Watch the videos, read the chapters and then answer these two questions. Remember to copy and paste the questions
- What is your key learning from these 4 video examples?
- How are these examples relevant to our current textbook material and your overall learning in this course?
VIDEOS:
1.
2.
3.
https://online.fiu.edu/videos/?vpvid=ba735101-d779-4497-982c-019232269511
4.
https://online.fiu.edu/videos/?vpvid=f09f2dc8-5ec6-4327-9ef0-7435846c1880
Chapter 5
Culture, Management Style, and Business Systems
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Learning Objectives
LO1 The necessity for adapting to cultural differences
LO2 How and why management styles vary around the world
LO3 The extent and implications of gender bias in other countries
LO4 The importance of cultural differences in business ethics
LO5 The differences between relationship-oriented and information-oriented cultures
2
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Business Customs in Global Marketing
Business etiquette is largely driven by cultural norms.
Cultural analysis often pinpoints market opportunities and gives companies a competitive edge.
3
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What we learned in Chapter 4, particularly Hofstede’s cultural value dimensions, are applicable to business customs and how business is conducted in various countries. For example, in high power distance countries, authority and hierarchy need to be respected while conducting business.
3
Required Adaptation
Adaptation is a key concept in international marketing.
To successfully deal with individuals, firms, or authorities in foreign countries, managers should exhibit:
open tolerance
flexibility
humility
justice/fairness
ability to adjust to varying tempos
curiosity/interest
knowledge of the country
liking for others
ability to command respect
ability to integrate oneself into the environment
4
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Unless marketers remain flexible by accepting differences in basic patterns of thinking, local business tempo, religious practices, political structure, and family loyalty, they are hampered, if not prevented, from reaching satisfactory conclusions to business transactions.
4
Cultural Imperatives, Electives,
and Exclusives (1 of 2)
Cultural imperatives:
business customs and expectations that must be met, conformed to, recognized, and accommodated if relationships are to be successful
Cultural electives:
areas of behavior or customs that cultural aliens may wish to conform to or participate in but that are not required
5
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Cultural imperatives are “must do” things in another culture, such as meeting and greeting, or exchange of business cards in Asian cultures (e.g., China, Japan and Korea). Cultural electives are optional activities that a foreigner may or may not want to engage in, such as drinking aperitifs (strong alcoholic drinks) before lunch in the Czech Republic or coffee in Saudi Arabia. No offense is taken if one refuses to participate in these cultural customs.
5
Cultural Imperatives, Electives
and Exclusives (2 of 2)
Cultural exclusives:
customs or behavior patterns reserved exclusively for the locals and from which the foreigner is barred and must not participate
6
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In general, politics and religion are taboo in conversations in many cultures, particularly for foreigners. In Mexico, McDonald’s used the national symbol of the Mexican flag on paper placemats and insulted the people (as you treat anything with the national symbol with the utmost respect). These are cultural exclusives, things you never engage in or do when in another culture.
6
Cultural elective or imperative?
BEIJING, CHINA: German Chancellor Angela Merkel and Chinese Prime Minister Wen Jiabao toast after the EU–China Business Summit at the Great Hall of the People in Beijing. The summit was boosted by the settlement of a trade row that had left 80 million Chinese-made garments piled up in European seaports, unable to be delivered to shops under a quota pact agreed to at the time. Drinking half a bottle is a cultural elective, but taking a sip is more of an imperative in this case.
© POOL/Reuters/Corbis
7
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American Culture and Management Style
There are at least three reasons to focus briefly on American culture and management style:
For Americans, it is important to be aware of the elements of culture influencing decisions and behaviors.
For those new to American culture, it is useful to better understand business associates from the U.S., as the U.S. market is the biggest export market in the world.
Since the late 1990s, American business culture has been exported around the world.
8
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For Americans, a self-awareness will help adapt to working with associates in other cultures. This knowledge will help everyone be more patient while conducting business across borders. American business culture has been exported around the world, just as in the 1980s Japanese management practices were imitated almost everywhere.
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The Impact of American Culture
Ways in which U.S. culture has influenced management style include, but are not limited to, the following:
“Master of destiny” viewpoint
Independent enterprise as the instrument of social action
Personnel selection and reward based on merit
Decisions based on objective analysis
Wide sharing in decision making
Never-ending quest for improvement
Competition produces efficiency
9
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American culture is based on a few basic premises, such as reward based on merit and not group performance. Decisions are made objectively not subjectively. Also, it is a competitive business environment where continuous improvement is the goal.
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Differences in Management Styles Around the World (1 of 4)
Authority and Decision Making
In high-PDI countries subordinates are not likely to contradict bosses, but in low-PDI countries they often do
Three typical patterns exist:
Top-level management decisions
Decentralized decisions
Committee or group decisions
Top-level management decision making is generally found in situations in which family or close ownership gives absolute control to owners, and businesses are small enough to allow such centralized decision making.
10
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In countries such as Mexico and Venezuela where a semi-feudal, land-equals-power heritage exists, management styles are characterized as autocratic and paternalistic. Decision-making participation by middle management tends to be deemphasized; dominant family members make decisions that tend to please the family members more than to increase productivity. This description is also true for government-owned companies in which professional managers have to follow decisions made by politicians, who generally lack any working knowledge about management.
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Differences in Management Styles Around the World (2 of 4)
Decentralized decision making allows executives at different levels of management to exercise authority over their own functions.
Committee decision making is by group or consensus. Committees may operate on a centralized or decentralized basis, but the concept of committee management implies something quite different from the individualized functioning of the top management and decentralized decision-making arrangements.
11
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11
Differences in Management Styles Around the World (3 of 4)
Management Objectives and Aspirations
Security and mobility
Personal life
Affiliation and social acceptance
Power and achievement
12
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Differences in Management Styles Around the World (4 of 4)
Personal security and job mobility relate directly to basic human motivation and therefore have widespread economic and social implications.
For many individuals, a good personal and/or family life takes priority over profit, security, or any other goal.
In some countries, acceptance by neighbors and fellow workers appears to be a predominant goal within business.
Although there is some power seeking by business managers throughout the world, power seems to be a more important motivating force in South American countries.
13
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To the Japanese, personal life is company life. Many Japanese workers regard their work as the most important part of their overall lives. The Japanese work ethic—maintenance of a sense of purpose—derives from company loyalty and frequently results in the Japanese employee maintaining identity with the corporation.
