INTERNATIONAL BUSINESS AND TRADE

Application of New Knowledge: Debrief: Communication, Reflective Thinking, Ethical Reasoning, Multiculturalism and Diversity.

Case 1 - Suppose you get a job at Kismet Indemnity, a life insurance company. In its 45-year history, Kismet has never done any international business. Now its president, Randall Fraser, wants to expand abroad. You have noted in meetings that he seems to lack much awareness of the role of culture. Write a letter to him in which you explain why culture matters in international business. Be sure to speculate on the effects of various dimensions of culture on sales of life insurance.

Case 2 - Ethical Dilemma: Suppose you work for a multinational firm and are posted to Bogota, Colombia. After renting a house in a posh neighborhood, you hire a full-time housekeeper to perform household chores, a common practice among wealthy Colombians. A colleague at work tells you that local housekeepers are typically poor women who live in Bogota's slums and earn about $200 a month. As an executive, you feel guilty about paying such a cheap wage when you can afford much more, but for cultural and socioeconomic reasons, your colleague insists you cannot pay more than the going rate. Doing so might embarrass your housekeeper and risk upsetting the economic balance in her community. Analyze this dilemma. Do you pay your housekeeper the customary local rate or a higher wage? Justify your decision. Can you think of any creative solutions to this dilemma?

base the problem here!

1.CULTURE AND CROSS-CULTURAL RISK

Culture shapes our behavior. Although as human beings we share many similarities, as groups of people or societies, we exhibit many differences. Culture even affects the common rituals of daily life. Greeting ceremonies are a deeply embedded cultural marker and have evolved over many centuries. They specify such behaviors as whether to shake hands, what to say, and how far apart to stand. These cultural conventions may vary as a function of the age, gender, or status of the greeters.

In China, friends express thoughtfulness by asking each other whether they have had their meal yet. In Turkey, a typical greeting is "What is new with you?" In Japan, elaborate greeting and parting rituals are the norm, and individuals routinely apologize to the other party just before ending a telephone conversation.

Culture captures how the members of the society live for instance, how we feed, clothe, and shelter ourselves. Culture explains how we behave toward each other and with other groups. Culture defines our values and attitudes and the way we perceive the meaning of life. Food is among the most interesting aspects of national culture. In Japan, pizza is often topped with fish and seaweed. In the United States, pizza can be piled high with meat. In France, it often comes with various cheeses. Some cultures are very complex.

Why should we concern ourselves with culture in cross-border business? The answer is that culture introduces new risks. Cross-cultural risk is a situation or event in which a cultural misunderstanding puts some human value at stake. Misunderstanding and miscommunication arise because people have differing values and expectations. They do not always communicate (verbally or nonverbally) what the other party is anticipating or may have different ways of communicating. For example, a head nod has different meanings in India and the United Kingdom. Cross-cultural misunderstandings can ruin business deals, hurt sales, or harm the corporate image. Today, developing an appreciation of, and sensitivity for, cultural differences is an imperative. Managers who are well informed about cross-cultural differences have advantages in managing employees, marketing products, and interaction with customers and business partners.

Today, firms conduct business in environments characterized by unfamiliar languages as well as unique beliefs, norms, and behaviors. Managers need to be able to reconcile these differences to create profitable ventures. They must not only understand cultural differencesthey must also develop international cultural competence.

2. WHAT CULTURE IS NOT

Now that you have an idea of what culture is, let us define what it is not. Culture is:

• Not right or wrong. Culture is relative. People of different nationalities simply perceive the world differently. Each culture has its own notions of acceptable and unacceptable behavior. For example, in some Islamic cultures, a wife cannot divorce her husband. In many countries, nudity is entirely acceptable on TV. In Japan and Turkey, wearing shoes in the home is taboo.
• Not about individual behavior. Culture is about groups. It refers to a collective phenomenon of shared values and meanings. Thus, whereas culture defines the collective behavior of each society, individuals often behave differently.
• Not inherited. Culture comes from people's social environment. No one is born with a shared set of values and attitudes. Rather, children gradually acquire specific ways of thinking and behaving as they are raised in a society. In the United States, for example, children usually learn to value individualism. In China, children learn to depend on family members and acquire values based on Confucianism. Culture is passed from generation to generation by parents, teachers, mentors, peers, and leaders. Modern methods of communication, including the media, play an enormous role in transmitting culture.

