • • • • • Introduction Cultural Awareness Identification and Dynamics of Cultures The Nation As A Point Of Reference Cultural Formations And Dynamics Language as a Cultural Stabilizer Religion as a Cultural Stablizer Cultural Universals Behavioral Practices Affecting Business Social Stratification Systems Motivation Relationship Preferences Risk Taking Behavior Information and Task Processing Hofstede’s Cultural Typology
Refer to the ppt for further topics:
Strategies for Dealing With Cultural Differences Company and Management Orientations Strategies for Instituting Change
Introduction
• The major problems of cultural collision in international business are when
• A company implements practices that work less well that intended. • A company’s employees encounter distress because of an inability to accept or adjust to foreign behaviors.
• Business comprises of employees, employers, sellers ,buyers, regulators all of them are people. In case of international business the various business functions are subject to potential cultural problems. • An International Company must be sensitive to these cultural differences in order to predict and control its relationship and operations. • When doing business abroad, a company should first determine what business practices in a foreign country differ from those it’s used to. • Management then must decide what, if any, adjustments are necessary to operate efficiently in the foreign country.
Cultural Awareness
• Building cultural awareness is not an easy task, and no foolproof method exists for doing so. • Culture consists of specific learned norms based on attitudes ,value and beliefs, all of which exists in every nations. • There are so many cultural variation that business people cannot expect to memorize all of them for every country. • Not all companies need to have the same degree of cultural awareness. • Nor must a particular company have a consistent degree of awareness during the course of its operations.
• They may expand their cultural knowledge as they move from one to multiple foreign function or locations, from similar to dissimilar foreign environments, and from external to internal handling of their international operations. • A co. that is new to international business may need only a minimal level of cultural awareness, but a highly entrenched company needs a high level of awareness because of its multi functional operations in multiple countries. • When a company engages in few foreign functions, for example when it is just exports of its home country production. It must be aware of only those cultural factors that must influence its marketing program. • For multifunctional activities such as producing and selling a product in a foreign country, a company must be concerned with a wide array of cultural relationships. The more countries in which a company does business, the more cultural nuances it must consider.
Identification and Dynamics of Cultures
• Cultures are elusive subject of study. There is no universally satisfactory definition of the domain of a culture. • Cultures consists of people with shared attitude, values and beliefs ; • People simultaneously belong to national , ethnic, professional and organizational cultures at the same time, individual and group attitudes , values and beliefs evolve. • From the perspective of International Business , nations are useful but not the perfect reference for culture.
The Nation as a Point of Reference
• The nation provides a workable definition of a culture for international business because the basic similarity among people is both a cause and an effect of national boundaries. • The laws governing business operations also apply primarily along national lines. • Within bounds of nations are people who shares essential attributes , such as value , language and race. • Though national identity is perpetuated through rites and symbols of the country- flags, parades, rallies- and a common perception of history . • These shared attributes do not mean that everyone in a country is alike. Nor do they suggest that each country is unique in all respects.
• Nevertheless, each nation possesses certain human, demographic and behavioural characteristics that constitute its national identity and that may affect a company’s methods of conducting business affectively in that country. • Similarities can link groups from different nations more closely than groups within a nation. For instance, regardless of the nation examined, people in urban areas differ in certain attitudes from people in rural areas, and managers have different work attitudes than production workers do. • Thus managers in countries A and B hold more similar values with each other than either person holds with production workers in his or her own country.
Cultural Formation and Dynamics
• Culture is transmitted in various ways – from parent to child,teacher to pupil, social leader to follower, and one peer to another. • The parent to child route is especially important in the transmission of religious and political affiliations. Psychologists believe that by age 10, most children have their basic value systems firmly in place, after which they do not make changes easily. • However, individual and societal values and customs may evolve over time.
• Examining this evolution and its causes may reveal something about the process by which the new practices are accepted, thus aiding international companies that would like to introduce changes into the culture. • Change may come through choice or imposition. • Change by imposition is called Cultural Imperialism.
Language as Cultural Stabilizer
• In addition to national boundaries and geographical obstacles, language is a factor that greatly affects cultural stability. • A common language within countries is a unifying force • When people from different areas speak the same language, culture spreads easily. • When people speak only a language with few speakers, especially if those speakers are concentrated in a small geographic area, they tend to adhere to their culture because meaningful contact with others is difficult.
Religion as a Cultural Stabilizer
• Religion is a strong shaper of values. • The specific beliefs of religion may affect business, such as prohibiting sale of certain products or work at certain times. • For example, McDonald’s serves neither beef nor pork in India so as not to offend its Hindu and Muslim populations.
Cultural Universals
• A universal is a mode of behavior existing in all cultures. • Universal aspects of cultural environment represent opportunities for global marketers to standardize some or all elements of a marketing program. • A partial list of cultural universal includes the following :
• • • • • • • • • • • • • • • • • • • •
Athletic Sports Body Adornment Cooking Courtship Dancing Decorative art Education Ethics Etiquette Family Feasting Food taboos Marriage Meal time Medicine Mourning Music Property Rights Religious rituals Status differentiation Trade
Behavioural Practices Affecting Business
• Attitudes and values affect business behaviour. • From what products to sell to how to organize, finance, manage, and control operations. • Researchers define cultural variables differently, attaching different names to slightly different and sometimes overlapping attitudes and values. • The result is that there are thousands of possible ways of relating culture to business. • The following are the most noted influencing factors that affect the business practices from one country to another.