13
Exhibit 5.1
Annual Hours Worked
Source: OECD, Labor Market Indicators, 2012.
2000 2010
United Kingdom 1700 1647
Canada 1775 1702
Germany 1473 1419
Netherlands 1435 1377
Japan 1821 1733
Norway 1455 1414
United States 1814 1778
S. Korea 2512 2193
Mexico 1888 1866
Italy 1861 1778
14
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In Exhibit 5.1: Americans appear to be in the middle of hours worked, far above the northern Europeans and way below the South Koreans.
14
Communication Styles
Differences in Communication Styles
Face-to-face communication
Internet communication
According to Edward T. Hall, the symbolic meanings of time, space, things, friendships, and agreements vary across cultures
Hall places eleven cultures along a high-context/low-context continuum
Communication in a high-context culture depends heavily on the contextual (who says it, when it is said, how it is said) or nonverbal aspects of communication
Communication in a low-context culture depends more on explicit, verbally expressed communications
15
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Note: Patterned after E. T. Hall.
Exhibit 5.2
Context, Communication, and Cultures: Edward Hall’s Scale
16
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High-context versus low-context culture score for different countries, based on Hall’s classification.
16
Differences in the American and Japanese office structure
Speaking of office space: Notice the individualism reflected in the American cubicles and the collectivism demonstrated by the Japanese office organization.
© Ed Kashi/Corbis
© Andy Rain/Bloomberg News/Getty Images
17
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The pictures demonstrate office space in the U.S. and Japan. The U.S. is more individualistic, with more space and higher walls between cubicles. Japan is more collectivistic.
17
Formality and Tempo
Level of formality in addressing business clients by first name
Level of formality in addressing your boss by first name
Tempo or speed in getting “down to business”
Perception of time varies in many cultures
18
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P-Time versus M-Time
M-time, or monochronic time, typifies most North Americans, Swiss, Germans, and Scandinavians.
Monochronic time divides time into small units and is concerned with promptness. M-time is used in a linear way, and it is experienced as almost tangible, in that one saves time, wastes time, bides time, spends time, and loses time.
Most low-context cultures operate on M-time, concentrating on one thing at a time.
P-time, or polychronic time, is more dominant in high-context cultures.
P-time is characterized by multi-tasking and by “a great involvement with people.”
19
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The American desire to get straight to the point and get down to business is a manifestation of an M-time culture, as are other indications of directness. The P-time system gives rise to looser time schedules, deeper involvement with individuals, and a wait-and-see-what-develops attitude. Some are similar to Japan, where appointments are adhered to with the greatest M-time precision but P-time is followed once a meeting begins.
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Overall Pace Country Walking 60 Feet Postal Service Public Clocks
1 Switzerland 3 2 1
2 Ireland 1 3 11
3 Germany 5 1 8
4 Japan 7 4 6
5 Italy 10 12 2
6 England 4 9 13
7 Sweden 13 5 7
8 Austria 23 8 9
9 Netherlands 2 14 25
10 Hong Kong 14 6 14
11 France 8 18 10
Exhibit 5.3 (1 of 3)
Speed Is Relative
Rank of 31 countries for overall pace of life [combination of three measures: (1) minutes downtown pedestrians take to walk 60 feet, (2) minutes it takes a postal clerk to complete a stamp-purchase transaction, and (3) accuracy in minutes of public clocks].
Source: Robert Levine, “The Pace of Life in 31 Countries,” American Demographics, November 1997. Reprinted with permission of Robert Levine.
20
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How fast does it take pedestrians to walk 60 feet downtown in different cultures? The longer it takes, the more polychronic the culture is. Accuracy of public clocks is also an indication of M-time versus P-time.
20
Source: Robert Levine, “The Pace of Life in 31 Countries,” American Demographics, November 1997. Reprinted with permission of Robert Levine.
Overall Pace Country Walking 60 Feet Postal Service Public Clocks
12 Poland 12 15 8
13 Costa Rica 16 10 15
14 Taiwan 18 7 21
15 Singapore 25 11 4
16 United States 6 23 20
17 Canada 11 21 22
18 South Korea 20 20 16
19 Hungary 19 19 18
20 Czech Republic 21 17 23
21 Greece 14 13 29
Exhibit 5.3 (2 of 3)
Speed Is Relative
Rank of 31 countries for overall pace of life [combination of three measures: (1) minutes downtown pedestrians take to walk 60 feet, (2) minutes it takes a postal clerk to complete a stamp-purchase transaction, and (3) accuracy in minutes of public clocks].
21
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21
Source: Robert Levine, “The Pace of Life in 31 Countries,” American Demographics, November 1997. Reprinted with permission of Robert Levine.
Overall Pace Country Walking 60 Feet Postal Service Public Clocks
22 Kenya 9 30 24
23 China 24 25 12
24 Bulgaria 27 22 17
25 Romania 30 29 5
26 Jordan 28 27 19
27 Syria 29 28 27
28 El Salvador 22 16 31
29 Brazil 31 24 28
30 Indonesia 26 26 30
31 Mexico 17 31 26
Exhibit 5.3 (3 of 3)
Speed Is Relative
Rank of 31 countries for overall pace of life [combination of three measures: (1) minutes downtown pedestrians take to walk 60 feet, (2) minutes it takes a postal clerk to complete a stamp-purchase transaction, and (3) accuracy in minutes of public clocks].
22
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22
Negotiations Emphasis
Differences with respect to the product, its price and terms, services associated with the product, and finally, friendship between vendors and customers
Negotiating process is complicated, and the risk of misunderstanding increases when negotiating with someone from another culture
Attitudes brought to the negotiating table by each individual are affected by many cultural factors and customs often unknown to the other participants and perhaps unrecognized by the individuals themselves
23
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Market Orientation
American companies are embracing the market orientation philosophy
Other countries are still in the traditional production, product, and selling orientations
24
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Gender Bias in International Business
The gender bias against women managers exists in some countries
Women are not easily accepted in upper-level management roles in Asia, the Middle East, and Latin America (although this is changing)
Gender bias poses significant challenges in cross-cultural negotiations
25
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Gender bias is an issue in international negotiations. Women may not be easily accepted in certain cultures (e.g., the Middle East and Latin America). This poses challenges in cross-cultural negotiations.
