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Culture and Global Business

Learning Objectives 1 . Explore the meaning of culture: its definitions, classifications, and dimensions 2. Analyze different models of cultural communications 3. Examine why culture matters in international business 4.

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Understand the role of cultural intelligence 2 Culture Affects All Business Functions 0 Marketing 0 Human Resources 0 Production 0 Accounting and Finance 0 Preferred Leadership Styles 3 Culture (re)defined 0 Shared learned values, norms of behaviour, means f communication and other outward expressions which distinguish one group of people from another. Visible cultural makeup (Culture) 0 Noticeable cultural makeup (Folk Culture) 0 Undercurrents of cultural makeup (Fundamental Culture) 4 The Constitution of Culture The Meaning of Culture: Features OCulture is learned 0 Socialization: The process of learning the rules and behavioral patterns appropriate to one’s given society, i. e. cultural learning. 0 Acculturation: The process of adjusting and adapting to a culture other than one’s own. It is commonly experienced by expatriate workers.

Olceberg concept of culture 0 Above the surface, certain characteristics are visible. Below the surface is a massive base of assumptions, attitudes, and values. 6 Language and the Halls 0 Low-context culture 0 Communication is clear and direct; speakers come straight to the point. 0 United States 0 High-context culture 0 Much going unsaid; ambiguity is the norm 0 Asian cultures; I-JK 7 Hofstede cultural dimensions 0 Five cultural dimensions 0 Power-distance 0 Uncertainty avoidance 0 Individualism 0 Masculinity 0 Long vs. hortterm orientation Long-term orientation characteristics Social order nort-term orientation Personal survival Hierarchical relationships Personal respect/dignity Collective face-saving Individual face-saving Thrift-centered Spending-centred Long-term outcomes Short to medium term outcomes Pakistan, Nigeria, Phillippines, Canada, Zimbabwe, I-JK, US, Germany China, HK, Taiwan, Japan, South Korea, India, Brazil, Singapore 8 Trompenaars’ 7f cultural dimensions model 0 Universalism vs particularism 0 Individualism vs collectivism 0 Neutral vs Effective 0 Specific vs diffuse 0 Achievement vs ascription 0 Time orientation 0 Internal vs external control 9 Culture and MNE Operations 0 Consumer preferences and market segmentation 0 Modifications in Cultural Differences over time 0 Migration 0 The Malleability of Youth 0 Changes in Demographic Profiles 0 Interactions between social forces and other forces in the business environment 0 Government 0 New Technologies, incl. iotechnologies 10 The Role of Culture in International Business 0 Developing products and services 0 Communicating and interacting with foreign business partners 0 Screening and selecting foreign distributors and other partners 0 Negotiating and structuring international business entures 0 Interacting with current and potential customers from abroad 0 Preparing for overseas trade fairs and exhibitions 0 Preparing advertising and promotional materials 11 The Role of Culture in International Business: Global Managers’ and Entrepreneurs’ Perspective 0 Developing cultural profiles 0 Ethnocentric and polycentric approaches 0 Expatriates 0 Work Attitudes 12 Cultural Intelligence 0 The measure of a person’s capability to function effectively in situations characterized by cultural diversity 0 How do individual project members in an international roject cope with culture-specific behaviour? 0 What is the role of project member’s cultural intelligence for the emergence of a negotiated culture? 13 Negotiated culture 14 Summary 0 The models developed by Hofstede, Hall, Trompenaars and Schwartz provide useful tools for cross-cultural analysis. 0 Organizations, while they may develop their own specific values and behaviour, are also highly influenced by the national culture of their home country. 0 The development of cognitive, motivational, and behavioural cultural intelligence gradually leads tot eh formation of a negotiated culture. 15

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