This is a short summary explains how differences in culture across and within countries can affect international business through several themes.
Scholars have never been able to agree on a simple definition of culture. Geert Hofstede defined culture as ‘the collective programming of the mind which distinguishes the members of one human group from another. … Culture, in this sense, includes systems of values; and values are among the building blocks of culture’. Values are abstract ideas about what a group believes to be good, right, and desirable. They provide the context within which a society’s norms are established and justified, and form the bedrock of a culture. Norms are the social rules and guidelines that prescribe appropriate behavior in particular situations. They can be subdivided into two major categories: the routine conventions of everyday life and other norms that are seen as central to the functioning of a society and to its social life. The Routine Conventions of Everyday Life are social conventions concerning things such as the appropriate dress code in a particular situation, good social manners, eating with the correct utensils, neighbourly behaviour, and the like.
Determinants of Culture
The values and norms of a culture are the evolutionary product of a number of factors at work in a society that prevail political and economic philosophies, social structure, Dominant religion, language and education.
Figure 1 Determinants of Culture
A society 's social structure is its basic social organization which has two dimensions to consider: the degree to which the basic unit of social organization is the individual, as opposed to the group and the degree to which...
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...lief in the superiority of one 's own culture.
Culture and Competitive Advantage
For international companies, the connection between culture and competitive advantage is important because this connection suggests which countries are likely to produce the most viable competitors. This connection has important implications for the choice of countries in which to locate production facilities and do business
The trend to forming multicultural societies and developing new communication technologies will help to increase the cultural exchange which in turn will narrow the cultural gap among countries over the time. Is that means the impact of cultural diversity on international business will become less important due to the massive cultural exchange and the focus will be on the cultural diversity among individuals and not on the cultural diversity among countries?
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