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Global Business Today Eleventh Edition Chapter 4
4-1
Differences in Culture
Table of Contents
Learning Objectives
Chapter Summary
Chapter Opening Activity
Chapter Outline
Opening Case: China, Hong Kong, Macau, and Taiwan
Introduction
What Is Culture?
Social Structure
Religious and Ethical Systems
Cultural Change
Focus on Managerial Implications: Cultural Literacy and Competitive Advantage
End-of-Chapter Resources
Critical Thinking and Discussion Questions
globalEDGE™ Research Task
Closing Case: The Swatch Group and Cultural Uniqueness
Continuous Case Concept
Additional Readings and Sources of Information
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Learning Objectives
4-1 Explain what is meant by the culture of a society.
4-2 Identify the forces that lead to differences in social culture.
4-3 Identify the business and economic implications of differences in culture.
4-4 Recognize how differences in social culture influence values in business.
4-5 Demonstrate an appreciation for the economic and business implications of cultural change.
Chapter Summary
This chapter begins by introducing the concept of culture. The determinants of culture are
identified, which include religion, political philosophy, economic philosophy, education,
language, and social structure. The first half of the chapter focuses on the influence of social
structure, religion, language, and education on culture. The section on religion explains the
Chapter Opening Activity
Ask students to find out what percentage of the world population is comprised of people in the
U.S. and other countries. Students can search the World Bank, the CIA Factbook, some of the
databases on globalEDGE, or even Wikipedia. As of 2018:
• U.S. is 4.3% of the world’s population
• British are 1%
• Brazil is 2.7%
• Mexico is 1.6%
Ask students what conclusions they draw from this data. For example, international business is
conducted outside of the home country. Nations have cultural diversity and different values,
metaphors, stereotypes, idioms, and languages. How will students learn to work with people
from different countries and cultures? How will they function effectively when visiting countries
with distinctive cultures, such as Mexico, China, Russia, Japan, or Switzerland? Introduce them
Global Business Today Eleventh Edition Chapter 4
Chapter Outline
China, Hong Kong, Macau, and Taiwan
opening case
Summary
The opening case explores the cultural complexity of the Greater China Region. While it is often
thought of as simply being Chinese, the Greater China Region, frequently known as simply
China, is actually comprised of China, Hong Kong, Macau, and Taiwan. Each of these brings its
own political, economic, and cultural differences to the region making it important for
international businesses and indeed countries to fully understand “Chinese” culture and what it
means to trade relations, the investment climate, and so on.
Discussion Questions
1. The United States is often referred to as a melting pot of culture. Discuss the cultural
complexities of the Great China Region. What forces shaped the culture of Hong Kong and
Macau? How similar or different are these forces from those that shaped the culture of Taiwan?
Does the Greater China Region share the same melting pot phenomenon that dominates the
United States?
2. Explain the importance of Macau to China as China works to develop a closer trading
relationship with Portuguese-speaking countries. How does Macau’s history help both sides
better understand each other?
4-4
3. If you were in a position to advise a Western company that was considering doing business in
Greater China for the first time, what would your advice be?
4. Suppose you are a Western business person who has been assigned to oversee your company’s
entry into the Greater China the Region. Your company has indicated that you are free to choose
to live anywhere in region. Which part of the country would you choose and why?
Video Note: To learn more about the conflict between mainland China and Hong Kong, consider
https://www.cnn.com/2015/06/30/asia/china-mainlanders-in-hongkong/index.html.
Introduction
A) The focus of this chapter is culture, and how the underlying characteristics of a country help
define the values and norms of a society.
B) Two themes run through this chapter. The first theme is that operating a successful
international business requires cross-cultural literacy. By cross-cultural literacy, we mean an
understanding of how cultural differences across and within nations can affect the way in which
business is practiced. The second theme is that a relationship may exist between culture and the
costs of doing business in a country or region.
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Did You Know Video Clip
The video clip asks: “Did you know arriving late is expected in some cultures?”
Discussion Questions
1. Have you ever arrived too early or too late for a social event here in the United States?
2. How did your hosts react?
3. How might you figure out whether or not you should be late, on time, or early if you’re
meeting with people in another country?
Lecture Note: To learn more about how people from different cultures understand the concept
of time, go to
http://www.businessinsider.com/how-different-cultures-understand-time-2014-5 and
https://hbr.org/2016/05/different-cultures-see-deadlines-differently.
What Is Culture?
