International Business Strategy 301LON. Cultural Environment of International Business. Unit: 5 Knowledgecast: 1. Module Learning Outcomes. Communicate an in-depth understanding of the complexity of the environment and its applications on decision-making process
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International Business Strategy
Cultural EnvironmentofInternational Business
Unit: 5 Knowledgecast: 1
The Four Risks of International Business
Culture: The learned, shared, and enduring orientation patterns in a society. People demonstrate their culture through values, ideas, attitudes, behaviors, and symbols.
Cross-cultural risk: A situation or eventwhere a cultural miscommunication puts some human value at stake. It arises in environments characterized by unfamiliar languages and unique value systems, beliefs, and behaviors.
Ethnocentric orientation: Using one’s own culture as the standard for judging other cultures
Polycentric orientation: A mindset in which the manager develops a greater affinity for the country in which he or she works than for the home country
Geocentric orientation: A global mindset in which the manager is able to understand a business or market without regard to national boundaries
Managers should strive for a geocentric orientation.
Key issues-Culture Is…
Not right or wrong: It is relative. There is no cultural absolute. Different nationalities simply perceive the world differently.
Not about individual behavior: It is about groups. It is a collective phenomenon of shared values and meanings.
Not inherited: It derives from the social environment. We are not born with a shared set of values and beliefs; we acquire them as we grow up.
Culture as an Iceberg
Impact of Culture on Managerial Tasks
Developing products and services
Preparing advertising and promotional materials
Preparing for overseas trade fairs and exhibitions
Screening and selecting foreign distributors
Communicating and interacting with foreign partners
Negotiating and structuring ventures
Interacting with current and potential customers from abroad
Some Cultural Differences in Entrepreneurship
It is said that when someone starts a new business…
in Hong Kong, the whole family works ceaselessly to make it a success.
in the United States, friends put up their money for the entrepreneur.
in Turkey, friends will ask the entrepreneur to hire their sons and nephews.
in India, the administrative system will impose a staggering amount of red tape.
Interpretations of Culture
Stereotypes are generalizations that may or may not be factual, often overlooking real, deeper differences.
People from the United States are said to be:
Argumentative and aggressive when compared to Japanese people, who tend to be reserved and humble.
Individualistic lovers of personal freedom when compared to Chinese people, who tend to be group oriented.
Entrepreneurial when compared to Saudi Arabian people, who use time-honored methods to get things done.
Direct and interested in immediate returns when compared to Mexican people, who invest time in building relationships.
More on CultureIdioms that Symbolize Cultural Values
Language as a Key Dimension of Culture
Language is the “mirror” or expression of culture; it is essential for communications and provides insights into culture.
Linguistic proficiency is a great asset in international business.
Language has both verbal and nonverbal components (i.e., facial expressions and gestures).
There are nearly 7,000 active languages, including over 2,000 in both Africa and Asia.
Blunders in International Advertising
Examples of Differences in Meaning Between British and U.S. English
Environmental Audit – Preparation
Assignment Preparation – Research
Assignment Preparation – Rehearsal