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                         (“SOCIOCULTURAL FORCES”)

   Due to the close linkage between “social” and “cultural’ in the business
    world we link the two together to the term of “SOCIOCULTURAL” FORCES
    that we as business people must understand.

 Rules of thumb for doing international (cross-cultural) business:

    1. Be prepared

    2. Slow down

    3. Establish trust

    4. Understand the importance of language

    S. Respect the culture

    6. Understand the components of culture

 Culture is "learned" and is not innate (We are not born with culture).
 The first step to learning to live with other cultures is the realization
    that there are indeed other cultures.
 Culture defined: The sum total of beliefs, rules, techniques, institutions,
    and artifacts that characterize human populations. Culture consists of
    the individual worldviews, social rules, and interpersonal dynamics
    characterizing a group of people set in a particular time and place.
 The various aspects of culture are "interrelated."
 Culture is "shared."
 Indeed, culture defines the "boundaries" of different groups.
 Ethnocentricity is the belief in the superiority of one's own ethnic group
    (We referred earlier to this as "self-reference criterion.")
 As Americans we MUST be careful to not try to impose our culture, our
    ways, on other cultures, or we may be referred to as "Ugly Americans."
   A national culture is definitely a key in determining the criteria by
    which managers are evaluated in each country. As Americans
    managing in another country we must be aware of this.
   Culture affects all business functions (e.g., marketing, human resources,
    production, accounting and finance, legal, R&D, etc.)
• Components of culture include:

    1. Aesthetics (A culture's sense of beauty and good expressed
       in its art, drama, folklore and dances.
    2. Attitudes and beliefs (Every culture has a set of attitudes and beliefs
       that influence nearly all aspects of human behavior and help bring
       order to a society and its individuals). Attitude towards "time" is
       what presents the most adaptation problems for Americans
       abroad....The American pride in directness and drive is interpreted
       by many foreigners as being brash and rude....People's attitude
       towards "change" makes it difficult for the marketer to introduce
       new products in many foreign markets...Understand "manana" and
       "adios, siesta time." Bottom line: The more consistent a new idea or
       technique is with a society's attitudes and experiences the more
       quickly it will be adopted. ...The result of seeing others with
       "desirable goods and products" is called the "demonstration effect."
    3. Religion (The European and American attitude toward work stems
       in part from the "Protestant work ethic")....The "caste system" in
       India is still a real factor and managers must understand this system
       is inherited." And is the basis for the division of Labor in Hindu
       society....Islam is the second largest religion with 1.3 billion
       followers....Christianity has 2 billion....Muslims are divided into two
       major divisions, Sunnis and the Shiites, with the Sunnis being less
     authoritarian....There is little separation of church and
     state....Judaism began ca. 1900 b.c. in Israel, then known as
     Canaan….American business people must fully understand the
     importance of religion in doing business abroad. ...Sikhism is a
     religion, a military brotherhood, and a political movement with 80%
     of Sikhs living in Punjab. ...Shintoism is the indigenous religion of
     Japan and has no founder or sacred text. ...Islam with over 1.3
     billion followers is the second largest religion in terms of
     faith/membership. In Muslim nations there is not complete
     separation of church (mosque) and state. .. .Animism is a kind of
     spirit worship that includes magic and witchcraft.
4.   Material Culture (Refers to all human-made objects and is
     concerned with how people make things .. technology .. and who
     makes what and why .. economics...."Technology" in a society is
     critical and it is the mix of usable knowledge that that society applies
     and directs towards attainment of culture and economic
     objectives....Indeed, good technology held by a country can even
     enable a company in that country which has only a minority equity
     position to control a joint venture...Indeed, appropriate technology
     is the technology that most closely fits the society using it.
5.   Language (Definitely one of the key aspects of culture!)....Languages
     demarcate cultures just as much as physical barriers!!.... Nonverbal
     communication or the "unspoken language" can often tell
     businesspeople something that the spoken language does not. But,
     the differences in customs among cultures may cause
     misinterpretations of the communication. ..."lingua Franca" is a
     foreign language used to communicate among a nation's diverse
     cultures. ...To avoid translation errors, the experienced marketer
     will use the back-translation" approach.
6.   Societal Organization (The "extended family" includes blood
     relatives and relatives by marriage)..."Associations" are social units
     based on age, gender, or common interest and not on kinship...So,
     every culture and society has two classes of relationships which are
     "kinship" and "association." Managers working in different
     countries should always understand the importance of these social
     organizations and how to manage them effectively....
7.   Education
8.   Legal characteristics
9.   Political structures
     several methods that are analytical in nature to try to understand
     cultures, including “Hall’s High and Low Context”, “Trompenaar’s
     Seven Dimensions” and “Hofstede’s Five Dimensions” theories. Let’s
     consider the latter only:

• Geert Hofstede, a Dutch psychologist came up with four dimensions which
give managers a basis for understanding people of other cultures, and hence a
clue as to how to manage them. The four dimensions give managers a basis for
understanding that a management technique appropriate in one national
culture is /lot necessarily appropriate in another. They are:

1. Individualism vs. collectivism (People in collective cultures belong to groups
that are supposed to look after them in exchange for loyalty, whereas people
in individualistic societies look only after themselves. Therefore, firms
operating in collectivistic cultures are more likely to rely on "group" decision

2. Large vs. small power distance (Power distance is the extent to which
members of a society accept the unequal distribution of power among
individuals). Large power distance societies reflect the fact that employees
believe their supervisors are always right. A participative management style is
viewed as weak.

3. Masculinity vs. femininity (A dominant value system in a society
emphasizes assertiveness, acquisition of money and status and visible
achievement, whereas in a feminity society relationships and concerns for
others are emphasized.

4. Strong vs. weak uncertainty avoidance (Uncertainty avoidance is the degree
to which the members of a society feel threatened by ambiguity and are rule
oriented. Employees in high-uncertainty-avoidance cultures, such as Japan
and Greece tend to stay with their organizations for a long time. Those from
low-uncertainty-avoidance cultures such as the USA and Denmark are much
more mobile.

5. Long-Term Orientation/Confucian Dynamism (added by Chinese Scholars)

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