25
Societal attitudes toward women in Tokyo and Riyadh
Two ways to prevent the harassment of women. Mika Kondo Kunieda, a consultant at the World Bank in Tokyo, explains, “I ride in a special women-only metro car that runs between 7:20 and 9:20 am. The cars were created in 2005 due to frequent complaints that women were being groped and sexually harassed. I was a victim a few times when I was younger, and it was—and still is—a humiliating experience. I had to learn how to position myself against moves even in the most overcrowded train. Now, I’ve seen a few men get visibly anxious when they realize they’ve accidentally boarded a car during women-only time!” One interpretation of the Koran specifies the cover-up pictured here in Riyadh, Saudi Arabia.
© Kyodo News/Newscom
© Hasan Jamali/AP Images
26
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Source: “All Aboard: The World in 2012,” The Economist. Copyright © The Economist Newspaper Limited, London, November 17, 2011.
Exhibit 5.4
Few and Far Between
Female directors on corporate boards as a percentage of total.
27
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Percent of women executives in different countries.
27
Business Ethics (1 of 2)
Business ethics is complex in the international marketplace because value judgments differ widely among culturally diverse groups.
Corruption is varyingly defined from culture to culture.
28
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Business Ethics (2 of 2)
Different levels of corruption, bribery, and fraud exist worldwide.
Bribery creates a major conflict between ethics and profitability.
The international organization Transparency International is curbing corruption through international and national coalitions encouraging governments to establish and implement effective laws, policies, and anti-corruption programs.
29
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29
Rank Country CPI Score
1 Denmark 91
2 New Zealand 91
3 Finland 89
4 Sweden 89
5 Norway 86
5 Singapore 86
7 Switzerland 85
8 Netherlands 83
9 Australia 81
9 Canada 81
11 Luxembourg 80
Source: Corruption Perceptions Index 2013, www.transparency.org. Reprinted from Corruption Perceptions Index. Copyright © 2013, Transparency International: the global coalition against corruption. Used with permission. For more information, visit http://www.transparency.org
Exhibit 5.5 (1 of 5)
Transparency International Corruption Perceptions Index 2013
Higher numbers correspond to a perceived lower level of public sector corruption. The top 25 (4 tied for #22), the BRIC countries, and the bottom 20 are shown; see http://www.transparency.org for the most complete and up-to-date listings. http://cpi.transparency.org/cpi3013/ for the complete 2013 listings.
30
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30
Rank Country CPI Score
12 Germany 78
12 Iceland 78
14 United Kingdom 76
15 Barbados 75
15 Belgium 75
15 Hong Kong 75
18 Japan 74
19 United States 73
19 Uruguay 73
21 Ireland 72
22 Bahamas 71
Source: Corruption Perceptions Index 2013, www.transparency.org. Reprinted from Corruption Perceptions Index. Copyright © 2013, Transparency International: the global coalition against corruption. Used with permission. For more information, visit http://www.transparency.org
Exhibit 5.5 (2 of 5)
Transparency International Corruption Perceptions Index 2013
Higher numbers correspond to a perceived lower level of public sector corruption. The top 25 (4 tied for #22), the BRIC countries, and the bottom 20 are shown; see http://www.transparency.org for the most complete and up-to-date listings. http://cpi.transparency.org/cpi3013/ for the complete 2013 listings.
31
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Rank Country CPI Score
22 Chile 71
22 France 71
22 Santa Lucia 71
BRIC Countries
72 Brazil 42
80 China 40
94 India 36
127 Russia 28
Bottom 20
153 Angola 23
154 Republic of Congo 22
Source: Corruption Perceptions Index 2013, www.transparency.org. Reprinted from Corruption Perceptions Index. Copyright © 2013, Transparency International: the global coalition against corruption. Used with permission. For more information, visit http://www.transparency.org
Exhibit 5.5 (3 of 5)
Transparency International Corruption Perceptions Index 2013
Higher numbers correspond to a perceived lower level of public sector corruption. The top 25 (4 tied for #22), the BRIC countries, and the bottom 20 are shown; see http://www.transparency.org for the most complete and up-to-date listings. http://cpi.transparency.org/cpi3013/ for the complete 2013 listings.
32
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Rank Country CPI Score
154 Democratic Republic of Congo 22
154 Tajikistan 22
157 Burundi 21
157 Myanmar 21
157 Zimbabwe 21
160 Cambodia 20
160 Eritrea 20
160 Venezuela 20
163 Chad 19
163 Equatorial Guinea 19
163 Haiti 19
167 Yemen 18
Source: Corruption Perceptions Index 2013, www.transparency.org. Reprinted from Corruption Perceptions Index. Copyright © 2013, Transparency International: the global coalition against corruption. Used with permission. For more information, visit http://www.transparency.org
Exhibit 5.5 (4 of 5)
Transparency International Corruption Perceptions Index 2013
Higher numbers correspond to a perceived lower level of public sector corruption. The top 25 (4 tied for #22), the BRIC countries, and the bottom 20 are shown; see http://www.transparency.org for the most complete and up-to-date listings. http://cpi.transparency.org/cpi3013/ for the complete 2013 listings.
33
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Rank Country CPI Score
168 Syria 17
168 Turkmenistan 17
168 Uzbekistan 17
171 Iraq 16
172 Libya 15
173 South Sudan 14
174 Sudan 11
175 Afghanistan 8
175 North Korea 8
175 Somalia 8
Source: Corruption Perceptions Index 2013, www.transparency.org. Reprinted from Corruption Perceptions Index. Copyright © 2013, Transparency International: the global coalition against corruption. Used with permission. For more information, visit http://www.transparency.org
Exhibit 5.5 (5 of 5)
Transparency International Corruption Perceptions Index 2013
Higher numbers correspond to a perceived lower level of public sector corruption. The top 25 (4 tied for #22), the BRIC countries, and the bottom 20 are shown; see http://www.transparency.org for the most complete and up-to-date listings. http://cpi.transparency.org/cpi3013/ for the complete 2013 listings.
34
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Rank Country Score
1 Netherlands 8.8
1 Switzerland 8.8
3 Belgium 8.7
4 Germany 8.6
4 Japan 8.6
6 Australia 8.5
6 Canada 8.5
8 Singapore 8.3
8 United Kingdom 8.3
Source: Bribe Payers Index 2011, www.transparency.org. Reprinted from Bribe Payers Index. Copyright © 2011, Transparency International: the global coalition against corruption. Used with permission. For more information, visit http://www.transparency.org.
