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Chapter 04 – Differences in Culture
4-8
Hofstede recently added another dimension, called indulgence versus restraint to capture the
notion of relatively free gratification of basic and natural human drives related to enjoying life
and having fun versus suppressed gratification of needs and regulated by means of strict social
norms.
While Hofstede’s work on culture is the world’s leading research on culture, it is not without
criticism. Two newer frameworks on culture are the Global Leadership and Organizational
Behavior Effectiveness (GLOBE) instrument and the World Values Survey (WVS).
Culture is not a constant, but evolves over time. As countries become economically stronger,
cultural change is particularly common.
Slide 4-29 Implications for Managers
Managers need to be aware that societies differ because their cultures vary, and cultures vary
because of profound differences in social structure, religion, language, education, economic
philosophy, and political philosophy.
Individuals and firms must develop cross-cultural literacy. International businesses that are ill
informed about the practices of another culture are unlikely to succeed in that culture. One
way to develop cross-cultural literacy is to regularly rotate and transfer people internationally.
Managers need to be aware of ethnocentric behavior, or a belief in the superiority of one’s
own ethnic group or culture.
Another Perspective: To better understand how to run a meeting with people from different
cultures, go to {https://hbr.org/2015/12/how-to-run-a-meeting-of-people-from-different-
cultures}. For tips to avoid cultural missteps when doing business in other countries consider
{https://www.forbes.com/sites/jacquelynsmith/2012/08/27/your-basic-guide-to-business-
travel-abroad/#b2c82bf1ae00} and {https://www.entrepreneur.com/article/226286}.
The connection between culture and competitive advantage is important because it suggests
which countries are likely to produce the most viable competitors, and it has implications for
the choice of countries in which to locate production facilities and do business.
CRITICAL THINKING AND DISCUSSION QUESTIONS
QUESTION 1: Outline why the culture of a country might influence the cost of doing
business in that country. Illustrate your answer with examples.
ANSWER 1: This question has been 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 single acceptable response to the question. Several are highlighted below, but there could
be numerous others. When there are simply different norms between how individuals from
Chapter 04 – Differences in Culture
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Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
then get to know each other socially later. In many South American countries, it is important
to develop a good social relationship before trying to discuss business issues. Different class
structures and social mobility also raise the costs of doing business, for if there are inhibitions
against working with people from different classes, then the efficiency with which
information can flow may be limited and the cost of running a business increased. A country's
religion can also affect the costs of business, as religious values can affect attitudes toward
work, entrepreneurship, honesty, fairness, and social responsibility. In Hindu societies where
the pursuit of material well-being can be viewed as making spiritual well-being less likely,
worker productivity may be lower than in nations with other religious beliefs. Finally, a
country's education system can have important implications when considering the costs of
doing business. In countries where workers receive excellent training and are highly literate,
the need for specific worker training programs is decreased and the hiring of additional
employees is facilitated.
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—taking into consideration the public role
women can take on; practicing appropriate etiquette (including simple things like not passing
objects with the left hand); celebrating holidays; and wining and dining all differ from
QUESTION 3: 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 3: 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
information on the dimensions of culture including values, norms, social structure, religion,
Chapter 04 – Differences in Culture
4-10
Copyright © 2019 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
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
{https://www.cia.gov/library}.
QUESTION 4: Reread the Country Focus on Secularism 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?
c. What are the implications of Islamic values toward business for the participation of a
country like Turkey in the global economy or becoming a member of the European Union?
ANSWER 4:
a. Many students will probably focus on the comment made by furniture producer Saffet
Arslan that Muslims typically eschew the notion of making money and instead focus on
b. The area around Kayseri that has been growing rapidly is strongly influenced by Islam.
However, it is Islamic Calvinism that is contributing to the growth. Islamic Calvinism is a
c. Some students might focus on the lack of competitiveness that is sometimes associated with
Islam. Others might note though that, at least for Turkey, this does not seem to be an issue.
QUESTION 5: Reread the Management Focus on China and Its Guanxi, then answer the
following questions
a. Why do you think 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 the rules and regulations rather than trying to find a
way around them as Dan Mintz apparently does?
c. What ethical issues 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 5:
a. Guanxi literally means relationships, although in business settings in can better be
understood as “connections.” The concept of guanxi is deeply rooted in Chinese culture and
Chapter 04 – Differences in Culture
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Confucianism. The Chinese will often cultivate a guanxiwang, or “relationship network,” for
b. Personal power and relationships or connections (guanxi), rather than the rule of law, have
c. Guanxiwang refers to the relationship network on which many Chinese companies rely.
Because reciprocal obligations are central to the process, some students may suggest that
CLOSING CASE: The Emirates Group and Employee Diversity
The closing case explores employee diversity at the Emirates Group. Individuals from more
than 160 nationalities comprise the organization’s workforce, and the company believes this
diversity provides a distinct competitive advantage as it provides a constant flow of new ideas,
innovations, and thinking styles. The Emirates Group also feels that having its headquarters
located in Dubai, a multicultural cosmopolitan city, also contributes to the global mindset of
the organization. Discussion of the case can begin with the following questions:
QUESTION 1: Is it sustainable to think that Emiratis, which make up only about 15 percent of
the people in Dubai, can be leading the city as they have for so long?
ANSWER 1: Historically, the United Arab Emirates (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, several of the country’s largest emirates have become increasingly
QUESTION 2: Integrating 160 different nationalities into one corporation, such as The
Emirates Group, has challenges and opportunities. What challenges do you see? What
opportunities come from this diverse workforce?
Chapter 04 – Differences in Culture
4-12
ANSWER 2: Along with the benefits of having a multicultural workforce come numerous
challenges. Many students will probably suggest that The Emirates Group will need to be
particularly careful to ensure that all employees take a geocentric approach to their
interactions with each other to avoid misunderstandings. Students might note, for example,
QUESTION 3: If you lived in a city with such diversity of people as Dubai, would you
assimilate yourself with the people who are like you, or would you try to integrate into the
overall community of all people?
QUESTION 4: Compared with 10 years ago, expatriate employees stay twice as long in
Dubai, about 5 years, before they return to their home country or another foreign location. Do
you think more expatriates will stay longer in Dubai as the city continues to develop into a
world-class location?
ANSWER 4: Responses to this question will vary by student. Many will probably suggest that
as Dubai continues to increase its role as a major cosmopolitan business hub in the Middle
MHE INTERNATIONAL BUSINESS VIDEO LIBRARY
stream of updated video suggestions correlated by key concept and major topic. Every new
clip posted is supported by teaching notes and discussion questions. Please feel free to leave
comments in the library that you feel might be helpful to your colleagues.
INCORPORATING globalEDGE™ EXERCISES
Use the globalEDGE™ site {http://globalEDGE.msu.edu/} to complete the following
exercises:
Chapter 04 – Differences in Culture
4-13
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 affect 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. Identify five tips regarding business etiquette in the Middle Eastern country of
your choice.
Answers to Exercises
Exercise 1 Answer
The data can be accessed by searching for the term “Centre for Intercultural Learning” at
http://globaledge.msu.edu/ResourceDesk/. The Centre for Intercultural Learning is the only
source in this search. Go to the Country Insights link on the left side of this resource’s
Exercise 2 Answer
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
