The Cultural Environment: Unit 2 Section

INTERNATIONAL
UNIT 2 SECTION 2 THE CULTURAL ENVIRONMENT

BUSINESS Unit 2, section 2: The Cultural Environment
A country’s workforce reflects its cultural diversity, which refers to the

degree to which the population is made up of people from varied national,
ethnic, racial, and religious backgrounds. Cultural differences usually show
up in employees’ social values, ideals of status, decision-making habits, and
attitudes toward time, space, body language, manners and ethical behaviour.
By the end of this Section, you should be able to:

 define culture
 determine whether culture is static or dynamic
 outline the determinants of culture.
 explain the factors leading to cultural differences around the globe
Now read on ....
Definition of Culture
Most anthropologists view culture as the sum total of the beliefs, rules,
mores, techniques, institutions and artefacts that characterise human
population. Edward Taylor (1870s) defined culture as “that complex whole
which includes knowledge, beliefs, art, morals, laws, customs and other
capabilities acquired by man as a member of society”.
Culture can also be defined as a system of values and norms that are shared
among a group of people, and which when taken together constitute a design
for living.
Values mean abstract ideas about what a group of people believes to be

good, right, and desirable. They include a society’s attitude toward such
concepts as individualism, democracy, truth, justice, honesty, loyalty, social
obligation, collective responsibility, and the role of women, love, sex, and
marriage. Norms are the social rules that govern the actions of people
toward one another. They are social rules and guidelines that prescribe
appropriate behaviour in particular situations.
Determinants of Culture
The values and norms of a culture are the evolution of a number of factors
that are at work in a society. A society refers to a group of people who share
a common set of values and norms. The determinants of culture include
political and economic philosophy, social structure, religion, language,
dressing, education, the traditional system of governance, inheritance,
adulthood, initiation rites, marriage ceremonies, burial practices, education,
etc.
Political Philosophy/System
The economic and legal systems in a country are often shaped by its
political philosophy or system. Political system means the system of
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Unit 2, section 2: The Cultural Environment BUSINESS
government or governance structure in a nation. This can be assessed

according to two related dimensions. The first dimension is the degree to
which the political system emphasise collectivism [socialism] as opposed to
individualism [capitalism]. The second dimension is the degree to which the
political systems are democratic or totalitarian.
Economic Philosophy/System
There are three main types of economic systems, namely a free market
economy, a government command or controlled economy, and a mixed
economy. In countries where individual goals are given priority over
collective goals, we are more likely to find a free market economic system.
The reverse is true for state-controlled economies.
A free market economy is an economic system in which the interaction of

demand and supply determines the quantity of goods and services that are
produced and sold. This is determined through the price mechanism.
In a planned, command, state-directed, or state-controlled economy, the
quantity of goods and services produced and the price at which they are sold
are all determined by the government.
An economy in which some sectors are left to private ownership and a free
market mechanism, and in which there is significant state ownership of
factors of production and government planning is known as a mixed
economy. A state directed economy is one in which the state plays a
significant role in directing the investment activities of private enterprise
through ‘industry policy’ and in otherwise regulating business activity in
accordance with national goals.
Social Structure
This refers to society’s social organisation. There are two main dimensions
to explain the differences between the social structures of individual
cultures. First is the level of emphasis which the society places on the
individual as the basic unit of social organisation as opposed to group
organisation. A group is an association of two or more individuals who have
a shared sense of identity and who interact with each other in structured
ways on the basis of a common set of expectations about each other’s
behaviour.
The second is the degree to which a society is stratified into classes or

castes. Some societies are characterised by a relatively high degree of social
stratification with low mobility between the various strata; while other
societies are characterised by a low degree of social stratification but high
mobility between strata.
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BUSINESS Unit 2, section 2: The Cultural Environment
Religious and Ethical Systems