Exhibit 5.6 (1 of 3)
Transparency International Bribe Payers Index 2011*
*Based on responses to questions such as: In the business sectors with which you are most familiar, please indicate how likely companies from the following countries are to pay or offer bribes to win or retain business in this country (respondent’s country of residence). The Index ranks the likelihood of companies from 28 leading economies to win business abroad by paying bribes—higher scores correspond to perceived lower levels of bribe paying internationally.
35
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Rank Country Score
10 United States 8.1
11 France 8.0
11 Spain 8.0
13 South Korea 7.9
14 Brazil 7.7
15 Hong Kong 7.6
15 Italy 7.6
15 Malaysia 7.6
15 South Africa 7.6
19 Taiwan 7.5
Source: Bribe Payers Index 2011, www.transparency.org. Reprinted from Bribe Payers Index. Copyright © 2011, Transparency International: the global coalition against corruption. Used with permission. For more information, visit http://www.transparency.org.
Exhibit 5.6 (2 of 3)
Transparency International Bribe Payers Index 2011*
*Based on responses to questions such as: In the business sectors with which you are most familiar, please indicate how likely companies from the following countries are to pay or offer bribes to win or retain business in this country (respondent’s country of residence). The Index ranks the likelihood of companies from 28 leading economies to win business abroad by paying bribes—higher scores correspond to perceived lower levels of bribe paying internationally.
36
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Rank Country Score
19 India 7.5
19 Turkey 7.5
22 Saudi Arabia 7.4
23 Argentina 7.3
23 United Arab Emirates 7.3
25 Indonesia 7.1
26 Mexico 7.0
27 China 6.5
28 Russia 6.1
Source: Bribe Payers Index 2011, www.transparency.org. Reprinted from Bribe Payers Index. Copyright © 2011, Transparency International: the global coalition against corruption. Used with permission. For more information, visit http://www.transparency.org.
Exhibit 5.6 (3 of 3)
Transparency International Bribe Payers Index 2011*
*Based on responses to questions such as: In the business sectors with which you are most familiar, please indicate how likely companies from the following countries are to pay or offer bribes to win or retain business in this country (respondent’s country of residence). The Index ranks the likelihood of companies from 28 leading economies to win business abroad by paying bribes—higher scores correspond to perceived lower levels of bribe paying internationally.
37
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Bribery: Variations on a Theme (1 of 3)
Bribery
Voluntarily offered payment by someone seeking unlawful advantage
Extortion
Payments are extracted under duress by someone in authority from a person seeking only what they are lawfully entitled to
38
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38
Bribery: Variations on a Theme (2 of 3)
Lubrication
Involves a relatively small sum of cash, a gift, or a service given to a low-ranking official in a country where such offerings are not prohibited by law
Subornation
Involves giving large sums of money—frequently not properly accounted for—designed to entice an official to commit an illegal act on behalf of the one offering the bribe; involves breaking the law
39
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Bribery: Variations on a Theme (3 of 3)
Agent Fees
When a businessperson is uncertain of a country’s rules and regulations, an agent may be hired to represent the company in that country
It’s often a legal and useful procedure
If a part of that agent’s fee is used to pay bribes, the intermediary’s fees are being used unlawfully
40
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The Foreign Corrupt Practices Act, which prohibits American executives and firms from bribing officials of foreign governments, has had a positive effect.
40
Ethical Decisions
Difficulties arise in making decisions, establishing policies, and engaging in business operations in five broad areas:
employment practices and policies
consumer protection
environmental protection
political payments and involvement in political affairs of the country
basic human rights and fundamental freedoms
41
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41
A Framework for Ethical Principles
(1) Utilitarian ethics
Does the action optimize the “common good” or benefits of all constituencies? And, who are the pertinent constituencies?
(2) Rights of the parties
Does the action respect the rights of the individuals involved?
(3) Justice or fairness
Does the action respect the canons of justice or fairness to all parties involved?
42
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Information-Oriented (IO) Relationship-Oriented (RO)
Low context High context
Individualism Collectivism
Low power distance High power distance (including gender)
Bribery less common Bribery more common*
Low distance from English High distance from English
Linguistic directness Linguistic indirectness
Monochronic time Polychronic time
Internet Face-to-face
Focus on the foreground Background
Competition Reduce transaction costs
Exhibit 5.7
Dimensions of Culture: A Synthesis
*We note that Singapore, Hong Kong, Japan, and Chile do not fit all the rules here. Most would agree that all four are relationship-oriented cultures.
43
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Summary (1 of 2)
Management styles differ around the world. Some cultures appear to emphasize the importance of information and competition, while others focus more on relationships and transaction cost reductions.
Business behavior is derived in large part from the basic cultural environment in which the business operates and, as such, is subject to the extreme diversity encountered among various cultures and subcultures.
Environmental considerations significantly affect the attitudes, behavior, and outlook of foreign businesspeople.
44
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Summary (2 of 2)
Varying motivational patterns inevitably affect methods of doing business in different countries.
International variation characterizes contact level, ethical orientation, negotiation outlook, and nearly every part of doing business.
Sensitivity, however, is not enough; the international trader must be constantly alert and prepared to adapt when necessary.
45
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Chapter 4
Cultural Dynamics
in Assessing
Global Markets
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Learning Objectives
LO1 The importance of culture to an international marketer
LO2 The origins of culture
LO3 The elements of culture
LO4 The impact of cultural borrowing
LO5 The strategy of planned change and its consequences
2
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Culture’s Pervasive Impact
Culture affects every part of our lives
How we spend money
How we consume
How we sleep
3
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Culture is a very important part of international marketing, it affects us from the time we wake up in the morning till we go to bed and even while we sleep the products we use are impacted by culture.
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Culture and Birthrates
The birthrate tables in Exhibit 4.1 show the gradual decline beginning in the 1960s.
Birthrate spikes in Singapore in 1976 and 1988 are not a matter of random fluctuation.
In Chinese cultures, being born in the Year of the Dragon is considered good luck.
A sudden and substantial decline in fertility in Japan in 1966 reflects abstinence, abortions, and birth certificate fudging.
The Japanese believe that women born in the Year of the Fire Horse will lead unhappy lives and perhaps murder their husbands.
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Almost everywhere, smaller families are becoming favored. This cultural change now leads experts to predict that the planet’s population may actually begin to decline after the middle of the century unless major breakthroughs in longevity intervene, as some predict.
