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Dubai

Presenatation On Global Business Strategy

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Published in: Business Strategy
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Globalization Culture

Mahafrin F / Dubai

10 years of teaching experience

Qualification: MBA Finance and Operations Specialization, BBA Finance, Expert English Language Trainer (IELTS, TOEFL, ESL)

Teaches: English, Accounting, Business, English As A Second Language, English Language, Accounts, Business Studies, Maths

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  1. Graw Hill Education 10 e Global Business Today Charles W. Hill I G. Tomas M. Huit Global Business Today IOe by Charles W.L. Hill Tomas M, H Necause learning changesæverything.N
  2. National Differences EXPO 2020 Chapter 4: Differences in Culture
  3. Learning Objectives LO 4-1 Explain what is meant by the culture of a society. Identify the forces that lead to differences in social LO 4-2 culture. LO 4-3 Identify the business and economic implications of differences in culture. Recognize how differences in social culture influence LO 4-4 values in business. Demonstrate an appreciation for the economic and LO 4-5 business implications of cultural change.
  4. Opening Case: World Expo 2020 in Dubai, UAE united Arab Emirates established in 1971 •an top ten of countries with largest oil reserves in the world Open-market economy includes seven emirates Dubai rated as one of best places to live in the Middle East Theme of World Expo 2020 "connecting minds, creating the future" Expo will last six months where countries are expected to show what they can do: "nation branding'
  5. Introduction Cross-cultural literacy - an understanding of how cultural differences across and within nations can affect the way in which business is practiced There may be a relationship between culture and the costs of doing business in a country or region Culture is not static — it can and does evolve Multinational enterprises can be engines of cultural change
  6. Did You Know? Did you know arriving late is expected in some cultures? Click to play video
  7. What is Culture? lof4 Scholars have not been able to agree on a simple definition Culture is a system of values and norms that are shared among a group of people and that when taken together constitute a design for living Society is a group of people sharing a common set of values and norms
  8. What is Culture? 20f4 Values and Norms Values - provide the context within which a society's norms are established and justified Norms - the social rules that govern the actions of people toward one another Folkways - the routine conventions of everyday life Mores - norms that are seen as central to the functioning of a society and to its social life
  9. Planning on Doing Business Internationally? If a company is planning to start exporting a product, there are two basic questions that need to be asked. Is the product ready to be exported? And, is the company ready to export the product? Culturally, the product is either ready for a global market or not (and, if not, the company can modify it if the market is important enough). Company readiness is much more culturally sensitive. Having the appropriate cultural knowledge and skills are important. If you have the basic information about a company, you can use globalEDGETM's diagnostic tool called CORE (Company Readiness to Export) to assess both product and company readiness to be exported. Try it out; how much better do you think Microsoft, which is everywhere in the world, will score compared with Questcor Pharmaceuticals (questcor.com), which was ranked number one on Forbes' list of "America's Best Small Companies" in 2013? Sources: globalEDGE's CORE diagnostic tool, http://globalEDGE.msu.edu;Badenhausen, K., "America's Best Small Companies," Forbes, October 9, 2013.
  10. What is Culture? 30f4 Culture, Society, and the Nation-State Society reflects people who are bound together by a common culture Nation-states are political creations that can contain a single culture or several cultures Some cultures embrace several nations Also possible to talk about culture at different levels within societies
  11. What is Culture? 40f4 The Determinants of Culture The values and norms of a culture evolve based on: Prevailing political and economic philosophies A society's social structure The dominant religion, language, and education
  12. Figure 4.1 The Determinants of Culture Religion Social St ructure Culture Norms and Systems Language Education Political Philosophy Economic Philosophy
  13. Social Structure 1 of 7 A society's social structure is its basic social organization Two dimensions to consider The degree to which the basic unit of social organization is the individual, as opposed to the group The degree to which a society is stratified into classes or castes
  14. Social Structure 20f7 Individuals and Groups Group - an association of two or more individuals who have a shared sense of identity and who interact with each other in structured ways on the basis of a common set of expectations about each other's behavior
