Expert answer:BUS 4480-WK3 Diversity
Solved by verified expert:Please choose ONE of the five topics below and provide a 1-2 page discussion. Support your stance with information in the reading material and one peer reviewed academic journal article. In text reference and references are required. Imagine that you are about to hire an individual from a foreign country for a position in the United States. How would you explain the culture of the society in which you live to the potential new hire. Note: In your discussion, you may select the country for which you are hiring the individual. How do differences in social culture influence values in the workplace. Be sure to cite specific examples to make your discussion interesting. Choose two countries that appear to be culturally diverse. Compare the cultures of those countries and then indicate how cultural differences influence (a) the cost of doing business in each country, (b) the likely future economic development of the country, and (c) business practices. Discuss how unrealistic performance expectations influence ethical behavior. Include at least one example in your discussion that will make the deliverable interesting. Freestyle–Choose any hot topic in the news (current events) and relate it to concepts and principles studied in this week’s chapter reading assignment.
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Global Business Today
10e
by Charles W.L. Hill
and G. Tomas M. Hult
©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
Source: © Ashok Saxena/Alamy Stock Photo
National Differences
Chapter 4: Differences in Culture
Learning Objectives
LO 4-1 Explain what is meant by the culture of a society.
LO 4-2 Identify the forces that lead to differences in social
culture.
LO 4-3 Identify the business and economic implications of
differences in culture.
LO 4-4 Recognize how differences in social culture influence
values in business.
LO 4-5 Demonstrate an appreciation for the economic and
business implications of cultural change.
Opening Case:
World Expo 2020 in Dubai, UAE
▪ United Arab Emirates established in 1971
▪ In top ten of countries with largest oil reserves in the world
▪ Open-market economy includes seven emirates
▪ Dubai rated as one of best places to live in the Middle East
▪ Theme of World Expo 2020 “connecting minds, creating the
future”
▪ Expo will last six months where countries are expected to
show what they can do: “nation branding”
Introduction
▪ Cross-cultural literacy – an understanding of how
cultural differences across and within nations can
affect the way in which business is practiced
▪ There may be a relationship between culture and the
costs of doing business in a country or region
▪ Culture is not static – it can and does evolve
▪ Multinational enterprises can be engines of cultural
change
Did You Know?
Did you know arriving
late is expected in some
cultures?
Click to play
video
What is Culture? 1 of 4
Scholars have not been able to agree on a simple
definition
✓ Culture is a system of values and norms that are shared
among a group of people and that when taken together
constitute a design for living
✓ Society is a group of people sharing a common set of
values and norms
What is Culture? 2 of 4
Values and Norms
✓ Values – provide the context within which a society’s norms
are established and justified
✓ Norms – the social rules that govern the actions of people
toward one another
▪ Folkways – the routine conventions of everyday life
▪ Mores – norms that are seen as central to the functioning of a
society and to its social life
Planning on Doing Business Internationally?
If a company is planning to start exporting a product, there are two
basic questions that need to be asked. Is the product ready to be
exported? And, is the company ready to export the product?
Culturally, the product is either ready for a global market or not (and,
if not, the company can modify it if the market is important enough).
Company readiness is much more culturally sensitive. Having the
appropriate cultural knowledge and skills are important. If you have
the basic information about a company, you can use globalEDGETM’s
diagnostic tool called CORE (Company Readiness to Export) to assess
both product and company readiness to be exported. Try it out; how
much better do you think Microsoft, which is everywhere in the
world, will score compared with Questcor Pharmaceuticals
(questcor.com), which was ranked number one on Forbes’ list of
“America’s Best Small Companies” in 2013?
Sources: globalEDGE’s CORE diagnostic tool, http://globalEDGE.msu.edu;Badenhausen, K.,
“America’s Best Small Companies,” Forbes, October 9, 2013.