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Exhibit 4.1
Birthrates (per 1000 women)
Source: World Bank, World Development Indicators by International Bank for Reconstruction and Development, 2012. Copyright © 2012 by World Bank. Reproduced with permission of World Bank via Copyright Clearance Center.
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As countries move from agricultural to industrial to services economies, birthrates decline. Immediate causes may be government policies and birth control technologies, but a global change in values is also occurring. Birthrate spikes have implications for sellers of diapers, toys, schools, and colleges. However, culture-based superstitions have an even stronger influence on the birthrates in Japan.
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Culture and Consumption
Exhibit 4.2
illustrates culture’s influence on consumption patterns
The Dutch are the champion consumers of cut flowers.
The Germans and British love their chocolates.
The Japanese and Spaniards prefer seafood.
The Italians love pasta.
The French and Italians consume wine.
The Japanese are the highest consumers of tobacco.
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Different types of food are consumed in different cultures (Exhibit 4.2). In hot, tropical countries, spicy food is eaten as spices preserve the food even without refrigeration. The geography of the country also shapes food habits–the Japanese eat a lot of fish and seafood since that is a primary source of food for an island country. The French are famous for wines and champagne because the weather and soil are conducive for grape farming. Diseases also follow food habits such as lung cancer in Spain due to excessive smoking, and liver disease in Germany due to consumption of fatty foods (Exhibit 4.3).
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Exhibit 4.2
Patterns of Consumption (annual per capita)
Country Cut
Flowers
(€) Chocolate
(kg) Fish and
Seafood
(kg) Dried
Pasta
(kg) Wine
(liters) Tobacco
(sticks)
France 42 4.3 5.2 9.2 37.9 682
Germany 48 8.1 8.6 9.0 24.6 980
Italy 45 2.5 8.3 24.7 35.1 1147
Netherlands 49 4.9 4.8 3.7 25.7 659
Spain 23 2.1 28.2 5.2 19.5 911
United Kingdom 38 8.0 11.3 4.7 21.2 568
Japan 46 1.1 32.1 8.0 7.2 1490
United States 32 4.4 5.0 2.2 9.9 874
Source: CBI Marketing Information Data Base, “CBI Tradewatch for Cut Flowers and Foliage,” http://www.cbi.eu, 2012; and 2015. EuroMonitor International
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Culture also influences the laws, age limits, and such related to alcohol. The legal environment also has implications for the consumption of cigarettes. Although expenditures on tobacco generally are rising in these countries because of increasing taxes, the amount consumed is declining universally. The dramatic decline of tobacco consumption in Spain represents a huge cultural shift that the world seldom sees.
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Culture and Disease
Exhibit 4.3
shows the consequence of consumption patterns across the countries listed.
The Germans have some of the highest consumption levels of flowers, candy, and wine, but the lowest birthrate among the six European countries.
Perhaps the Japanese diet’s emphasis on fish yields them the longest life expectancy.
The diabetes mellitus death rates have declined in five of the countries.
Japan shows a high incidence of stomach cancer.
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How people die varies substantially across the countries. The influence of fish versus red meat consumption on the incidence of heart problems is easy to see. Because stomach cancer in Japan is so prevalent, the Japanese have developed the most advanced treatment of the disease, that is, both procedures and instruments. This demonstrates that culture not only affects consumption; it also affects production.
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Exhibit 4.3
Consequences of Consumption
Country Birthrates
(per 1,000) Life
Expectancy Ischemic
Heart
Disease Diabetes
Mellitus Lung
Cancer Stomach
Cancer
France 13.1 82.2 58.6 18.3 52.2 7.8
Germany 8.6 81.2 161.3 30.8 56.7 12.6
Italy 8.9 82.6 120.2 35.2 60.6 16.8
Netherlands 10.7 81.3 57.8 16.4 64.8 8.5
Spain 9.5 82.6 77.6 22.4 48.0 12.5
United Kingdom 12.8 81.2 121.0 9.7 56.4 7.7
Japan 7.9 83.3 62.1 11.7 56.5 39.4
United States 12.7 78.9 120.1 22.3 51.6 3.7
Source: EuroMonitor 2015.
Death Rate per 100,000
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It is imperative for foreign marketers to learn to appreciate the intricacies of cultures different from their own if they are to be effective in foreign markets.
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The Traditional Definition of Culture
The sum of the values, rituals, symbols, beliefs, and thought processes that are learned and shared by a group of people, then transmitted from generation to generation
Resides in the individual’s mind
Recognizes that large collectives of people can be like-minded
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Exhibit 4.4
Origins, Elements, and Consequences of Culture
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We as humans and consumers are able to adapt to changing environments through innovation. Individuals can learn culture from social institutions through socialization (where one is raised and how) and acculturation (adjusting to a new culture). We also learn and adapt to a culture through role modeling, or imitation of peers. People also make decisions about consumption and production through application of their cultural-based knowledge.
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Origins of Culture: Geography
Includes climate, topography, flora, fauna, and microbiology
Influences history, technology, and economics
Social institutions
Boy-to-girl birth ratio
Ways of thinking
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Geographical influences manifest themselves in our deepest cultural values developed through the millennia, and as geography changes, humans can adapt almost immediately.
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Origins of Culture: History
The impact of specific events in history can be seen reflected in technology, social institutions, cultural values, and even consumer behavior.
Much of American trade policy has depended on the happenstance of tobacco being the original source of the Virginia colony’s economic survival in the 1600s.
The Declaration of Independence, and thereby Americans’ values and institutions, was fundamentally influenced by the coincident 1776 publication of Adam Smith’s The Wealth of Nations.
The military conflicts in the Middle East in 2003 bred new cola brands as alternatives to Coca-Cola—Mecca Cola, Muslim Up, Arab Cola, and ColaTurka.
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Perhaps most important are the ripple effects of World War II. For example, Germany’s long-standing mistrust of propaganda has yielded a variety of unusual limitations on marketing practices. The post-War baby boom still affects consumption patterns around the world.
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Origins of Culture: The Political Economy
For most of the 20th century, four approaches to governance competed for world dominance:
Colonialism
Casualty of World War II
Fascism
Fell in 1945
Communism
Crumbled in the 1990s
Democracy/free enterprise
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Origins of Culture: Technology
The effect of birth control techniques
Women have careers.
Half the marketing majors in the United States are women.
10 percent of the crews on U.S. Navy ships are women.
