International Business & Trade Reviewer Hinduism is third-largest worldwide religion, with over 1 billion adherents.

Midterms: Chapter 8 - Culture 3) Education - offers opportunities to both reinforce and shape a culture, but it must
also ensure students are receiving the appropriate skills and knowledge to
Culture – a society’s unique set of values and norms that govern how people live and interact compete in the new global environment.
with each other.

Culture is like an iceberg. It is difficult to navigate your way around a culture when much of Common Areas Of Difference/ What Does Culture Mean for Business?
what makes up the culture consists of norms, values, habits and customs that are 1) Social stratification is the hierarchy created by society to cluster people into groups
difficult to identify, even for members of that culture. according to characteristics such as status, power, and wealth.

Visible Behaviors/Determinants of Culture: Invisible Sources of Culture: Ascribed characteristics an individual is born with.
1) Language 1) Values Acquired characteristics an individual takes on through experience.
2) Education 2) Norms 2) Work Motivation – All people work for a reason, but that reason may differ
3) Religion 3) Customs systematically a cross different cultures.
4) Habits
Materialistic – drive in a culture is likely to lead to more development and
Values – A society’s values are its backbone, the shared assumptions that identify what its members to foster economic growth, but it also is likely to lead to greater
believe is good, right, and desirable. concentration of wealth and higher income disparity.
Other forms of motivation include fame or honor, stability and security,
Values – determine, in part, the culture’s attitudes toward core social ideals like honesty,
avoiding disdain or saving face, providing for family, and meeting other
freedom, and equality, and toward various kinds of interactions.
personal needs and goals.
Norms – are the social rules that govern people’s interactions within that culture. Norms can 3) Relationship Preferences – Different cultures often have different perceptions
be either customs or social mores. about how interpersonal relationships should function and how power is
distributed within the work place. This cultural characteristic affects both
Customs – are socially approved standards of behavior that are not morally significant, such
management styles and interpersonal relationships between the employee
as how to greet one another, how to dress, what to eat, and how to behave toward
and the company.
neighbors. Customs are rooted in some historical or deeper value in the society
Power distance – Is the degree to which subordinates in an organization
Social mores – are strict norms that control moral and ethical behavior in a culture. They accept that power is distributed unequally.
form the basis for what people believe is right and wrong, and thus, unlike customs,
Individualism – a concept that gives preference to individual freedoms,
are deeply, morally significant; violating them could result in ruined business deals
liberties, and rights
or worse.
Collectivism – the belief that people should prioritize the good of society
Determinants of Culture: above the advancement of the individual
1) Language – shapes the way people see the world, it also helps to define culture, so
High Individualism People – are more focused on individual activities and
countries with more than one language often have more than one culture.
outcomes.
Most spoken languages are Chinese, Hindi, and English.
English is the unofficial language of business and of the Internet. 4) Risk taking behavior reflects people’s belief in their ability to control the outcomes
of their lives. It depends on factors such as uncertainty avoidance, level of
2) Religion – is a system of shared beliefs and rituals expressing the way adherents
trust, future orientation, and assertiveness.
interpret their place in the universe.
Ethical systems are sets of moral principles or values that guide and Uncertainty Avoidance – a business-related aspect of culture that
shape behavior, ensuring people can interact and live together effectively. measures how persons deal with an unknown future.
Christianity is currently the world’s largest religion, with roughly 2.3 billion Future Orientation – the degree to which a culture chooses future rather
adherents. than immediate results.
Islam is the second-largest global religion, with 1.8 billion adherents.
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 Assertiveness a measure of how competitive and aggressive a culture is Extrinsic motivation, on the other hand, comes from external motivators, like taking
a job in a foreign country or realizing that distinct professional or personal benefits
5) Information – A final dimension of culture relevant to international business is the can be gained from an experience.
way different cultures acquire and process information. This characteristic Improving Cultural Intelligence:
often influences cultures’ perceptions of products, people, and ideas.
Step 1: Identify CQ Strengths and Weaknesses.
Low-Context Cultures – cultures that rely on the direct means of Identify your target areas of CQ by looking at your results from the CQ assessment.
conveying messages with little background information
High-Context Cultures – cultures that rely on implicit messages and Step 2: Select and Apply Training to Focus on Strengths and Weaknesses.
contextual elements to convey information Once you’ve received feedback on your strengths and weaknesses, develop specific
training to correct those weaknesses. Don’t forget to build on your strengths, too,
Managing Cultural Differences: because effectively reconciling differences across cultures requires you to build on
1) Recognize Differences – Recognizing cultural differences begins with assessing and expand your CQ strengths.
your factual knowledge about the other culture.
Step 3: Organize Daily Tasks to Align with Training.
• Decenter – to take what you have learned about another’s culture and use
The last step in improving your cultural intelligence is to integrate your training into
that knowledge to adapt one’s own behavior and thinking
your daily tasks as much as possible. Most people are too busy to worry about how
• Recenter – to find or create shared ground between old and new behavior they interact cross-culturally. This is a major reason so many people aren’t better at
and understanding it. The key is to find ways to improve your CQ while on the job. Many of the ideas
2) Respect Differences – Demonstrating such respect might mean changing and suggested above can be incorporated into your daily work.
adapting your own views of the world to better appreciate the elements of
that culture.
Respect – Is defined as esteem for the worth of a culture.
3) Reconcile Differences – apply knowledge and cultural empathy to the task of
reconciling differences. That means bringing different cultures into
agreement or harmony in a way that allows all concerned to work toward a
common goal or objective.

Cultural Intelligence – the knowledge to function effectively across cultural contexts. Cultural
intelligence is rooted in research across many different countries and profoundly
affects the way businesses work and the success of cross-border leadership.
Three factors determine a person’s level of CQ:
1) Cognitive CQ is our level of understanding about how cultures are similar and
different.
2) Behavioral CQ measures your ability to do this.
3) Motivational CQ assesses your level of interest, drive, and energy to adapt cross-
culturally; this can come from both an innate (intrinsic) desire as well as external
(extrinsic) forces.
Intrinsic forces are internal motivations, like the enjoyment you get from having
culturally diverse experiences.

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