Managing Across Cultures

19







MANAGING ACROSS CULTURES



Part 1 Social and Cultural Environments



Ø Basic Aspects of Society and Culture



Ø Analytical Approaches to Cultural Factors



Ø Impact on Marketing Industrial Products



Ø Impact on Marketing Consumer Products



Ø Cross-cultural Complications and Suggested Solutions

























































Sources:



1. We Europeans - R. Hill

2. Global Marketing Management - W. Keegan





SOCIAL AND CULTURAL ENVIRONMENTS



“I believe only in French culture, and regard everything else in
Europe which calls itself 'culture' as a misunderstanding. I do not
even take the German kind into consideration.”

FRIEDRICH WILHELM NIETZSCHE 1844 – 1900



Culture has always been a source of disagreement and misunderstanding.

What does Nietzsche mean when he says "culture"? As you will soon see,
the meaning of culture to a manager nowadays is quite different than it
was to Nietzsche, who is probably referring to art, literature, and
perhaps even music in the quote above. All of these elements of
“high” and “low” culture are important, but as managers know,
culture is about much more than art. It is definitely a major influence
on what happens in the marketplace.



In Europe, where scones, croissants, and strudels have long been the
pride of bakers and pastry chefs, trend-conscious consumers have started
gobbling up American-style baked goods. It seems the Europeans are
discovering what Americans have known all along: In addition to being
tasty, brownies, muffins, and cookies are perfectly suited to on-the-go
lifestyles that include snacking while traveling on the metro or riding
a bicycle. Also, American baked goods have a shelf life of more than one
day, unlike many traditional European baked goods such as fresh cream
tarts. European bakers, many of whom regard pastries from across the
Atlantic as inferior, had to make some adjustments to accommodate
changing taste buds.

American companies have also experienced some culture shock. While
British consumers snapped up soft, moist Otis Spunkmeyer muffins, the
American company's managers soon discovered that the word “spunk” is
slang for "semen" in Britain and other countries. After the disk jockey
of a national radio show asked on the air “Who is going to eat a
product with a name like that?” the company sent him a free sample.
The result was favorable publicity in the form of an on-air endorsement
for the goodies. Now, some bakeries that sell the muffins put stickers
reading “American Muffin” over the offending word. A good pastry is
a good pastry no matter where it comes from and no matter what country
it's sold in. Any company making good pastries will have a market in
Europe.

The warm reception in Europe for American baked goods shows that many
products can achieve success outside the borne-country cultural
environment. This part of the course focuses on the social and cultural
forces that shape and affect individual and corporate behavior in the
marketplace. The conceptual orientation is that the cultures of the
world are characterized by both differences and similarities. Thus, the
task of the global manager is twofold. Managers must be prepared to
recognize and understand the differences between cultures and then
incorporate this understanding into the management planning process so
that strategies and marketing management programs are adapted when
necessary. At the same time, managers should take advantage of shared
cultural characteristics and avoid unneeded and costly adaptations of
the marketing mix,

Global managers must recognize and deal with the differences in the
social and cultural environments of world markets. Here, we focus on the
important differences in world markets and the equally important
similarities that express the fact of cultural universals. To help
managers better understand social and cultural dynamics in the global
marketplace, several useful analytical approaches are explained
(Maslow's hierarchy, Hotstede's cultural typology, the self-reference
criterion, and diffusion theory included). Also, suggested solutions to
cross-cultural difficulties and a review of cross-cultural training
procedures currently being used in global companies are thoroughly
considered.



BASIC ASPECTS OF SOCIETY AND CULTURE



Anthropologists and sociologists define culture as “ways of living”,
built up by a group of human beings, that are transmitted from one
generation to another. A culture acts out its ways of living in the
context of social institutions, including family, educational,
religious, governmental, and business institutions. Culture includes
both conscious and unconscious values, ideas, attitudes, and symbols
that shape human behavior and that are transmitted from one generation
to the next. In this sense, culture does not include one-time solutions
to unique problems, or passing fads and styles. As defined by
organizational anthropologist Geert Hofstede, culture is “the
collective programming of the mind that distinguishes the members of one
category of people from those of another.”



The Search for Cultural Universals



In addition to agreeing that culture is learned, not innate, most
anthropologists share two additional views. First, all facets of culture
are interrelated: influence or change one aspect of a culture and
everything else is affected. Second, because it is shared by the members
of a group, culture defines the boundaries between different groups.