Men spend more time with kids.
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Jet aircraft, air conditioning, televisions, computers, mobile phones, and the Internet are all technological innovations that have had great impacts on institutions and cultural values in the past 50 years in the United States.
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Exhibit 4.5
Comparison of Healthcare Systems
Source: Michelle Andrews, “Health, The Cost of Care,” National Geographic Magazine, December 2009. Oliver Uberti/National Geographic Stock. Reprinted with permission.
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Origins of Culture: Social Institutions
Includes family, religion, school, the media, government, and corporations
Aspects that are interpreted differently within each culture:
The positions of men and women in society
The family
Social classes
Group behavior
Age groups
How societies define decency and civility
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In cultures in which the social organizations result in close-knit family units, a promotion campaign aimed at the family unit is usually more effective than one aimed at individual family members.
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Social Institutions: Family
The technology of birth control has tremendously affected families and reduced family sizes around the world.
Family forms and functions also vary substantially around the world, even around the country.
The ratio of male to female children is affected by culture (as well as latitude).
All these differences lead directly to differences in how children think and behave.
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In America, single women are choosing to have children without marriage.
In Asia, the percentages of women aged 35–39 years who have never married has burgeoned to more than 15 percent, up from about 5 percent in 1970.
Whereas nepotism is seen as a problem in American organizations, it is more often seen as an organizing principle in Chinese and Mexican firms.
There’s the common practice of high-income folks in Cairo buying an apartment house and filling it up with the extended family—grandparents, married siblings, cousins, and kids.
There’s the American family in California—both parents work to support their cars, closets, and kids in college, all the while worrying about aging grandparents halfway across the country.
In most European countries the ratio is about fifty-fifty.
The gender percentage of boys aged one to six years is 52 in India.
The gender percentage of boys aged one to four years is 55 in China.
Individualism is being taught the first night the American infant is tucked into her own separate bassinette.
Values for egalitarianism are learned the first time Dad washes the dishes in front of the kids or Mom heads off to work.
The toddler learns that both Grandpa and little brother are properly called “you.”
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Social Institutions: Religion
The impact of religion on the value systems of a society and the effect of value systems on marketing must not be underestimated.
In most cultures, the first social institution infants are exposed to outside the home takes the form of a church, mosque, shrine, or synagogue.
The influence of religion is often quite strong, so marketers with little or no understanding of a religion may readily offend deeply.
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The South African government banned an Axe deodorant advertisement from television, when it portrayed angels tossing their halos—an image that offended Christians there.
The French fashion house of Chanel unwittingly desecrated the Koran by embroidering verses from the sacred book of Islam on several dresses shown in its summer collections.
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Religious Pilgrims
Every Muslim is enjoined to make the hajj, or pilgrimage, to Mecca, once in his or her lifetime if physically able. Millions of faithful Muslims come from all over the world annually to participate in what is one of the largest ritual meetings on Earth.
Each day at sunrise and sunset, pilgrims crowd the Ghats (steps to the holy river/Mother Ganga/the River Ganges) to immerse themselves in the water and perform puja. The 55-day festival attracts some 60–80 million pilgrims.
© Mahmoud Mahmoud/AFP/Getty Images
© John Graham
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Varanasi (also known as Benares or Banaris) is one of the oldest and holiest cities in India. It is believed to be the home of Lord Shiva (Hindu god) and the location of the first sermon by Buddha, so followers of numerous religions flock to Varanasi on a daily basis. On the busiest day of the ritual, estimates are that tens of millions participate (according to Professor Rika Houston). Meanwhile, televised rituals such as the Academy Awards and World Cup soccer draw billions in the form of virtual crowds.
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Social Institutions: School
The literacy rate of a country is a potent force in economic development.
According to the World Bank, no country has been successful economically with less than 50 percent literacy.
When countries have invested in education, the economic rewards have been substantial.
Communicating with a literate market is much easier than communicating with one in which the marketer must depend on symbols and pictures.
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Children reading books rented from a street vendor
In the United States, kids attend school 180 days per year; in China, they attend 251 days—that’s six days a week. There’s a great thirst for the written word in China.
© Cary Wolinsky/Trillium Studios
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Social Institutions: The Media
The relative performance of educational systems (Exhibit 4.6) is seen as a leading indicator of economic competitiveness.
Media time (TV and increasingly the Internet and mobile phones) has replaced family time.
American kids spend only 180 days per year in school.
Chinese, Japanese, and German kids spend around 220 days per year in school.
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Chinese officials are recognizing the national disadvantages of too much school—narrow minds. Likewise, Americans more and more complain about the detrimental effects of too much media.
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Exhibit 4.6
OECD Program for International Student Assessment (PISA)
Selected Scores and Rankings for 15-Year-Olds, 2013
Source: OECD, PISA, http://www. economist.com/node/21529014, 2015.
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Social Institutions: Government
Most often governments try to influence the thinking and behaviors of adult citizens for the citizens’ “own good.”
In some countries, the government owns the media and regularly uses propaganda to form “favorable” public opinions.
Other countries prefer no separation of church and state.
Governments also affect ways of thinking indirectly, through their support of religious organizations and schools.
Governments influence thinking and behavior through the passage, promulgation, promotion, and enforcement of a variety of laws affecting consumption and marketing behaviors.
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The French government has been urging citizens to procreate since the time of Napoleon. Now the government is offering a new “birth bonus” of $800, given to women in their seventh month of pregnancy. Likewise the Japanese government is spending $225 million to expand day-care facilities toward increasing the falling birthrate and better employing women in the workforce.
Both the Japanese and Chinese governments are currently trying to promote more creative thinking among students through mandated changes in classroom activities and hours.
The Irish government is newly concerned about its citizens’ consumption of Guinness and other alcoholic products.
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Social Institutions: Corporations
Most innovations are introduced to societies by companies, many times by multinational companies.
Multinational companies efficiently distribute new products and services based on new ideas from around the word. As a result:
Cultures change.
New ways of thinking are stimulated.
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Corporations get a grip on us early through the media.
Merchants and traders have throughout history been the primary conduit for the diffusion of innovations, whether it be over the Silk Road or via today’s air freight and/or the Internet.
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Elements of Culture
The five elements of culture
Values
Rituals
Symbols
Beliefs
Thought processes
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International marketers must design products, distribution systems, and promotional programs with due consideration of each of the five elements of culture.
