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Chapter 2 Culture and International Business Learning Objectives To define and demonstrate the effect of culture’s various dimensions on business. To examine ways in which cultural knowledge can be acquired and individuals and organizations prepared for cross-cultural interaction. To illustrate ways in which cultural risk poses a challenge to the effective conduct of business communications and transactions. To suggest ways in which businesses act as change agents in the diverse cultural environments in which they operate. Expanding Operations Across Borders Two distinct tasks emerge: to understand cultural differences and the ways they manifest themselves to determine similarities across cultures and exploit them in strategy formulation Culture Defined Characteristics of Culture Culture is learned, shared, and transmitted from one generation to the next. Culture can be passed from parents to children, by social organizations, special interest groups, the government, schools, and churches. Culture is multidimensional, consisting of a number of common elements that are interdependent. Acculturation High- versus Low-Context Cultures High-context culture context is at least as important as what is actually said what is not being said can carry more meaning than what is said focuses on group development Japan and Saudi Arabia are examples Low-context culture most of the information is contained explicitly in words what is said is more important that what is not said focuses on individual development The U.S. is an example Change Agents By introducing new products or ideas and practices, an international business entity becomes a change agent. this may shift consumption from one product to another, or it may lead to massive social change Many governments take action to protect their culture-specific industries. Cultural Universals Cultural universals are manifestations of the total way of life of any group of people. These include elements such
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