3. SOCIALIZATION AND ACCULTURATION

This process of learning the rules and behavioral patterns appropriate to one's society is called socialization. Each society has rules mean the do's, don'ts, expectations, and preferences that guide behavior particularly of children as they the mature. Breaking a rule amounts to a failure to conform. As each of us matures, failing to follow society's rules provides opportunities for learning what the rules are. Socialization is cultural learning and provides the means to acquire cultural understandings and orientations that a particular society shares. It is a subtle process; we often adapt our behavior unconsciously and unwittingly. Acculturation is the process of adjusting and adapting to a culture other than one's own. It is commonly experienced by people who live in other countries for extended periods, such as expatriate workers. In many ways, acculturation is

challenging because adults are often less flexible than children.

4. DIMENSIONS OF CULTURE

More than any other feature of human civilization, culture illustrates the differences among societies based on language, habits, customs, and modes of thought. Yet most of us are not completely aware of how culture affects our behavior until we encounter people from other cultures.

Anthropologists use the iceberg metaphor to call attention to the many dimensions of culture, some obvious and some not so obvious. Above the surface, certain characteristics are visible, but below, invisible to the observer, is a massive base of assumptions, attitudes, and values. These invisible characteristics strongly influence decision making, relationships, conflict, and other dimensions of international business.

Culture emerges through the integration of our values and attitudes; manners and customs; time and space perceptions; symbolic, material, and creative expressions; education; social structure; language; and religion. Let's examine these in more detail.

A.Values and Attitudes

Values represent a person's judgments about what is good or bad, acceptable or unacceptable, important or unimportant, and normal or abnormal. Values are the basis for our motivation and behavior. Typical values in North America and northern Europe include work, or output orientation, being on time, and the acquisition of wealth. People from such countries may misjudge those from, say, Latin America, who may not hold such values. Attitudes are similar to opinions but are often unconsciously held and may not be based on logical facts. Prejudices are rigidly held attitudes, usually unfavorable and usually aimed at particular groups of people.

B.Manners and Customs

Manners and customs are ways of behaving and conducting oneself in public and business situations. Some countries are characterized by informal cultures; people treat each other as equals and work together cooperatively. In other countries, people tend to be more formal; status, power, and respect are relatively more important.

Customs that vary most worldwide relate to work hours and holidays, drinking and toasting, appropriate behavior at social gatherings, gift giving, and women in the workforce. Gift giving is complex in much of the world. In Japan, it is usually a mistake not to offer a gift in initial meetings. The Middle East is characterized by generous gift giving.

Handshaking varies across the world: limp handshakes, firm handshakes, elbow-grasping handshakes, and no handshake at all. In some parts of the world, people greet by kissing each other on both cheeks. In Southeast Asia, greeting involves placing the palms together in front of the chest, as in praying. In Japan, bowing is the norm.

C.Perceptions of Time

Time has a strong influence on business. It affects people's expectations about planning, scheduling, profit flows, and promptness in arriving for work and meetings. Japanese managers tend to prepare strategic plans for long periods, such as a decade. The planning horizon for Western companies is much shorter, typically a few years. Some societies are more oriented to the past, others to the present, and still others to the future.

People in past-oriented cultures believe plans should be evaluated in terms of their fit with established traditions, customs, and wisdom. Innovation and change do not occur very often and are justified to the extent they fit with experience. Europeans are relatively past-oriented and prefer to conserve traditional ways of doing things.

Young countries such as Australia, Canada, and the United States are relatively focused on the present. They tend to have a monochronic orientation to time that is a rigid orientation in which people are focused on schedules, punctuality, and time as a resource. They view time as linear, like a river flowing into the future, carrying workers from one activity to the next.

In such cultures, where people are highly focused on the clock, managers make commitments, set deadlines, and follow a strict schedule in meetings. Punctuality is a virtue and time is money. Investors are impatient and want quick returns. Managers have a relatively short-term perspective when it comes to investments and making money. Company profitability is measured on a quarterly basis. In this way, people in the United States have acquired a reputation for being hurried and impatient. Indeed, the word business was originally spelled busyness.

