BUSS 3103
International Business Environments
Lecture 3
Cultural Issues in International Business
• Educating Professionals • Creating and Applying Knowledge • Engaging our Communities
Recap
Cultural Issues in International Business
Concepts of Culture
Dimensions of Culture
The Meaning of Culture
Language in Culture
Challenge of Crossing Cultural Boundaries
Managerial Guidelines For Cross-cultural Success
Review
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Can you recall these?
a. Drivers of globalisation
b. Dimensions of globalisation
c. Firm-level consequences of globalisation
d. Societal consequences of globalisation
Globalisation
Cultural Issues in International
Business
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What will you learn?
• Introduction of International Business (Ch.1)
• Globalisation and Internationalization (Ch.2)
• Cultural Issues in International Business (Ch.3)
• International Trade and Investment (Ch.5)
• Political and Legal Systems (Ch.6)
• Government and Regional Integration (Ch.7)
• Emerging Markets (Ch.8)
• Global Strategic Structure (Ch.11)
• International Entry Strategies (Ch.13~15)
• Contemporary Research in IB & Course Revision
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Have you ever encountered any
cultural shock in a new
environment?
East Meets West
Ms Yang Liu is a
Chinese artist who
lives in Germany. Her
pictograms have
illustrated the cultural
differences between
Germany and China.
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East Meets West
(Standard of Aesthetic Beauty)
West East
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East Meets West
(Attitude to Sunshine)
West East
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East Meets West
(Mood and Weather)
West East
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East Meets West
(Time Sense)
West East
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Learning Objectives
1. Concepts of Culture
2. Dimensions of Culture
3. The Meaning of Culture
4. Language in Culture
5. Challenge of Crossing Cultural
Boundaries
6. Managerial Guidelines for Cross-cultural
Success
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3.1. Concepts of Culture
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3.1. Concepts of culture
• Culture:
– the learned, shared and enduring orientation
patterns in a society
– the relatively stable characteristics of a group of
people which differentiate them from other groups
– languages, value systems, beliefs and behaviours
• Characteristics of culture
– A variety of ways
– Not right or wrong
– Not about individual behavior
– Not inherited
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3.1. Concepts of culture (cont’d)
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Iceberg Metaphor
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3.1. Concepts of culture (cont’d)
• “Types” of culture:
• National culture
• Professional culture
• Corporate culture
• ……
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3.1. Concepts of culture (cont’d)
• Homogeneity vs. Heterogeneity
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3.1. Concepts of culture (cont’d)
• The “drift” of culture
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3.1. Concepts of culture (cont’d)
• The “drift” of culture
–Captain America, 1990 vs 2020
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3.1. Concepts of culture (cont’d)
• Culture matters in international business for
managerial tasks including:
o Teamwork
o Lifetime employment
o Pay-for-performance system
o Organisational structure
o Attitudes towards ambiguity
o ……
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3.2. Dimensions of Culture
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3.2. Dimensions of Culture
• Values • Attitudes
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3.2. Dimensions of Culture (cont’d)
• Manners • Custom(s)
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3.2. Dimensions of Culture (cont’d)
• Perceptions of time
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3.2. Dimensions of Culture (cont’d)
• Perceptions of space
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3.2. Dimensions of Culture (cont’d)
• Symbolic productions
Great Sept of Baelor, the Westeros
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3.2. Dimensions of Culture (cont’d)
• Material productions and Creative expressions
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3.2. Dimensions of Culture (cont’d)
• Education
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3.2. Dimensions of Culture (cont’d)
• Social structure
– Individuals
– Family
– Reference groups
– Social stratification
– Social mobility
(Social structure of ancient Egypt)
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3.2. Dimensions of Culture (cont’d)
• Religion
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Scenario
Restaurant chain internationalisation.
The UK restaurant chain Winchester Fish & Chips
(WFC) is considering the idea of opening a restaurant in
Sweden. The president of WFC believes worldwide
demand for fish and chips is growing and that Sweden
could be a profitable market in which the firm could
internationalise. WFC executives are in the process of
gathering information in preparation for a board meeting
in which a vote will be taken on the plan to open a
restaurant in Sweden.
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Scenario (cont’d)
• Which of the following should be first considered
in making the decision regarding whether WFC
should open a restaurant in Sweden?
a. In which foreign city would WFC be successful?
b. What style of food do Swedes typically enjoy
eating?
c. How successful has WFC been in the United
Kingdom?
d. What UK firms have recently entered the Swedish
market?
Answer: b
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Scenario (cont’d)
• Which of the following best supports WFC
entering the Swedish market?
a. Language differences
b. Swedish culture
c. Cultural homogenisation
d. WFC culture
Answer: c
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Scenario (cont’d)
• Which of the following would be more important to
evaluate before WFC internationalises its
operations?
a. Has the increased presence of UK culture in Europe
popularised fish and chips?
b. Has global homogenisation increased the likelihood that
Swedes will try food from a different culture?
c. What culturally related food products are available to
consumers as a result of a globalised market?
d. Has cross-cultural integration promoted a resistance in the
world to UK food products and consumerism?
