Chapter 6Cultural Environment Facing International BusinessLearning objectivesFRealize the challenge of crossing cultural boundariesFUnderstand why culture matters in international businessFIllustrate key dimensions of cultureFlearn managerial guidelines for cross-cultural successText: The Challenge of Crossing Cultural BoundariesFIn cross-border business, we step into different cultural environments characterized by unfamiliar languages and unique value systems, beliefs, and behaviors. FWe encounter customers and business partners who display different lifestyles, norms and consumption behaviors. FThese differences influence all dimensions of international business. Culture & cross-cultural riskFCulture refers to the learned, shared, and enduring orientation patterns in a society. People demonstrate their culture through values, ideas, attitudes, behaviors, and symbols. FCross-cultural risk is defined as a situation or event where a cultural miscommunication puts some human value at stake. Cross-cultural proficiency FUnlike political, legal, and economic systems, culture has proven very difficult to identify and analyze. Its effects on international business are deep and broad. FCulture influences a range of interpersonal exchange as well as value-chain operations. FMost companies want their employees to leant about other cultures and acquire a degree of cross-cultural proficiency. Ethnocentric vs. polycentricFManagers engaged in cross-border business should give up their ethnocentric orientations in favor of a polycentric or geocentric orientation. FEthnocentric tendencies are a characteristic of virtually every society, and entail the belief that ones own race, religion, or ethnic group is somehow superior to others. FPolycentric orientation refers to a host-country mindset where the manager develops a greater affinity with the country in which she or he conducts business. FGeocentric orientation refers to a global mindset where the manager is able to understand a business or market without regard to country boundaries. Cross-cultural integration FUnfamiliar cultures may be ever present in domestic as well as international dealings. FThe cross-cultural integration is yet another manifestation of globalization. But globalization is leading to convergence of cultural values as well. FCommon norms and expectations of behavior are gradually emerging. In addition, many universal values apply to cross-cultural encounters. Miscommunication alertFCross-cultural miscommunication can ruin business deals, hurt sales, or harm the corporate image. FToday, developing an appreciation of, and sensitivity for, cultural differences has become an imperative for any manager.Managerial guidelines for cross-cultural successFManagers can achieve effective cross-cultural interaction by keeping an open mind, being inquisitive, and not rushing to conclusions about others behaviors. FThey undergo cultural training that emphasizes observational skills and human relations techniques. FVarious resources are available to managers for developing skills, including videotape courses, cross-cultural consultants, and programs offered by governments, universities, and training institutes. Guideline 1FAcquire factual and interpretive knowledge about the other culture and try to speak their language. FSincere interest in the target culture helps establish trust and respect, laying the foundation for open and productive relationships. FEven modest attempts to speak the local language are welcome. Higher levels of language proficiency pave the way for acquiring competitive advantages. Guideline 2FAvoid cultural bias.FCultural bias can be a significant barrier to successful interpersonal communication.FSelf-reference criterion: the tendency to view other cultures through the lens of ones own culture.FCritical incident analysis (CIA) refers to an analytical method for analyzing awkward situations in cross-cultural interactions by developing empathy for other points of view. It is an approach to avoiding the trap of self-reference criterion in cross-cultural encounters. Guideline 3FDevelop cross-cultural skills. FCross-cultural proficiency is characterized by four key personality traits: FTolerance for ambiguityFPerceptivenessFValuing personal relationshipsFFlexibility and adaptabilityFCultural intelligence (CQ) is a persons capability to function effectively in situations characterized by cultural diversity. Key termsFCulture 文化FCross-cultural risk 跨文化风险FEthnocentric orientation 种族取向FGeocentric orientation 地心取向FPolycentric orientation 多中心取向FSelf-reference criterion 自我参考标准FCritical incident analysis (CIA) 关键事件分析FCultural intelligence (CQ) 文化智商Summary of key pointsFCulture refers to the learned, shared, and enduring orientation patterns in a society.FCross-cultural risk is defined as a situation or event where a cultural miscommunication puts some human value at stake.FThree main types of cross-cultural patterns are ethnocentric orientation, geocentric orientation, and Polycentric orientation.FThere are some guidelines to help achieve cross-cultural success.Comprehension QuestionsFDefine culture and cross-cultural riskFIllustrate with examples how culture affects daily greetings in different countries.FWhy does the author say that unlike political, legal and economic systems, culture has proven very difficult to identify and analyze.FExplain why culture matters in international business. In what types of contexts can cross-cultural differences cause concerns for managers?FSummarize the three major guidelines for success in cross-cultural settings.Apply your understandingFDescribe a situation where you encountered cultural differences and how you reacted to that.FWhat do you think are the necessary cross-culture skills? Please illustrate them.FExamine the following comparison of cultural values in Mexico and the United States. Based on your analysis, use the discussion in this chapter the dimensions and drivers of culture, as well as their management implications, to formulate a policy for marketing automobiles to consumers from each of these countries. What attributes should you emphasize in advertising cars?Essay questionsFIt is sometimes said that local diversity will inevitably fade away under the tidal wave of cultural globalization. Examine the evidence which supports this view and also the evidence which contradicts it. Do you agree with the idea that the globalization of business had led to a dilution of national culture?FIn selling goods abroad, cultural considerations are much less important than a strong brand image, as illustrated by big names such as Reebok and Nike. Discuss the arguments for and against this statement.Case study: How do you throw your meishi?FExplain what kinds of broad cultural differences we are likely to find between the Japanese and the British, the Japanese and the Chinese.FWhat impression do you think the Scottish engineer made on the Japanese executives?FWhat steps could the Scottish firm have taken to avoid this kind of mistake?FHow easy is it to do a simple cost-benefit analysis on investments into improved cultural awareness among employees? Point-counterpointFDoes International Business Lead to Cultural Imperialism?PointFU.S. companies control the international entertainment media. FThe United States has been such a super-power that its culture is being explored in ways that are detrimental to the best interests of the Periphery. FAs international companies come in to take advantage of the demand that has been created, they further upset the local culture and the self-identity that helps stabilize the nation state. CounterpointFPeople in poor countries pick and choose what to accept and reject based on personal interpretations of their needs in relation to the realities of the cultures in which they live. FCulture, such as language, diffuses in both directions and has always evolved. FTourism has contributed to the maintenance of traditional aspects of culture. FWe cannot establish that people change their values when they view the foreign materials or buy the foreign products. FCompanies must adhere sufficiently to local culture lest they fail. WebalertFFor websites in Asian business and culture, look at:Fhttp:/www.apmforum.com/default.htmFhttp:/ewnglish.china.com/cdc/enFhttp:/www.japanecho.comFFor foreign language and culture specific resources on the web, look at:Fhttp:/www.itp.berkeley.edu/thorne/HumanResources.htmlFurther readingFAlbers, H. H. (2000). International Management: Culture, Strategy, and Behavior. McGraw Hill Higher Education, FDavid H. Holt & Daren W. Wigginton. (2002). International Managemet, 2nd edition, Harcourt College Publishers, FJohn J. Wild, Kenneth L. Wild & Jerry C.Y. Han. (2002). International Business. 2nd edition, Prence Hall.FSamovar, L.a.& Porter, R.E. (2004). Communication Between Cultures, 5th edition, Peking University Press.AssignmentFReview this chapter carefullyFInterview some international businesspeople and ask them how they learn to live with other cultures. Then share with the class some stories you get from them. Thank You!