Some cultures have a polychronic perspective on time. In such societies, instead of performing single tasks serially, people are inclined to do many things at once. In this way, members of polychronic cultures are easily distracted. They can change plans often and easily, and long delays are sometimes needed before taking action. Punctuality per se is relatively unimportant, and managers consider time commitments flexible. They do not strictly follow the clock and schedules. They put more value on relationships and spending time with people.

Chinese and Japanese firms typically are future-oriented. They focus not on how the firm will perform next quarter but on how it will perform a decade from now. Many large Japanese firms offer lifetime employment and invest heavily in employee training. They expect workers to remain with the firm for decades. Latin Americans have a flexible perception of time and may not arrive exactly at the predetermined time for appointments.

In the Middle East, strict Muslims view destiny as the will of God ("Inshallah" or "God willing" is a frequently used phrase). They tend to downplay the importance of future planning. They perceive appointments as relatively vague future obligations.

D.Perceptions of Space

Cultures also differ in their perceptions of physical space. We have our own sense of personal space and feel uncomfortable if others violate it. Conversational distance is closer in Latin America than in northern Europe or the United States. When a North American talks to a Latin American, he or she may unconsciously back up to maintain personal space. Those who live in crowded Japan or Belgium have smaller personal space requirements than those who live in land-rich Russia or the United States. In Japan, it is common for employee workspaces to be crowded together in the same room, desks pushed against each other. One large office space might contain desks for fifty employees. U.S. firms partition individual workspaces and provide private offices for more important employees. In Islamic countries close interaction between men and women is not encouraged in public places.

E.Symbolic Productions

A symbol can be letters, figures, colors, or other characters that communicate a meaning. For example, the cross is the main symbol of Christianity. The red star was the symbol of the former Soviet Union. National symbols include flags, anthems, seals, monuments, and historical myths. Symbols can represent nations, religions, or corporations, and they can help to unite people. Mathematicians and scientists use symbols as their language. Businesses have many types of symbols, in the form of trademarks, logos, and brands. Think how easy it is to identify popular company logos such as Nike's swoosh, Apple's apple, and Cadbury's unique lettering.

F.Material Productions and Creative Expressions

Material productions are artifacts, objects, and technological systems that people construct to function within their environments. They are integral to human life and provide the means to accomplish objectives as well as communicate and conduct exchanges within and between societies. The most important technology- based material productions are the infrastructures that supply energy, transportation, and communications. Others include social infrastructure (systems that provide housing, education, and health care), financial infrastructure (systems for managing means of exchange in banks and other financial institutions), and marketing infrastructure (systems that support marketing-related activities such as ad agencies). Creative expressions of culture include arts, folklore, music, dance, theater, and high cuisine. Education is an especially important system that emerges within cultures.

G.Education

Cultural values, ideas, beliefs, traditions, and attitudes are passed from one generation to the next through education. Education takes place in various ways, especially through lessons and behavior acquired from parents, family, and peers; participation in groups (social, business, and religious); and formal schooling. In most countries, academic education usually occurs through schooling. Available talent and skill base of a region or country influences where corporations will locate international ventures such as factories or call centers. Better-educated locations tend to attract higher paying and higher skilled positions such as outsourced call centers and account- ing functions. Literacy is the ability to read, is an important indicator of education level and varies substantially around the world.

H.Social Structure

Social structure refers to the pattern of social arrangements and organized relationships that characterize a society. It refers to how a society is organized in terms of individuals, families, groups, and socioeconomic strata. All cultures have a social structure that influences our status or class in society. Understanding the social structure of international employees, clients, and suppliers is vital for avoiding cultural misunderstandings and optimizing business transactions.

Individuals. Because Western cultures emphasize individualism and individual success, social status often is determined by individual performance. This helps explain the high degree of worker mobility and entrepreneurial activity typical in Western societies. Excessive individualism, however, can reduce the effectiveness of teams, particularly in collectivist cultures typical of Asia.

Family. In many cultures, immediate and extended family holds particular importance in the nation's social structure. In such cultures, the family often plays a substantial role in the formation and structure of business activities. In China, for example, family-owned and family-run businesses are relatively common, and ownership often passes on to successive generations.