What is Culture? 3 of 4
Culture, Society, and the Nation-State
✓ Society reflects people who are bound together by a
common culture
▪ Nation-states are political creations that can contain a single
culture or several cultures
▪ Some cultures embrace several nations
▪ Also possible to talk about culture at different levels within
societies
What is Culture? 4 of 4
The Determinants of Culture
✓ The values and norms of a culture evolve based on:
▪ Prevailing political and economic philosophies
▪ A society’s social structure
▪ The dominant religion, language, and education
Figure 4.1 The Determinants of Culture
Social Structure 1 of 7
▪ A society’s social structure is its basic social
organization
✓ Two dimensions to consider
▪ The degree to which the basic unit of social organization is the
individual, as opposed to the group
▪ The degree to which a society is stratified into classes or castes
Social Structure 2 of 7
Individuals and Groups
✓ Group – an association of two or more individuals who
have a shared sense of identity and who interact with each
other in structured ways on the basis of a common set of
expectations about each other’s behavior
Social Structure 3 of 7
▪ The Individual
✓ Emphasized in Western countries
✓ Individual achievement and entrepreneurship are
promoted
✓ Fosters managerial mobility
✓ Encourages job switching, competition between
individuals rather than team building, and a lack of
loyalty to the firm
▪ The Group
✓ Emphasized in non-Westernized countries (Japan)
✓ Cooperation and team work are encouraged and life time
employment is common
✓ Individual initiative and creativity may be suppressed
Social Structure 4 of 7
Social Stratification
✓ All societies are stratified on a hierarchical basis into social
categories, or social strata
▪ Usually defined by characteristics such as family background,
occupation, and income
✓ Societies differ in terms of
▪ The degree of mobility between social strata
▪ The significance attached to social strata in a business context
Social Structure 5 of 7
Social Stratification continued
✓ Four basic principles of social stratification
1.
2.
3.
4.
It is a trait of society, not a reflection of individual differences
It carries over a generation to the next generation
It is generally universal, but variable
It involves not just inequality but also beliefs
Social Structure 6 of 7
Social Stratification continued
✓ Social mobility – the extent to which individuals can move
out of the strata into which they are born
▪ Caste system – social position is determined by the family into
which a person is born, and change in that position is unlikely
▪ Class system – the position a person has by birth can be changed
through achievement or luck
▪ Social mobility in class system varies from society to society
▪ Class system in U.S. less pronounced than in Britain
Social Structure 7 of 7
Social Stratification continued
✓ Significance
▪ In cultures where class consciousness (where people tend to
perceive themselves in terms of their class background) is high,
the way individuals from different classes work together may be
prescribed
▪ Evident in British society
▪ Antagonism between labor and management can raise the
costs of doing business
Religious and Ethical Systems 1 of 8
▪ Religion – a system of shared beliefs and rituals that
are concerned with the realm of the sacred
▪ Ethical system – a set of moral principles, or values,
that are used to guide and shape behavior
▪ Religions with the greatest following
✓ Christianity (2.20 billion adherents)
✓ Islam (1.60 billion adherents)
✓ Hinduism (1.10 million adherents)
✓ Buddhism (535 million adherents)
✓ Confucianism shapes culture in many parts of Asia
Map 4.1 World Religions
Source: “Map 14,” Allen, John L., Student Atlas of World Politics, 10th ed. McGraw-Hill Education.
Religious and Ethical Systems 2 of 8
Christianity
✓ Most widely practiced religion
✓ In 1904, Max Weber suggested that it was the Protestant
work ethic (focus on hard work, wealth creation, and
frugality) that was the driving force of capitalism
✓ Protestantism gave individuals more freedom to develop
their own relationship with God which may have paved
way to economic freedom
Religious and Ethical Systems 3 of 8
Islam
✓ Adherents of Islam are referred to as Muslims
✓ One true omnipotent God
✓ In the Western media, Islamic fundamentalism is
associated with militants, terrorists, and violent upheavals
✓ Fundamentalists have gained political power in many
Muslim countries, and have tried to make Islamic law the
law of the land
Religious and Ethical Systems 4 of 8
Islam continued
✓ Economic Implications of Islam
▪ Koran establishes explicit economic principles many of which are
pro-free enterprise
▪ Under Islam, people do not own property, but only act as stewards
for God and thus must take care of that which they have been
entrusted with
• Islam is supportive of business, but the way business is practiced is
prescribed
• Businesses that are perceived to be making a profit through the
exploitation of others, by deception, or by breaking contractual
obligations are unwelcome
Islamic Banks
Islamic banks
function differently
than conventional
banks in the world,
as the Islamic
banks cannot pay
or charge interest.
