Global Business Today Eleventh Edition Chapter 4
4-13
Internet sites that focus on online language lessons, translating dictionaries, native literature,
translation services, software, and language schools.
SPOKEN LANGUAGE
B) While English is clearly the language of international business, knowing at least some of the
local language can greatly help when working in another country.
UNSPOKEN LANGUAGE
C) Unspoken language can be just as important for communication.
CONNECT
Video Case
Be Aware of Cultural Nuances
Summary
This activity explores differences in culture and the importance of understanding and
appreciating those differences when doing business.
Education
A) Formal education plays a key role in a society. Formal education is the medium through
which individuals learn many of the language, conceptual, and mathematical skills that are
indispensable in a modern society.
Culture and Business
A) For an international business with operations in different countries, an important question is
how a society’s culture impacts values found in the workplace.
B) The most famous study of how culture relates to values in the workplace was undertaken by
Geert Hofstede who isolated five dimensions that he claimed summarized different cultures.
Global Business Today Eleventh Edition Chapter 4
4-14
These are power distance, individualism versus collectivism, uncertainty avoidance, masculinity
versus femininity, and long-term vs. short-term orientation.
• Power Distance is focused on how a society deals with the fact that people are unequal
in physical and intellectual capabilities.
• Individualism Versus Collectivism is focused on the relationship between the individual
and his or her fellows.
C) Currently, there is interest in adding a sixth dimension to Hofstede’s model called indulgence
versus restraint. This dimension reflects recent research where indulgence refers to a society that
allows relatively free gratification of basic and natural human drives related to having fun, and
restraint refers to a society that suppresses gratification of needs and regulates it by means of
strict social norms.
D) Hofstede’s results are interesting for what they tell us in a general way about differences
between cultures. However, because of methodological issues, one should be careful about
reading too much into Hofstede’s research. Still, it is a good starting point for understanding how
cultures differ and what those differences might mean for management practice.
Lecture Note: For more discussion of Hofstede and his research go to
https://geerthofstede.com/landing-page.
CONNECT
Click and Drag
Geert Hofstede’s Big Idea
Summary
This activity focuses on Geert Hofstede’s study of culture. Hofstede’s identified several
dimensions of culture that he claimed summarized the differences between culture. Hofstede’s
study helped managers better understand the effects of cultural differences in the workplace.
Global Business Today Eleventh Edition Chapter 4
4-15
Should other dimensions be added to his model to better understand cultural differences in
today’s global economy?
Cultural Change
A) Culture evolves over time, although changes in value systems can be slow and painful for a
society. Social turmoil is an inevitable outcome of culture change.
B) As countries become economically stronger and increase in the globalization of products
bought and sold, cultural change is particularly common.
FOCUS ON MANAGERIAL IMPLICATIONS
Cross-Cultural Literacy and Competitive Advantage
A) The material discussed in this chapter has three important implications for international
business. First, there is a need to develop cross-cultural literacy. Second, there is a connection
between culture and national competitive advantage. Third, there is a connection between culture
and ethics in decision making.
Cross-Cultural Literacy
B) 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.
Culture and Competitive Advantage
D) For international business, the connection between culture and competitive advantage is
important for two reasons. First, the connection suggests which countries are likely to produce
the most viable competitors. Second, the connection between culture and competitive advantage
has important implications for the choice of countries in which to locate production facilities and
do business.
Teaching Tip: For guidelines on doing business in different countries, consider
https://www.entrepreneur.com/article/226286 and https://news.abs-
cbn.com/business/06/30/17/business-mentor-how-cultural-differences-affect-doing-business.
Global Business Today Eleventh Edition Chapter 4
4-16
CONNECT
Video Case
Arriving Late in Different Cultures
Summary
This activity explores differences in culture, and in particular the concept of time, and the
importance of understanding and appreciating those differences when doing business.
Global Business Today Eleventh Edition Chapter 4
4-17
End-of-Chapter Resources
Critical Thinking and Discussion Questions
1. Outline why the culture of a country might influence the costs of doing business in that
country. Illustrate your answer with examples.
Answer: Since in a sense the entire chapter is about this question, there can be numerous reasons
and examples of how culture influences the costs of doing business. Several are highlighted in
2. Do you think business practices in an Islamic country are likely to differ from business
practices in a Christian country? If so, how?
Answer: There are various cultural differences between an Islamic country and a Christian
country like the United States that could impact business practices. The role of women, for
example, or appropriate etiquette (including simple things like not passing papers with the left
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: Responses to this question will obviously vary based on the countries chosen by the
students and their knowledge of the countries. Hopefully students can present some information
Global Business Today Eleventh Edition Chapter 4
4-18
4. Reread the Country Focus “Turkey, Its Religion, and Politics.” Then answer the following
questions.
a. Can you see anything in the value 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: When responding to this question, many students will probably focus on three key
areas. First, they may note that Islam is firmly against making a profit by exploiting others.
