Chapter 4

The Role of Culture

Characteristics of Culture
• Culture reflects learned behavior that is transmitted from one
member of a society to another. Some elements of culture are
transmitted intergenerationally, as when parents teach their
children table manners. Other elements are transmitted
intragenerationally, as when seniors educate incoming freshmen
about a school’s traditions.
• The elements of culture are interrelated. For example, Japan’s
group-oriented, hierarchical society stresses harmony and loyalty,
which historically translated into lifetime employment and minimal
job switching.
• Because culture is learned behavior, it is adaptive; that is, the
culture changes in response to external forces that affect the society.
• Culture is shared by members of the society and indeed defines the
membership in the society. Individuals who share a culture are
members of a society; those who do not are outside the boundaries
of the society

Figure 4.1 Elements of Culture

A society’s culture determines how its members communicate and
interact with each other. The basic elements of culture (see Figure 4.1)
are social structure, language, communication, religion, and values and
attitudes. The interaction of these elements affects the local
environment in which international businesses operate.
Elements of Culture: Social Structure
• Basic to every society is its social structure, the overall framework
that determines the roles of individuals within the society, the
stratification of the society, and individuals’ mobility within the
society
• Societies differ in the way they define family and in the relative
importance they place on the individual’s role within groups
• Cultures also differ in the importance of the individual relative to
the group
• Societies differ in their degree of social stratification. All societies
categorize people to some extent on the basis of their birth,
occupation, educational achievements, or other attributes. However,
the importance of these categories in defining how individuals
interact with each other within and between these groups varies by
society
• Social mobility is the ability of individuals to move from one stratum
of society to another. Social mobility tends to be higher in less
stratified societies

Elements of Culture: Language (1 of 2)

• Language is a primary delineator of cultural groups because it is an
important means by which a society’s members communicate with
each other
• Language organizes the way members of a society think about the
world. It filters observations and perceptions and thus affects
unpredictably the messages that are sent when two individuals try to
communicate
• In addition to shaping one’s perceptions of the world, language
provides important clues about the cultural values of the society
and aids acculturation
• The presence of more than one language group is an important
signal about the diversity of a country’s population and suggests
that there may also be differences in income, cultural values, and
educational achievement

Elements of Culture: Language (2 of 2)

• Language as a Competitive Weapon : Linguistic ties often create
important competitive advantages because the ability to
communicate is so important in conducting business transactions
• Lingua Franca: To conduct business, international businesspeople
must be able to communicate. As a result of British economic and
military dominance in the nineteenth century and U.S. dominance
since World War II, English has emerged as the predominant
common language, or lingua franca, of international business
• Translation: Of course, some linguistic differences may be
overcome through translation. The process, however, requires
more than merely substituting words of one language for those of
another. Translators must be sensitive to subtleties in the
connotations of words and focus on translating ideas, not the
words themselves. Far too often, translation problems create
marketing disasters
• Firms can reduce the chances that they are sending the wrong
message to their customers by using a technique known as
backtranslation. With backtranslation, one person translates a
document, then a second person translates the translated version
 back into the original language. This technique provides a check
that the intended message is actually being sent, thus avoiding
communication mistakes
• When communications to non-native speakers must be made in
the home country’s language, speakers and writers should use
common words
• Saying No: Another cultural difficulty international
businesspeople face is that words may have different meanings to
persons with diverse cultural backgrounds

Elements of Culture: Communication (1 of 2)

• Members of a society communicate with each other using more than
words. In fact, some researchers believe 80 to 90 percent of all
information is transmitted among members of a culture by means
other than language. This nonverbal communication includes facial
expressions, hand gestures, intonation, eye contact, body
positioning, and body posture
• Although most members of a society quickly understand nonverbal
forms of communication common to their society, outsiders may
find the nonverbal communication difficult to comprehend. Table 4.1
lists some of the many common forms of nonverbal communication

Elements of Culture: Communication (2 of 2)

• Gift-Giving and Hospitality Gift-giving are important means of
communication in many business cultures
• Hospitality customs also differ.
 • Norms of hospitality even affect the way bad news is delivered in
various cultures.

