MAREX Week 6
Chapter 8 - Cultural Pitfalls in International Business
8.1 Dealing With Other Cultures
Comparative competitive advantage – a country may still benefit from international trade
even if it is at a disadvantage
National culture – the collective identity/programing of a society
When exporting find out if local culture fits the companies’ culture
In the East friends are made first, then business is done
Customer should also be seen as a friend
Distribution system should be based on friendship
8.2 Cultural & Ethical Dimensions
People often use culture as a “survival mechanism”
Culture is seen as an ethical value system
Widening the Horizon
The 3 Levels Of Culture
1. Hardware – visual aspects of culture
2. Software – non-visual aspects of culture
3. Orgware – interface between inside and outside
8.2.3 Ethical Perspective
Thinking
Rationally justified principles of acting right or wrong
Theoretical-ethical understanding of the hardware level
Doing
Ethical responsibility
Orgware level
Feeling
Intuitive
Software level
, MAREX Week 6
The Levels Of Culture
1. Hardware
2. Software
3. Orgware
1. Hardware Systems
Hardware of culture – visual aspects of culture
e.g. buildings, handwriting, productions systems
Can build policies, but no relationships with only hardware
Preferred by European countries
Conceptual level
a. Power Distance
Is the way in which people deal with social inequality and accept differences in power
Basis upon which culture assess social inequality
Great power distance cultures accept differences in power easily
Germanic countries have small power distances
Big power differences in “Romance” countries
b. Individualism vs. Collectivism
Individualism is the cultural attitude in which the interest of the individual is more important
than that of the group
Collectivist cultures
Group is more important than the individual
Usually consist of extended families who all live together
Relationship between group and individual is governed by material, psychological and ethical
dependence
When you are absorbed into strong close knit groups that provide protection from birth on
If ashamed, family is all guilty
Individualistic cultures
Give priority to the interests of the individual over those of the group
Families (grandma & grandpa) live separate
No “healthy” person depends on the extended family materially, psychologically or ethically
Chapter 8 - Cultural Pitfalls in International Business
8.1 Dealing With Other Cultures
Comparative competitive advantage – a country may still benefit from international trade
even if it is at a disadvantage
National culture – the collective identity/programing of a society
When exporting find out if local culture fits the companies’ culture
In the East friends are made first, then business is done
Customer should also be seen as a friend
Distribution system should be based on friendship
8.2 Cultural & Ethical Dimensions
People often use culture as a “survival mechanism”
Culture is seen as an ethical value system
Widening the Horizon
The 3 Levels Of Culture
1. Hardware – visual aspects of culture
2. Software – non-visual aspects of culture
3. Orgware – interface between inside and outside
8.2.3 Ethical Perspective
Thinking
Rationally justified principles of acting right or wrong
Theoretical-ethical understanding of the hardware level
Doing
Ethical responsibility
Orgware level
Feeling
Intuitive
Software level
, MAREX Week 6
The Levels Of Culture
1. Hardware
2. Software
3. Orgware
1. Hardware Systems
Hardware of culture – visual aspects of culture
e.g. buildings, handwriting, productions systems
Can build policies, but no relationships with only hardware
Preferred by European countries
Conceptual level
a. Power Distance
Is the way in which people deal with social inequality and accept differences in power
Basis upon which culture assess social inequality
Great power distance cultures accept differences in power easily
Germanic countries have small power distances
Big power differences in “Romance” countries
b. Individualism vs. Collectivism
Individualism is the cultural attitude in which the interest of the individual is more important
than that of the group
Collectivist cultures
Group is more important than the individual
Usually consist of extended families who all live together
Relationship between group and individual is governed by material, psychological and ethical
dependence
When you are absorbed into strong close knit groups that provide protection from birth on
If ashamed, family is all guilty
Individualistic cultures
Give priority to the interests of the individual over those of the group
Families (grandma & grandpa) live separate
No “healthy” person depends on the extended family materially, psychologically or ethically