Reference groups. In some societies, people's social status is defined by group or employer affiliation rather than by individual performance. When meeting business people in Tokyo, for instance, they typically will identify themselves in terms of the companies where they work rather than by their function or job title at that firm. In Japanese firms, objectives and strategies are typically decided by groups, rather than by individual managers.

Social stratification. In most cultures, individuals are classified within classes or social layers depending on their occupation, income level, or family history. However, societies differ in the importance they place on social strata and on the ease with which people can advance to higher strata. In most countries, senior business and government leaders typically occupy the highest social strata. The middle strata usually consist of business managers and medical or scientific professionals. Those in the lowest strata typically work in manual labor, basic services such as retailing, or lower-level administrative positions.

Social mobility. Social mobility refers to the ease with which a person can move up within social strata. The most rigid type of social mobility operates in a caste system, countries such as India. In a caste system, a person's social status is determined by birth, and he or she has little opportunity for social mobility. Individuals are often restricted to working in a specific occupation, such as a farmer or factory worker, depending on the caste they were born into. Understanding social norms in caste system countries is necessary to success- fully manage employees who work at different levels of the social strata. Advanced economies are characterized by the class system, a more flexible form of social stratification within which people usually have greater mobility to move to a higher strata and change their social status. Social mobility in caste and class systems alike influences people's attitude toward work, entrepreneurship, and labor relations.

5.ROLE OF LANGUAGE AND RELIGION IN CULTURE

Language and religion are among the most important manifestations of culture. Often described as the expression or mirror of culture, verbal language is not only essential for communications, it also provides insights into culture. It's a major differentiator between cultural groups and castes and provides an essential means for business leaders to communicate effectively with employees, suppliers, and customers. Language can be classified as verbal and nonverbal.

A.Verbal Language

The world has nearly 7,000 active languages, including more than 2,000 in each of Africa and Asia. Most of these languages have only a few thousand speakers. National languages, dialects, and translation tend to complicate verbal communication. It is sometimes difficult to find words to convey the same meaning in a different language. For example, a one-word equivalent to "aftertaste" does not exist in many languages. Even when a word can be translated well into other languages, its concept and meaning may not be universal. For example, the Japanese word muzukashii can be variously translated as "difficult," "delicate," or "I don't want to discuss it," but in business negotiations it usually means "out of the question." Advertising themes often lose their original meaning in translation or give the wrong impression. Sometimes business jargon,vocabulary unique to a particular country can cause communication problems.

An idiom is an expression whose symbolic meaning is different from its actual or literal meaning. It is a phrase you cannot understand by knowing only what the individual words in the phrase mean. For example, to "roll out the red carpet" is to welcome a guest extravagantly that is no red carpet is actually used. The phrase is misunderstood when interpreted in a literal way. Idioms exist in virtually every culture, and people often use them as a short way to express a larger concept.

B.Nonverbal Communication

Nonverbal communication is unspoken and includes facial expressions and gestures. In fact, nonverbal messages accompany most verbal ones. These include facial expressions, body movements, eye contact, physical distance, posture, and other nonverbal signals. Certain facial expressions and hand gestures have different meanings in different cultures, and a lack of awareness of the meanings of these gestures in the local culture can lead to negative consequences. For example, standing side by side with someone can indicate cooperation, whereas a face-to- face posture might indicate competition or opposition. Touching tends to indicate levels of intimacy, from shaking hands, to patting the back, to hugging.

C.Religion

Religion is a system of common beliefs or attitudes concerning a being or a system of thought that people consider sacred, divine, or the highest truth and includes the moral codes, values, institutions, traditions, and rituals associated with this system. Religious concepts of right and wrong have played a major role in the development of ethical values and social responsibility. Although there are thousands of distinct faith groups worldwide, four major religions dominate: Christianity with roughly 2 billion adherents, Islam with about 1.5 billion followers, and Hinduism and Buddhism, each with around 1 billion adherents. Other belief systems include Confucianism and Judaism.

Christianity. Followers of Jesus Christ, Christians are concentrated in the Americas, Europe, Australia, South Korea, and southern Africa. Christianity is divided into three major groups: Catholic, Protestant, and Eastern Orthodox. Catholics account for more than half of all Christians; Protestants encompass numerous denominations, including Baptists and Methodists; and Eastern Orthodox Christianity is practiced mainly in Greece and Russia. Protestantism long emphasized individual effort, orderliness, and hard work to achieve worldly success and as a duty that benefits both the individual and society. As a revolutionary movement that broke with the Catholic Church, Protestantism also long emphasized religious freedom and independent thinking.

