Cross-cultural practices in business and finance : frameworks and skills

In this book we will explore and lay out business, financial, cultural, and media use practices across different countries and cultures. Similar ideas have been made available to the academic and practitioner communities via textbooks on International and Intercultural Communication & Management, Global Business Practices, and online articles on how to do something or how not to do some-thing when interacting with people across cultures, particularly in the context of a business meeting or collaboration. These books make an excellent case for the ideas professed, using established and not so well-established theories about high-context and low-context cultures, collectivist and individualist cultures, cultural norms, practices, and expectations. However, while we will discuss these aspects and frameworks in the earlier chapters, our purpose in writing this book is to provide very practical and situational examples involving countries and regions around the world that will serve as a starting point for business professionals, academics, and students (on exchange, new job opportunities etc.) to learn about the cultural and business practices of people from different backgrounds, ethnicities, diversities, educational levels, and social strata and hierarchies. Towards this effort, we will integrate the discussion of chapter concepts within the context of these cultural frameworks. We will include discussions on how academics can be supportive and encouraging of the international students in their classrooms and how practitioners can help their international recruits/employees (in house or as part of their global teams) feel that they belong to the team and the organization. Acknowledgments Binod Sundararajan’s Acknowledgments Oksana Shkurska’s Acknowledgments Shannon Lin’s Acknowledgments Contents About the Authors List of Figures List of Tables 1 Introduction PESTLE (STEEPLE, PESTEL, PESTLIED, SLEPT, LONGPESTLE) Political Factors Economic Factors Sociocultural Factors Hofstede’s Cultural Dimensions Technological Factors Legal Factors Environmental Factors Waterbody Innovations and Technologies Inc. (WITI) References 2 Political, Economic, and Cultural Climate of International Business Perceptions of Business Across Cultures Types of Economies that Have Flourished Across Cultures Market Economies State Capitalism State Run Distributed Economies National Culture vs. Organizational Culture National Culture Organizational Culture Does Culture Override Business Strategy? Cultural Sensitivity, Diversity Training, and Truly Benefiting from a Culturally Diverse Workforce Unconscious Biases Affinity Bias Confirmation Bias Attribution Bias Conformity Bias The Halo Effect The Horns Effect Contrast Effect Gender Bias Ageism Name Bias Beauty Bias Height Bias Gaslighting Micro-aggression References 3 Culture Shock, Work, and Study Abroad Read and Reflect What Is Culture Shock? Oberg’s Culture Shock Theory Kim’s Adaptation Theory Bennet’s Developmental Model of Intercultural Sensitivity (DMIS) Berry’s Acculturative Model Cultural Intelligence and Intercultural Adaptation Coping with Culture Shock and Stress Practical Recommendations/Survival Tips Culture Shock and Business Jargon Online Resources References 4 Ethics and Ethical Dilemmas Across the Globe Globalization and Ethics of International Business Cultural Differences in Ethics Guidelines for Ethical Decision-Making Across Cultures Corporate Social Responsibility (CSR) and Sustainable Development Goals Online Resources References 5 The Role of Technology in Doing Business Across Cultures What Is Technology? Connected Technologies Social and Professional Networks Distributed Networks and Virtual Teams Challenges to VTs The ConnecT Framework Dealing with Complexities and Contexts Types of Leaders Types of Tasks Integrate Culture Creating a Sense of Community Types of Conflict Resolution Co-activate Leaders Disruptive Technologies and Adoption Conclusion References 6 Accounting Practices Accounting: The Language of Business A Brief History of the Double-Entry Accounting System The Usefulness of Accounting Numbers The Role of Financial Audits Types of Audits What Is Accounting Fraud? Types of Fraud Infamous Past Scandals Enhanced Regulation: The Sarbanes-Oxley Act Why Accounting Frauds Matter Current Accounting Practice and GAAP One Common Standard: IFRS Adoption Around the World Accounting, Legal Structure, and Tax Considerations for Operations Abroad Recent Trend Away from Globalization References 7 Banking and Financial Markets Around the Globe Brief History of Banking Equity and Bond Markets Around the Globe What Is a Bond? What Is Equity? Why Banking Regulation Is Necessary Regulation Full Disclosure (Reg FD) Technological Disruptions to Banking and Financial Markets Cryptocurrencies Central Bank-Issued Digital Currency (CBDC) Global Financial Contagion Listing a Business Abroad References 8 Negotiating Practices Who Is Involved in Negotiations? Steps in Intercultural Negotiations Communication Style Survival Tips Long-Term Versus Short-Term Orientation Negotiation Tactics Forms of Agreement Team Building and Decision-Making Approaches to Conflict and Conflict Management Strategies Approaches to Time Developing Intercultural Negotiation Skills Online Resources Appendix References 9 International Organizational Forms International Organizational Forms Multinational Corporations How a Multinational Corporation (MNC) Works Foreign Investment (FDI—Foreign