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Cultural Values
Hofstede, who studied over 90,000 people in 66 countries, found that the cultures differed along four primary dimensions.
Individualism/Collective Index (IDV), which focuses on self-orientation
Power Distance Index (PDI), which focuses on authority orientation
Uncertainty Avoidance Index (UAI), which focuses on risk orientation
Masculinity/Femininity Index (MAS), which focuses on assertiveness and achievement
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Individualism/Collective Index
Refers to the preference for behavior that promotes one’s self-interest
High IDV cultures reflect an “I” mentality and tend to reward and accept individual initiative
Low IDV cultures reflect a “we” mentality and generally subjugate the individual to the group
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Individualism pertains to societies in which the ties between individuals are loose. Everyone is expected to look after him- or herself and his or her immediate family.
Collectivism pertains to societies in which people from birth onward are integrated into strong, cohesive groups, which throughout people’s lifetimes continue to protect them in exchange for unquestioning loyalty.
more valued in collectivistic countries: Japan, China, and other Confucian cultures are more collectivistic.
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Power Distance Index
Measures the tolerance of social inequality, that is, power inequality between superiors and subordinates within a social system.
High PDI cultures tend to be hierarchical, with members citing social roles, manipulation, and inheritance as sources of power and social status.
Low PDI cultures tend to value equality and cite knowledge and achievement as sources of power.
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People from cultures with high PDI scores are more likely to have a general distrust of others (not those in their groups) because power is seen to rest with individuals and is coercive rather than legitimate. High PDI scores tend to indicate a perception of differences between superior and subordinate and a belief that those who hold power are entitled to privileges. A low PDI score reflects more egalitarian views.
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Uncertainty Avoidance Index
Measures the tolerance of uncertainty and ambiguity among members of a society
High UAI cultures are highly intolerant of ambiguity, experience anxiety and stress, are concerned with security and rule following, and accord a high level of authority to rules as a means of avoiding risk.
Low UAI cultures are associated with a low level of anxiety and stress, a tolerance of deviance and dissent, and a willingness to take risks.
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High UAI cultures tend to be distrustful of new ideas or behaviors. They dogmatically stick to historically tested patterns of behavior, which in the extreme become inviolable rules.
Cultures low in UAI take a more empirical approach to understanding and knowledge, whereas those high in UAI seek absolute truth.
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Cultural Values and Consumer Behavior
A variety of studies (Exhibit 4.7) have shown cultural values can predict such consumer behaviors as
word-of-mouth communications
impulsive buying
responses of both surprise and disgust
the propensity to complain
responses to service failures
movie preferences
the influence of perceptions of product creativity
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Hofstede’s notions of cultural values might help us predict the speed of diffusion of such new consumer services as equity investments and electronic auctions in Japan and France.
Hofstede’s data on cultural values suggest that the diffusion of innovations will be slower in Japan and France than in the United States. Such predictions are consistent with research findings that cultures scoring higher on individualism and lower on uncertainty avoidance tend to be more innovative.
Cultural values provide useful information for marketers. However, the complexity of human behavior, values, and culture is manifest.
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Exhibit 4.7
Hofstede’s Indexes, Language, and Linguistic Distance
Source: Geert Hofstede, Gert Jan Hofstede, and Michael Minkov, Culture and Organizations: Software of the Mind, 3rd ed. (New York: McGraw-Hill, 2011); Joel West and John L. Graham, “A Linguistics-Based Measure of Cultural Distance and Its Relationship to Managerial Values,” Management International Review 44, no.3 (2004), pp. 239–60.
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Rituals
Patterns of behavior and interaction that are learned and repeated
Marriage ceremonies
Funerals
Graduation rituals
Dinner at a restaurant
Visit to a department store
Grooming before heading off to work
Coordinate everyday interactions and special occasions
Let people know what to expect
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Walking into a department store in the United States often yields a search for an employee to answer questions. Not so in Japan, where the help bows at the door as you walk in.
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Symbols
Anthropologist Edward T. Hall tells us that culture is communication.
Learning to interpret correctly the symbols that surround us is a key part of socialization.
Aesthetics includes arts, folklore, music, drama, dance, dress, and cosmetics.
Customers everywhere respond to images, myths, and metaphors that help them define their personal and national identities and relationships within a context of culture and product benefits.
Exhibit 4.8 lists the metaphors Martin Gannon identified to represent cultures around the world.
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This learning begins immediately after birth.
Hear the language spoken
See the facial expressions
Feel the touch
Taste the milk of our mothers
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Language
For some around the world, language is itself thought of as a social institution, often with political importance.
Linguistic distance determines differences in values across countries and the amount of trade between countries and demonstrates a direct influence of language on cultural values, expectations, and even conceptions of time.
Bilingualism: Customers process advertisements differently if heard in their native versus second language.
Biculturalism: Customers can switch identities and perception frames.
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The successful international marketer must achieve expert communication, which requires a thorough understanding of the language as well as the ability to speak it.
Advertising copywriters should be concerned less with obvious differences between languages and more with the idiomatic and symbolic meanings expressed.
As linguistic distance from English increases, individualism decreases.
Spanish, Italian, French, and Portuguese are all classified as Romance languages because of their common roots in Latin. Distances can be measured on these linguistic trees. The notion of linguistic distance appears to hold promise for better understanding and predicting cultural differences in both consumer and management values, expectations, and behaviors.
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Exhibit 4.8
Metaphorical Journeys through 23 Nations
The Thai Kingdom The Traditional British House
The Japanese Garden The Malaysian Balik Kampung
India: The Dance of Shiva The Nigerian Marketplace
Bedouin Jewelry and Saudi Arabia The Israeli Kibbutzim and Moshavim
The Turkish Coffeehouse The Italian Opera
The Brazilian Samba Belgian Lace
The Polish Village Church The Mexican Fiesta
Kimchi and Korea The Russian Ballet
The German Symphony The Spanish Bullfight
The Swedish Stuga The Portuguese Bullfight
Irish Conversations The Chinese Family Altar
American Football
Source: From Martin J. Gannon, and Rajnandini K. Pillai Understanding Global Cultures, Metaphorical Journeys through 31 Nations, 5th ed. (Thousand Oaks, CA: Sage, 2012). Reprinted by permission of Sage Publications, Inc. via Copyright Clearance Center.
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Beliefs
Beliefs, which mainly stem from religious training, vary from culture to culture.
