Management of Multinational Corporations ( MNCS )

Chapter 3 : Socio, Political and Cultural Environment

Social Structure and International Business
Social Stratification and International Business
Implication For Business
Religion and International Business
Values and Attitudes and International Business
Customs and Manners and International Business
Language
Education
Culture and Workplace
Hofstede's Model Of Culture
Cross Cultural Literacy
Culture and Competitive Advantage
Cultural Impact of MNCs on Host Countries
Political Impact on MNCs on Home Countries.

Chapter Summary

Social structure and religion of a society greatly influences the culture of that country. There are two basic patterns of social structure: emphasis on individual or group, and social stratification. Individualistic societies favor capitalism, but may lack teamwork and cooperation. Society may be stratified on the basis of caste or class. Caste and class conflicts need to be minimized to reduce industrial disruptions.

The teachings of the dominant religion of a country can also influence its culture and thus its suitability for international business. Hofstede's model of culture identifies four dimensions along which the culture of a country can be classified: power distance, masculinity vs. femininity, uncertainty avoidance and individualism vs. collectivism.

Employees of MNCs must be trained and educated to develop an understanding of cultural differences. This will help them improve their performance. According to some critics, MNCs do more harm than good to the culture of the host country. MNCs also interfere in the politics of developing countries and attempt to influence their governments to formulate policies that favor them.

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