MGT491 Midterm Notes ± Ch. 3: Differences in Culture
x Business success in a variety of countries requires cross-cultural literacy
x Cross-cultural literacy ± understanding of how cultural differences across and within nations can affect the way
business is practiced
x Underneath the cover of modernism, deep cultural differences remain
x Ex. in China, guanxi ± relationships backed by reciprocal obligations, are central to getting business done
o Wal-Mart usually does not allow unions but in China in order to build up guanxi it had to embrace
unions, then it opened the way for the company to be successful in China
x Important for foreign businesses to gain an understanding of the culture that prevails in those countries where
they do business, success requires a foreign enterprise to adapt to the culture of its host country
x A relationship may exist between culture and the cost of doing business in a country or region
o Different cultures are more or less supportive of capitalism and may increase or lower the costs of
x Culture is not static ± evolves, but the rate at which is changes is different
x Multinational enterprises themselves can be engines of cultural change ± in Mexico for example, Wal-Mart has
changed the shopping culture of that nation, drawing away from small local stores and toward large self-service
discount stores, hoping to do the same in China
WHAT IS CULTURE?
x Culture ± 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 to be good, right, and desirable
o Norms ± social rules and guidelines that prescribe appropriate behaviour in particular situations
o Society ± group of people who share a common set of values and norms
Values and Norms
x Values ± SURYLGHFRQWH[WZLWKLQZKLFKDVRFLHW\¶VQRUPVDUHHVWDEOLVKHGDQGMXVWLILHG
honesty, loyalty, social obligations, collective responsibility, role of women, love, sex, marriage, etc.
o Invested with considerable emotional significance ± ex. people argue, fight and die over freedom
o Values are often reflected in the political and economic systems of a society ± democratic free
market capitalism is a reflection of a philosophical value system that emphasizes individual freedom
x Norms ± WKHVRFLDOUXOHVWKDWJRYHUQSHRSOH¶VDFWLRQVWRZDUGRQHDQRWKHU
o Can be subdivided into two major categories: folkways and mores
x Folkways ± routine conventions of everyday life, actions of little moral significance, social
conventions concerning things such as the appropriate dress code in a particular situation,
good social manners, eating with the correct utensils, neighbourly behaviour, etc.
x Define the way people are expected to behave, but violation of folkways is not
normally a serious matter.
x People who violate folkways may be thought of as eccentric or ill-mannered but not
usually considered evil or bad.
x In many countries, foreigners can be excused for violating folkways initially.
x Ex. attitudes toward time ± business people are very conscious about schedules,
get irritated when time is wasted because someone is late or if they are kept
waiting, talk about time as though it is money ± can be spent, saved, wasted or
lost. In other cultures, time is more elastic, keeping a schedule is less important
than finishing an interaction with people. Americans need to adjust their
expectations of time accordingly in order to be able to deal with people who have
different beliefs about this.
x Include rituals and symbolic behaviour ± most visible manifestations of a culture,
constitutes the outward expression of deeper values
o Ex. Japanese executive will hold his business card in both hands and bow
while presenting the card to the foreigner, bow is a sign of respect, deeper
the bow shows more respect
o To not respect the Japanese person and not examine the card and return
the gesture with his own card, the American violates this important folkway
and is considered rude.
x Mores ± norms that are seen as central to the functioning of a society and to its social life