BBA Sem III Generic Elective Unit 2 Cultural Environment

1. Business Environment
Unit II
Dr. Chhavi Jain
Dr. Chhavi Jain

2. Unit II
Socio-Cultural Environment:
Components of Culture- Language,
Religion, Values, Attitude, Customs,
Education, Family, Material Culture,
Aesthetics. Hofstede’s four dimensions
Dr. Chhavi Jain

3. CULTURAL ENVIRONMENT
Dr. Chhavi Jain

4. Culture- Iceberg
Dr. Chhavi Jain

5. What is Culture
• “The knowledge, beliefs, art law, morals,
customs and other capabilities of one group
distinguishing it from other groups.”
• Main features of culture:
– Culture is shared
– Culture is intangible
– Culture is confirmed by others
Dr. Chhavi Jain

6. What is Culture?
• Culture is the sum total of beliefs, rules, techniques,
institutions, and artifacts that characterize human
populations
– Culture is learned ( not innate)
– Its aspects are interrelated
– Culture is shared (as opposed to individual
traits)
– It defines the boundaries of different groups
Dr. Chhavi Jain

7. Culture and International Business
• Culture
– Impacts the way strategic moves are presented.
– Influences decisions.
– The lens through which motivation occurs.
• Management, decision making, and negotiations are all influenced
through culture.
• Culture influences nearly all business functions from accounting to finance
to production to service.
Dr. Chhavi Jain

8. Culture and International Business
• Culture is what makes international business
practice difficult or easy, depending on how
similar or different cultures are.
• Culture is both divisive and unifying.
Dr. Chhavi Jain

9. Culture Does Not Explain Everything
• Culture is not a residual variable; it is useful to
know that it is not a primary variable either. It
is one of many.
Dr. Chhavi Jain

10. Self Reference Criterion (SRC)
An unconscious reference to one’s own cultural values,
experiences, and knowledge as a basis for decision-making.
SRC significantly influences ability of international managers
to objectively evaluate environmental factors and make
business decision.
Dr. Chhavi Jain

11. Approach to Eliminate SRC
Step 1:Define the business problem or goal in home-country
traits, habits, or norms.
Step 2:Define the business problem or goal in foreign
country cultural traits, habits, or norms. Make no value
judgments.
Step 3:Isolate the SRC influence in the problem and examine it
carefully to see how it complicates the problem.
Step 4:Redefine the problem without the SRC influence and
solve for the optimum business goal situation.
Dr. Chhavi Jain

12. Basic Elements of culture
• Knowledge and beliefs- prevailing notions of
reality. Includes myths, metaphysical beliefs
and scientific realities.
• Ideals – what is expected in a given situation.
Norms enforced by rewards/punishments.
• Preferences- society’s definition of attractive
or unattractive things in life. Italy –corn-
pigfood.
Dr. Chhavi Jain

13. • Folkways
Norms of proper behaviour.
Eg., proper way to greet a
friend.
• Mores
Norms of obligatory behaviour
considered vital for the
welfare of the group.
Dr. Chhavi Jain

14. • 1996 …the first McDonald’s restaurant opened
on Oct. 13, at Basant Lok, Vasant Vihar, New
Delhi. It was also the first McDonald’s
restaurant in the world not serving beef on its
menu.
Dr. Chhavi Jain

15. • Grand Opening; McDonald's opened its
doors in India, the 95th country, in 1996
and was the first country to serve non-beef
and non-pork items. Its authority on non-
beef and non-pork products still remains
unchallenged, through a joint venture
• McDonald’s spent more than 5 years (from
1990 onwards) on developing the first beef-
less and pork-less menu in McDonald’s
history.
• Every McDonald’s burger has nine
different ingredients, which are sourced,
from 35 suppliers across the country before
it reaches the consumer
Dr. Chhavi Jain

16. • McDonald’s practices Vegetarian and
Non-Vegetarian Segregation right from
processing to serving and uses 100 per cent
vegetable cooking oil
• McAlo Tikki, Veg Surprise and Pizza
McPuff developed in India are now being
exported to the countries in the Middle East
• McDonald’s introduced Coke’s Georgia
Gold range of hot beverages which was
developed especially for the Indian market
in 2002
Dr. Chhavi Jain

17. • THAILAND- Burgers with Thai Basil
• JAPAN- Teriyaki Burger
• INDONESIA- Rice Dishes
• INDIA- Mc Aloo Burger, Veg Salad
Sandwich, Mc Masala, Mc Imli Sauces
Garlic free sauces, Eggless sandwich sauces
Veg Pizza Mcpuff,
India 75% localised menu, 33% in Asian
Countries, other countries less than 5%
Dr. Chhavi Jain