Islam. Islam is based on the Qur'an, the religion's holy book, which Muslims believe was revealed by God to the prophet Muhammed in the 7th century. The majority of Muslims belong to one of two denominations: Sunni and Shia. Although most Muslims live in the Middle East, North Africa, and South Asia, the most populous Muslim country is Indonesia. Adherents engage in daily ritual prayers and fasting during the month of Ramadan. The Qur'an strongly encourages charitable giving. Strict Muslims believe the purpose of life is to worship God (known as Allah). The Qur'an prohibits drinking alcohol, gambling, and showing too much skin. These restrictions affect firms that deal in alcoholic beverages, resorts, entertainment, and women's clothing. Many multinational firms are reaching out to Muslim communities. Nokia launched a mobile phone application that shows Muslims the direction toward Mecca, Islam's holiest site, when they pray. Heineken, the Dutch brewing giant, rolled out the nonalcoholic malt drink Fayrouz for the Islamic market.

Hinduism. A unique faith practiced in South Asia, especially India, Hinduism emerged from various ancient traditions. Unlike Christianity and Islam, Hinduism is not connected to any one prophet and lacks a unified belief system. To its adherents, it is a traditional way of life and an open-hearted faith that fully accepts other faiths. Dharma is a central concept that encourages behavior that is just, harmonious, and promotes joyful living. Hindus believe in reincarnation, a cycle of birth, life, death, and rebirth. Hindus believe that kindness in action fosters a better world. The religion values spiritual rather than material achievements. Karma implies that people are born into a social level, or caste, through their good or bad deeds in earlier lives.

Buddhism. Buddhism is a belief system that encompasses various traditions and practices, based on the teachings of the prophet Buddha. It is common in Asia, especially China and Japan. Buddhists subscribe to Four Noble Truths: Life is beset by suffering and pain; desire and greed are the root of all human suffering; personal suffering can be reduced by controlling desire and greed; and the way to end suffering is through righteous living, which includes good conduct, wisdom, and mental development.

Confucianism. Confucianism is a way of life taught by the philosopher Confucius, who lived about 2,500 years ago in present-day China. More a philosophy than a religion, Confucianism does not prescribe any specific rituals or practices. The main belief system of the Chinese people, it has influenced culture in China and other parts of Asia, especially Korea, Japan, and Vietnam, for thousands of years. Confucianism has an optimistic view of human nature and a strong emphasis on ethical behavior. They believe it is best to behave with fairness, humanity, and charity toward others. Ren is a Confucian virtue that refers to doing good deeds and being kind to others. Other important qualities include loyalty, social harmony, and respect for one's parents and ancestors.

Judaism. Judaism was founded more than 3,000 years ago in the Middle East. Today the world's 14 million Jews primarily reside in Israel, Europe, and North America. Many migrated around the world in the wake of persecution or the pursuit of business opportunities. Judaism strongly influenced early Christianity and Islam. Jews believe in one God and that that God is concerned with the actions of humankind. The Jewish attitude toward business is positive, and much business conduct is rooted in Jewish law, which prohibits dishonest behavior. The accumulation of wealth is acceptable and even encouraged. Simultaneously, Jews are expected to be generous and charitable. Businesses should operate responsibly, emphasizing ethics and fair play beyond that required by local law.

6.CULTURE'S EFFECT IN INTERNATIONAL BUSINESS

Culture can differ sharply, even between neighboring countries. Managers not only need to develop empathy and tolerance toward cultural differences but also must acquire a sufficient degree of factual knowledge about the beliefs and values of foreign counterparts. Cross-cultural proficiency is paramount in many managerial tasks, including:

Managing employees.

Communicating and interacting with foreign business partners.

Negotiating and structuring international business ventures.

Developing products and services.

Preparing advertising and promotional materials.

Preparing for international trade fairs and exhibitions.

Screening and selecting foreign distributors and other partners.

Interacting with current and potential customers from abroad.

