Nature of Culture & its Impact

on Business

Piyush Gupta
IIMT University
What is culture?
Culture is contextually based!

The common grasshopper (Acrididae)

Culture is an
important part
of
international
business and
USA: Pest! marketing!!!

CHINA: House pet!

Thailand: A snack!
Culture is…

 “ Collective programming of the mind which distinguishes

the members of one human group from another... Includes
system of values; and values are among the building blocks
of culture...” (Hofstede, 1980)
 Glue that binds groups together. Without cultural patterns,
organized system of significant symbols, people would have
difficulty living together (De Mooij, 2004)
 Set of control mechanisms – plans, recipes, rules,
instructions – for governing behavior (Geertz, 1973)
 Includes shared believs, attitudes, norms, roles and values
found among speakers of a particular language who live
during the same period in a specific geographic region
(Triandis, 1995).
 And soo much more…
Characteristics of culture
1. Culture is learned
2. Common to members of a certain group
3. Determines the behavior of group members
4. Culture (customs, values, habits) makes life
more effective

AN INDIVIDUAL DOESN’T HAVE

CULTURE!
AN INDIVIDUAL HAS A PERSONALITY!
Layers of culture

“a man should
have only 1
wife”

Core believes “Slovene values:

& expectations work, family,
implicit security”

Values & norms “walking other

ladders”
Habits, routines &
procedures
explicit
Physical objects, heroes,
symbols & artifacts
Culture ‘ingredients’ / elements
 Norms
 Values
 Believes
 Institutions
 Religion
 Language
 Education system
 Art and aesthetics
 Material culture and life-style…
Levels of culture
TRANSNATIONAL CULTURE

NATIONAL CULTURE

INDUSTRY CULTURE

PROFESSIONAL CULTURE

ORGANIZATIONAL CULTURE

SUBCULTURES

INDIVIDUAL
Culture and its impact on business
Competitive Competitive
environment environment

Culture is
the context STRATEGY

in which a
coordination
company
(people) STRUCTURE ORG.
operates! & SYSTEMS CULTURE

NATIONAL CULTURE
Impact of Culture on Business
 Culture creates people
 Culture and Globalization
 Culture determines Goods and Services
 People’s attitude to Business
 Attitude to work
 Education
 Ambitious or Complacent
 Ethics in business
 Cultural resources
Culture and Globalization
 Business units go international

 Work force diversity has important implication for

management practices

 Managed diversity can increase creativity, innovation &

decision making from different perspective

 Culture shock: any move from one country to another

will create a certain amount of confusion, disorientation
and emotional upheaval
Management concept How perceived in the How perceived in
United States Japan

Company Team in sport Family in Business

Business Goal Players in a team To survive
Employees Players in a team Children in a Family
Profit motivation By all means Means to an end
Sense of identification Job pride Group prestige
Pay service and result award for patience
and sacrifice
Promotion according to abilities length of service
Impact of culture on business

Differences in consumer behavior:

 Segmentation
 Positioning
 Marketing mix
 Buying habits

Business customs and etiquette:

 Negotiation styles
 Communication
 Business protocol
 Level of formality of arrangements
 Payment
 etc
Minimum negotiation pre-requisites
 At least 2 sides

 Different goals / agendas

 Ready to talk / communicate

 Believe they can jointly make a decision that

will benefit both
An experiment for the end…