18. Elements of culture-
1. Language
2. Values and attitudes
3. Customs and manners
4. Material goods
5. Religion
6. Education
7. Aesthetics
8. Family
Dr. Chhavi Jain

19. Dr. Chhavi Jain

20. Dr. Chhavi Jain

21. Language
• India has 22 officially recognised languages
• 1652 mother tongues listed by Census of
India.
• One of the competitive strengths of india –
capability of citizens to use ENGLISH.
Dr. Chhavi Jain

22. Language
• It is the primary mean used to transmit and
interpret information and ideas.
• Knowledge of local language helps-
• Understand the situation
• Direct access to localities
• Helps in getting information which is implied and not
stated outright.
Dr. Chhavi Jain

23. Language
• Consists of patterns of written symbols,
audible sounds and gestures that convey
meanings.
• Pepsi – come alive with pepsi
• NOVA
• Same symbols and gestures may mean
different things in different countries.
Dr. Chhavi Jain

24. Spoken Language
• Language is the key to culture, and without
it, people find themselves locked out of all
but a culture’s perimeter
Dr. Chhavi Jain

25. Language
• Must speak the local language
– Still need translators
– Use back translations to avoid errors
– Technical words do not exist in all languages
• Usually resort to English
– Many cultures avoid saying anything disagreeable

28. Unspoken Language
• Nonverbal communication, such as gestures
and body language.
– Gestures vary tremendously from one region to
another
– Conversational distance small in East
– Gift giving has specific etiquette in each culture
• Gift or bribe?
Dr. Chhavi Jain

29. Language
• The artifacts that surround language:
– Linguistics – or the meanings of words
– Proxemics – or the distance that speakers stand from one another
– Pragmatics – the cultural interpretations of words, gestures, and
nonverbals
– Nonverbals – The gestures and body language that accompanies
spoken words
• English has become the business world’s lingua franca, and the number
one foreign language taught in other countries
Dr. Chhavi Jain

30. Example Language
• When Parker Pen marketed a ball-point pen in
Mexico, its ads were supposed to have read,
"it won't leak in your pocket and embarrass
you". Instead, the company thought that the
word "embarazar" (to impregnate) meant to
embarrass, so the ad read: "It won't leak in
your pocket and make you pregnant".
Dr. Chhavi Jain

31. Example Language
• Pepsi's "Come alive with the Pepsi
Generation" translated into "Pepsi brings your
ancestors back from the grave", in Chinese.
Dr. Chhavi Jain

32. Example Language
• Chevrolet had problems marketing the Chevy
Nova automobile in Latin America. Since no va
means "it doesn't go" in Spanish, the oft-
repeated story goes, Latin American car
buyers shunned the car, forcing Chevrolet to
embarrassedly pull the car out of the market.
Dr. Chhavi Jain

33. Example Language
• In Chinese, the Kentucky Fried Chicken slogan
"finger-lickin' good" came out as "eat your
fingers off"
Dr. Chhavi Jain

34. Dr. Chhavi Jain

35. Value system
Value systems vary among managers across
different countries :
Eg. US managers : high achievement
orientation vs Japanese managers how have a
growth and size orientation vs Indian
Managers who have moralistic orientation.
Dr. Chhavi Jain

36. Norms
Guidelines or social rules that prescribe
appropriate behaviour in a given situation.
Dr. Chhavi Jain

37. Norms
 For eg. In Japan, aggressive selling is not perceived in the positive
spirit.
 Eg. Indian use hands or different types of spoons for eating. Chinese
and Japanese use chopsticks.
 Europeans and American use forks and knives to cut the food before
eating.
 International managers need to know what is acceptable ,
unacceptable in foreign culture. They also need to know cultural
tolerance to business customs that may be grouped as :
 Cultural Imperatives; Cultural Exclusives; Cultural Adiaphora
Dr. Chhavi Jain

38.  Culture Imperatives are the business customs and expectations that
must be met and conformed to or avoided if relationships are to be
successful.
 It refers to norms that must be followed / avoided in a foreign country.
 For Eg. Too much eye contact in Japan is considered to completely
offensive.
 On the other hand in the Gulf , strong eye contact necessary with an
Arab, to establish trustworthiness.
 Establishing friendship
Cultural Imperatives
Dr. Chhavi Jain

