Chapter Five

Sociocultural
Forces

McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
 Learning Objectives

 Explain the significance of culture for international

business
 Identify the sociocultural components of culture
 Discuss the significance of religion to
businesspeople
 Explain the cultural aspects of technology
 Discuss the pervasiveness of the Information
Technology Era

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 Learning Objectives

 Explain the importance of the ability to speak

the local language
 Discuss the importance of unspoken language
in international business
 Discuss the two classes of relationships within
a society
 Discuss cultural value dimensions

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 Rules of Thumb for Business
Conduct Across Cultures
 Be prepared
 Slow down
 Establish trust
 Understand the importance of language
 Respect the culture
 Understand the components of culture

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 What is Culture?

 Culture is the sum total of beliefs, rules, techniques,

institutions, and artifacts that characterize human
populations
 Culture is learned
 Its aspects are interrelated
 Culture is shared (as opposed to individual traits)
 It defines the boundaries of different groups

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 Ethnocentricity

 Ethnocentrism is the belief in the superiority of one’s

own ethnic group
 To overcome ethnocentricity
 Realize that there are many different cultures
 Spend time in another country
 Undergo training on culture and language

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 Culture Affects All
Business Functions
 Marketing
 Variation in attitudes and values affects marketing
mix
 Human Resource Management
 Evaluation of managers
 Attitudes toward authority
 Production
 Attitude towards change

LO1
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 Sociocultural Components

 Culture is reflected in
 aesthetics
 attitudes and beliefs
 religion
 materialism
 language
 societal organization
 legal characteristics
 political structures

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 Aesthetics
 Aesthetics refers to culture’s sense of beauty and
good taste
 Art conveys meaning
 Colors, symbols, numbers
 Architectural style differences
 Feng shui
 Music and Folklore
 Musical tastes vary
 Folklore discloses way of life
 Cowboys in Chile or Argentina

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 Attitudes and Beliefs

 Attitudes Toward Time

 Vary across cultures
 Difficult area for some Americans
 Directness and drive may be perceived to be
rudeness
 Deadlines
 Liability abroad

LO2
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 Attitudes Toward
Achievement and Work
 Germans put leisure first and work second

 Job Prestige
 The distinction between blue-collar workers and
office employees
 Professional order of hierarchy

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 Religion

 Religion is responsible for many of the attitudes and

beliefs affecting human behavior
 Work Ethic
 Protestant work ethic
 Duty to glorify God by hard work and the
practice of thrift
 Confucian work ethic
 Drive toward hard work and thrift; similar to
Protestant work ethic

LO2
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 Primary Asian Religions
 Hinduism
 Caste system
 Society is divided into four groups (plus the
outcasts)
 Each is assigned a certain class of work
 Buddhism
 Reform of Hinduism
 Jainism (Mahavira a contemporary of Buddha)
 Nonviolence a major principle
 Sikhism
 Bridge between Hinduism and Islam
LO3
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 Primary Asian Religions

 Confucianism
 Inseparable from Chinese culture
 Taoism
 Lao Tzu, contemporary of Confucius
 Shintoism
 Indigenous to Japan

LO3
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 Islam

 Islam is the youngest and second largest faith

 1.3 billion followers
 In comparison, Christianity has 2 billion
adherents
 Muhammad is Founder
 Prophet of God and head of state
 Holy Book Koran

LO3
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 Islam

 Five Pillars of Faith

 Confession of faith
 Five daily prayers
 Charity
 Ramadan fast
 Pilgrimage to Mecca
 Jihad – holy war
 Sunni-Shia Conflict
 Conflict gives rise to violent clashes

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Religions of the World

Insert Figure 6.1

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 Animism

 Animism
 Spirit worship, including magic and
witchcraft
 Everything in nature has its own spirit or
divinity

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 Material Culture

 Material culture refers to all human-made objects

 Concerned with how people make things
(technology) and
 Who makes what and why (economics)

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 Technology

 Technology is a mix of usable knowledge that

society applies and directs toward attainment of
cultural and economic objectives

