Cultural Aspects in Business

• Eight aspects of culture include:
  • Beliefs
  • Values
  • Attitudes
  • Experience
  • Knowledge
  • Possessions
  • Religion
  • Symbols

Stereotyping vs. Generalizing

• Stereotyping hinders learning and is often ethnocentric, fostering negative biases.
• Generalizing is a useful tool for starting conversations and deepening cultural understanding by recognizing patterns without oversimplifying.

Cultural Impact on Business

• Product features, design, and marketing should align with specific cultural needs.
• Cultures like Muslim and Jewish cultures do not consume pork.
• Buddhist and Sikh cultures mostly avoid alcohol,

How Money is Viewed

• Traditional saving habits are preferred over investing in China.
• Canadians save for summer vacations.
• Saving is done for ceremonies in other cultures like weddings.
• Muslims avoid borrowing money that requires paying interest.

Labour Practices

• Some cultures value work efficiency and speed, while others prioritize less responsibility with correspondingly lower pay.
• Company loyalty varies significantly across cultures.
• The acceptability of child labor, low wages, and poor working conditions also varies widely.

Perception of Personal Space

• Personal space is about 50 cm in North America, Europe, and some other countries.
• Personal space is smaller in Latin cultures, Greece, and parts of Asia.
• Seating arrangements in business settings differ across cultures.
• Holding hands is a sign of friendship in India and other parts of the Middle East.

Non-Verbal Communication

• Eye contact symbolizes trustworthiness in Canada, the US, the UK, and many Arab countries.
• Eye contact is considered disrespectful in many Asian cultures, especially toward authority figures.
• Common gestures may have different meanings; for instance, shaking your head side to side in India means agreement.

Business Etiquette

• Business practices differ in meeting setups, dress codes, punctuality, gift-giving, and conversation topics.
• Greetings and handling business significantly vary depending on cultural norms.

Time Perception

• Monochronic Cultures:
  • Time is linear, with focus being on one task at a time.
  • Cultures of this type are in countries like Canada, the US, and Japan.
  • Punctuality and sticking to schedules is important.
• Polychronic Cultures:
  • Time is flexible and allows for multiple activities simultaneously.
  • Results take precedence over strict schedules.
  • Cultures of this type are in the Mediterranean, Latin America, India, and much of Africa.

Systems of Government and Economic Systems

• Democracy: A freely elected government represents the majority of citizens.
• Market Economy: Production decisions are driven by buyers and sellers.
• Dictatorship: A violent form of government that uses force to achieve results.
• Command Economy: Central planners control production decisions.

Economic Systems Defined

• Capitalism: Economy based on private ownership, profit motive, and free markets.
• Fascism: Extreme-right political system that combines a free-market economy with a non-democratic government.
• Communism: Extreme-left political system advocating government or community ownership of production, from Karl Marx.
• Socialism: Moderate-left political system that calls for public ownership of principal production through democratic means.

Command Economy

• Individuals have an obligation of serving the state through working.
• To meet individual needs, the state handles clothing, shelter, housing, and education.
• The state decides who works where, production types, and worker salaries.
  • Example: North Korea, Cuba.

Market Economy

• Businesses and consumers make decisions.
• Supply and demand dictate production, methods, and distribution
• Governments usually have minimal involvement
  • Example: United States.
• Mixed economies combine elements of market and command economies, allowing regulation while encouraging competition.

Hidden Economy

• The hidden economy is also known as the informal economy.
• It includes unreported goods and services.
• Activities aren’t taxed or regulated.
  • Includes cash-based jobs, unlicensed street vending, and illegal activities.

Rationalization

• The process of streamlining business operations.
• Common examples:
  • Job cuts.
  • Automation.
  • Outsourcing.

Child Labour

• Children working in jobs that jeopardize their health, education, or development.
• Industries involved are: agriculture, mining, textiles, and factory work.
• Child labor is considered unethical in western countries, but some cultures sometimes view it as essential.
• Companies like Nike, H&M, Nestle, Apple, and Tesla have faced child labor backlash.

Discrimination

• Discrimination is unfair treatment in hiring, wages, or promotions
• Discrimination is done based on race, gender, age, disability, or religion.
• Many cultures still discourage women in leadership positions.
• Only 10% of executive positions are held by women in larger companies in Japan, compared to 45% in Canada.

Labour Unions

• Labour unions protect worker rights with varied strengths by country.
• Strong legal protection is present in Canada & Europe.
• US unions exist but face restrictions in some states.
• China has unions controlled by the government, limiting workers' rights.
• Union activity in Bangladesh is often suppressed in the garment industry.
• Some countries offer universal healthcare (e.g., Canada, UK, Germany).
• Businesses only offer supplemental benefits.