39. Cultural Electives/ Adiaphora
• Cultural Electives relate to areas of behviour or to customs that
cultural aliens may wish to conform to or participate in but are not
required.
• Japanese do not expect a Westerner to bow and to understand
the ritual of bowing among Japanese yet a symbolic bow indicates
interest and some sensitivity to Japanese culture that is
acknowledged as a gesture of goodwill.
• Arabs will offer coffee as a way to signal friendship, so you should
also accept it even if you don’t intend to drink it.
• It may help pave the way to strong trusting relationship
Dr. Chhavi Jain

40.  Cultural exclusives are customs that are only for locals.
 Social patterns which are considered appropriate for locals
and in which foreigners are expected not to participate.
 Eg. Foreigners should stay away from discussions on local
country politics, social customs and practices.
 Eg. If you are a Christian, don’t go to the Middle East and
attempt to act like a Muslim because that is insulting their
religion.
Cultural Exclusives:
Dr. Chhavi Jain

41. Values and Attitudes
• Attitude of people towards business
is largely determined by their
culture.
• Muslims and interests
Dr. Chhavi Jain

42. Values and Attitudes
• GOODYEAR
Britain – stresses safety
US – mileage and durability
Dr. Chhavi Jain

43. Values and Attitudes
• VALUE – basic convictions that
people have regarding what’s right/
wrong, good/bad,
important/unimportant.
Dr. Chhavi Jain

44. Values and Attitudes
• ATTITUDE is a persistent tendency to feel and
behave in a particular way towards some
object.
• Americans more receptive to change and are
risk takers.
• Negative attitude towards foreign made
goods.
Dr. Chhavi Jain

45. Attitudes and Beliefs
• Attitude Toward Time
– Problem for Americans
• Americans always prompt
– Directness and drive
• Perceived to be rudeness
– Deadlines
• Liability in Asian cultures
• Attitudes toward Achievement
and Work
– “American live to work,
Germans and Mexicans work to
live.”
Dr. Chhavi Jain

46. Customs and Manners
• CUSTOMS – common or established
practices
• MANNERS- behaviour regarded as
appropriate in a particular society.
Dr. Chhavi Jain

47. Traditions and Customs
 International managers need to know the customs and traditions of the
culture being dealt with:
 Eg. Food Habits eg. Chocolate flavors preferred are different in different
cultures : Eg. Americans and Germans prefer blends, French- Dark, Dutch
–White.
 Coffee brews: Nescafe manufactures 200 different varieties of coffee to
suit local tastes.
 The concept of Indian vegetarianism is very complex for foreigners to
understand. Vessels used for cooking both should be different. KFC offers
vegetarian dishes in its Indian outlets. Pizza Hut offers Jain Pizza in India
alone.
 Companies need to modify products/services to suit the local customs
and traditions.
Dr. Chhavi Jain

48. Manners and Customs
 Manners in gift giving:
 A lot of preparation and sensitivity required while giving gifts. What and when
is important.
 China : occasion : New Year
Preferred Gifts: Modest gifts such as coffee table, books, ties, pens.
 Japan: Oseibo( January 1)
Preferred Gifts : Brandy. Scotch, round fruits such as melons
 Manners and Customs in the Way Products are used should also be considered
 Example Orange juice:
 Breakfast item in US, Refreshment in France
 Moisturizers : After bath lotion in one, beauty product in another.
Dr. Chhavi Jain

49. Material Culture
• Material culture refers to the physical objects,
resources, and spaces that people use to
define their culture.
• These include homes, neighborhoods, cities,
schools, churches, temples, mosques, offices,
factories and plants, tools, means of
production, goods and products, stores, and
so forth.
Dr. Chhavi Jain

50. Material Culture
• All these physical aspects of a culture help to
define its members' behaviors and perceptions.
• For example, technology is a vital aspect of
material culture in today's United States.
• American students must learn to use computers
to survive in college and business, in contrast to
young adults in the Yanomamo society in the
Amazon who must learn to build weapons and
hunt.
Dr. Chhavi Jain

51. Non-Material Culture
• Non‐material culture refers to the nonphysical ideas
that people have about their culture, including beliefs,
values, rules, norms, morals, language, organizations,
and institutions.
• For instance, the non‐material cultural concept
of religion consists of a set of ideas and beliefs about
God, worship, morals, and ethics. These beliefs, then,
determine how the culture responds to its religious
topics, issues, and events.
Dr. Chhavi Jain