7MODELS AND EXPLANATIONS OF CULTURE

A.Cultural Metaphor

Martin Gannon offered an insightful analysis of cultural orientations. In his view, a cultural metaphor refers to a distinctive tradition or institution that is strongly associated with a particular society. It is a guide to deciphering people's attitudes, values, and behavior.

For example, American football is a cultural metaphor for traditions in the United States, such as being a team player and having a strong leader who moves an organization aggressively toward a desired goal. The Swedish stuga (cottage or summer home) is a cultural metaphor for Swedes' love of nature and desire for individualism through self-development. In the Brazilian context, manipulation and smooth talking are not necessarily viewed negatively, because individuals may need to resort to these methods to conduct business.

B.High- and Low-Context Cultures

Anthropologist Edward T. Hall classified cultures as low context and high context. When communicating, people in low-context cultures rely heavily on spoken words and detailed verbal explanations. Europeans and North Americans tend to be low-context with long traditions of writing and speech making. In such cultures, the main function of speech is to express ideas and thoughts clearly, logically, and convincingly; communication is direct, and meaning is straightforward. In negotiations, for example, Americans typically come to the point quickly. Low-context cultures tend to value expertise and performance. Managers conduct negotiations as efficiently as possible. These cultures use specific, legalistic contracts to conclude agreements. By contrast, high-context cultures, such as China and Japan, emphasize nonverbal messages and view communication as a means to promote smooth, harmonious relationships. They prefer an indirect and polite style that emphasizes mutual respect and care for others. They are on guard not to embarrass or offend others.

This helps explain why Japanese people hesitate to say no even when they disagree with what someone is saying. They are more likely to say "it is different," a softer response. Asians tend to be soft-spoken, and people typically are sensitive to context and body language. At a business luncheon in Tokyo, for example, the boss is almost always the senior-looking individual seated farthest from the entrance to the room. In Japan, superiors are given such favored seating to show respect. Negotiations tend to be slow and ritualistic, and agreement is founded on trust. To succeed in Asian cultures, it is critical to have a keen eye for nonverbal signs and body language. The notion of high and low-context cultures also plays a role in communications between people who speak the same language. British managers sometimes complain that presentations by their U.S. counterparts are too detailed. Everything is spelled out, even when meanings seem perfectly obvious.

C.Hofstede's Research on National Culture

Dutch anthropologist Geert Hofstede conducted one of the early studies of national cultural traits. Hofstede identified six independent dimensions of national culture, described next.

