BSB119 – GLOBAL BUSINESS
LECTURE 4: THE CULTURAL ENVIRONMENT
1. What is culture?
2. Elements of culture
3. Comparing cultures
4. Cultural influences on International Business and Management
5. Latin America
Awareness (differences exist);
Understanding (nature of the differences and their implications);
Competency (able to function in different cultures)
Advantages of understanding (a reputation able to handle cultural diversity)
Cost advantages: integrate workers of different cultures - avoid loss of job satisfaction, less absenteeism,
Quality staff: attract staff from a wider pool; access to international networks
Marketing advantage: adapt products and services.
Creative problem solving: broader and richer base of experience; different perspective and problem solving
Management control: better able to communicate.
Competitive advantage: more readily accepted by locals; better market intelligence; understanding by
Cross Cultural Literacy: an understanding of how cultural differences across and within nation’s effect
What is Culture
‘Culture is the total way of life in a society’ (Fletcher, 1979)
‘Culture is the collective programming of the mind’ (Hofstede, 1980)
Culture is the glue that binds groups together (anonymous)
A system of values and norms that are shared among a group of people and that when taken
together constitute a design for living
o Values: abstract ideas about what a group believes is good/bad/acceptable
o Norms: social rules that prescribe behavior in particular situations
Overall, culture is an integrated system of learned behaviour patterns that are distinguishing
characteristics of the members of any given society
o Primarily passed on by parents
o Provides a code of conduct
o Helps give an individual an identity
Characteristics of Culture
Prescriptive: prescribes form of acceptable behaviour
Learned: people are not born with culture
Subjective: based on people’s shared beliefs
Expressions of Culture 2
Symbols: Words, gestures, objects or pictures that are recognisable and have specific meaning
Heroes: People who possess the qualities highly prized in that culture
Rituals: Collective activities that are an essential element of social activities
Values: At the core of culture are values: tendencies to prefer certain affairs over others.
Values and Attitudes
Values are shared beliefs or group norms.
Attitudes are evaluations of alternatives based on these values.
In some cultures, cooperation is more important than competition (e.g. Chinese guanxi).
Attitudes towards change are of great importance to marketers.
o positive in industrialized countries
o viewed with suspicion in more tradition-bound countries
E.g., Japanese youth display positive attitudes towards Western products.
Levels at which culture operates
o global values
o values in which institutions are based
o values and norms of industry
o general business patterns of firms
o shared values of a group
Time - assumptions about time vary across cultures 3
o E.g. in western cultures’ being prompt is crucial for good business practice. It is often the
reverse in many Asian countries.
Language - precision versus ambiguity
Religion - beliefs
Consumption patterns - material possessions / dress, mealtimes
Business/social customs – bribery, etiquette, status, jokes, music.
Importance of the context -verbal / non-verbal cues
Relationship with authority (Hofstede, 1980)
Various: Music, Mealtimes, Personal names, Etiquette, Jokes
Social Structure – basic organization of society
o Social mobility: extent to which individuals can move out of the strata they were born into
o Caste system: social position is determined by the family in which a person is born and
change out of that is not usually possible.
o Class system – more flexible depending on changes in wealth or standing.
Local language capabilities play an important role:
o aids in information gathering and evaluation
o provides access to local society
o important for company communications
o how words are spoken
o gestures made and body position assumed
o degree of eye contact
o time flexibility and sensibility
o social acquaintance and rapport
o personal physical space and personal touching
o non-verbal gestures and signaling
Mitsubishi realized that Pajero was not the right name for a car in Spanish speaking countries, so
they changed it to Montero.
General Motors tried to sell the Chevrolet Nova in Latin America, only to find that people found
"no va" (doesn't go) a funny name for a car.
Mazda has a van in Japan called the Laputa, but they made the mistake of selling it under that
name in Spanish-speaking countries.
A car that would need a new name in Spain is the Nissan Moco (they even have it in the right shade
Religion: system of shared beliefs and rituals that are concerned with the realm of the scared.
o Ethical systems are a by product of religion
People find in religion a reason for being, the belief in a higher power and the belief that they are
part of the ‘bigger picture’.
Religion has an impact on international business.
o Seen in a culture’s values and attitudes towards entrepreneurship, consumption and social
The dominant religions of the world (2007) 4
o Islam 1,600,000,000 – 1,800,000,000
o Christianity 1,300,000,000 – 1,500,000,000
o Hinduism 828,000,000 – 1,000,000,000
o Buddhism 500,000,000 – 1.5 billion
Manners and Customs
Products are used differently according to manners and customs.
Potential problems arise from an insufficient understanding of:
o different ways of thinking in the host country
o the decision-making process and personal relations
o The allocation of time for negotiations.
Example: The number eight in Chinese culture is of great significance.
o Its pronunciation in Cantonese sounds like the same as the words for ‘to make money’.
o The Beijing Olympic Games will begin at 8 a.m. on 8/8/08.
o Six, eight and nine are considered lucky numbers.
o One, four, and seven are considered unfortunate.
Low cultural context = culture in which the speaker’s message is conveyed explicitly by spoken
High cultural context = context of a discussion is as important a s actual words spoken
Power distance = how much a society allows inequalities of physical and intellectual capabilities
between people to grown into inequalities of power and wealth
What is good taste?
What is and what is not acceptable?