Answer: b
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3.3. The Meaning of Culture
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3.3. The Meaning of Culture
• Cultural Metaphor.
A distinctive
tradition
or institution
strongly associated
with a particular
society.
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3.3. The Meaning of Culture (cont’d)
• Stereotypes:
Generalisation
about a group of
people that may or
may not be factual,
often overlooking
real, deeper
differences.
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3.3. The Meaning of Culture (cont’d)
• Hall’s high- and low- context cultures
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3.3. The Meaning of Culture (cont’d)
• Deal-oriented cultures
• Relationship-
oriented
cultures
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3.3. The Meaning of Culture (cont’d)
• Hofstede’s Research on National Culture
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3.3. The Meaning of Culture (cont’d)
• Major streams of culture research (in international
business)
Hofstede (Hofstede, G. H., Hofstede, G. J., & Minkov, M. (2010). Cultures and
Organizations: Software of the Minded. McGraw-Hill.)
Trompenaars (Trompenaars, Fons & Hampden-Turner, Charles. (2012) Riding
the Waves of Culture: Understanding Diversity in Global Business, Nicholas Brealey)
World Value Survey (Inglehart, R. (1997). Modernization and
Postmodernization: Cultural, Economic, and Political Change in 43 Societies. Princeton
University Press.)
Schwartz’s Value Survey (Schwartz, S. H. (1999). A theory of cultural
values and some implications for work. Applied Psychology: An International Review,
48, 23-47.)
Global Leadership and Organizational Behaviour
Effectiveness (House, R. J., Hanges, P. J., Javidan, M., Dorfman, P. W., &
Gupta, V. (2004). Culture, Leadership, and Organizations: The GLOBE Study of 62
societies. Sage Publications.)
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3.4. Language in Culture
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3.4. Language in Culture
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3.4. Language in Culture (cont’d)
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3.4. Language in Culture (cont’d)
• Idiom
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3.4. Language in Culture (cont’d)
• Oral and Body Languages
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3.4. Language in Culture (cont’d)
• Culture or Language? - Culture matters
(Differences exist even when controlling language)
category-based:
on the basis of
similarity of
attributes;
relationship-based:
on the basis of
causal, spatial, and
temporal
relationships
(Ji, Zhang & Nisbett, 2004)
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3.4. Language in Culture (cont’d)
• Culture or Language? – Language matters too
(language affected Chinese bilinguals' categorization)
(Ji, Zhang & Nisbett, 2004)
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3.4. Language in Culture (cont’d)
• Culture or Language? – Learning context matters
(Context of learning English)
(Ji, Zhang & Nisbett, 2004)
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3.5. Challenge of Crossing Cultural
Boundaries
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3.5. Challenge of Crossing Cultural Boundaries
• Different cultural environments
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3.5. Challenge of Crossing Cultural Boundaries
(cont’d)
• Cross-cultural risk
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3.6. Managerial Guidelines for
Cross-Cultural Success
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3.6. Managerial Guidelines for Cross-
Cultural Success (cont’d)
• Three approaches to understanding the other
culture
Ethnocentric orientation: Using our own culture as
the standard for judging other cultures.
Polycentric orientation: A host-country mindset
where the manager develops a greater affinity with
the country in which he or she conducts business.
Geocentric orientation: A global mindset where the
manager is able to understand a business or market
without regard to country boundaries; a cognitive
orientation that combines openness to, and
awareness of, diversity across cultures.
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3.6. Managerial Guidelines for Cross-Cultural
Success (cont’d)
• Guidelines
1. Acquire factual and
interpretive
knowledge about the
other culture, and try
to speak their
language.
2. Avoid cultural bias.
3. Develop cross-cultural
skills (e.g., making
friends).
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3.6. Managerial Guidelines for Cross-Cultural
Success (cont’d)
• Acculturation process
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A Video Scenario: Audi Trains Mexican
Auto Workers in Germany
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A Video Scenario: Audi Trains Mexican
Auto Workers in Germany
The strategy that Audi is following may help
prepare its managers to lead co-workers in the
new plant in Mexico.
1. How will this approach facilitate
communication between managers in Germany
and managers in Mexico?
2. How can developing a cadre of local
managers help Audi succeed in Mexico?
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3.6. Managerial Guidelines for Cross-Cultural
Success (cont’d)
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Do you get some ideas about
Culture in IB?
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Do you understand these?
a. concepts of culture
b. dimensions of culture
c. the meaning of culture
d. language in culture
e. challenge of crossing cultural boundaries
f. managerial guidelines for cross-cultural success
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This Week
• In tutorial
– Video Case: Amazon India
Launces Hindi App and Website
– Assignment checkpoint (Task 1)
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Next Week
• Reminder:
– Assignment Task 1: Memo
– Due at 17:30pm on 23 March
• In lecture
– “International Trade and Investment”
• In tutorial
– Case: We’re Excluded, It’s Not A Good
Thing
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Comments & Questions?
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