Source: © Ali Al Saadi/AFP/Getty Images
Religious and Ethical Systems 5 of 8
Islam continued
✓ Economic Implications of Islam continued
• Prohibits payment or receipt of interest
• Mudarabah
• Similar to profit sharing
• Murabaha
• Most widely used
• Includes a price markup
Religious and Ethical Systems 6 of 8
Hinduism
✓ World’s oldest religion
✓ Moral force in society requires the acceptance of certain
responsibilities called dharma
✓ Believe in reincarnation and karma
✓ Individuals should be judged by their spiritual
achievements
✓ Promotion and adding new responsibilities may not be the
goal of an employee, or may be infeasible due to the
employee’s caste
Religious and Ethical Systems 7 of 8
Buddhism
✓ Suffering originates in people’s desire for pleasure
✓ Stress spiritual growth and the afterlife, rather than
achievement while in this world
✓ The Noble Eight Path
✓ Buddhism does not support the caste system, so
individuals do have some mobility and can work with
individuals from different classes
✓ Entrepreneurial activity is acceptable
Religious and Ethical Systems 8 of 8
Confucianism
✓ Until 1949, official ethical system of China
✓ Not a religion
✓ High moral and ethical conduct and loyalty to others
✓ Attain personal salvation through right action
✓ Three key teachings of Confucianism – loyalty, reciprocal
obligations, and honesty – may all lead to a lowering of the
cost of doing business in Confucian societies
Language 1 of 3
▪ Countries differ in terms of language or means of
communication
▪ There are two forms language:
✓ Spoken
✓ Unspoken
▪ Language is one of the defining characteristics of
culture
Can You Speak the Most Important Languages?
Mastering your own native language is critically important to doing
business in your own home country. Mastering the language of a
foreign country (or subcultures) with which you want to do business
is also an added value in any cross-cultural relationship. English
leads the way in terms of business languages, but which languages
are important after English? Spanish? No, not necessarily. The three
languages that are important for business after English are Mandarin
Chinese, French, and Arabic. Spanish is fifth, so it is clearly
important, but not as useful as English, Mandarin, French, and Arabic
because of the number of people who speak these languages. Do
you agree with the rank order of these languages? Why or why
not?
Source: S. Kim, “Top 3 Useful Foreign Languages for Business Excludes Spanish,” ABC News, September 1,
2011. http://abcnews.go.com/blogs.
Language 2 of 3
Spoken Language
✓ Countries with more than one spoken language often have
more than one culture
▪ Chinese is the mother tongue of the largest number of people in
the world
▪ English is the most widely spoken language in the world, and is
becoming the language of international business
Language 3 of 3
Unspoken Language
✓ Unspoken language – nonverbal cues
▪ Examples include facial expressions and hand gestures
▪ Can be important for communication
▪ Personal space
✓ Many nonverbal cues are culturally bound and because
they may be interpreted differently, can result in
misunderstandings
Education
▪ Formal education is the medium through which
individuals learn many of the language, conceptual, and
technical skills that are indispensable in a modern society
▪ The knowledge base, training, and educational
opportunities available to a country’s citizens can also
give it a competitive advantage in the market and make it
a more or less attractive place for expanding business
✓ Porter points to an excellent education system as an important
factor in explaining the country’s postwar economic success
▪ The general education level of a country is a good
indicator of the types of products that might sell in that
location or the type of promotional materials that might
be successful
Culture and Business 1 of 3
Geert Hofstede isolated five dimensions that
summarized different cultures
1.
2.
3.
4.
5.
✓
Power distance
Individualism versus collectivism
Uncertainty avoidance
Masculinity versus femininity
Long-term versus short-term orientation
A move to add a sixth dimension: indulgence versus
restraint
Culture and Business 2 of 3
Hofstede’s work has been criticized
✓ Assumes a one-to-one relationship between culture and
nation-state
✓ Research may be culturally bound
✓ Informants only worked within a single industry –
computers – and within one company – IBM.
✓ Certain social classes excluded from research
Culture and Business 3 of 3
▪ Hofstede’s work represents a starting point for
managers trying to understand cultural differences
▪ Global Leadership and Organizational Behavior
Effectiveness instrument
▪ World Values Survey
Cultural Change
Culture evolves over time, although changes in value
systems can be slow and painful for a society
✓ Social turmoil is an inevitable outcome of cultural change
✓ Cultural change is particularly common as countries
become economically stronger
✓ As countries get richer, there is a shift from “traditional
values” to “secular rational” values and from “survival
values” to “well-being values”
Focus on Managerial Implications 1 of 3
CROSS-CULTURAL LITERACY AND COMPETITIVE
ADVANTAGE
There is a need for managers to develop cross-cultural
literacy
1. There is a connection between culture and national
competitive advantage
2. There is a connection between culture and ethics in
decision making
Focus on Managerial Implications 2 of 3
Cross-Cultural Literacy
✓ Firms that are ill-informed about the practices of another
culture are unlikely to succeed in that culture
✓ Individuals must also beware of ethnocentric behavior
▪ Belief in the superiority of one’s own culture
Focus on Managerial Implications 3 of 3
Culture and Competitive Advantage
✓ Connection between culture and competitive advantage
▪ It suggests which countries are likely to produce the most viable
competitors
▪ It has implications for the choice of countries in which to locate
production facilities and do business
Summary
In this chapter we have
✓ Explained what is meant by the culture of a society.