5. Reread the Management Focus “China and Its Guanxi” and answer the following questions:
a. Why do you think 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 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: Guanxi and guanxiwang are essential to business in China. Guanxi refers to the
business connections that are so important to companies doing business in China. Guanxiwang
Global Business Today Eleventh Edition Chapter 4
4-19
globalEDGE™ Research Task
Use the globalEDGE™ site (globaledge.msu.edu) to complete the exercises in the text.
Exercise 1
Search phrase: Centre for Intercultural Learning
Resource Name: Centre for Intercultural Learning
Additional Info:
Exercise 2
Search phrase: Business Etiquette Around the World
Resource Name: Kwintessential Language and Culture Specialists
Additional Info:
The Swatch Group and Cultural Uniqueness
closing case
Summary
The closing case explores the Swatch Group and the influence of Swatch on culture. Founded in
1983 by Nicolas Hayek, Swatch is now the world’s biggest watchmaker. With some 40 percent
of the company still under the control of the Hayek family, Swatch focuses on diversity and
culture. Swatch promotes its watches as a means of speaking without words. Wearers of Swatch
Global Business Today Eleventh Edition Chapter 4
4-20
are telling more than just time; they are telling the world something about themselves.
Discussion of the case can revolve around the following questions.
Case Discussion Questions
1. With the Hayek family controlling nearly 40 percent of The Swatch Group, how do you think
the family influence impacts the type of corporate culture in the company? What about the
company’s international culture being impacted by the Hayek family?
2. Many of the Swatch brands have become cultural icons among a strong core following of
customers in the global marketplace. Some even talk about the “Swatch Revolution” that began
when Nicolas Hayek founded the company. Why do you think Swatch has such a strong cultural
following?
3. Swatch wants you to create your own unique way of accessorizing by the use of a Swatch
watch. A person can showcase his or her individualized Swatch use by tagging #MySwatch. Is a
watch a way to show who a person is culturally? Does a watch get embedded into a person’s
culture? Can a watch create a cultural image?
4-21
4. According to the company, “Swatch is an attitude, an approach to life, a way of seeing. The
sight of a Swatch excites emotion. Wearing one is a way to communicate, to speak without
speaking. Heart to heart.” Do you buy this overarching “branding” of a Swatch watch as a
cultural icon?
Teaching Tip: Consider exploring Instagram to see how Swatch is viewed across social media.
Go to https://www.instagram.com/swatch/?hl=en.
CONNECT
Geography
Summary
This activity is designed to test the student’s knowledge of geography. Questions related to
chapter material are asked, requiring students to understand the topics and the locations of the
countries involved.
Global Business Today Eleventh Edition Chapter 4
4-22
Continuous Case Concept
How does culture affect companies? When German automakers began their expansion into the
U.S. market, cup holders were not a feature of their products. In contrast, because many
Americans spent significant time in their cars, ate in their cars, and so on, advertisements for
American cars often boasted of the number of cup holders that were part of their design. The
German companies had to shift their thinking from strictly performance-based cars, to ones that
better fit the needs of Americans. Today, many automakers have shifted their focus to the
emerging markets, and how they can best serve the customers in those markets.
• Ask students to consider how different cultural dimensions might be reflected in the
design of automobiles. Students might observe that in emerging markets, “stripped down’
models could make cars more affordable for many, or that in Japan, smaller cars might be
more appropriate.
This exercise works at the beginning of the discussion on culture but can be even more valuable
after the presentation of the chapter material. The exercise is also useful as a linking mechanism
between the various chapter topics if it is used at the start and then referenced throughout the
chapter. So, for example, you could talk about how religious practices might affect how a factory
can be operated in certain countries, and then later, discuss how factory management could
inadvertently miscommunicate with employees or how the color of the paint on a car could send
the wrong message.
Global Business Today Eleventh Edition Chapter 4
4-23
Additional Readings and Sources of Information
How Amazon plans to battle Walmart in India
https://money.cnn.com/2018/09/20/technology/more-supermarket-amazon-india/index.html
How we made the Swatch
https://www.theguardian.com/culture/2018/jan/08/how-we-made-the-swatch
The Caste Formerly Known as “Untouchables” Demands A New Role In India
http://one.npr.org/?sharedMediaId=489883492:489883493
Microsoft Looks to China for an Xbox One Rescue
http://www.bloomberg.com/news/articles/2014-10-02/microsoft-looks-to-china-for-an-xbox-one-
rescue
Gate B22 in the Frankfurt Airport Offers a Lesson in Cultural Differences
http://www.bloomberg.com/news/articles/2014-03-19/gate-b22-in-the-frankfurt-airport-offers-a-
lesson-in-cultural-differences
Taiwanese people may be nice, but Hongkongers are good at being real
https://www.scmp.com/comment/article/2148087/taiwanese-people-may-be-nice-hongkongers-
are-good-being-real
Global Business Today Eleventh Edition Chapter 4