• Individualism versus collectivismrefers to whether a person functions primarily as an individual or as part of a group. In individualistic societies, each person tends to focus on his or her own self-interest, and ties among people are relatively loose. These societies prefer individualism over agreement within the group. Competition for resources is the norm, and those who compete best are rewarded financially. Australia, Canada, the United Kingdom, and the United States tend to be strongly individualistic societies. By contrast, in collectivist societies, ties among individuals are highly valued. Business is conducted in the context of a group in which others' views are strongly considered. The group is all- important because life is a cooperative experience. Conformity and compromise help maintain group harmony. China, Panama, and South Korea are examples of strongly collectivist societies.
• Power distancedescribes how a society deals with the inequalities in power that exist among people. In societies with low power distance, the gaps between the powerful and weak are small. In Denmark and Sweden, for example, governments have set up tax and social welfare systems that ensure their citizens are relatively equal in terms of income and power. The United States also scores relatively low on power distance. Societies characterized by high power distance do not care very much about inequalities and allow them to grow over time. There are substantial gaps between the powerful and the weak. Guatemala, Malaysia, the Philippines, and several Middle East countries are examples of countries with high power distance. In high power-distance firms, autocratic management styles focus power at the top and grant little self-rule to lower-level employees. In low power-distance firms, managers and subordinates are relatively equal and cooperate to achieve organizational goals.
• Uncertainty avoidancerefers to the extent to which individuals can tolerate risk and uncertainty in their lives. People in societies with high uncertainty avoidance create institutions that minimize risk and ensure financial security. Companies emphasize stable careers and produce many rules to regulate worker actions and minimize uncertainty. Managers may be slow to make decisions as they investigate the nature and potential outcomes of several options. Belgium, France, and Japan are countries that score high on uncertainty avoidance. India, Ireland, Jamaica, and the United States are leading examples of countries with low uncertainty avoidance.
• Masculinity versus femininityrefers to a society's orientation based on traditional male and female values. In masculine cultures, both men and women put high priority on achievement, ambition, and economic growth. Society values competitiveness and boldness. In the workplace, men and women alike are assertive and focused on career and earning money. Typical examples include Australia and Italy. The United States is a moderately masculine society. Hispanic cultures are relatively masculine and display a zest for action, daring, and competitiveness. In business, the masculinity dimension reveals itself as self-confidence and leadership. In feminine cultures, such as the Scandinavian countries, gender roles overlap. Both men and women emphasize nurturing roles, interdependence among people, and caring for less fortunate people. Welfare systems are highly developed and education is highly supported.
• Long-term versus short-term orientationrefers to the degree to which people and organizations defer pleasure or gratification to achieve long-term success. Firms and people in cultures with a long-term orientation tend to take the long view to planning and living. They focus on years and decades. The long-term dimension is best illustrated by the so-called Asian values traditional cultural orientations of several Asian societies, including China, Japan, and Singapore. These values are partly based on the teachings of the Chinese philosopher Confucius. They include discipline, loyalty, hard work, regard for education, respect for family, focus on group harmony, and control over one's desires. By contrast, the United States and most other Western countries emphasize a short-term orientation.
• Indulgence versus restraintis the extent to which people try to control their desires and impulses. Indulgent cultures focus on individual happiness, having fun, and enjoying life. People feel greater freedom to express their own emotions and desires. In the workplace, people feel freer to express their opinions, give feedback, and even change jobs. They aim to be happy on the job and project a positive attitude. Mexico, Sweden, and the United States are examples of indulgent societies. By contrast, restrained societies try to suppress needs gratification. Happiness of the individual is less valued, and people are reluctant to express their own emotions and needs. People avoid expressing personal opinions, and job mobility is often limited.

8DEAL VERSUS RELATIONSHIP ORIENTATION

Another important dimension of culture concerns the nature of business relationships. In deal-oriented cultures, managers focus on the task at hand and prefer getting down to business. At the extreme, such managers may even avoid small talk and other preliminaries. They prefer to seal agreements with a legalistic contract and take an impersonal approach to settling disputes. Leading examples of deal-oriented cultures include those of Australia, northern Europe, and North America.

In relationship-oriented cultures, managers put more value on relationships with people. To these managers, it is important to build trust and understanding and get to know the other party in business interactions.

For example, it took nine years for Volkswagen to negotiate the opening of a car factory in China, a strong relationship-oriented society. For the Chinese, Japanese, and many in Latin America, relationships are more important than the deal. In China, the concept of guanxi (literally, "connections") is deeply rooted in ancient Confucian philosophy, which values a social chain of command and people's responsibilities to each other. It stresses the importance of rela- tionships within the family and between superiors and subordinates.

9.MANAGERIAL IMPLICATIONS OF CULTURE

Although culture shapes behavior generally, it also plays a major role in cross- border business. Most companies have a distinctive set of norms, values, and modes of behavior that distinguish them from other organizations. Such differences are often as distinctive as national culture, so that two firms from the same country can have vastly different organizational cultures. In companies with a strong organizational culture, it is hard to determine where the corporate influence begins and the national influence ends.

Cultural Orientations

One aspect of cross-cultural risk is ethnocentric orientation means using our own culture as the standard for judging other cultures. It is also known as home- country orientation. Most managers are raised in a single culture and tend to view the world mainly from their own perspective. Ethnocentric managers usually believe their own race, religion, or ethnic group is somehow superior to others. Although the tendency to be ethnocentric is widespread, the most effective international managers avoid it; instead, they adopt a polycentric or geocentric orientation. A polycentric orientation refers to a host-country mindset in which the manager develops a strong attachment to the country in which she or he conducts business. Geocentric orientation refers to a global mindset through which the manager can understand a business or market without regard to country boundaries. A geocentric orientation implies an openness to, and awareness of, diversity across cultures. Managers with a geocentric orientation possess a cosmopolitan view and acquire skills for successful social behavior in cross-cultural encounters. They adopt new ways of thinking and learn to analyze cultures. They avoid the temptation to judge different behavior as somehow inferior.