✓ Identified the forces that lead to differences in social
culture.
✓ Identified the business and economic implications of
differences in culture.
✓ Recognized how differences in social culture influence
values in business.
✓ Demonstrated an appreciation for the economic and
business implications of cultural change.
Global Business Today
10e
by Charles W.L. Hill
and G. Tomas M. Hult
©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
Source: © Ozdel/Anadolu Agency/Getty Images
National Differences
Chapter 5: Ethics, Corporate Social Responsibility, and
Sustainability
Learning Objectives
LO 5-1 Understand the ethical issues faced by international
businesses.
LO 5-2 Recognize an ethical dilemma.
LO 5-3 Identify the causes of unethical behavior by managers.
LO 5-4 Describe the different philosophical approaches to ethics.
LO 5-5 Explain how managers can incorporate ethical
considerations into their decision
making.
Opening Case:
UNCTAD Sustainable Development Goals
▪ United Nations Conference on Trade and
Development established in 1964
▪ Ensuring countries’ domestic policies and
international actions are mutually supportive to
sustainable development
▪ September 2015: many countries adopted 17
“sustainable development goals”
✓ An opportunity to bring together countries, companies,
and societies of all levels in an effort to improve lives
everywhere
Introduction
Ethics – accepted principles of right or wrong that
govern the conduct of a person, the members of a
profession, or the actions of an organization
✓ Business ethics – accepted principles of right or wrong
governing the conduct of business people
✓ Ethical strategy – a strategy, or course of action, that does
not violate these accepted principles
Ethics and International Business 1 of 4
The most common ethical issues in business involve
✓ Employment practices
✓ Human rights
✓ Environmental pollution
✓ Corruption
Ethics and International Business 2 of 4
Employment Practices
✓ What practices should be used when work conditions are
inferior in the host nation?
Human Rights
✓ What is the responsibility of a foreign multinational when
operating in a country where basic human rights are not
respected?
▪ South Africa and apartheid
▪ The Sullivan principles adopted by GM
Ethics and International Business 3 of 4
Environmental Pollution
✓ Should a multinational feel free to pollute in a developing
nation if doing so does not violate laws?
▪ Tragedy of the commons
Corruption
✓ Is it ethical to make payments to government officials to
secure business?
▪ Foreign Corrupt Practices Act
▪ Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions
▪ Facilitating payments/speed money excluded
Ethics and International Business 4 of 4
Corruption continued
✓ Some argue that paying bribes might be the price of doing
a greater good
▪ Where preexisting political structures distort or limit the workings
of the market mechanism, corruption -marketeering, smuggling,
and side payments to government bureaucrats to “speed up”
approval for business investments – may actually enhance welfare
✓ Others argue that corruption reduces the returns on
business investment and leads to low economic growth
Should the United States have Jurisdiction over
Foreign Firms?
The Foreign Corrupt Practices Act (FCPA) is not just imposed on U.S.
companies with operations globally. It also has jurisdiction over
foreigners operating in the country. Settling a FCPA investigation,
Siemens—Europe’s largest engineering company and the largest
electronics company in the world—was fined $800 million by the U.S.
Department of Justice and the U.S. Securities and Exchange Commission.
Together with various penalties imposed in Germany, Siemens’ home
country, the penalties total $1.6 billion. The settlement involved at least
4,200 allegedly corrupt payments totaling some $1.4 billion over six
years to foreign officials in numerous countries. Meetings, negotiations,
and bank account transfers were taking place in the United States
between Siemens and officials from other countries. Is it appropriate
that the U.S. government can use the FCPA to investigate and fine
foreign companies doing business in other countries?
Sources: U.S. Department of Justice, www.justice.gov; “Siemens: A Giant Awakens,” The Economist, September 10,
2010; J. Ewing, “Siemens Settlement: Relief, But Is It Over?” BusinessWeek, December 15, 2008.
Ethical Dilemmas
▪ Managers often face situations where the
appropriate …
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