Midterm Study Notes - Chapter 3-Differences in Culture

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12 Oct 2010
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
doing business
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
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
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
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
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x Much greater significance than folkways, violating mores can bring serious
x Include indictments against theft, adultery, incest, cannibalism
x Certain mores have been enacted into law
x Differences between cultures ± ex. in America, drinking alcohol is widely accepted,
but in Saudi Arabia the consumption of alcohol is a violation of important social
mores and is punishable by imprisonment.
Culture, Society, and the Nation-State
x Society ± a group of people who share a common set of values and norms; people who are bound together by a
common culture
x Nation-states are political creations, may contain a single culture or several cultures
x At the other end of the scale are cultures that embrace several nations ± ex. Islamic society of citizens of many
different nations in the Middle East, Asia and Africa
x Even within American society and American culture, there are several societies and cultures ± African
American, Cajun, Chinese, Hispanic, Indian, Irish, Southern
x Even if a country can be characterized as having a single homogeneous culture, often that national culture is a
mosaic of subcultures
The Determinants of Culture
x Social Structure
x Language
x Religion
x Education
x Political Philosophy
x Economic Philosophy
x Values and norms of a culture are the evolutionary product of the prevailing political and economic
philosophies, social structure of a society, dominant religion, language, and education.
x Chain of causation flows both ways ± factors such as social structure and religion clearly influence the values
and norms of a society, but the values and norms of a society can also influence the social structure and
x Social structure ± refers to a soFLHW\VEDVLFVRFLDORUJDQL]DWLRQ
x 2 dimensions are important when explaining differences between cultures
o Degree to which the basic unit of social organization is the individual, as opposed to the group
In general, western societies tend to emphasize the individual
o Degree to which a society is stratified into classes or castes
Some societies are characterized by a relatively high degree of social stratification and
relatively low mobility between strata (ex. India), other societies are characterized by a low
degree of social stratification and high mobility between strata (ex. America)
Individuals and Groups
x Group ± an association or two or more individuals who have a shared sense of identity and who interact with
each other in structured ways on the basis of a common set of expectations about each others behaviour
x Individuals are involved in families, work groups, social groups, recreational groups, etc.
x While groups are found in all societies, they differ according to the degree to which the group is viewed as the
primary means of social organization ± in some societies, individual attributes and achievements are viewed as
being more important than group membership, in others the reverse is true.
x The Individual:
o Individualism is more than just an abstract political philosophy, in many western societies the
individual Is the basic building block of social organization, reflected not just in the political and
economic organization of society but also in the way people perceive themselves and relate to each
other in social and business settings
o Social standing of individuals is not so much a function of where they work as it is of their individual
performance in whatever work setting they choose
o Emphasis on individual performance in western societies has beneficial and harmful aspects
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Admiration of individualism and entrepreneurship, high level of entrepreneurial activity, new
products and new ways of doing business
High degree of managerial mobility between companies, which is not necessarily a good
thing ± moving from company to company may be good for individual managers who are
trying to build impressive resumes, but there is a lack of loyalty and commitment to an
individual company ± the tendency to move on for a better offer, can result in managers
who have good general skills but lack the knowledge, expertise and network of
interpersonal contacts that come from years of working within the same company
A positive aspect of high managerial mobility is that managers are exposed to different
ways of going business, ability to compare business practices helps execs identify how
good practices and techniques developed in one firm might be profitably applied to other
Emphasis on individualism can also make it difficult to build teams within an organization to
perform collective tasks ± if individuals are always competing with each other on the basis
of individual performance; it makes it hard for them to cooperate.
Firms are being hurt in the global economy by a failure to achieve cooperation both within a
company and between companies
o The emphasis on individualism may raise the costs of doing business due to its adverse impact on
managerial stability and cooperation
x The Group:
o In contrast to the western emphasis on the individual, the group is the primary unit of social
organization in many other societies
o In Japan, the social status of an individual is determined as much by the standing of the group to
which they belong as by his or her individual performance
o Traditionally, the group was associated with the family or village, today the group is associated also
o Strong identification with the group is argued to create pressures for mutual self-help and collective
action ± may be a beneficial implication for businesses
o Strong incentive for individual members of the group to work for the common good
o Success of Japanese enterprises in the global economy is argued to be partly because of their
ability to have close cooperation between individuals within a company and between companies
o Widespread diffusion of self-managing work teams within Japanese organizations
o Cooperation between a company and its suppliers on issues such as design, quality control and
inventory reduction
o The need to improve the performance of the group drives cooperation
o The primacy of the value of group identification also discourages manager and workers from
moving from company to company, lifetime employment in a particular company was the norm in
Japanese economy ± over the years, build up knowledge, experience, and network of interpersonal
business contacts, all of which can help managers perform their jobs more effectively and achieve
cooperation with others
o Primacy of the group is not always beneficial ± some argue that Japanese society is characterized
by a lack of dynamism and entrepreneurship
Social Stratification
x All societies are stratified on a hierarchical basis into social categories, (social strata)
x Strata are typically defined on the basis of characteristics such as family background, occupation and income
x Individuals are born into a particular stratum, become a member of the category that their parents belong to
x Individuals born into a stratum on the higher end of the social hierarchy tend to have better life chances than
those born toward the bottom of the hierarchy
x Those on to pare likely to have better education, health, standard of living, and work opportunities
x All societies are stratified to some degree but they differ in two ways:
o Degree of mobility between social strata
o Significance attached to social strata in business contexts
x Social Mobility:
o Social mobility ± the extent to which individuals can move out of the strata into which they are born
o Varies significantly from society to society
o Most rigid system of stratification is a caste system
o Caste system ± closed system of stratification in which social position is determined by the family
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