Peng Inst Chapter 3 REVISED (2nd Edition)

Peng Inst Chapter 3 REVISED (2nd Edition) - Peng...

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Peng Global Business 2e Chapter 3 Emphasizing Informal Institutions:  Cultures, Ethics, and Norms  1
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LEARNING OBJECTIVES After studying this chapter, you should be able to: 1. Explain where informal institutions come from. 2. Define culture and articulate its four manifestations: language,  religion, social structure, and education. 3. Discuss how cultures systematically differ from each other. 4. Explain why ethics is important and identify ways to combat  corruption. 5. Identify norms associated with strategic responses when firms  deal with ethical challenges. 6. Participate in three leading debates on cultures, ethics, and  norms. 7. Draw implications for action. 2
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WHERE DO INFORMAL INSTITUTIONS  COME FROM? They come from socially transmitted information and  are part of the heritage that we call  cultures, ethics, and  norms. Those within a society tend to perceive their own  culture, ethics, and norms as “natural, rational, and  morally right” (ethnocentrism). The Opening Case illustrates that informal institutions  can make or break firms hence their importance. 3
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WHERE DO INFORMAL  INSTITUTIONS COME FROM? Danish norms support freedom of  expression, in contrast to Muslim norms  that restrict portrayals of prophet  Mohammad (Opening Case).   Common sense in one society may be  uncommon elsewhere. 4
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CULTURE Culture – a major part of informal institutions, four components –  language, religion, social structure,  and  education.  Defined by Geert Hofstede as “the collective programming of  the mind which distinguishes the members of one group or  category of people from another.” Culture is a  characteristic of a society  and not necessarily a  nation state (i.e., nations may have several cultures as do China,  Spain, Belgium, Switzerland, and the USA).   5
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Language Lingua franca   - dominance of one language as a global  business language. English-speaking countries contribute the largest share of global  output. Globalization contributes to the use of one common language. Nonnative speakers of English who can master English  increasingly command a premium in jobs and compensation (e.g.,  Shakira). Expatriate manager not knowing the local language misses a lot  of cultural subtleties and can only interact with locals fluent in  English. 6
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Religion About 85% of the world’s population have some religious beliefs  (see Peng AtlasMap 1.4).
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This note was uploaded on 01/25/2012 for the course ECON 102 taught by Professor Jones during the Spring '11 term at UVA.

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Peng Inst Chapter 3 REVISED (2nd Edition) - Peng...

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