Culture and International Business

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Table of Contents

Introduction
Globalization
Theoretical Perspective
List of References

Introduction

Various scholars have defined culture differently. Recent researchers define it as the pattern of learned behaviors and outcomes of behavior whose constituent rudiments are collective and spread by members of certain society.

Culture entails shared principles, ideologies, value assumptions and beliefs of particular people. Geert Hofstede observes that culture is the combined indoctrination of the mind, which differentiates members of one group or class of people from another.

Culture affects many things in an individual’s life including social, political and economic (Guille´n 2001, p. 236). The most important is economic because people consume goods that their culture permits. It is not surprising that Europeans would have different tastes as those of Africans and Arabs. Several theorists have explained how culture affects consumer behavior.

Through analysis, it is established that one’s culture is superior to all others meaning that an individual tends to ignore the ways of living of other people. People rarely appreciate the culture of others. Any firm has a challenge of dealing with the influence of culture. Goods are produced and consumed globally implying that the firm should understand the nature of customers both locally and globally (Chatman & Barsade 1995, p. 429).

This paper examines the influence of culture in production and consumption of goods in Nigeria. The paper uses some theories to explain how culture affects people in their economic lives.

Globalization

Globalization is popularly referred to as growing economic interdependence among states. It is brought about by cross-border flow of three categories of entities that is, services, capital and technology. In the modern financial system, flow of goods, technology, money and people take place on a global scale.

Globalization is characterized by international organizations, multinational organizations and cross-border coalitions such as joint ventures and international mergers. Globalization is claimed to have affected businesses in the third world countries.

Global companies are said to affect major decision-making processes in the developing countries. However, developed nations have also been affected by globalization (Greider 1997, p. 21).

Citizens in developed nations claim that businesses offshore their services to states proved to have cheap workforce. In this regard, countries have stepped up to counter the effects of globalization by establishing regional blocs such as AU, EU, ASIAN, NAFTA and many more.

Proponents of globalization assert that the World Trade Organization should be embraced in order to allow fairness and equality in business transactions. In globalization, universal culture usually refers to the suppositions, principles and practices of people in the west and some leaders in non-western societies.

Individuals tend to adopt new cultures during the world economic forums. Individuals who share ideas globally seem to share a cultural value of individuality and believe strongly in market economics and political egalitarianism.

Popular cultures, which mostly originate from the west and America, contribute to unification of expenditure prototypes and leisure activities around the globe. Critics argue that the issue of convergent consumption is apparent meaning that it only has a small influence on basic issues such as attitudes, customs and thoughts on how people and groups should function.

Morris & Peng claimed that the fundamental nature of western culture is Magna Carta but not Magna Mac (Morris & Peng 1994, p. 951). This shows that non-westerners can learn western culture in business but not the other way round (Mitchell & Smith 2000, p. 976). For example, Chinese Kung Fu dominates fight views in Hollywood cinemas such as Matrix Reloaded. This does not mean that the West is influenced to ape Chinese culture in any way.

Theoretical Perspective

Geert Hofstede

Hofstede observes that cultural diversity is expected to persist due to growing nature of international business. Furthermore, he attributes the persistence of cultural diversity to technology that has rocked every sector of the economy in various parts of the world.

In Nigeria for example, people consume goods according to the western culture. People have abandoned traditional ways of acquiring goods meaning that they embrace technology. Majority of Nigerians utilize goods that satisfy their statuses.

Goods and services are not acquired out of necessity. This means that people have been influenced by western cultures. According to the scholar, four fundamental values are inherent in international system. The first one is power distance index.

This aspect focuses on the degree of egalitarianism or disparity among people. The Nigerian society is highly ordered meaning that people acquire products based on their abilities. In other words, production and distribution is controlled by individual financial capability. The more able members are in a good position to acquire goods while the less fortunate expect the society to favor them (Levine & Norenzayan 1999, p. 180).

Hofstede continues to observe that individualism is another aspect of globalization that has been distributed to developing countries. In Nigeria for instance, economic and financial power lies in the hands of the ruling elites. In this regard, Nigeria is a society that tolerates low individualism.

Ruling elites are expected to support their kin and provide them with necessities. However, this trend is changing due to the influence of western culture. Another aspect of Hofstede’s theory is masculinity (Leung, Wang & Smith 2001, p. 930).

In Nigeria, the society supports traditional masculine work role. This shows that power is concentrated in the hands of men. Men are therefore expected to provide goods and services to women. In this case, Nigeria experiences a high masculinity ranking because of gender differentiation.

Furthermore, Nigeria is a society that tolerates high long-term orientation ranking meaning that traditions are respected and are expected to persist (Schein 1992, p. 93). Nigerian society can be termed as static because people rarely change to new things. Nigerian culture is a typical African culture, which upholds that western cultures are immoral and are not to be allowed in society.

Hall

Hall conducted extensive studies pertaining to culture in the field of anthropology. He postulated several findings but the most notable one is the high/low context cultural study. He observed that in a high-context culture, several contextual rudiments that assist individuals to comprehend regulations and laws exist.

In this respect, many things are taken for granted. The scholar noted that people who do not understand rules of a particular culture experience various problems.

In a low-context culture, nothing is taken for granted. Members of a certain culture are expected to familiarize themselves with the rudiments of culture so that nothing is to be explained to them during enforcement (Schaeffer 2003, p. 78). Visitors do not encounter hard times because there would be no any misunderstanding between the locals.

In the Nigerian context, contracts seem to be short in both physical length and time duration. This is because there is enough data within the high-context Nigerian culture that allow people to strike deals faster. American context for instance is characterized by low context (Hall 1990, p. 34).

This implies that contracts seem to take long time to materialize because things are to be explained in detail. Highly nomadic atmospheres, which are characterized by movement of people, require lower-context culture. With steady population such as that in Nigeria, higher-context culture is observed.

List of References

Chatman, JA & Barsade, SG 1995, ‘Personality, organizational culture, and cooperation: evidence from a business simulation’, Administrative Science Quarterly, Issue, 40, no. 3, pp 423–443.

Greider, W 1997, One World: Ready or Not, Crown Business, New York.

Guille´n, M 2001, ‘Is globalization civilizing, destructive, or feeble? A critique of five key debates in the social science literature’, Annual Review of Sociology, Issue 27, no. 1, pp 235–260.

Hall, ET 1990, Understanding Cultural Differences, Germans, French and Americans, Intercultural Press, Yarmouth.

Leung, K, Wang, ZM & Smith, PB 2001, ‘Job attitudes and organizational justice in joint venture hotels in China: the role of expatriate managers’, International Journal of Human Resource Management, Issue 12, no. 1, pp 926–945.

Levine, RV & Norenzayan, A 1999, ‘The pace of life in 31 countries’, Journal of Cross Cultural Psychology, Issue 30, no. 2, pp 178–205.

Mitchell, RK & Smith, B 2000, ‘Cross-cultural cognitions and the venture creation decision’, Academy of Management Journal, Issue 43, no. 1, pp 974–993.

Morris, MW & Peng, KP 1994, ‘Culture and cause: American and Chinese attributions for social and physical events’, Journal of Personality and Social Psychology, Issue 67, no. 1, pp 949–971.

Schaeffer, RK 2003, Understanding Globalization: The Social Consequences of Political, Economic, and Environmental Change, Rowman & Littlefield, Lanham.

Schein, EH 1992, Organizational Culture and Leadership, Jossey-Bass, San Francisco.

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