52. Technologically advanced
• If a country is technologically advanced their
values are more likely to be materialistic
because they have a higher standard of living.
• Up-to-date products , less expensive or
provide more benefits.
Dr. Chhavi Jain

53. Less technologically advanced
• Less technologically advanced countries
infrastructure may not support too advanced
products or need of those products may not
exist.
• Laptop, dishwashers
Dr. Chhavi Jain

54. Dr. Chhavi Jain

55. Religion
• Influences life style, beliefs, values and
attitudes.
• Knowledge of religions existing in target
market helps in understanding work habits,
underlying motivation and consumption
behaviour.
Dr. Chhavi Jain

56. Religion
• Knowledge helpful in deciding
• Weekly holidays, working/ lunch hours.
• Festive season for promotion, discounts, incentive,
special offers
• Work culture of employees
• Boss subordinate relations
• Attitude towards business
• Dress code
• Gender of workers
Dr. Chhavi Jain

57. Religion
• Many business decisions are based on
astrological advice.
• Time of launch
• Name, Brand, Location of organisation
Dr. Chhavi Jain

58. Religion
• Marriage customs, naming ceremony of child,
festivals vary between religions.
• Affect businesses like textiles, jewellery,
catering, consumer durables, etc.
Dr. Chhavi Jain

59. Religion
• A US Firm blundered in
Saudi Arabia by sending a
meticulously prepared
proposal bound with an
expensive pigskin leather
cover hoping to impress
the clients.
Dr. Chhavi Jain

60. Religion
• 1857- India- bullets
were encased in pig
wax, and tops had to
be bitten off before
firing the bullets.
When Muslims soldiers
discovered the fact
they revolted against
British officers.
Dr. Chhavi Jain

61. Religion
• Global fast food major McDonald's says it
survived and expanded in India by developing
innovative menus to cater to the Indian taste
bud, something it has not done anywhere else
in the world.
• "In India we have been extra careful not to
offer beef or pork items keeping in view the
country's cultural sensitivity."
Dr. Chhavi Jain

62. Religion
• The biggest challenge the
American franchise faced in
India was how to reach the
large vegetarian population of
India for which it had to
reengineer its products and yet
maintain international brand
value.
• So in 1999 it came up with
'McAloo Tikki Burger' - a burger
unheard of anywhere else.
Dr. Chhavi Jain

63. Religion
• Considerable influences international
business decisions.
• Location of commerical buildings and
office interiors need to be as per Feng shui
in China and Vastu Shastra in India.
• Advertisements and corporate
communications must keep religious
sentiments in mind. Example - Islam does
not permit shaving. So Shaving equipment
makers like Gillette need to be sensitive
while advertising their product in Islamic
countries.
Dr. Chhavi Jain

64. ETHNODOMINATION
• ETHNODOMINATION in distribution is
defined as a situation where an ethnic group
occupies a majority position in a channel of
distribution with respect to the ownership
and control of physical and financial
resources or through the manipulation of
social environment.
• Beneficial for international marketer to co-
opt rather than compete with dominant
ethnic group.
Dr. Chhavi Jain

65. ETHNODOMINATION
• Automobile spare
products- sikhs
• Banking and money
lending- chettiars in TN
and vysyas in Karnataka
• Ethnic population staying
abroad is target for indian
currry, spices, pickles,
papad exporters.
Dr. Chhavi Jain

66. Ethnodomination
• Chinese dominate the trade of rice and
pineapples in the Philippines,
• Hindu Sikhs dominate the trade of cloth in
Afghanistan,
• The Otavalo Indians dominate the trade of
handwoven textiles in Ecuador
Dr. Chhavi Jain

67. Education
• When Gerber started selling
baby food in Africa, they
used the same packaging as
in the US, with the beautiful
Caucasian baby on the
label. Later they learned
that in Africa, companies
routinely put pictures on
the label of what's inside,
since most people can't
read English.
Dr. Chhavi Jain

68. Dr. Chhavi Jain

69. Education
• Brain Drain
– The emigration of highly
educated professionals to
industrialized nations
• Reverse Brain Drain
– The return of highly
educated professionals to
their home countries.
– Korea and Taiwan are luring
home engineers and
scientists
• Women’s Education
– Fall in illiteracy rate
– Most governments now provide
education for both genders
– Educated women have fewer,
healthier, and better educated
children
– Educated women achieve higher
labor force participation and
wages
Dr. Chhavi Jain

70. Aesthetics
Ideas and perceptions that a cultural group
upholds in terms of beauty and good taste. It
includes areas related to music, dance,
painting, drama, architecture, etc.
Dr. Chhavi Jain