Elements of Culture: Religion (1 of 2)

• Religion is an important aspect of most societies. It affects the
ways in which members of a society relate to each other and to
outsiders.
• Approximately 84 percent of the world’s 7.5 billion people claim
some religious affiliation. As reflected in Map 4.3, 77 percent of
the world’s population adheres to one of four religions:
Christianity (31.2 percent), including Roman Catholics,
Protestants, and Eastern Orthodox; Islam (24.1 percent);
Hinduism (15.1 percent); and Buddhism (6.9 percent)

Elements of Culture: Religion (2 of 2)

• Religion shapes the attitudes its adherents have toward work,
consumption, individual responsibility, and planning for the future
• Religion affects the business environment in other important
ways. Often religions impose constraints on the roles of
individuals
• Religion also affects the types of products consumers may
purchase as well as seasonal patterns of consumption
• The impact of religion on international businesses varies from
country to country, depending on the country’s legal system, its
homogeneity of religious beliefs, and its toleration of other
religious viewpoints
Elements of Culture: Values and Attitudes
• Culture also affects and reflects the secular values and attitudes of
the members of a society. Values are the principles and standards
accepted by the members; attitudes encompass the actions, feelings,
and thoughts that result from those values. Cultural values often
stem from deep-seated beliefs about the individual’s position in
relation to his or her deity, the family, and the social hierarchy.
Cultural attitudes toward such factors as time, age, education, and
status reflect these values and in turn shape the behavior of and
opportunities available to international businesses operating in a
given culture
• Time: Attitudes about time differ dramatically across cultures.
• Age: Important cultural differences exist in attitudes toward age.
• Education: A country’s formal system of public and private education
is an important transmitter and reflection of the cultural values of its
society
• Status: The means by which status is achieved also vary across
cultures. In some societies status is inherited as a result of the
wealth or rank of one’s ancestors. In others it is earned by the
individual through personal accomplishments or professional
achievements

Seeing the Forest, Not the Trees: Hall’s Low-Context–High-Context

Approach
• One useful way of characterizing differences in cultures is the low-
context–high-context approach developed by Edward and Mildred
Hall. In a low-context culture, the words used by the speaker
explicitly convey the speaker’s message to the listener.
 • Anglo-Saxon countries such as Canada, the United Kingdom, and
the United States, and Germanic countries are good examples of
low-context cultures (see Table 4.2). In a high-context culture, the
context in which a conversation occurs is just as important as the
words that are actually spoken, and cultural clues are important in
understanding what is being communicated. Examples are Arab
countries and Japan
• Business behaviors in high-context cultures often differ from
those in low-context cultures. High-context cultures place higher
value on interpersonal relations in deciding whether to enter into
a business arrangement. In such cultures preliminary meetings are
often held to determine whether the parties can trust each other
and work together comfortably. Low-context cultures place more
importance on the specific terms of a transaction

Seeing the Forest, Not the Trees: The Cultural Cluster Approach (1 of
2)
• The cultural cluster approach is another technique for classifying and
making sense of national cultures. Similarities exist among many
cultures, thereby reducing some of the need to customize business
practices to meet the demands of local cultures. Anthropologists,
sociologists, and international business scholars have analyzed such
factors as job satisfaction, work roles, and interpersonal work
relations in an attempt to identify clusters of countries that share
similar cultural values that can affect business practices
• Map 4.4 shows ten country clusters, synthesized from the work of
several teams of researchers
• A cultural cluster comprises countries that share many cultural
similarities, although differences do remain. Many clusters are based
on language similarities, as is apparent in the Anglo, Germanic, Latin
American, and Middle East (excepting Turkey) clusters and, to a
lesser extent, in the Nordic and Latin European clusters. Of course,
one can disagree with some placements of countries within clusters.
Spain and the countries of Latin America share many culture values,
for example

Seeing the Forest, Not the Trees: The Cultural Cluster Approach (2 of
2)
• Many international businesses instinctively use the cultural cluster
approach in formulating their internationalization strategies. U.S.
firms’ first exporting efforts often focus on Canada and the United
Kingdom. Hong Kong and Taiwanese firms have been successful in
exploiting China’s markets. Similarly, many Spanish firms have
chosen to focus their international expansion efforts on Spanish-
speaking areas in the Americas
• Closeness of culture may affect the form that firms use to enter
foreign markets. Researchers have found, for example, that
Canadian firms are more likely to enter the British market by
establishing joint ventures with British firms, whereas Japanese
firms are more likely to enter the British market via a greenfield
investment, that is, a brand-new investment. The likely reason for
the difference? Because of the relative closeness of their national
cultures, Canadian firms are more comfortable working with
British partners than are Japanese firms
Seeing the Forest, Not the Trees: Hofstede’s Six Dimensions
The most influential studies analyzing cultural differences and
synthesizing cultural similarities are those performed by Geert
Hofstede, a Dutch researcher who studied 116,000 people working for
IBM in dozens of different countries. Although Hofstede’s work has
been criticized for methodological weaknesses and his own cultural
biases, it remains the largest and most comprehensive work of its kind.
Hofstede’s work identified six important dimensions along which
people seem to differ across cultures. These dimensions are shown in
Figure 4.2. Note that these dimensions reflect tendencies within
cultures, not absolutes. Within any given culture, there are
likely to be people at every point on each dimension. Moreover,
cultures can change over time, albeit usually slowly