The western aversion to the number 13
Japanese concern about Year of the Fire Horse
The Chinese practice of Feng Shui
Myths, beliefs, superstitions, or other cultural beliefs are an important part of the cultural fabric of a society and influence all manner of behavior.
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What Westerners often call superstition may play quite a large role in a society’s belief system in another part of the world. For example, in parts of Asia, ghosts, fortune telling, palmistry, blood types, head-bump reading, phases of the moon, faith healers, demons, and soothsayers can all be integral elements of society.
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Russian Orthodox priests blessing a Niva assembly line
Part of a joint venture between General Motors and AvtoVaz, the Niva is the best-selling SUV in Russia, making a profit for GM.
© Maxim Marmur/AP Images
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Thought Processes
Culture seems to matter more in snap judgments than in longer deliberations.
Studies demonstrate a deeper impact of culture on sensory perceptions themselves, particularly aromas.
Newer products and services and more extensive programs involving the entire cycle, from product development through promotion to final selling, require greater consideration of cultural factors.
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The difference in perception—focus versus big picture—is associated with a wide variety of differences in values, preferences, and expectations about future events.
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Cultural Sensitivity and Tolerance
Successful foreign marketing begins with cultural sensitivity
Being attuned to the nuances of culture
A new culture can be viewed objectively, evaluated, and appreciated
Being culturally sensitive will reduce conflict and improve communications and thereby increase success in collaborative relationships.
41
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Besides knowledge of the origins and elements of cultures, the international marketer also should have an appreciation of how cultures change and accept or reject new ideas. Because the marketer usually is trying to introduce something completely new (such as e-trading) or to improve what is already in use, how cultures change and the manner in which resistance to change occurs should be thoroughly understood.
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The Paradox in Cultural Change
Culture is dynamic in nature.
It is a living process.
Culture is conservative and resists change.
Culture is the accumulation of a series of the best solutions to problems faced in common by members of a given society.
Why do societies change?
War
Natural disaster
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Cultural Borrowing
Cultural borrowing is a responsible effort to learn from others’ cultural ways in the quest for better solutions to a society’s particular problems.
Regardless of how or where solutions are found, once a particular pattern of action is judged acceptable by society, it becomes the approved way and is passed on and taught as part of the group’s cultural heritage.
Culture is learned; societies pass on to succeeding generations solutions to problems, constantly building on and expanding the culture so that a wide range of behavior is possible.
43
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Consider, for example, American (U.S.) culture and a typical U.S. citizen, who begins breakfast with an orange from the eastern Mediterranean, a cantaloupe from Persia, or perhaps a piece of African watermelon. After her fruit and first coffee, she goes on to waffles, cakes made by a Scandinavian technique from wheat domesticated in Asia Minor. Over these she pours maple syrup, invented by the Native Americans of the eastern U.S. woodlands. As a side dish, she may have the eggs of a species of bird domesticated in Indochina or thin strips of the flesh of an animal domesticated in eastern Asia that have been salted and smoked by a process developed in northern Europe. While eating, she reads the news of the day, imprinted in characters invented by the ancient Semites upon a material invented in China by a process also invented in China. As she absorbs the accounts of foreign troubles, she will, if she is a good conservative citizen, thank a Hebrew deity in an Indo-European language that she is 100 percent American. Actually, this citizen is correct to assume that she is 100 percent American, because each of the borrowed cultural facets has been adapted to fit her needs, molded into uniquely American habits, foods, and customs. Americans behave as they do because of the dictates of their culture.
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Similarities: An Illusion
A common language does not guarantee a similar interpretation of words or phrases.
Americans and British have a harder time understanding each other because of their apparent and assumed cultural similarities.
The growing economic unification of Europe has fostered a tendency to speak of the “European consumer.”
Marketers must assess each country thoroughly in terms of the proposed products or services and never rely on an often-used axiom that if it sells in one country, it will surely sell in another.
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As worldwide mass communications and increased economic and social interdependence of countries grow, similarities among countries will increase, and common market behaviors, wants, and needs will continue to develop. As this process occurs, the tendency will be to rely more on apparent similarities when they may not exist. A marketer is wise to remember that a culture borrows and then adapts and customizes to its own needs and idiosyncrasies; thus, what may appear to be the same on the surface may be different in its cultural meaning.
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Resistance to Change
Consumers in different cultures display differing resistance.
Observations indicate that those innovations most readily accepted are those holding the greatest interest within the society and those least disruptive.
Historically, most cultural borrowing and the resulting change has occurred without a deliberate plan, but increasingly, changes are occurring in societies as a result of purposeful attempts by some acceptable institution to bring about change, that is, planned change.
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An understanding of the process of acceptance of innovations is of crucial importance to the marketer. The marketer cannot wait centuries or even decades for acceptance but must gain acceptance within the limits of financial resources and projected profitability periods. Possible methods and insights are offered by social scientists who are concerned with the concepts of planned social change.
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Mom in Mumbai
Culture does change—dress and even names of major cities! Mumbai was formerly called Bombay. However, according to a local resident, everyone still calls it Bombay despite the official alteration.
© Joe McNally/Getty Images
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Planned and Unplanned Cultural Change
The first step in bringing about planned change in a society is to determine which cultural factors conflict with an innovation, thus creating resistance to its acceptance.
The next step is an effort to change those factors from obstacles to acceptance into stimulants for change.
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Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Introducing Innovation
Marketers have two options when introducing an innovation to a culture.
They can wait for changes to occur.
Hopeful waiting for eventual cultural changes that prove their innovations of value to the culture
They can spur change.
Introducing an idea or product and deliberately setting about to overcome resistance and to cause change that accelerates the rate of acceptance
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Cultural Congruence
Not all marketing efforts require change to be accepted.
Cultural congruence involves marketing products similar to ones already on the market in a manner as congruent as possible with existing cultural norms, thereby minimizing resistance.
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Marketing strategy is judged culturally in terms of acceptance, resistance, or rejection. How marketing efforts interact with a culture determines the degree of success or failure. All too often marketers are not aware of the scope of their impact on a host culture. If a strategy of planned change is implemented, the marketer has some responsibility to determine the consequences of such action.
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Summary
Marketers have only limited control over the cultural environment.
New environments influenced by elements unfamiliar and sometimes unrecognizable to the marketer complicate the task of planning marketing strategies.
Of all the tools the foreign marketer must have, those that help generate empathy for another culture are, perhaps, the most valuable.
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Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.