Religion is a system of shared beliefs and rituals that are concerned with the
sacred and ethical systems of a society or group of people. It is a set of
moral principles or values that are used to guide and shape human
behaviour. We can, therefore, talk about the Christian, Islamic, and
Traditional ethics. There are thousands of different religions in the world
but four of these religions, namely Christianity, Islam, Hinduism, and
Buddhism dominate.
Language
Language is one defining characteristics of a culture. It has both spoken and
unspoken dimensions. In countries with more than one spoken language, we
tend to find more than one culture.
 Spoken Language – Spoken language enables people to communicate

with each other. The nature of language also structures the way we
perceive the world. The language of a society can direct its members’
attention to certain features of the world. When many spoken languages
exist in a single country, one foreign language usually serves as the
principal vehicle for communication across cultures. This foreign
language becomes a lingua franca or link language. International
businesses that do not understand the local language can make major
blunders through improper translations.
 Unspoken Language: - Unspoken language refers to non-verbal

communication. Non-verbal communication encompasses all unwritten
and unspoken messages, whether intended or not. In short, it is
communication that does not use words. It includes voice quality, body
language, space, time and other miscellaneous matters such as clothing,
colour and age. Thoughts and feelings can be conveyed either
consciously or unconsciously by facial expressions such as smiles,
yawns, geris, grimaces, frowns, raised eyebrows etc., and by a variety of
gestures. A failure to understand the non-verbal cues of another culture
can lead to miscommunication.
Education
Education in its widest sense can be thought of as any part of the learning
process that equips an individual to take his or her place in the adult society.
Nearly everyone in the western cultures equates education with formal
schooling. Formal education is the medium through which individuals learn
many of the language, writing, conceptual and mathematical skills that are
indispensable in a modern society.
The firm contemplating foreign investment has no indicators of the

educational level of a country’s inhabitants except the usual yardstick of
formal education, such as the literacy rate, kinds of schools, quality of
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Unit 2, section 2: The Cultural Environment BUSINESS
schools and their enrolments, and possibly, the amount of per capital income
spent on education. Such data underestimate the size of the vocationally-
trained group in the many developing countries where people learn trades
through apprenticeships.
The UNESCO recommends defining a literate person as “one who can both
read and write a short, simple statement in his or her everyday life”.
Someone who can read but not write or can write but not read is considered
illiterate. Marketers are interested in the literacy rate because it helps them
decide what type of media to employ, and at what level they should prepare
advertisements, labels, point-of-purchase displays, and owner’s manuals.
The human resource manager will use the kinds of literate and skilled
people available to staff the organisation.
Most developing nations are convinced that economic development is

impossible without developing human resources. For the last two decades,
especially, governments may have probably over invested in higher
education in relation to the demand for skilled labour. The result has been
rising unemployment among the highly educated, which has led to a brain
drain or the emigration of professionals to the industrialised nations.
Summary
In conclusion, we have explained the cultural environment and how it
affects the operations of International Business. It is worth noting that the
determinants of culture include economic and political philosophy, social
structure, education, religion and language. Can you think of any
determinants of culture that has not been discussed in the main text?
Please, refer to other texts in the references provided for further information
on the meaning and importance of this topic. Put down any important notes
you come across in the blank sheet provided below for face-to-face
discussions with your course lecturer.
Now assess your understanding of this Section by answering the following

Self-Assessment Questions (SAQs). Good luck!
Activity 2.2
 What is culture?
 What are the determinants of culture?
 Why are marketers interested in the literacy rate of a country?
 Who is a literate person?
 What are the dominant religions?
Did you score all? That’s great! Keep it up.
UEW/IEDE 55

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INTERNATIONAL

UNIT 2 SECTION 2 THE CULTURAL ENVIRONMENT

A country’s workforce reflects its cultural diversity, which refers to the

By the end of this Section, you should be able to:

Now read on ....

Values mean abstract ideas about what a group of people believes to be

government or governance structure in a nation. This can be assessed

A free market economy is an economic system in which the interaction of

The second is the degree to which a society is stratified into classes or

Religious and Ethical Systems

 Spoken Language – Spoken language enables people to communicate

 Unspoken Language: - Unspoken language refers to non-verbal

The firm contemplating foreign investment has no indicators of the

Most developing nations are convinced that economic development is

Now assess your understanding of this Section by answering the following

Did you score all? That’s great! Keep it up.

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