Seeing the Forest, Not the Trees: Social Orientation

• Social orientation is a person’s beliefs about the relative
importance of the individual and the groups to which that person
belongs. The two extremes of social orientation, summarized in
Table 4.3, are individualism and collectivism
• Individualism is the cultural belief that the person comes first.
Key values of individualistic people include a high degree of self-
respect and independence. These people often put their own
career interests before the good of their organizations, and they
tend to assess decisions in terms of how those decisions affect
them as individuals
• Collectivism, the opposite of individualism, is the belief that the
group comes first. Societies that tend to be collectivistic are
usually characterized by well-defined social networks, including
 extended families, tribes, and coworkers. People are expected to
put the good of the group ahead of their own personal welfare,
interests, or success. Individual behavior in such cultures is
strongly influenced by the emotion of shame; when a group fails,
its members take the failure personally and experience shame. In
addition, group members try to fit into their group harmoniously,
with a minimum of conflict or tension

Seeing the Forest, Not the Trees: Power Orientation (1 of 2)

Power orientation refers to the beliefs that people in a culture hold
about the appropriateness of power and authority differences in
hierarchies such as business organizations. The extremes of the
dimension of power orientation are summarized in Table 4.4

Seeing the Forest, Not the Trees: Power Orientation (2 of 2)

• Some cultures are characterized by power respect. This means that
people in a culture tend to accept the power and authority of their
superiors simply on the basis of the superiors’ positions in the
hierarchy. These same people also tend to respect the superiors’
right to that power. People at all levels in a firm accept the decisions
and mandates of those above them because of the implicit belief
that higher-level positions carry the right to make decisions and
issue mandates
• In contrast, people in cultures characterized by power tolerance
attach much less significance to a person’s position in the hierarchy.
These people are more willing to question a decision or mandate
from someone at a higher level or perhaps even refuse to accept it.
They are willing to follow a leader when that leader is perceived to
 be right or when it seems to be in their own self-interest to do so but
not because of the leader’s intangible right to issue orders
• Persons from power-tolerant cultures believe that hierarchies exist
to solve problems and organize tasks within organizations

Seeing the Forest, Not the Trees: Uncertainty Orientation

• Uncertainty orientation is the feeling people have regarding
uncertain and ambiguous situations. The extremes of this
dimension are summarized in Table 4.5
• People in cultures characterized by uncertainty acceptance are
stimulated by change and thrive on new opportunities. Ambiguity
is seen as a context within which an individual can grow, develop,
and carve out new opportunities. In these cultures certainty
carries with it a sense of monotony, routineness, and overbearing
structure
• In contrast, people in cultures characterized by uncertainty
avoidance dislike ambiguity and will avoid it whenever possible.
Ambiguity and change are seen as undesirable. These people tend
to prefer a structured and routine, even bureaucratic, way of
doing things

Seeing the Forest, Not the Trees: Goal Orientation

Hofstede’s fourth dimension, goal orientation, is the manner in which
people are motivated to work toward different kinds of goals. One
extreme on the goal orientation continuum is aggressive goal behavior
(see Table 4.6). People who exhibit aggressive goal behavior tend to
place a high premium on material possessions, money, and
assertiveness. At the other extreme, people who adopt passive goal
behavior place a higher value on social relationships, quality of life, and
concern for others

Seeing the Forest, Not the Trees: Time Orientation

Hofstede’s fifth dimension, time orientation, is the extent to which
members of a culture adopt a long-term versus a short-term outlook on
work, life, and other aspects of society. Table 4.7 describes the
extremes of time orientation.

Seeing the Forest, Not the Trees: Indulgence-Restraint Orientation

In an extension of their original research, Hofstede and his colleagues
have developed a sixth dimension describing cultural differences, which
they have labeled indulgence-restraint. As the label indicates, this
dimension measures the importance of self-control. In Hofstede’s view,
cultures scoring high in this dimension value leisure time and pleasure
and are generally optimistic in outlook. Conversely, cultures scoring low
in this dimension tend to be cynical and to place little value on leisure
time. In cultures scoring high on restraint, social norms are important in
regulating the actions of the culture’s members. Table 4.8 describes the
extremes of this dimension in more detail.

International Management and Cultural Differences: Understanding

New Cultures
• When dealing with a new culture, many international
businesspeople make the mistake of relying on the self-reference
 criterion, the unconscious use of one’s own culture to help assess
new surroundings
• To be successful, international businesspeople traveling abroad must
remember that they are the foreigners and must attempt to behave
according to the rules of the culture at hand. There are numerous
ways to obtain knowledge about other cultures to achieve cross-
cultural literacy
• Cross-cultural literacy is the first step in acculturation, the process
by which people not only understand a foreign culture but also
modify and adapt their behavior to make it compatible with that
culture. Acculturation is of particular importance to home country
managers who frequently interact with host country nationals—for
example, a plant manager from the home country or a marketing
director working overseas at a foreign subsidiary