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Introduction%20to%20International%20Business

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Title: Introduction%20to%20International%20Business


1
Introduction to International Business
  • David J. Boggs, Ph.D.
  • Cultural Environment

2
International Business and Globalization
  • IB has grown rapidly and continues to grow
    rapidly
  • Activities are diverse and taken for many
    purposes
  • Different environment and activities than
    domestic-only competition
  • More difficult, complex, and risky than domestic
    business
  • In many industries it is no longer possible to be
    just a domestic competitor

3
Culture
  • Culture is the set of values, beliefs, rules,
    and institutions held by a specific group of
    people
  • It is learned and shared, its elements are
    interrelated, and it defines group boundaries
  • Subcultures exist within larger cultural contexts
  • One can acquire cultural literacy
  • Ethnocentricity is a belief that ones own
    culture is universally superior to others

4
Elements of Culture
  • Aesthetics sense of beauty and good taste
  • Art, color, symbols, music, folklore
  • Attitudes and beliefs
  • Time, directness, achievement, work, change
  • Manners (appropriate behavior) and customs
    (traditional behaviors)

5
Elements of Culture
  • Education
  • Literacy, science, math, trades, management
  • Legal and political system
  • Secular versus religious
  • Free or not free
  • Planned versus laissez-faire

6
Elements of Culture
  • Societal organization
  • Family structure, in-laws, extended family,
    divorce
  • Class mobility
  • Associations by age, gender, common interests, or
    otherwise

7
Elements of Culture
  • Language and communication
  • Verbal and non-verbal
  • Gestures and body language
  • Office size and closed versus open doors
  • Conversational distance
  • Touching
  • Protecting traditional languages

8
Elements of Culture
  • Religious beliefs
  • Christianity (Protestant, Catholic, Orthodox)
  • Hinduism and Sikhism in India
  • Sunni and Shia Islam
  • Judaism
  • Animism
  • Atheism
  • Confucianism, Taoism, Buddhism, and Shintoism in
    Asia

9
Less Obvious Elements of Culture Observed by
Hofstede
  • Individualism versus collectivism
  • High/low power distance
  • High/low uncertainty avoidance
  • Desire for achievement/affiliation
  • Long/short time horizon

10
Kluckhohn-Strodtbeck Framework
  • Environment control, controlled by, or part of
  • Time focus past, present, or future
  • People control/dont trust or free/trust
  • Purpose focus accomplishment, leisure, or
    spiritual
  • Individual or group responsibility
  • Public or private work and lives

11
Other Elements of Culture
  • Trust
  • Fatalism and locus of control
  • High context/low context
  • Idealism versus pragmatism
  • Monochronic versus Polychronic
  • Attitudes toward change

12
Culture Shock
  • When placed in a foreign culture people tend to
    experience culture shock, the frustration from
    having to learn to cope with new cultural cues
    and expectations

13
Stages of Culture Shock
High
Acceptance of New Culture
Low
Months Living in New Culture
14
Cultural Clusters
  • Should cultures be defined by national borders?

15
Group Activity
  • Describe American culture
  • What elements of American culture might some
    foreigners find strange?
  • Describe one foreign culture
  • Describe ways that cultural differences can
    affect business activities in particular
    industries

16
Acquiring and Using Cultural Understanding
  • Cultural awareness can be improved
  • Companys need for cultural knowledge increases
    as it
  • Moves from one to multiple foreign functions
  • Increases the number of countries in which it
    operates
  • Moves from similar to dissimilar foreign
    environments
  • Converts from external to internal handling of
    international operations

17
How does culture affect business?
  • Work ethic
  • Attitudes toward
  • Time
  • Supervisors and superiors
  • Quality and reliability
  • Rewards and promotions

18
Attitudes and Hiring Practices
  • Ethnocentrism is the belief that all elements of
    ones own culture are superior than the
    corresponding elements of others cultures
  • Polycentric staffing involves hiring locals to
    manage subsidiaries in each country and special
    attention to each culture
  • Geocentric staffing involves hiring without
    regard to cultural heritage or nationality

19
Need Hierarchy
  • Lower-order needs must be fulfilled prior to
    higher-order needs
  • Workers in poor countries motivated by
    lower-order needs
  • People from different countries or cultures may
    rank needs differently

20
Attitudes Toward Change
  • The more a change upsets important values, the
    more resistance it will engender attend to
    attitudes and needs of culture
  • Consider the expected cost-benefit relationship
    of any adjustments
  • Resistance to change may be lower if the number
    of changes is not too great at any one time
  • Discussing proposed change with stakeholders in
    advance may reduce resistance

21
Attitudes Toward Change
  • Employees are more apt to support change when
    they see its benefits and they expect personal or
    group rewards
  • Change should be timed to occur when resistance
    is likely to be low
  • International companies should learn things
    abroad that they can apply at home
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