Culture and Its Influence on International Business Relations

Introduction to Culture

• Definition: A system of values and norms shared among a group of people that directs and justifies behavior.
• Culture is interconnected and influences every aspect of life.
• Analogy: Culture is like a computer's operating system; it’s often invisible but directs behavior.

Elements of Culture

1. Religion
   • Influences values and norms (e.g., Judeo-Christian values in the U.S.).
   • Other religions emphasize different values (e.g., Buddhism emphasizes family reverence).
2. Political Philosophy
   • Shapes societal structures (e.g., democracy vs. collectivism).
3. Economic Philosophy
   • Influences views on wealth distribution and economic systems.
4. Communication
   • Includes verbal and non-verbal forms; varies by culture.
5. Social Structure
   • Hierarchies and mobility differ across cultures.
6. History
   • Past events shape cultural identity and values.
7. Customs and Traditions
   • Everyday practices and rituals that vary by culture.
8. Stories and Mythologies
   • Reinforce cultural values and norms.

Values, Norms, Folkways, Mores, and Taboos

• Values: Principles considered good and desirable (e.g., freedom in the U.S.).
• Norms: Social rules for appropriate behavior (e.g., openness vs. reservedness).
• Folkways: Routine conventions (e.g., eating with silverware vs. hands).
• Mores: Norms related to morality (e.g., drug abuse is frowned upon).
• Taboos: Behaviors considered forbidden (e.g., incest, cannibalism).

Cultural Relativism vs. Universality of Human Rights

• Human rights are universal, but cultural practices may conflict with them.
• Cultural relativism emphasizes respecting cultural practices even if they differ from universal norms.

Hofstede’s Cultural Dimensions (Comparison of Cultures)

1. Power Distance: Acceptance of unequal power distribution.
   • Malaysia scores high (100); Israel low (13).
2. Individualism vs. Collectivism: Preference for individual rights vs. group harmony.
   • U.S. values individualism; China values collectivism.
3. Masculinity vs. Femininity: Preference for traditional masculine values vs. more nurturing values.
   • Japan (masculine) vs. France (feminine).
4. Uncertainty Avoidance: Comfort with ambiguity.
   • Japan scores high (92); U.S. scores moderate (46).
5. Long-term vs. Short-term Orientation: Focus on future vs. present.
   • China values long-term planning; U.S. focuses on short-term results (26).
6. Indulgence vs. Restraint: Degree of enjoyment of life and fun.
   • U.S. leans towards indulgence (68); China demonstrates restraint.

Communication Styles

• Low Context Cultures: Clear and direct communication (e.g., U.S., Germany).
• High Context Cultures: Indirect communication, relying on context (e.g., Japan, Arab cultures).

Perception of Time

• Monochronic (M-Time): Time is structured and managed (e.g., U.S.).
• Polychronic (P-Time): Time is more fluid and relational (e.g., Latin America).

Pace of Life

• Cultural differences affect the pace of life and efficiency (e.g., U.S. fast pace vs. slower pace in Mexico).

Culture Shock

• Definition: Emotional response to cultural differences.
• Often begins with expecting others to behave like us.
• Can lead to two paths: negative (false attribution and withdrawal) or positive (awareness and understanding).
• Strategies to manage culture shock:
  1. Acknowledge emotional reactions.
  2. Reflect on the causes of these feelings.
  3. Allow emotions to subside.
  4. Observe and decode cultural differences.
  5. Develop culturally appropriate expectations.

Conclusion

• Cultural differences are fascinating and important in international relations.
• Understanding and respecting cultural diversity can lead to more fruitful relationships.