1
Chapter 3: Emphasizing Cultures, Ethics, & Norms
Chapter 3
Emphasizing Cultures, Ethics, & Norms
Learning Objectives
After studying this chapter, students will be able to accomplish the following objectives:
1. Explain where informal institutions come from.
2. Define culture and articulate its two main manifestations.
3. Articulate three ways to understand cultural differences.
4. Explain why understanding cultural differences is crucial for global business.
5. Explain why ethics is important.
6. Identify ways to combat corruption.
7. Identify norms associated with strategic responses when firms deal with ethical challenges.
8. Explain how you can acquire cross-cultural literacy.
Chapter Overview
Chapter 3, Emphasizing Cultures, Ethics, & Norms, focuses on the informal institutions that
shape global business and the world around us. After a brief introduction to informal institutions,
the chapter opens with a discussion about culture. The section begins by explaining the
complexity of culture and offers the students an insight into culture by discussing two of its key
facets: language and religion. Three approaches to classifying cultural differences are then
discussed—the context approach, the cluster approach, and the dimension approach. Each of
these provides a unique perspective on why cultures are different. Next, the chapter defines
ethics and discusses how to manage ethics in other cultures. The chapter then introduces
corruption and explains how bribery and other forms of corruption are controlled. Finally, the
chapter defines norms and describes the four strategic responses that companies use to deal with
potential ethical issues: the reactive strategy, the defensive strategy, the accommodative strategy,
and the proactive strategy.
Opening Case Discussion Guide
Partying in Saudi Arabia and Xinjiang, China
Enjoying food together is part of the fun everywhere around the world. When venturing to
locations far away from home, international businesspeople can often expect invitations to go to
interesting parties. Two Swiss engineers, A and B, working for the French engineering giant
2
Chapter 3: Emphasizing Cultures, Ethics, and Norms
Alstom at a location in Saudi Arabia were told at midday that there would be a farewell dinner
party after work. A tray the size of a wagon wheel containing a bed of rice with a huge piece of
grilled lamb on top was set on the floor of the workshop. (Of course the floor had been cleaned
earlier.) Since there were neither chairs nor utensils, colleagues just sat down on the floor around
the tray and started eating—with their bare hands.
Swiss engineer A was a vegetarian. He nervously told his Swiss colleague B: “I won’t squat on
the floor like that, and I won’t eat anything either.” By then everybody else already had a piece
of lamb in hand. B encouraged A by saying: “Come on, let’s just sit down. You don’t have to eat
lamb, but you can at least scoop up a handful of rice—it’s so yummy!” After A sat down and
meat was passed around, the atmosphere became quite interesting and relaxing. The Saudi
colleagues gained immense joy from entertaining A and B—an experience that A later told B that
he also enjoyed.
On a trip to Xinjiang University in Xinjiang Uyghur Autonomous Region in northwest China, the
author and his family were invited to a Kazakh dinner inside a Kazakh yurt (a traditional tent).
On a huge tray, the main dish served was beshbarmak—meaning “five fingers” in Kazakh and a
number of other Central Asian languages. By tradition, the dish was to be enjoyed with “five
fingers” only. They enjoyed using their hands, but after they all had a bite and licked their
fingers, the hosts graciously gave them utensils. They all had an amazing, unforgettable
experience.
Lesson Plan for Lecture
Brief Outline and Suggested PowerPoint Slides
Learning Objectives PowerPoint Slides
Learning Objectives Overview 2–3: Learning Objectives
LO1
Explain where informal institutions come
from.
4: Informal Institutions
LO2
Define culture and articulate its two main
manifestations.
5: Culture
6: Components of Culture
LO3
Articulate three ways to understand cultural
differences.
7: Classifying Cultural Differences:
Context Approach
8: Exhibit 3.1: High-Context versus Low-
Context Cultures
3
Chapter 3: Emphasizing Cultures, Ethics, & Norms
9: Classifying Cultural Differences: Cluster
Approach
10: Exhibit 3.2: Cultural Clusters
11–12: Classifying Cultural Differences:
Dimension Approach
LO4
Explain why understanding cultural
differences is crucial for global business.
13–15: Understanding Cultural Differences
to do Global Business
LO5
Explain why ethics is important.
16: Ethics
17: Views on Ethical Motivation of Firms
18: Schools of Thought for Managing
Ethics Overseas
19: Exhibit 3.4: Managing Ethics Overseas:
Three Approaches
LO6
Identify ways to combat corruption.
20: Corruption
21: Fighting Corruption
LO7
Identify norms associated with strategic
responses when firms deal with ethical
challenges.
22: Norms
23: Exhibit 3.6: Strategic Responses to
Ethical Challenges
LO8
Explain how you can acquire cross-cultural
literacy.
24: Implications for Savvy Managers
25: Phases in Acquisition of Cultural
Intelligence
26: Exhibit 3.7: Implications for Action
Key Terms 27–28: Key Terms
Summary 29–30: Summary