Successful international managers need cross-cultural

knowledge for developing an understanding, how cultural

differences across and within nations can affect the way in
which business is practiced.
Like In China, gifts are good sign of building relationship and
routine thing in a Chinese meeting but an expensive gift
could be seen as bribery. In China meetings are not for
decision making or sharing facts and figures but to build
personal relationships while in USA meeting are for sharing
information and one has to come with full preparation,
otherwise USA will guess that party is not interested to make
meeting fruitful.
A relationship may exist between culture and the costs of
doing business in a country or region. Culture is the basic
factor which can make a business profitable or in loss.
SOCIETY
Group of people who share a common set of values and norms. Hindu,
Christianity, Muslims are examples of society.
VALUES:
Abstract ideas about what a group believes to be good,
right, and desirable.
The attitude towards individual freedom, loyalty, love,
collective responsibilities.
The basic idea is that what a group normally considers
ethically, morally, legally good or bad. Changing job for
Japanese is not an easy task or good thing.
NORMS:
The social rules and guidelines that prescribe appropriate
behavior in particular situations. Norms could be implicit
or explicit.
DEFINITIONS OF DIFFERENT TERMS
TYPES OF NORMS
Folkways:
These are routine conventions of everyday life like
dress codes, manners ,eating with correct utensils, time
discipline, etc.
Mores:
These are such norms that are central to the
functioning of society like accusations, theft, adultery
etc.
Social Structure:
Social structure can be studied under two dimensions:
The extent to which society is group or individual oriented
Second dimension discusses either society is divided into caste
based or class based system.
Individual:
An individual is a basic unit of a society. A society may prefer
individual freedom and individual rights and little role of family
or member of society can be seen.

Group:
Two or more than two people who have common beliefs can be
considered a group. A group can be socialist, extremist, orthodox
or Islamic.
Typically define by family background income and occupation. Strata mean
layers, which reflect the idea of division in a society. Following division
normally present in almost every country.
Class System:
A society might have so many classes like upper class, which are; considered
quite rich then there might be middle class, which normally consist of
professionals like doctors, professors, Engineers and junior mangers.
Caste System:
A social structure in which classes are determined by heredity. This system is
very much practiced in Hinduism. Society is being divided into five groups.
The Brahmin, The Kshatriya, The Vaishaya, The Shudra, The Dalit.
 :
 
With business point of view, social mobility has
interesting implications. In a country where social
mobility is challenged, a talented poor professional
might have little chance to get promotion. Similarly
different class system may bring dissatisfaction and
psychological stress in lower income class. The class
system may also develop differences among people
and motivate people to use unethical practices to
narrow the gap or in other words to become rich in
short time.
Religion can be defined as, “Shared beliefs and rituals
concerned with the realm of the sacred.”
 
