Define Globalization? How have changes in technology contributed towards the globalization of markets and production?
International Business
Seventeenth Edition
Chapter 2
The Cultural
Environments Facing
Business
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Learning Objectives
2.1 Explain why culture, especially national culture,
is important in IB but tricky to assess
2.2 Grasp the major causes of national cultural
formation and change
2.3 Discuss major behavioral factors influencing
countriesÂ’ business practices
2.4 Recognize the complexities of cross-cultural
communications
2.5 Analyze guidelines for cultural adjustment
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CultureÂ’s Importance in IB and
Trickiness to Assess (1 of 2)
Objective 2.1
• Why study IB?
• What to study in IB
• How to study IB to develop a critical set of skills
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Cultural Factors Affecting IB
Operations
Objective 2-1
FIGURE 2.1 Cultural Factors Affecting IB Operations
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National Cultures As a Point of Reference
• Culture can be useful reference point
– National culture
– The nation as cultural mediator
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The People Factor
• Cultural diversity
• Cultural collision
– Deal-focus culture (DF)
– Relationship-focus culture (RF)
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CultureÂ’s Importance in IB and
Trickiness to Assess (2 of 2)
• Building cultural awareness
• Shortcomings in cultural assessments
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Influences on Cultural Formation
and Change (1 of 2)
Objective 2.2
• Sources of Change
– Change by choice
– Change by imposition
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Influences on Cultural Formation and
Change (2 of 2)
• Language as both diffuser and stabilizer of culture
– Common language is a unifying force
– Multiple language groups
– Why English travels so well
– The evolvement of language
• Religion as a cultural stabilizer
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Major Behavioral Practices Affecting
Business (1 of 4)
Objective 2.3
• Social stratification
• Individual qualifications and their limitations
– Ethnic and racial groups
– Gender-based groups
– Age-based groups
– Family-based groups
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Major Behavioral Practices Affecting
Business (2 of 4)
• Work motivation
– Materialism and motivation
– Expectation of success and reward
– Performance and achievement
– Hierarchy of needs
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Major Behavioral Practices Affecting
Business (3 of 4)
• Relationship preferences
– Power distance
– Individualism versus collectivism
• Risk-taking behavior
– Uncertainty avoidance
– Trust
– Future orientation
– Fatalism
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Major Behavioral Practices Affecting
Business (4 of 4)
• Information and task processing
– Perception of cues
– Low and high context cultures
– Information processing
– Monochromic and polychromic cultures
– Idealism vs. Pragmatic
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Problems in Communicating Across
Cultures
Objective 2.4
• Translation of spoken and written language
• Silent language
– Colors
– Distance
– Time and punctuality
– Body language
– Prestige
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Guidelines for Cultural Adjustment
(1 of 2)
Objective 2.5
• Host society acceptance
• Degrees of cultural differences
– Cultural distance
– Hidden cultural attitudes
– Ability to adjust
• Company and management orientations
– Polycentrism
– Ethnocentrism
– Geocentrism
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Guidelines for Cultural Adjustment
(2 of 2)
• Value systems
• Resistance to too much change
• Participation
• Reward sharing
• Opinion leadership
• Biculturals as mediators
• Timing
• Learning abroad
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Copyright
This work is protected by United States copyright laws
and is provided solely for the use of instructors in
teaching their courses and assessing student learning.
Dissemination or sale of any part of this work (including
on the World Wide Web) will destroy the integrity of the
work and is not permitted. The work and materials from
it should never be made available to students except by
instructors using the accompanying text in their
classes. All recipients of this work are expected to abide
by these restrictions and to honor the intended
pedagogical purposes and the needs of other
instructors who rely on these materials.
Copyright © 2022, 2018, 2015 Pearson Education, Inc. All Rights Reserved.
International Business
Seventeenth Edition
Chapter 1
Globalization and
International Business
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Learning Objectives (1 of 2)
1.1 Explain why and how the study of international
business (IB) is important
1.2 Understand the relationship between
globalization and IB
1.3 Grasp the forces driving globalization and IB
1.4 Discuss the major criticisms of globalization
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Learning Objectives (2 of 2)
1.5 Assess the major reasons companies seek to
create value by engaging in IB
1.6 Define and illustrate the different operating
modes for companies to accomplish their
international objectives
1.7 Recognize why national differences in
companiesÂ’ external environments affect how
they may best improve their IB performance
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The Why, What, And How of
Studying International Business (IB)
Objective 1.1
• Why study IB?
• What to study in IB
• How to study IB to develop a critical set of skills
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Factors in IB Operations
Objective 1.1
Figure 1.1 Factors in IB Operations
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The Relationship Between
Globalization and IB
Objective 1.2
• What is globalization?
• The connection between globalization and IB
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The Forces Driving Globalization
and IB
Objective 1.3
• Globalization
– Has been growing
– Is less pervasive than generally thought
– Has economic and noneconomic dimensions
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Factors in Increased Globalization
• Rise in and application of technology
• Liberalization of cross-border trade and resource
movements
• Services that support IB
• Growth in consumer pressures
• Increase in global competition
• Changes in political situations and government
policies
• Expansion of cross-national cooperation
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The Criticisms of Globalization and
IB
Objective 1.4
• Threats to national sovereignty
• Environmental stress
• Growing income inequality and personal stress
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Why Companies Engage in IB
Objective 1.5
• Sales expansion
• Resource acquisition
• Risk reduction
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IB Operating Modes
Objective 1.6
• Merchandise exports and imports
• Service exports and imports
• Investments
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Types of International Business
Organizations
•
International company
– Any company operating in more than one country
– Multinational enterprise (MNE)
– Transnational company (TNC)
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Why Do CompaniesÂ’ External
Environments Affect How They May
Best Operate Abroad? (1 of 3)
Objective 1.7
• Physical factors
– Geography influences
– Demographic influences
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Why Do CompaniesÂ’ External
Environments Affect How They May
Best Operate Abroad? (2 of 3)
Objective 1.7
• Institutional factors
– Political policies
– Legal policies
– Behavioral factors
– Economic forces
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Why Do CompaniesÂ’ External
Environments Affect How They May
Best Operate Abroad? (3 of 3)
Objective 1.7
• Competitive factors
– Competitive product strategy
– Company resources and experience
– Competitors faced in each market
Copyright © 2022, 2018, 2015 Pearson Education, Inc. All Rights Reserved.
Copyright
This work is protected by United States copyright laws
and is provided solely for the use of instructors in
teaching their courses and assessing student learning.
Dissemination or sale of any part of this work (including
on the World Wide Web) will destroy the integrity of the
work and is not permitted. The work and materials from
it should never be made available to students except by
instructors using the accompanying text in their
classes. All recipients of this work are expected to abide
by these restrictions and to honor the intended
pedagogical purposes and the needs of other
instructors who rely on these materials.
Copyright © 2022, 2018, 2015 Pearson Education, Inc. All Rights Reserved.