A) Culture is a system of values and norms that are shared among a group of people and that
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VALUES AND NORMS
B) Values provide the context within which a society’s norms are established and justified and
form the bedrock of a culture. Norms are the social rules that govern the actions of people toward
one another. Norms can be further subdivided into folkways (the routine conventions of
everyday life) and mores (norms that are seen as central to the functioning of a society and to its
social life).
CULTURE, SOCIETY, AND THE NATION-STATE
C) A society can be defined as a group of people that share a common set of values and norms;
that is, a group bound together by a common culture. But there is not a strict one-to-one
DETERMINANTS OF CULTURE
D) The values and norms of a culture do not emerge fully formed. They are the evolutionary
product of factors including prevailing political and economic philosophies, the social structure
of a society, and the dominant religion, language, and education.
CONNECT
Click and Drag
The Determinants of Culture
Summary
This activity focuses on the determinants of culture. A nation’s culture reflects a nation’s
political and economic philosophies, its social structure, dominant religions, language, and
Social Structure
A) A society's social structure refers to its basic social organization. Two dimensions stand out
when explaining the differences between cultures. The first is the degree to which the basic unit
of social organization is the individual, as opposed to the group. The second dimension is the
degree to which a society is stratified into classes or castes.
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INDIVIDUALS AND GROUPS
The Individual
B) A focus on the individual and individual achievement is common in many Western societies.
The Group
C) In sharp contrast to the Western emphasis on the individual, in many Asian societies the
group (an association of two or more individuals who have a shared sense of identity and who
interact with each other in structured ways on the basis of a common set of expectations about
each other’s behavior) is the primary unit of social organization.
SOCIAL STRATIFICATION
D) All societies are stratified on a hierarchical basis into social categories, or social strata. There
are four basic principles of social stratification: 1) it is a trait of society, not a reflection of
individual differences; 2) it carries over to the next generation; 3) it is generally universal, but
variable; 4) it involves not just inequality but also beliefs.
Social Mobility
E) Social mobility refers to the extent to which individuals can move out of the strata into which
country FOCUS: Determining Your Social Class by Birth
Summary
This feature explores India’s caste system and the implications of the system. While many urban
middle-class citizens are not affected in a significant way by the caste system, for India’s rural
population, the influence of the system is readily apparent. The government is strongly
encouraging private companies to hire more individuals from lower level castes.
Discussion Questions
1. India’s castes system has been around for many years. Explain why its influence has
diminished among educated urban middle-class Indians.
The caste system in India was officially abolished in 1949. However, it seems that urban citizens
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homes of higher caste individuals. Yet the same engineer, a beneficiary of Infosys training
programs, now works for Infosys in a “higher caste” position.
2. Why are many private companies in India resisting the hiring quotas suggested by the
government? Why might it be necessary to hire lower caste individuals?
Video Note: To explore this discussion from a different perspective, consider how the caste
system in India affects Indian women. To learn more, go to
https://www.pbs.org/video/independent-lens-impact-indias-caste-system-women.
Significance
F) A country’s social strata can have important implications for the management and
organization of businesses. In cultures where there is a great deal of consciousness over the class
of others, the way individuals from different classes work together (i.e. management and labor)
may be very prescribed and strained in some cultures (i.e. Britain), or have almost no
Religious and Ethical Systems
A) Religion can be defined as a system of shared beliefs and rituals that are concerned with the
realm of the sacred. Ethical systems refer to a set of moral principles, or values, that are used to
guide and shape behavior. The ethical practices of individuals within a culture are often closely
CHRISTIANITY
B) Christianity is the most practiced religion in the world and is common throughout Europe, the
Americas, and other countries settled by Europeans. Christianity is also rapidly growing in
Africa. Within Christianity there are three major branches: Protestant, Roman Catholic, and
Eastern Orthodox.
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Economic Implications of Christianity
C) At the turn of the century, Weber suggested that the "Protestant work ethic" was the driving
force of capitalism. This focus on hard work, wealth creation, and frugality encouraged
capitalism while the Catholic promise of salvation in the next world did not foster the same kind
of work ethic. The Protestant emphasis on individual religious freedom, in contrast to the
hierarchical Catholic Church, was also consistent with the individualist economic and political
philosophy discussed in Chapter 2.
ISLAM
D) Islam has the same underlying roots of Christianity (Christ is viewed as a prophet), and
suggests many of the same underlying societal mores. Islam, however, extends this to more of an
all-embracing way of life that governs one's being. It also prescribes many more "laws" on how
people should act and live that are entirely counter the U.S. "separation of church and state."