71. Aesthetics
 Colours have different aesthetic value in different cultures:
 Africa : bright colours are favourites
 Japan : pastel colours preferred as they express harmony.
 China : red is lucky colour but associated with witchcraft in
Africa.
 America : blues and greys are perfect for official
environments. But blue is evil in Africa
 Death colours : Black signifies death in America, Europe; In
India, Japan & other Asian countries it is white, For Latin
Americans Purple means death; Dark red is the mourning
colour in the Ivory Coast.
Dr. Chhavi Jain

72. To commemorate its initial
flights from Hong Kong,
United Airlines handed
out white carnations to the
passengers.
For many Asians white
flowers represent bad luck
and even death.

73. Aesthetics
• Relates to the artistic taste of culture.
• Influences behaviour.
• It pertains to a culture’s sense of beauty and
good taste and is expressed in arts, drama,
music, folklores, dance, etc.
Dr. Chhavi Jain

74. Dr. Chhavi Jain

75. Dr. Chhavi Jain

76. Aesthetics
• Its knowledge is helpful in interpreting
meanings of various methods of artistic
expressions, colour, shapes, forms and
symbols in a particular culture.
Dr. Chhavi Jain

77. Dr. Chhavi Jain

78. Aesthetics
• Sensitivity to the Aesthetics of a society and
their symbolic expressions can greatly help in
avoiding socially embarrassing situations and
correctly designing the products and
messages.
Dr. Chhavi Jain

79. Aesthetics
• Art
– Colors, symbols, numbers convey meaning
• Nike air symbol
– Architectural styles different
• Feng shui
• Music and Folklore
– Musical tastes vary
– Folklore discloses way of life
• Cowboys in Chile or Argentina
• Mexican singing cricket
Dr. Chhavi Jain

80. Cultural Shock
• Environmental changes sometimes produce
cultural shock- a feeling of confusion,
insecurity and anxiety caused by the strangers
of the new environment.
Dr. Chhavi Jain

81. Dr. Chhavi Jain

82. Dr. Chhavi Jain

83. Culture shock
• Culture shock is the
difficulty people have
adjusting to a new culture
that differs markedly from
their own.
Dr. Chhavi Jain

84. Culture shock
• Culture shock is a
subcategory of a more
universal construct called
transition shock. Transition
shock is a state of loss and
disorientation predicated by
a change in one's familiar
environment which requires
adjustment
Dr. Chhavi Jain

85. Symptoms of Cultural Shock
– excessive concern over
cleanliness and health
– feelings of helplessness and
withdrawal
– irritability
– glazed stare
– desire for home and old friends
– physiological stress reactions
– Homesickness
– boredom
– withdrawal
– getting "stuck" on one thing
– excessive sleep
– compulsive
eating/drinking/weight gain
– stereotyping host nationals
– hostility towards host nationals
Dr. Chhavi Jain

86. Culture shock
• The differences between cultures can make it
very difficult to adjust to the new surroundings.
• One may encounter unfamiliar clothes, weather,
and food as well as different people, schools, and
values.
• One may find himself struggling to do things in
new surroundings that were easy back home.
• Dealing with the differences can be very
unsettling; those feelings are part adjusting to a
new culture.
Dr. Chhavi Jain

87. • So how do you deal with the frustration and fears you may be
having? How can you begin to feel comfortable in your new
surroundings?
• Learning the Language
• Knowing What to Expect
• Coping With Teasing
• Your Family
• Help If You Need It
• Maintaining Your Culture
Culture shock
Dr. Chhavi Jain

88. Example
• “We went to university in England for a while,
and one day a fellow student came into my
husband's lab and said he saw a professor
running down the hall with a Winchester. My
husband was ready to hit the deck, but no one
else seemed concerned. It turned out that a
Winchester is a large flask in England, not a
rifle as it is here in America!”
Dr. Chhavi Jain

89. Dr. Chhavi Jain

90. Cultural Adaptation
• Refers to the manner in which a social system
or an individual fits into the physical/ social
environment.
• Type of clothing, food and dwelling, suitable
for the climate and weather conditions are
types of adaptations.
Dr. Chhavi Jain

91. Adaptation
• Focus is on prerequisites
and the moderating factors
-
respectively their
consequences for cultural
adaptation.
• Changes that result from
the direct contact between
people from different
cultures are observed.
• Focus is on the definition
and the measurement of
this status
• Goal: to define the traits of
well adapted individuals
status process
Dr. Chhavi Jain