Social Stratification Systems
• Every culture values some people more highly than others, and such distinctions dictate a person’s class or status within that culture. • In business, this might mean valuing members of managerial groups more highly than members of production groups . • However what determines the ranking or social stratification varies substantially from country to country. • A persons ranking is partly determined by individual factors and partly by person’s affiliation or membership in given groups. • Affiliations determined by birth known as ascribed group memberships include those based on gender , family , age ,caste and ethnic, racial or national origin. • Affiliations not determined by birth are called acquired group memberships and include those based on religion, political affiliation , and professional and other associations.
Motivation
• Employees who are motivated to work long and hard are normally more productive than those who are not. • On an aggregate basis, this influences economic development positively. • International companies are concerned about economic development because markets for their products grow as economies grow. • They are also interested in motivation because higher productivity normally reduces production costs.
Relationship Preferences
• We have discussed two categories of behavioural practices affecting business-social stratification systems and motivation. • Within Social Stratification Systems, not everyone within the reference group is necessarily an equal. • Further there may be strong or weak pressures for conformity within one’s group. • In both cases , there are national differences in norms that influence management styles and marketing behaviour. • We will use Hofstetes Cultural Typology to understand these differences-
Hofstede’s Cultural Typology
• As per Hofstede, the cultures of different nations can be compared in terms of following dimensions• Power Distance- Power distance is a term describing the relationship between superior and subordinates. Where power distance is high, people prefer little consultation between superiors and sub-ordinates and vice-versa. • Individualism Vs Collectivism-Studies have compared employee’s inclination toward individualism or collectivism. Attributes of individualism are low dependence on the organization and a desire for personal time, freedom and challenge.Attributes of collectivism are loyalty and dependence on organization.
• Masculinity Vs Femininity-Masculinity describes a society in which men are expected to be assertive , competitive and concerned with material success, while women fulfil the role of nurturer and are concerned with issues such as the welfare of children. • Femininity, on the other hand, describes a society in which the social roles of men and women overlap, with neither gender exhibiting overly ambitious or competitive behaviour. • Uncertainty Avoidance - In countries characterized by high uncertainty avoidance, employees prefer set rules that are not to be broken, they plan to work for a longer period with the same company, few consumers are prepared to take the risk of trying a new product first. • This is very important when it comes time for firms to introduce new products.
Strategies for Dealing With Cultural Differences
• After a company has identified cultural differences in the foreign country where it intends to do business, it can adopt any or all of the following strategies to get host culture to accept the innovations it would like to introduce.
Making little or no adjustment
• International co.s have sometime succeeded in introducing new products, technologies and operating procedures to foreign countries with little adjustment.Thats because some of these introductions have not run counter to deep rooted attitudes or because the host societyis willing to accept foreign customs as a tradeoff for other advantages.
Communications
• Spoken and Written Language-Translating one language directly to another can be difficult, making international business communication difficult. • Good international managers use rules such as the following• Get references on the people who will do the translation with good technical vocabulary of business. • Using simple words whenever possible. • Avoiding Slang etc.
• Silent Language- Spoken and written language is not the only means of communication. Messages can be exchanged through a host of non verbal cues that form a silent language. • Use of colour of the product. • Another aspect of silent language is distance between people during conversation. People's sense of appropriate distance is learned and differs among societies. • Body Language, Perception of time and punctuality are another unspoken cues that differs by context and may differ across cultures.
Company and Management Orientations
• Polycentrism-In polycentrism organizations the control is decentralized so that management is free to conduct business in his or her manner. • Ethnocentrism-Ethnocentrism is a belief that one’s own culture is superior to others. In international business it describes a company or individual to believe that what worked at home will work abroad. • Geocentrism-Between the extremes of Polycentrism and Ethnocentrism are business practices that are hybrid of the two.
Strategies for Instituting Change
• Companies may need to transfer new products or operating methods from one country to another if they are to have competitive advantages. How they make such introductions is important for assuring success. • Value system-it is much easier to adapt to things that do not challenge our value systems than to things that do. • Cost benefit of change.-Some adjustments to foreign culture are costly to undertake, whereas others are inexpensive.
• Resistance to too much change-Excessive change in the outlook and practices must be avoided. • Participation-One way to avoid problems that could result from change is to discuss a proposed change with the stakeholders in advance. • Reward Sharing-Sometimes a proposed change may have no foreseeable benefit for the people who must support it. • Opinion Leaders-By discovering the local channels of influence, an international company may locate opinion leaders who can help up acceptance of change. • Timing.Many good businesses may fall flat because they are ill timed. • Learning Abroad.As companies operate abroad, they affect the host society and are affected by it.The company may learn things that will be useful in its home country or in other operations.
doc_968280544.pptx