  15. Social Structure 30f7 The Individual Emphasized in Western countries Individual achievement and entrepreneurship are promoted Fosters managerial mobility Encourages job switching, competition between individuals rather than team building, and a lack of loyalty to the firm The Group Emphasized in non-Westernized countries (Japan) Cooperation and team work are encouraged and life time employment is common Individual initiative and creativity may be suppressed
  16. Social Structure 40f7 Social Stratification All societies are stratified on a hierarchical basis into social categories, or social strata Usually defined by characteristics such as family background, occupation, and income Societies differ in terms of The degree of mobility between social strata The significance attached to social strata in a business context
  17. Social Structure 50f7 Social Stratification continued Four basic principles of social stratification 1. 2. 3. 4. It is a trait of society, not a reflection of individual differences It carries over a generation to the next generation It is generally universal, but variable It involves not just inequality but also beliefs
  18. Social Structure 60f7 Social Stratification continued Social mobility - the extent to which individuals can move out of the strata into which they are born Caste system - social position is determined by the family into which a person is born, and change in that position is unlikely Class system - the position a person has by birth can be changed through achievement or luck Social mobility in class system varies from society to society Class system in U.S. less pronounced than in Britain
  19. Social Structure 7 of 7 Social Stratification continued Significance In cultures where class consciousness (where people tend to perceive themselves in terms of their class background) is high, the way individuals from different classes work together may be prescribed Evident in British society Antagonism between labor and management can raise the costs of doing business
  20. Religious and Ethical Systems lof8 Religion - a system of shared beliefs and rituals that are concerned with the realm of the sacred Ethical system — a set of moral principles, or values, that are used to guide and shape behavior Religions with the greatest following Christianity (2.20 billion adherents) Islam (1.60 billion adherents) Hinduism (1.10 million adherents) Buddhism (535 million adherents) Confucianism shapes culture in many parts of Asia
  21. Map 4.1 World Religions ARCTIC predom t Religio PACIFIC OCEAN scurce: 14,' INDIAN OCEAN Student Atlas Pditics, ed OCEAN McGraw Hill EdEation.
  22. Religious and Ethical Systems 20f8 Christianity Most widely practiced religion In 1904, Max Weber suggested that it was the Protestant work ethic (focus on hard work, wealth creation, and frugality) that was the driving force of capitalism Protestantism gave individuals more freedom to develop their own relationship with God which may have paved way to economic freedom
  23. Religious and Ethical Systems 30f8 Islam Adherents of Islam are referred to as Muslims One true omnipotent God In the Western media, Islamic fundamentalism is associated with militants, terrorists, and violent upheavals Fundamentalists have gained political power in many Muslim countries, and have tried to make Islamic law the law of the land
  24. Religious and Ethical Systems 40f8 Islam continued Economic Implications of Islam • Koran establishes explicit economic principles many of which are pro-free enterprise Under Islam, people do not own property, but only act as stewards for God and thus must take care of that which they have been entrusted with Islam is supportive of business, but the way business is practiced is prescribed Businesses that are perceived to be making a profit through the exploitation of others, by deception, or by breaking contractual obligations are unwelcome
  25. Islamic Banks Islamic banks function differently than conventional banks in the world, as the Islamic banks cannot pay or charge interest. O All Al
  26. Religious and Ethical Systems 50f8 Islam continued Economic Implications of Islam continued Prohibits payment or receipt of interest Mudarabah Similar to profit sharing Murabaha Most widely used Includes a price markup
  27. Religious and Ethical Systems 60f8 Hinduism World's oldest religion Moral force in society requires the acceptance of certain responsibilities called dharma Believe in reincarnation and karma Individuals should be judged by their spiritual achievements Promotion and adding new responsibilities may not be the goal of an employee, or may be infeasible due to the employee's caste
  28. Religious and Ethical Systems 70f8 Buddhism Suffering originates in people's desire for pleasure Stress spiritual growth and the afterlife, rather than achievement while in this world The Noble Eight Path Buddhism does not support the caste system, so individuals do have some mobility and can work with individuals from different classes Entrepreneurial activity is acceptable