Systems of Government Defined

• Dictatorship:
  • Government where absolute power is held by one leader.
  • Achieved without free and fair elections.
  • Example: North Korea
  • Pro: Quick decision making
  • Con: Lack of freedoms and rights
• Federal:
  • Power is divided between a central government and regional governments.
  • Example: Canada
  • Pro: Local governments address regional needs
  • Con: Conflict between national and regional governments
• Confederal:
  • Union of independent states where the states hold the most power, and have a weak central government.
  • Example: Former Confederate States of America
  • Pro: States retain independence and control
  • Con: Central government may be too weak to handle national issues
• Presidential:
  • The executive branch is separate from the legislative and the president is elected independently.
  • Example: United States
  • Pro: Clear separation of powers prevents abuse
  • Con: Potential for gridlock between branches
• Parliamentarian:
  • The executive branch is chosen from the legislature, the head of government is usually a prime minister.
  • Example: United Kingdom
  • Pro: Easier to pass laws due to close legislative ties
  • Con: Less separation between executive and legislative branches
• Democratic:
  • System where power is held by the people.
  • Through elected representatives and free elections.
  • Example: Germany
  • Pro: Citizens can vote and have a say
  • Con: Decision-making can be slow due to the need for consensus

Success(capitalism vs socialism)

• Capitalism: An economic system based on private ownership and the goal of making profit.
• Socialism: Resources are owned and controlled by the community or government for equal benefit.
• Industrial Capitalism: Capitalism during the Industrial Revolution where profits came from factories, machines, and wage labor.
• Authoritarian Capitalism: A mix where the government has strict control politically, but allows private business and markets.
  • Example: China.

Historical Impacts

• Piracy: Robbery or violence at sea.
  • It was a major risk for trade in the 1700s.
• Innovation: A new method, idea, or product.
  • Oftens drives efficiency and growth.

Hofstede’s 6 Cultural Dimensions

• Power Distance:

  • How much inequality in power people accept in a society.
  • High - People accept hierarchy & authority (e.g., Malaysia, Mexico)
  • Low - People expect equality and challenge authority (e.g., Denmark, Canada)

• Individualism vs. Collectivism:

  • Whether people prioritize individual goals or group goals.
  • High Individualism - Focus on personal achievement, independence (e.g., USA, UK)
  • High Collectivism - Loyalty to groups, family or community come first (e.g., China, Indonesia)

• Masculinity vs. Femininity:

  • The degree to which a culture values competitiveness vs. care and quality of life.
  • Masculine (High) - Competitive, ambitious, success-driven (e.g., Japan, Germany)
  • Feminine (Low) - Focus on cooperation, care, life balance (e.g., Sweden, Norway)

• Uncertainty Avoidance:

  • How comfortable a culture is with ambiguity, risk, and change.
  • High - Prefer rules, structure, and security (e.g., Greece, France)
  • Low - More flexible, okay with risk and change (e.g., Singapore, USA)

• Long-Term vs. Short-Term Orientation:

  • Whether a culture focuses more on future rewards or present traditions.
  • Long-Term - Value persistence, planning, saving (e.g., China, Japan)
  • Short-Term - Value traditions, quick results, social obligations (e.g., USA, Nigeria)

• Indulgence vs. Restraint:

  • How much a society allows free gratification of desires and fun.
  • Indulgent - Enjoy life, freedom, leisure important (e.g., Mexico, Sweden)
  • Restrained - Strict social norms, less focus on fun (e.g., Russia, Pakistan)

• International Business: Sells products or services across national borders.

  • Most of its operations remain in its home country.
  • Example: A Canadian company that sells maple syrup to Japan.

• Multinational Business:

  • Has operations, offices, or factories in multiple countries.
  • Example: McDonald's has restaurants and staff globally.

Top 10 Easiest Countries to Start a Business

• These are often ranked by how fast, cheap, and simple it is to legally start a business:
  • New Zealand
  • Singapore
  • Denmark
  • South Korea
  • Hong Kong
  • United Kingdom
  • United States
  • Georgia (the country)
  • Norway
  • Sweden
• Ranking changes year to year, but New Zealand usually ranks the best.

PESTLE Acronym

• A tool used to analyze external factors that affect a business:
  • P = Political (e.g., government stability, trade policies).
  • E = Economic (e.g., inflation, interest rates).
  • S = Social (e.g., cultural trends, population demographics).
  • T = Technological (e.g., automation, innovation).
  • L = Legal (e.g., labor laws, regulations).
  • E = Environmental (e.g., climate, sustainability).

Ethnocentric

• The belief by business that its home country's culture is superior,
• It can cause to use the same products and marketing everywhere.
• It can lead to poor global strategy by ignoring local cultures and needs.

Trade Mission

• Government officials and business leaders travel to another country to:
  • Promote their products.
  • Build business relationships.
  • Explore trade opportunities.
• It helps companies expand globally with government support.