Presented to: Senior Lecturer: Faculty of Business Administration Eastern University

Presented By: Name ID

Topic Name: The Cultural Environments

Introduction

Our opening case shows how important it is for companies to understand and adjust to ever changing operating environments. Both the jave Lounge, a domestic company and Harvey Nichols, a foreign company , operate successfully in Saudi Arabia because each is sensitive to the Saudi operating environment.

People Factor
1) 2)

Cultural Diversity Cultural collision

Cultural Diversity by bringing Together people of diverse backgrounds and experience companies often gain a deeper knowledge about products and services and ways in which to produce and deliver them.
Cultural collision occurs when divergent cultures come in contact . in international business, the major problems of cultures collision arise under two conditions: When a company implements practices that are less effective then intended

1)

2)

When a companys employees encounter distress distress because of difficulty in accepting or adjusting to foreign behaviors

Cultural Factors
1.

Cultural awareness Almost Everyone agree that natural culture differ but they disagree on what the differences are

2. A little learning goes a long way : Although some people seem to have an innate ability to say and do the right thing at the right time, others often unintentionally or forget they are no longer on their hometown

Cultural Factors
3.The nation as point of reference :
The nation is a useful definition of society because

1. Similarity among people is a cause and an effect of national boundaries

2. Laws apply primarily along national line

4.The nation as cultural mediator :

Manager find country by country analysis difficult because :
1. 2.

Subcultures exist within nation Similarities link groups from different countries.

Dealing with cultural Differences

1 . The extent to which a culture is willing to accept the introduction of anything foreign 2. Whether key cultural differences are small or great

3. The ability of individual to adjust to what the find in foreign cultures

4. The general management orientation of the company doing business in foreign culture

Accommodation :
Host culture do not always expect foreigners to adjust to them

Cultural Distance :
When doing business in a similar culture companies
1. 2.

Usually have to make a fewer adjustments May overlook subtle differences

Cultural Shock :
1Some people get frustrated when entering a different culture

Company and management orientation

The Following section discussed three such attitudes or orientations 1.polycentrism : polycentrism management is so overwhelmed by national differences that it won't introduce workable changes. 2.etonocentrism : ethnocentrism management overlooks national differences and 1.ignores important factors. 2. believes home country objectives should prevail. 3. thinks change is easy. 3. geocentrism : geocentric management often uses business practices that are hybrids of home and foreign norms. Because people do not necessarily accept change readily, The management of change is important.

Strategies for instituting change

We focus on strategies in eight different areas:

1)
2) 3)

Value systems
Cost benefit analysis of change Resistance to too much change

4)
5) 6)

Participation
Reward sharing Opinion leadership

7)
8)

Timing
Learning abroad

Strategies for instituting change

Value Systems: The more something contradicts our value system, the more difficulty we have accepting it .

Example: a poor nation in northeast Africa.

Cost Benefit Analysis of Change: Although some adjustments to foreign ways are inexpensive, others are quite costly. Resistance to too much change: When the german magazine publisher gruner +Jahr (G+J) bought U.S. based Mc Calls It immediately overhauled the magazines format.

Strategies for instituting change

Participation:

One way to avoid problem like those encountered by G+j is t discuss proposed changes with stakeholders in advance. Reward Sharing : Sometimes a proposed change may have no foreseeable benefit for the people whose support must be obtained if its to succeed. Opinion Leadership: By making use of local channels of influence, or opinion leaders, a firm may be able to facilitate the acceptance of change. Timing: Many wall conceived changes fail simply because theyre ill timed.