Chapter 13 Summary

LO 13.1 Meaning of Culture and Social Structure

• Culture is a system of values and norms that guides the social behaviour of people and serves as a foundation of social structure.
• The social structure refers to a society’s basic social organization. The two main dimensions of social structure are the individual vs. group dimension and the stratification dimension.

LO 13.2 Business and Economic Implications of Social Structure

• In some societies, the individual is the basic unit of a social structure, and in other societies, a group is considered the basic unit of a social structure.
• All societies are stratified into classes. Some societies have low social mobility and a high degree of stratification, while others have high social mobility and a low degree of stratification. There are some societies which still have caste systems, especially in the rural areas.
• Caste is a closed system, and the individual who is born into it cannot move out of it.
• The caste system determines who the individual marries and what occupation an individual can pursue.
• Class is a more open system of stratification and is based on social ranking.
• Social ranking can change based on economic status and education level attainment.
• Social mobility level in a class system differs from one society to another.

LO 13.3 Importance of Cross-Cultural Literacy

• Geert Hofstede’s Cultural Dimensions Theory explains how culture relates to values in the workplace. Cultural dimensions studied by Geert Hofstede are the power distance index, individualism vs. collectivism, uncertainty avoidance index, masculinity vs. femininity, short-term vs. long-term orientation, and restraint vs. indulgence.
• Organizations that put effort into gaining cross-cultural literacy are more agile and can easily adapt to different processes, capture new opportunities, and respond to changes across diverse markets.

LO 13.4 Social Risk in International Business and Mitigation Strategies

• Social risk refers to the negative perception of an organization’s impact on a broad range of issues related to human welfare.
• Organizations can be exposed to social risk either by contributing to social and environmental problems, or they might be considered guilty by association, simply operating directly in areas with social problems.
• There are a range of strategies and activities companies can incorporate into their business concept to help reduce social risk: the triple bottom line framework, responsible business conduct, corporate social responsibility, and environmental, social and governance standards.

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