2.) Define culture and articulate its two main manifestations. Culture is the collective programming of the mind that distinguishes one group from another. Managers and firms ignorant of foreign languages and religious traditions may end up with embarrassments and, worse, disasters when doing business around the globe. 3.) Articulate three ways to understand cultural differences. The context approach differentiates cultures based on the higher-versus-low-context dimension. The cluster approach groups similar cultures together as clusters and civilizations. Hofstede and colleagues have identified five cultural dimensions: power distance, individualism/collectivism, masculinity/femininity, uncertainty avoidance, and long-term orientation. 4.) Explain why understanding cultural differences is crucial for global business. A great deal of global business activity is consistent with the context, cluster, and dimension approaches to cultural differences. 5.) Explain why ethics is important. Ethics refers to the principles, standards, and norms of conduct governing individual and firm behavior. When managing ethics overseas, two schools of thought are ethical relativism and ethical imperialism. 6.) Identify ways to combat corruption. The fight against corruption around the world is a long- term, global battle. Corruption distorts the basis for competition. High levels of corruption and low levels of economic development are strongly correlated. Legislation criminalizing corruption must not only be institutionalized, but also must be enforced to be effective.
7.) Identify norms associated with strategic responses when firms deal with ethical challenges. When confronting ethical challenges, individual firms have four strategic choices: reactive, defensive, accommodative, and proactive strategies. Using a reactive strategy, a firm is passive and does not feel compelled to act even when problems arise. Using a defensive strategy, a firm fights informal pressure and is only concerned with required regulatory compliance. Using an accommodative strategy, a firm accepts responsibility and will act beyond what is simply required. Using a proactive strategy, a firm anticipates institutional changes and does more than required by current regulations. 8.) Explain how you can acquire cross-cultural literacy. It is important to enhance cultural intelligence, leading to cross-cultural literacy. Acquisition of cultural intelligence passes through three phases: awareness, knowledge, and skills. The most effective way to acquire cultural intelligence is through total immersion is a foreign culture. It is crucial to understand and adapt to the changing norms globally. Quiz Questions: 1.) Informal institutions are based on the rules and legal systems of an economy. False 2.) Ethnocentrism is the quality of a society that perceives its own culture, ethics, and norms as natural, rational, and morally right. True 3.) The basis behind the cluster approach is that firms are more comfortable doing business with other firms in their same cluster. True 4.)
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- Winter '17