  29. Religious and Ethical Systems 80f8 Confucianism Until 1949, official ethical system of China Not a religion High moral and ethical conduct and loyalty to others Attain personal salvation through right action Three key teachings of Confucianism - loyalty, reciprocal obligations, and honesty - may all lead to a lowering of the cost of doing business in Confucian societies
  30. Language lof3 Countries differ in terms of language or means of communication There are two forms language: Spoken Unspoken Language is one of the defining characteristics of culture
  31. Can You Speak the Most Important Languages? Mastering your own native language is critically important to doing business in your own home country. Mastering the language of a foreign country (or subcultures) with which you want to do business is also an added value in any cross-cultural relationship. English leads the way in terms of business languages, but which languages are important after English? Spanish? No, not necessarily. The three languages that are important for business after English are Mandarin Chinese, French, and Arabic. Spanish is fifth, so it is clearly important, but not as useful as English, Mandarin, French, and Arabic because of the number of people who speak these languages. Do you agree with the rank order of these languages? Why or why not? Source: S. Kim, "Top 3 Useful Foreign Languages for Business Excludes Spanish," ABC News, September 1, 2011. http://abcnews.go.com/blogs.
  32. Language 2 of3 Spoken Language Countries with more than one spoken language often have more than one culture Chinese is the mother tongue of the largest number of people in the world English is the most widely spoken language in the world, and is becoming the language of international business
  33. Language 3 of3 Unspoken Language Unspoken language - nonverbal cues Examples include facial expressions and hand gestures Can be important for communication Personal space Many nonverbal cues are culturally bound and because they may be interpreted differently, can result in misunderstandings
  34. Education Formal education is the medium through which individuals learn many of the language, conceptual, and technical skills that are indispensable in a modern society The knowledge base, training, and educational opportunities available to a country's citizens can also give it a competitive advantage in the market and make it a more or less attractive place for expanding business Porter points to an excellent education system as an important factor in explaining the country's postwar economic success The general education level of a country is a good indicator of the types of products that might sell in that location or the type of promotional materials that might be successful
  35. Culture and Business lof3 Geert Hofstede isolated five dimensions that summarized different cultures 1. 2. 3. 4. 5. Power distance Individualism versus collectivism Uncertainty avoidance Masculinity versus femininity Long-term versus short-term orientation A move to add a sixth dimension: indulgence versus restraint
  36. Culture and Business 20f3 Hofstede's work has been criticized Assumes a one-to-one relationship between culture and nation-state Research may be culturally bound Informants only worked within a single industry — computers— and within one company — IBM. Certain social classes excluded from research
  37. Culture and Business 30f3 Hofstede's work represents a starting point for managers trying to understand cultural differences Global Leadership and Organizational Behavior Effectiveness instrument World Values Survey
  38. Cultural Change Culture evolves over time, although changes in value systems can be slow and painful for a society Social turmoil is an inevitable outcome of cultural change Cultural change is particularly common as countries become economically stronger As countries get richer, there is a shift from "traditional values" to "secular rational" values and from "survival values" to "well-being values"
  39. Focus on Managerial Implications lof3 CROSS-CULTURAL LITERACY AND COMPETITIVE ADVANTAGE There is a need for managers to develop cross-cultural literacy There is a connection between culture and national 1. competitive advantage There is a connection between culture and ethics in 2. decision making
  40. Focus on Managerial Implications 20f3 Cross-Cultural Literacy Firms that are ill-informed about the practices of another culture are unlikely to succeed in that culture Individuals must also beware of ethnocentric behavior Belief in the superiority of one's own culture
  41. Focus on Managerial Implications 30f3 Culture and Competitive Advantage Connection between culture and competitive advantage • It suggests which countries are likely to produce the most viable competitors • It has implications for the choice of countries in which to locate production facilities and do business
  42. Summary In this chapter we have Explained what is meant by the culture of a society. Identified the forces that lead to differences in social culture. Identified the business and economic implications of differences in culture. Recognized how differences in social culture influence values in business. Demonstrated an appreciation for the economic and business implications of cultural change.

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