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Chapter 04 - Differences in Culture
CRITICAL THINKING AND DISCUSSION QUESTIONS
QUESTION 1: Outline why the culture of a country might influence the costs of doing business
in that country. Illustrate your answer with examples.
ANSWER 1: This question has be explored throughout the chapter, and since there can be
numerous reasons and examples of how culture influences the costs of doing business, there is no
QUESTION 2: Do you think that business practices in an Islamic country are likely to differ
from business practices in a Christian country? If so how?
ANSWER 2: The cultural differences between a Muslim country and the United States will
cause business practices to differ dramatically. The public role women can take, appropriate
QUESTION 3: What are the implications for international business of differences in the
dominant or ethical system of a country?
ANSWER 3: Differences in the dominant religion of a country affect relationships, attitudes
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Chapter 04 - Differences in Culture
Basic, unarticulated assumptions about what has value, what is right and wrong, and what
constitutes good are embedded in our religions. Should rules or laws apply to all people all the
QUESTION 4: Choose two countries that appear to be culturally diverse. Compare the culture
of those countries and then indicate how cultural differences influence (a) the costs of doing
business in each country, (b) the likely future economic development of that country, and (c)
business practices.
ANSWER 4: Responses to this question will obviously vary based on the countries chosen by
students, and their knowledge of the countries. Hopefully, students can present some
Another Perspective: The US CIA website is a good place for introductory-level information
(economic, demographic, climate, background) on countries. The site is available at
{http://www.cia.gov/cia/publications/factbook}.
QUESTION 5: Reread the Country Focus on Islamic Capitalism in Turkey. Then answer the
following questions:
a. Can you see anything in the values and norms of Islam that is hostile to business?
b. What does the experience of the region around Kayseri teach about the relationship between
Islam and business?
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Education.
Chapter 04 - Differences in Culture
c. What are the implications of Islamic values towards business for the participation of a country
like Turkey in the global economy or becoming a member of the European Union?
ANSWER 5:
a. Many students will probably focus on the comment by the sugar factory manager that “if you
b. The area around Kayseri that has been growing rapidly is strongly influenced by Islam. In
c. Some students might focus on the lack of competitiveness that is sometimes associated with
QUESTION 6: Reread the Management Focus on DMG-Shanghai. Then, answer the following
questions
a. Why do you that it is so important to cultivate guanxi and guanxiwang in China?
b. What does the experience of DMG tell us about the way things work in China? What would
likely happen to a business that obeyed all of the rules and regulations rather than trying to find a
way around them as Dan Mintz apparently does?
c. What are the ethical issues that might arise when drawing upon guanxiwang to get things done
in China? What does this suggest about the limits of using guanxiwang for a Western business
committed to high ethical standards?
ANSWER 6:
a. Guanxi literally means relationships, although in business settings in can better be understood
b. Personal power and relationships or connections (guanxi), rather than the rule of law, have
c. Guanxiwang refers to the relationship network that many Chinese companies rely on.
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Education.
Chapter 04 - Differences in Culture
CLOSING CASE: World Expo 2020 in Dubai, UAE
The closing case explores the culture of the United Arab Emirates and its impact on the
upcoming World Expo 2020. The Expo’s theme, “connecting minds, creating the future,” is
shown to be an apt reflection of Dubai’s multicultural atmosphere and status as an international
gateway to doing business in the Middle East. In particular, the theme of connecting minds
relates to the notion that businesses competing in the global marketplace must connect with
foreign consumers by underscoring cultural similarities while downplaying cultural differences.
Discussion of the case can revolve around the following questions:
QUESTION 1: What forces shaped the culture in the country of UAE and Dubai in Particular?
How similar or different are these forces from those that shaped the culture of Western nations.
ANSWER 1: Historically, the UAE is a conservative country where a large segment of the
population desires to preserve the religious values and ancient traditions of the region. However,
QUESTION 2: What kinds of misunderstanding, if any, are likely to arise between
Western-based visitors and people from the UAE during World Expo 2020?
ANSWER 2: Reflecting their Bedouin traditions, Emiratis will often conduct business only after
QUESTION 3: If you were in a position to advise a Western company that was considering doing
business in UAE for the first time, what would your advice be?
