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Understanding culture

Introduction

There was once a managerial school of thought that said that cultural differences do not really matter in international business: good managers function well regardless of the cultural environment. This was the 'practical' school of thought. The alternative view, the cross-cultural school, says that managerial behaviour and effectiveness are quite extensively affected by the culture in which managers operate. The research evidence is overwhelmingly in favour of the cross-cultural approach.

Culture influences every aspect of international business, so that managers concerned with marketing, finance, production and human resources need to be aware of the beliefs, attitudes, values, feelings and opinions of people in the local environment. Differences in values and attitudes between the head office of a MNE and the local management and employees of the overseas subsidiary can lead to serious operational and functional problems. These arise not because of personal issues but because of important differences between the home office culture and the local culture.

Some cultural differences are obvious while others are relatively subtle but equally important. It is difficult for international managers to become acquainted with these subtleties unless they have lived or worked in cultures other than the home country or have been trained in cultural matters before going overseas.

In this chapter we examine a range of cultural issues, beginning with definitions of culture and ending with a brief review of a framework for cultural analysis.

Topics

The following is the outline of the topics covered in this chapter.

Learning outcomes

The objectives for this chapter have been carefully constructed to reflect the most significant concepts and ideas we are going to cover and to provide a focus for your work during the chapter. After completing the work you should be able to:

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