International Marketing Chapter 5

1
International MarketingChapter 5

• Cultural, Management Style, and Business Systems

2
Degree of Adaptation

• Businesses may not have to adapt to all markets.
  As an example, kids in Asia want the golden
  haired Barbie just like kids in the US.
• However, business must adapt in some ways to be
  successful.
• Business customs can be grouped into imperatives,
  electives and exclusives.

3
Degree of Adaptation Continued
Cultural Imperatives, Electives and Exclusives

• Cultural imperatives are the business customs and
  expectations that must be met, conformed,
  recognized and accommodated if relationships are
  to be successful

• Cultural electives relate to areas of behavior or
  to customs that cultural aliens may wish to
  conform to or participate in but that are not
  required

• Cultural exclusives are those customs or behavior
  patterns reserved exclusively for the locals and
  from which the foreigner is barred and must not
  participate

4
Degree of Adaptation Continued

• Imperatives Guanxi trust and human
  relationships,
• never lose your patience, correct someone in
  public
• Electives Greeting another man with a kiss, eat
  foods that are disagreeable, drink alcohol,
  bowing
• Exclusives Taking on anothers religious
  symbolisms
• or important political or cultural symbols
  used in inappropriate ways

5
Required Adaptation

• Adaptation is a key concept in international
  marketing
• To successfully deal with individuals, firms, or
  authorities in foreign countries, managers should
  exhibit

1. open tolerance,
2. flexibility,
3. humility,
4. justice/fairness,
5. ability to adjust to varying tempos,
6. curiosity/interest,
7. knowledge of the country,
8. liking for others,
9. ability to command respect, and
10. ability to integrate oneself into the environment

6
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 yielding efficiency

7
Management Styles Around the World

• Management values, and behaviors vary around the
  world.

• Differences in the contact level, communications
  emphasis, tempo, and formality of foreign
  businesses are encountered from culture to
  culture.

• Ethical standards and sales interactions and
  negotiation styles differ substantially.

8
Management Styles Around the World

• Cross-cultural differences influence management
  styles in the following areas

• Authority and Decision Making
• Management Objectives and Aspirations
• Communication Styles
• Formality and Tempo
• P-Time versus M-Time
• Negotiations Emphasis

9
Differences in Management Styles Around the World

• Three typical patterns exist
• top-level management decisions,
• decentralized decisions, and
• committee or group decisions

• Security especially of lifetime employment
• Affiliation and Social Acceptance by neighbors
  and fellow workers
• Power and Achievement Orientation sought by
  managers
• Importance of personal/family life over work and
  profit

10
Differences in Management Styles Around the World

• According to Edward T. Hall, the symbolic
  meanings of time, space, things, friendships, and
  agreements, vary across cultures
• In some cultures, messages are explicit the
  words carry most of the information. In other
  cultures ... less information is contained in the
  verbal part of the message since more is in the
  context
• 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
• Hall places eleven cultures along a
  high-context/low-context continuum

11
Low Context vs High Context Cultures
12
Differences in Management Styles Around the World

• 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

13
Differences in Management Styles Around the World

• M-time, or monochronic time, typifies most North
  Americans, Swiss, Germans, and Scandinavians
• 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

14
The Time Element in Culture
15
Gender Bias in International Business

• The gender bias against women managers exists in
  some countries

• Gender bias poses significant challenges in
  cross-cultural negotiations

16
Business Ethics
Business ethics is complex in the international
marketplace because value judgments differ widely
among culturally diverse groups
Corruption varyingly defined from culture to
culture
Existence of different levels of corruption,
bribery, and fraud
The Foreign Corrupt Practices Act 1997
Imprisonment for bribery
Bribery creates a major conflict between ethics
and profitability
17
Cultural and Corruption
18
Culture and Bribery
19
Bribery Variations on a Theme

• Voluntarily offered payment by someone seeking
  unlawful advantage

• Payments are extracted under duress by someone in
  authority from a person seeking only what they
  are lawfully entitled

20
Bribery Variations on a Theme

• 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

• Involves giving large sums of moneyfrequently
  not properly accounted fordesigned to entice an
  official to commit an illegal act on behalf of
  the one offering the bribe involves breaking the
  law

21
Ethical and Socially Responsible Decisions

• Areas of decision making where ethical issues
  arise

• employment practices and policies,
• consumer protection,
• environmental protection,
• political payments and involvement in political
  affairs of the country, and
• basic human rights and fundamental freedoms

22
Cultures Influence on Strategic Thinking

• Culture influences managers thinking about
  business strategy

• The British-American individualistic view of
  capitalism typifies adversarial relationships
  among labor, management, and government

• The communitarian form of capitalism in Japan
  and Germany are typified by cooperation among
  government, management, and labor, particularly
  in Japan

• The Chinese emphasis on guanxi (ones network of
  personal connections) is a kind of capitalism
  manifested by culture

23
Information vs Relationship Orientation