ANSWER 3: Student answers will vary on this question. Several important strategies could be
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Chapter 04 - Differences in Culture
QUESTION 4: Using Dubai as an example, do you believe that cultural similarities among
people can outweigh cultural differences that exist in terms of doing business together in the
future?
ANSWER 4: As shown by Dubai Expo 2020's stated aims (to explore creative solutions relating
Another Perspective: To learn more about the cultural differences that impact companies doing
business in the UAE, go to
{http://usuaebusiness.org/about-the-uae/business-etiquette-in-the-uae/}.
MHE INTERNATIONAL BUSINESS VIDEO LIBRARY
Please click here to visit our International Business Video Library on Pinterest, which is updated
on a monthly basis. While there be sure to "like" the clips that work well for you, and add notes
that might be helpful to your colleagues.
INCORPORATING globalEDGE™ EXERCISES
Use the globalEDGE™ site {http://globalEDGE.msu.edu/} to complete the following exercises:
Exercise 1
You are preparing for a business trip to Chile where you will need to interact extensively with
local professionals. Therefore, you should consider collecting information regarding local culture
and business habits prior to your departure. A colleague from Latin America recommends you
visit the “Centre for Intercultural Learning” and read through the country insights provided for
Chile. Prepare a short description of the most striking cultural characteristics that may effect
business interactions in this country.
Exercise 2
Typically, cultural factors drive the differences in business etiquette encountered during
international business travel. In fact, Middle Eastern cultures exhibit significant differences in
business etiquette when compared to Western cultures. Prior to leaving for your first business trip
to the region, a colleague informed you that a guide to business etiquette around the world may
help you. Using the globalEDGE website, find five tips regarding business etiquette in the
Middle Eastern country of your choice.
Answers to Exercise Questions
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Chapter 04 - Differences in Culture
Exercise 1
The data can be accessed by searching for the term “Centre for Intercultural Learning” at
Exercise 2
The data can be accessed by searching for the term “Business Etiquette Around the World” at
http://globaledge.msu.edu/ResourceDesk/. The Guide to Business Etiquette in the Middle East is
OPENING CASE: Best Buy and eBay in China
Summary
The opening case explores the many missteps by Best Buy and eBay when they decided to do
business in China. In the case of Best Buy, the company failed to recognize differences in price
sensitivity between Chinese and American consumers. Also, higher rates of piracy in China
meant that demand for Best Buy’s products was lower than in the United States, where piracy is
not as common. Finally, the company’s traditional mega-store aesthetics did not appeal to
Chinese consumers. In the case of eBay, the company failed to recognize Chinese consumers’
preference for rival e-commerce company TaoBao and the unique advantage TaoBao had with its
built-in instant messaging feature.
QUESTION 1: Reflect on the cultural traditions in China and how they shape the country’s retail
experience expectations. What should Best Buy and eBay executives have done differently when
it came to acknowledging (and embracing) the Chinese shopping culture?
ANSWER 1: Chinese consumers expect a more modest, patient, and personalized approach to
retail sales. Best Buy’s cavernous, gadget-filled stores proved off-putting to Chinese shoppers.
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Chapter 04 - Differences in Culture
QUESTION 2: In response to Chinese consumers’ distaste for Best Buy’s prices and large store
size, Best Buy elected to close all of its stores and focus on its chain of local Jiangsu Five Star
stores. Does this strategy make sense given the expected growth in China’s middle class
purchasing power by 2020?
ANSWER 2: Student responses will vary. The decision to focus on the more modest Five Star
QUESTION 3: If eBay could go back in time with the knowledge it now has about the Chinese
e-commerce market, what strategies might it use to ensure a more positive reception? Do you
think it would be able to attract a large share of TaoBao users?
ANSWER 3: Following in TaoBao’s footsteps, eBay might seek to encourage better
Another Perspective: To learn more about Best Buy and eBay’s experiences in China, go to
{http://www.wsj.com/articles/SB10001424052702303444204577460693377819420} and
{http://www.businessinsider.com/heres-how-alibaba-defeated-ebay-in-china-2014-9}.
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