Culture is the collection of values, beliefs, behaviours, customs, and attitudes that distinguish one society from another. Culture determines rules that govern how firms operate. Reflects learned behaviour transmitted from one member to another. Adaptive, changes in response to external forces. Shared by members of society and defines membership in that culture. Interaction of these elements affects the local environment in which ibs operate. Involve individuals living in family units and working with each other in groups. Differences in definition of family and individual roles within groups. Reflected in importance of family to business (nepotism) Societies categorize people to some extent on the basis of their birth, occupation, educational achievement etc. Importance of these categories, and their interactions b/w one another varies across countries. Mncs operating in highly stratified societies often must adjust their hiring and promotion procedures to take into class or clan differences among supervisors and workers.