three

The Cultural Environment of International Business.

1. Understand How Culture, Language, And Religion Influence International Investment And Trade.
2. Recognize How Corporate, National And Local Culture Interacts.

Culture: What is it??

Culture is the art and other manifestations of human intellectual achievement regarded collectively; it is the customs, civilization, and achievement of a particular time or people; is it the way of life of a particular society or group. Culture is the knowledge, beliefs, art, law, morals, customs, and other capabilities of one group, distinguishing it from other groups Culture is the total way of life and thinking pattern that are passed through generation to generation.

Culture and International Business

Culture is very important to the practice of international business. Culture impacts the way strategic moves are presented. Culture influences decisions. Culture is the lens through which motivation occurs. Management, decision making, and negotiations are all influenced through culture. Culture influences nearly all business functions from accounting to finance to production to service.

Culture and the Liability of Foreign-ness

Culture is a key ingredient in the liability of foreignness Culture is what makes international business practice difficult or easy, depending on how similar or different cultures are. Culture is both divisive and unifying.

Culture does not explain everything

While culture is very important to our understanding of international business, it does not explain everything that is different from one place to another. While culture explains some, other things like corporate strategy, structure, rivalry, governmental policy, and economics also help to explain success or failure in international business. Shenkar indicates that culture is not a residual variable; it is useful to know that it is not a primary variable either. It is one of many.

Correlates of Culture: Overview

Culture is correlated with other variables that vary cross-nationally, like language and religion. It is useful to remember that culture often cuts across religious, linguistic, and national borders. Religious, linguistic and national boundaries also often cut across cultures too.

Characteristic:
Perspective: It prescribe the kind of behaviour considered acceptable in
the society. Socially shared: culture is based on social interaction and creation. Culture facilitate communication: culture brings common habits of thoughts and feeling among people. Learned: culture is acquired through learning but not inherited genetically. Subjective: people of different culture have different ideas about the same object Enduring: culture is relatively stable as it is passed from generation to generation. Dynamic: culture is not immune to change, it goes on changing. New ideas are added and old ideas are dropped.

Correlates of Culture: Language

Language is the means by which we communicate verbally. We use it for socialization and for communicating how values and norms are expressed and understood. According to the textbook, there are approximately 20 different language families that cut across national borders. Not only are words different, but also syntax and usages are also quite different between language families.

Correlates of Culture: Verbal and Nonverbal Language

Linguists study language. They also study the artifacts surrounding language. These are called: Linguistics or the meanings of words Proxemics or the distance that speakers stand from one another Pragmatics the cultural interpretations of words, gestures, and non verbal Non verbal The gestures and body language that accompanies spoken words

Correlates of Culture: Verbal and Nonverbal Language

It is important to remember, that for language to be truly useful to business people, they must understand the uses, distances, gestures and interpretations that accompany verbal communication. Without this broader understanding, cross cultural communication can quickly go away.

Language: English has become a Lingua-Franca

The term lingua franca denotes any knowledge shared by people of different national and linguistic origins. While people have tried Esperanto for inter-cultural communication, English is generally considered the worlds lingua franca. This does not, however, imply that it is not necessary to learn other languages. While English may be a business language, it may not be socially acceptable away from the business setting.

Correlates of Culture: Religion

Religion contains key values and norms that are reflected in a way of life. Largest religions: Christianity Islam Hinduism Buddhism Confucianism Sikhism Judaism

Correlates of Culture: Religion

Religion influences international business practices. People try to adopt business practices that will satisfy religious tenets without sacrificing modern practices in business. Examples: Islam Banking China Calendar Islam Ramadan

Cross Culture Communication Process

Low Context Culture:

In some countries the message that people convey are explicit and clear. They use the actual word to convey the information. E.G: U.S.A. , Canada, Germany, Switzerland

High context culture:

In many countries communication is mostly indirect and the expressive manner in which the message is delivered becomes critical. Much of the information is transmitted through non verbal communication. These message can be understood only with the reference to the context.

E.G : India Japan, Saudi Arabia

According to Hall: Monochromic: Culture which handles information in a direct linear fashion called monochromic. E.g. Americans

Polychromic: In this culture people work on

several forms simultaneously instead of pursuing a single task. E.g. Japanese and Indians

Layers of Corporate Culture: Other Layers

Ethnicity Industry Demographics Ideology

Layers of Corporate Culture: Key Cultural Issues

Cultural Etiquette Cultural Stereotyping Cultural Distance Cultural Convergence and Divergence