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Culture and Global Business
Dr. Aaron C. van Klyton
Global Business 1357
The Business School; Greenwich University
Lecture 3

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Learning Objectives
1. Explore the meaning of culture: its definitions, classifications, and dimensions
2. Analyze different models of cultural communications

3. Examine why culture matters in international business
4. Understand the role of cultural intelligence

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Culture Affects All Business Functions
 Marketing
 Human Resources

 Production
 Accounting and Finance
 Preferred Leadership Styles

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Culture (re)defined
 Shared learned values, norms of behaviour, means of communication and other outward expressions which distinguish one group of people from another.  Visible cultural makeup (Culture)

 Noticeable cultural makeup (Folk Culture)
 Undercurrents of cultural makeup (Fundamental
Culture)
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The Constitution of Culture

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The Meaning of Culture: Features
Culture is learned

 Socialization: The process of learning the rules and behavioral patterns appropriate to one's given society, i.e. cultural learning.

 Acculturation: The process of adjusting and

adapting to a culture other than one's own. It is commonly experienced by expatriate workers.

Iceberg concept of culture
 Above the surface, certain characteristics are visible.
Below the surface is a massive base of assumptions, attitudes, and values.

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Language and the Halls
 Low-context culture
 Communication is clear and direct; speakers come straight to the point.
 United States
 High-context culture
 Much going unsaid; ambiguity is the norm
 Asian cultures; UK

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Hofstede cultural dimensions
 Five cultural dimensions  Power-distance
 Uncertainty avoidance  Individualism
 Masculinity
 Long vs. shortterm orientation

Long-term orientation characteristics Social order

Short-term orientation characteristics Personal survival

Hierarchical relationships Personal respect/dignity
Collective face-saving

Individual face-saving

Thrift-centered

Spending-centred

Long-term outcomes

Short to medium term outcomes Pakistan, Nigeria,
Phillippines, Canada,
Zimbabwe, UK, US,
Germany

China, HK, Taiwan,
Japan, South Korea,
India, Brazil, Singapore

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Trompenaars’ 7f cultural dimensions model  Universalism vs particularism

 Individualism vs collectivism
 Neutral vs Effective

 Specific vs diffuse
 Achievement vs ascription
 Time orientation
 Internal vs external control

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Culture and MNE Operations
 Consumer preferences and market segmentation  Modifications in Cultural Differences over time
 Migration

 The Malleability of Youth
 Changes in Demographic
Profiles
 Interactions between social forces and other forces in the business environment  Government
 New Technologies, incl. biotechnologies 10

The Role of Culture in International Business
 Developing products and services

 Communicating and interacting with foreign business partners
 Screening and selecting foreign distributors and other partners

 Negotiating and structuring international business ventures  Interacting with current and potential customers from abroad
 Preparing for overseas trade fairs and exhibitions
 Preparing advertising and promotional materials

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The Role of Culture in International Business: Global
Managers’ and Entrepreneurs’ Perspective
 Developing cultural profiles

 Ethnocentric and polycentric approaches

 Expatriates

 Work Attitudes

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Cultural Intelligence
 The measure of a person’s capability to function effectively in situations characterized by cultural diversity  How do individual project members in an international project cope with culture-specific behaviour?
 What is the role of project member’s cultural intelligence for the emergence of a negotiated culture? 13

Cultural Intelligence

Negotiated culture
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Summary
 The models developed by Hofstede, Hall, Trompenaars and Schwartz provide useful tools for cross-cultural analysis.  Organizations, while they may develop their own specific values and behaviour, are also highly influenced by the national culture of their home country.
 The development of cognitive, motivational, and behavioural cultural intelligence gradually leads tot eh formation of a negotiated culture.

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