Islamic Fundamentalism
E) The past three decades have witnessed the growth of a social movement often referred to as
“Islamic fundamentalism.” In the West, Islamic fundamentalism is associated in the media with
militants, terrorists, and violent upheavals. However, this characterization may be misleading as
the vast majority of Muslims point out that Islam teaches peace, justice, and tolerance.
Economic Implications of Islam
F) In Islam, people do not own property, but only act as stewards for God and thus must take
care of that with which they have been entrusted. They must use property in a righteous, socially
beneficial, and prudent manner; not exploit others for their own benefit; and they have
obligations to help the disadvantaged. Thus, Islam is supportive of international business as long
as it is carried out in a way that reflects basic Islamic values.
country FOCUS: Turkey, Its Religion, and Politics
Summary
This feature examines the debate surrounding Turkey’s membership in the European Union.
Turkey has indicated that it would like to be a part of the regional bloc, but many are concerned
that because the country’s dominant religion is Islam, it would not be a good fit. Others,
however, argue that these fears are unfounded. Supporters of Turkey’s membership in the
European Union note that the country’s central region is home to many thriving entrepreneurial
ventures.
Discussion Questions
1. Are the concerns of those opposing Turkey’s admittance to the European Union well-founded?
Can Islam, capitalism, and globalization co-exist?
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2. Explain the concept of Islamic Calvinism. How has Islamic Calvinism helped the Kayseri
region of Turkey?
Lecture Note: To get an update of Turkey’s current situation, go to
http://www.mfa.gov.tr/default.en.mfa.
HINDUISM
G) Hinduism, practiced primarily on the Indian sub-continent, focuses on the importance of
achieving spiritual growth and development, which may require material and physical self-
denial.
Economic Implications of Hinduism
H) Since Hindus are valued by their spiritual rather than material achievements, there is not the
same work ethic or focus on entrepreneurship found in some other religions. Likewise,
BUDDHISM
I) Buddhists also stress spiritual growth and the afterlife, rather than achievement while in this
world. Buddhism, practiced mainly in South East Asia, does not support the caste system;
however, individuals do have some mobility not found in Hinduism and can work with
individuals from different classes.
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Economic Implications of Buddhism
J) Because Buddhists do not support the caste system and do not practice the extreme ascetic
behavior of Hinduism, entrepreneurial activity is possible. Buddhism’s Zen orientation has
become a popular trend in the Western business world.
CONFUCIANISM
K) Confucianism, practiced mainly in China, teaches the importance of attaining personal
salvation through right action. Unlike religions, Confucianism is not concerned with the
supernatural and has little to say about the concept of a supreme being or an afterlife. The need
for high moral and ethical conduct and loyalty to others is central in Confucianism.
Economic Implications of Confucianism
L) Three key teachings of Confucianism―loyalty, reciprocal obligations, and honesty―may all
lead to a lowering of the cost of doing business in Confucian societies. The close ties between
Japanese auto companies and their suppliers, which has been an important ingredient in the
CONNECT
Click and Drag
Economic Implications of Major Religions
Summary
This activity focuses on the role of religion in business, its effect on entrepreneurship, and
religious ethics. Understanding religion and how it influences the way of doing business in a
nation is important in understanding how to do business in that country.
management FOCUS: China and Its Guanxi
Summary
This feature explores guanxi, or the relationships and connections that are so important in the
Chinese business world. The notion of guanxi comes from the Confucian philosophy of valuing
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social hierarchy and reciprocal obligations. Dan Mintz, founder of DMG, one of China’s fastest-
growing advertising agencies, credits guanxi for his success. Mintz established connections with
two Chinese individuals with access to high ranking government officials. Through these
guanxiwang, or relationship networks, Mintz has been able to get permission to shoot
advertisements in locations that are usually closed to foreigners.
Discussion Questions
1. Explain the concept of guanxi. How did Mintz’s guanxiwang help his company become so
successful?
2. Compare the difference between doing business in the West and doing business in China.
Video Note: To expand the discussion, consider how top CEOs view guanxi in business, see
https://www.bbc.com/news/business-29524701.
Language
A) One obvious way in which countries differ is language. By language, we mean both the
spoken and the unspoken means of communication. Language is one of the defining
characteristics of culture.
Teaching Tip: For individuals with a particular interest in language, iLoveLanguages
(http://www.ilovelanguages.com/index.php) is a comprehensive catalog of language-related
Internet resources. There are more than 2,400 links available at this site include links to other
