National Differences in Political Economy

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					COUNTRY FACTORS II


  Differences in Culture
           National Differences in Culture
• Cross-cultural literacy impacts business ventures
• Relationship between culture and costs of doing business:
  implications for competitive advantage
• What is CULTURE?
   – shared system of values and norms which taken together
     offer a design for living
      • Values: abstract ideas about what is good, right and
         desirable
      • Norms: social rules and guidelines that prescribe
         appropriate behavior in particular situations
   The Determinants of Culture


               Religion


 Social                       Political
Structure      Culture       philosophy
                Norms
              and value
               systems       Economic
Language                     philosophy

              Education
     Analytical Models to Understand Culture
               I. Hofstede’s Model

Power Distance: how society deals with unequal endowments of
 people. High power distance cultures let inequalities grow over
 time in inequalities of power and wealth

Individualism versus collectivism: relationship between individual
  and his or her fellows

Uncertainty avoidance: acceptance of ambiguous situations and
 tolerance of uncertainty.

Masculinity versus femininity: relationship between gender and
 work roles
           Hofstede’s Classification of Triad Countries

                Japan         North America             W. Europe
                         (Canada, USA, Great Britain) Northern Continent
Individualism     low                  high             high   low

Power             high                 low              low    high
distance
Masculinity       high                 high             low    high

Risk              low                  high             high   low
tolerance

Context           high                 low              high   low
       II. High and Low Context Cultures

• High Context Cultures
      • The meaning of individual behavior and speed changes
        depending on the situation
      • Nonverbal messages are full of important and intended
        meanings


• Low Context Cultures
      • Intentions are expressed verbally
      • Situation is not allowed to change the meaning of words
        and behavior
Factors/                High Context             Low Context
Dimensions
Lawyers                Less Important           Very Important

A Person’s word        Is his or her bond       Is not be relied upon,
                                                “get it in writing”
Responsibility for     Taken by highest level   Pushed to lowest level
organizational error
Space                  People breathe on each People carry a bubble
                       other                   of private space with
                                               them
Time                   Polycronic – everything Monocronic – time is
                       in life must be dealt   money
                       with in term of its own
                       time
Negotiations           Are lengthy – know      Proceed quickly
                       each other first
Country Examples       Japan, Middle East      Canada, U.S., Northern
                                               Europe
               Implications for Business

• Need to develop cross-cultural literacy: the dangers of
  ethnocentrism

• Relationship between culture, costs of doing business, and
  national competitive advantage

• Implications for:
   – understanding the evolution of competition
   – Decision-making on which market to locate production
     facilities
   – Decision-making on which market to enter
   – Decision-making on developing marketing programs

				
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posted:7/27/2012
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