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 Importance of Technology

 Technology
 enables a firm to be competitive in world markets
 can be sold or be embodied in the company’s
products
 can give a firm confidence to enter a foreign
market
 enables the firm to obtain better than usual
conditions for a foreign market investment

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 Importance of Technology

 Technology
 enables a company with only a minority equity
position to control a joint venture
 can change the international division of labor
 causes major firms to form competitive
alliances

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 Material Culture - Technology

 Cultural aspects of technology

 Includes skills in marketing, finance, and
management
 People are not always ready to adapt to
changes technology brings
 Technological dualism
 The side-by-side presence of technologically
advanced and technologically primitive
production systems

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 Material Culture - Technology

 Appropriate Technology
 The technology (advanced, intermediate,
or primitive) that most closely fits the
society using it
 Boomerang Effect
 Situation in which technology sold to
companies in another nation is used to
produce goods to compete with those of
the seller of the technology

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 Information Technology

 Information Technology Era

 As early as 2000 the Internet economy
 had reached $850 billion
 exceeded the size of the life insurance
and real estate industries

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 Spoken Language

 Spoken language is the most apparent cultural

distinction between countries
 Spoken languages demarcate cultures
 Switzerland has four separate cultures
 Many languages can exist in a single country, but one
usually serves as communication vehicle
 Lingua franca or link language
 English primary language of business

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 Language and Translation

 Translation
 The ability to speak the language well does
not eliminate the need for translator
 Use back translation to avoid translation
problems
 Japanese hotel: “You are invited to take
advantage of the chambermaid.”
 Bangkok dry cleaner: “Drop your trousers
here for best results.”

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 Language Issues

 Technical words do not exist in all languages

 Usually use English
 Many cultures avoid saying anything disagreeable

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 Unspoken Language
 Nonverbal communication
 Gestures vary tremendously from one region
to another
 Closed doors convey different meanings
 Office size has different meanings in various
cultures
 Conversational distance small in Middle East
 Gift giving has specific etiquette in each culture
 Gift or bribe?
 Questionable Payments

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2003 Corruption Index
Scores and Ranking

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 Societal Organization

 Kinship
 Extended family
 includes blood and marriage relatives
 Member’s responsibility
 Although the extended family is large, each
member’s feeling of responsibility to it is
strong
 Associations
 Social units based on age, gender, or common
interest, not on kinship
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 Societal Organization

 Associations
 Age is an important market segment criterion
 Gender
 As nations industrialize, more women enter the
job market and assume greater importance in
the economy
 Free association
 people joined together by a common bond:
political, occupational, religious or recreational

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Understanding National Cultures

 Hofstede’s Dimensions of Culture

 Individualism versus Collectivism
 Large versus Small Power Distance
 Strong versus Weak Uncertainty
Avoidance
 Masculinity versus Femininity

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 Hofstede
Value Dimension Scores

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Individualism versus Collectivism
 Collectivistic cultures
 People belong to groups that are supposed
to look after them in exchange for loyalty
 Individualistic cultures
 People look after only themselves and the
immediate family

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 Large versus Small
Power Distance
 Power distance refers to the extent to which members
of a society accept the unequal distribution of power
among individuals
 In large-power-distance societies employees
believe their supervisors are right; employees do
not take any initiative in making non-routine
decisions

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 Strong versus Weak
Uncertainty Avoidance
 Uncertainty avoidance refers to the degree to which
members of a society feel threatened by ambiguity
and are rule-oriented
 Employees in high uncertainty-avoidance cultures
tend to stay with their organizations
 Japan, Greece, and Portugal
 Those from low uncertainty-avoidance nations are
more mobile
 United States, Singapore, and Denmark

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 Power Distance and
Uncertainty Avoidance

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Individualism and
Power Distance

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 Masculinity versus Femininity

 Masculinity versus femininity refers to the

degree to which the dominant values in a
society emphasize assertiveness, acquisition
of money, and status
 Masculinity
 achievement of visible and symbolic
organizational rewards
 Femininity
 emphasize relationships, concern for
others, and the overall quality of life

LO9
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