Religion is based on beliefs, which may vary from one
culture to another culture. Religion shapes attitude
toward work and entrepreneurship and can affect the cost
of doing business. Cost could be psychological, physical
and financial. As Islam emphasizes on hard work,
transparent transactions, ethical standards, avoidance of
unethical methods of wealth accumulation, which
somehow also centre of teachings of protestant religion
but Islam focus on intentions rather than results.
ISLAM:
It is not quite old religion. Followers are monotheists and holy
book is Quran.
Islam is a complete religion in which many guidelines have been
given for a good business. Islam emphasizes open business that
nothing should be hidden from buyers or sellers and
shortcoming of product should be conveyed to interested party.
A portion of earned money should be given to poor as a Zakat so
that equal distribution of income in society can be possible.
Interest is not allowed in Islam.
Strong ethical standards and protection for both buyer and
seller has made this religion quite favorable for business.
Hinduism is one of oldest religions dated back to 4000B.C.
There is no holy book in Hinduism just like in Islam and
Christianity. There is concept about God but concepts are quite
vague. There are different gods for different purposes like lord
Krishna, lord Vishnu, lord Shiva, lord Ganesha and Goddess
Lakshmi etc. Hinduism beliefs are quite interesting and have
been narrated in different forms. One belief Karma, which is
defined as deeds, actions have been explained as that actions
and deeds in this world would result in type of life in the
regeneration. If deeds are good, a person will reincarnate in a
good character, but if deeds are bad then a bad character will
be given. This concept has been termed as “Reincarnation.”
Another belief called Nirvan, in which a man involves himself
in religious affairs only become Sadhu and in this way may get
infinity at one stage.
Christianity:
Christianity is one of the oldest religions, which root back to
Judaism. The followers spread around the world like USA, Italy,
Philippines, and Canada etc.
Groups: Roman Catholic, Orthodox, Protestant, Anglican etc.
The largest group is Roman Catholic. Orthodox followers are
mostly in Western Europe, Russia, Georgia etc.
Protestant are a new popular group of Christianity, which
emerged from Italy, and big supporter of Capitalism. The
religion emphasizes to earn money for good cause like spending
for human welfare. This is why most rich countries are mostly
protestant.
Opposite to that Orthodox are mostly confined to religious
activities and little attention being paid to earn money.
Buddhism:
Buddhism is quite old religion dated back to BC6000 and 25 crore
followers around the world available. Followers believe that Buddhist
comes in human life called Dalai Lama, and present Dalai Lama is
based at China Turbat area. Lamas avoid world life and concentrate on
prayers. China, Japan, Thailand, Cambodia, and part of India are greatly
populated with Buddhism followers.
Business implications:
Buddhists are normally very humble, peace loving and feel great
affection with people. This is why Buddhists like to work together, have
mutual care rather than individual sensitivity and are quite loyal to
organization where they work. Due to this loyalty factor their service
period may be from 20 to 30 years and in other cases till death. This is
why they understand organization culture very well and productivity
increased. The economic progress of Japan and China lies behind these
values, greatly influenced by Buddhism teachings.
Confucianism.
Confucianism is not a religion but a system of ethics. Confucian was a
philosopher from China who gave different ideas and thoughts, which
become popular in China and later on in the neighboring areas. This
Confucianism was followed in true spirit till 1949 but after communism
revolution it become in background.
In Confucianism, social values are very much important. Great respect
is given to elders/seniors and politeness is considered one of good
element of moral values.
Business Implication:
Confucians are quite honest, integrated and commitment is for a
prolong relationship. Confucians have to sacrifice short-term benefits
for long-term benefits. They feel happy to do extra work as part time
and spend weekend with bosses. As bosses are also from same culture
so they do acknowledge these kinds of efforts by rewarding back in
different shapes.
The author of Culture's Consequences, the most
important work in the field of cross-cultural quantitative
research, Prof. Geert Hofstede has quantitatively analyzed
how workplace values are influenced by culture. It is based
upon a study of 100,000 IBM employees who work in IBM
divisions throughout the world. Geert Hofstede analyzed a
large data base of employee values scores collected by IBM
between 1967 and 1973 covering more than 70 countries,
from which he first used the 40 largest only, and afterwards
extended the analysis to 50 countries and 3 regions. In the
editions of Geert Hofstede's work since 2001, scores are
listed for 74 countries and regions, partly based on
replications and extensions of the IBM study on different
international populations.
Country Power Distance Uncertainty Avoidance Individualism Masculinity
Index Index
JAPAN 54 92 46 95

USA 40 46 91 62

PAKISTAN 55 70 14 50
CHINA 80 40 20 66

SAUDI ARABIA 80 68 38 52

UK 35 35 89 66

FRANCE 68 86 71 43
The Hofsted’s model was criticized by different researchers and research
institutes on many grounds.
Single company’s data, with a large Multinational Enterprise having a strong
corporate culture.
Time dependent results, which are an artifact of the time of data collection
and analysis.
Business culture, not values culture, representing a reflection of business
culture at IBM and not national culture of the countries IBM operates within.
 Hofsted has taken observations from employees of a particular company
and therefore there was a probability of greater similarity in responses.
personal views were contaminated by country background influence.
Employees were chosen from a particular industry with similar skills and
there was less variation in the chosen sample. Moreover, research cannot
be generalized as the result may or may not be applicable to individuals or
particular groups and events.