Direct Investment) Mergers and Acquisitions Joint Ventures (JV) International Market Entry Strategies Potential Export Challenges and Factors Planning to Enter International Markets Other Modes of International Market Entry Emerging Markets Cultural Considerations in Advertising People—Expatriates, Host-Country Nationals, Third-Country Nationals International Business Terms Incoterms Conclusion References 10 Bringing It All Together Together, From Aways© Core Principles from Around the World Themes of Christian Social Teachings (Estimated at About 2.4 Billion Followers) The Five Pillars of Islam and Social Teachings (Estimated at About 1.9 Billion Followers) Basic Tenets of Hinduism (Estimated at About 1.2 Billion Followers) Principles of Buddhism (Estimated at About 0.5 Billion Followers) The Seven Principles of Kwanzaa Principles of Ubuntu Cultural Practices Around the World Flowers to a Russian Gifts to Chinese Classmates Avoid Salt While Dining in Egypt Concept of Punctuality in Many States Table Manners in Norway Using Sharp Items Losing a Tooth in Greece Avoid Clinking Glasses but Say Cheers in Hungary Avoid Discussing Business in the Events in Bolivia Don’t Try to “Go Dutch” in Turkey Avoid Using Red Ink A Trip to the Sauna in Finland Sitting Seat in the Taxi Greeting a Magpie in the UK Birthday Greetings in the Netherlands Greeting People in Japan and Germany The Finger-Pulling Tradition in Austria The Tradition for Unmarried People in Germany Face on a Birthday Cake Wife-Carrying as a Competitive Sport Durga Puja in Bengal Lucia Festival of Sweden Yi Peng in Thailand Fasching Parade in Germany Shinbyu in Myanmar How Does One Acquire Cultural Sensitivity? Conclusion References Glossary Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Index This textbook explains the effects of culture on business and financial practices and introduces students to the cross-cultural and international dimensions of working in global environments, exploring topics across both business and finance. Given that doing business across cultures has become the norm in modern companies, managers must develop and acquire the skills to lead effectively in cross-cultural contexts. This textbook will help you to attain those skills through its practical and situational examples involving countries and regions around the world while learning about the cultural and business practices of people from different backgrounds, ethnicities, diversities, educational levels, and social strata and hierarchies. It covers important aspects of doing business across cultures/countries, such as the role (and importance) of technology adoption, different organizational forms, financial and accounting approaches in different parts of the world, negotiating practices, ethics across the globe, and working and studying abroad. Further, it equips readers with useful knowledge about cross-cultural nuances beyond the usual discussions of high vs. low contexts, power distance, uncertainty avoidance, and such dimensions of cross-cultural interactions. The varied experiences of the authors - having lived and worked in many countries - along with their backgrounds in linguistics, communication, and financial accounting provide unique perspectives not available elsewhere. With its case studies, end-of-chapter exercises, as well as multiple-choice and short-answer questions, this broad, yet thorough textbook will guide you in leading with cultural intelligence. Binod Sundararajan is Professor of Management at the Rowe School of Business, Faculty of Management, Dalhousie University, Canada. Oksana Shkurska is an Assistant Professor at Rowe School of Business, Faculty of Management, Dalhousie University, Canada. Shannon Lin is an Associate Professor of Accounting at the Rowe School of Business, Faculty of Management, Dalhousie University, Canada. "This textbook explains the effects of culture on business practices and introduces students to the cross-cultural and international dimensions of working internationally, exploring topics across both business and finance. Given that doing business across cultures has become the norm in modern companies, managers must develop and acquire the skills to lead effectively in cross-cultural contexts. This textbook will help you to attain those skills through its practical and situational examples involving countries and regions around the world while learning about the cultural and business practices of people from different backgrounds, ethnicities, diversities, educational levels, and social strata and hierarchies. It covers important aspects of doing business across cultures/countries, such as the role (and importance) of technology adoption, different organizational forms, financial and accounting approaches in different parts of the world, negotiating practices, ethics across the globe, and working and studying abroad. Further, it equips readers with useful knowledge about cross-cultural nuances beyond the usual discussions of high vs. low contexts, power distance, uncertainty avoidance, and such dimensions of cross-cultural interactions. The varied experiences of the authors - having lived and worked in many countries - along with their backgrounds in linguistics, communication, and financial accounting provide unique perspectives not available elsewhere. With its case studies, end-of-chapter exercises, as well as multiple-choice and short-answer questions, this broad, yet thorough textbook will guide you in leading with cultural intelligence."--Publisher's description