Culture consists of learned responses to recurring situations. The
earlier these responses are learned, the more difficult they are to
change. Taste and preferences for food and drink, for example, represent
learned responses that are highly variable from culture to culture and
can have a major impact on consumer behavior. Preference for color is
culturally influenced as well. For example, although green is a highly
regarded color in Moslem countries, it is associated with disease in
some Asian countries. White, usually associated with purity and
cleanliness in the West, can signify death in Asian countries. Red is a
popular color in most parts of the world (often associated with full
flavor, passion, or virility); it is poorly received in some African
countries. Of course, there is no inherent attribute to any color of the
spectrum; all associations and perceptions regarding color arise from
culture.

Attitudes toward whole classes of products can also be a function of
culture. For example, in the United States, consumers have a cultural
predisposition for product innovations that have a "gadgetry" quality.
Thus, the electric knife, the electric toothbrush, and a host of other
"labor-saving" small appliances find ready market acceptance even though
many are purchased, used for a while, and then quietly put away and
never used again. There is unquestionably a smaller predisposition to
purchase such products in other developed markets such as Europe.

This difference is a result of cultural differences. Income levels also
influence consumer behavior and attitudes around the world. Indeed, a
basic question that must be answered by managers who want to understand
or predict behavior is, "How much do social and cultural factors
influence behavior independent of income levels?" Sometimes, the
influence is strong. For example, U.S. companies introduced fluffy,
frosted cake mixes in the United Kingdom where cake is eaten at tea-time
with the fingers rather than as a dessert with a fork. Green Giant Foods
attempted to market corn in Europe, where the prevailing attitude is
that corn is a grain fed to hogs, not people. In both instances,
cultural differences resulted in market failures.

Nevertheless, the demand for convenience foods, luxury consumer
products, electronic products, disposable products, and soft drinks in
the United States, Europe, Asia, Africa, and the Middle East suggests
that most consumer products have broad almost universal, appeal. As
communication continues to shrink the world, more and more products will
be marketed and consumed globally This implies that an important
characteristic of culture - that it defines boundaries between people
- will not limit the global reach of companies that want to extend
their operations globally. This does not suggest, however, that these
companies can ignore cultural factors. The fact that there is a global
market for a product does not mean that one can approach the market in
different countries identically. Cultural sensitivity to differences
spells the difference between global success and failure.

An important quest for the global manager is to discover cultural
universals. A universal is a mode of behavior existing in all cultures.
Universal aspects of the cultural environment represent opportunities
for global marketing managers to standardize some or all elements of a
marketing program. A partial list of cultural universals, taken from
cultural anthropologist G. Murdock's classic study includes the
following: athletic sports, body adornment, cooking, courtship, dancing,
decorative art, education, ethics, etiquette, family feasting, food
taboos, language, marriage, mealtime, medicine, mourning, music,
property rights, religious rituals, residence rules, status
differentiation, and trade. The astute global marketing manager often
discovers that much of the apparent cultural diversity in the world
turns out to be different ways of accomplishing the same thing.

Music provides one example of how these universals apply to marketing.
Music is part of all cultures, accepted as a form of artistic expression
and source of entertainment. However, music is also an art form
characterized by widely varying styles. Therefore, although background
music can be used effectively in broadcast commercials, the type of
music appropriate for a commercial in one part of the world may not be
acceptable or effective in another part. A jingle might use a bossa nova
rhythm for Latin America, a rock rhythm for North America, and "high
life" for Africa. Music, then, is a cultural universal that global
marketing managers can adapt to cultural preferences in different
countries or regions.

Because music is a cultural universal, it should come as no surprise
that the music business is going global. However, this does not mean
that the world's music is uniform. In countries like Turkey and China,
over 90 percent of all music played is local. Even in the United States,
75 percent of music is local. Does this mean that the music business in
Turkey is entirely local? Certainly not - the global music companies
are in Turkey giving the Turkish people the music that they want and
using their know-how and experience about the process of serving music
markets: identifying and signing artists, and building a repertoire;
introducing and promoting artists; recording, packaging, and
distributing recordings; and so on. Thus, even though the content of the
Turkish music market may be largely unique, the process of creating
value for customers in Turkey is identical to the process of creating
value anywhere. Moreover, the one constant in every market is change,
and the clear trend in global music markets is toward new sounds and
acts.

The global managers in the business are always alert to the potential of
extending a successful act across national boundaries. For example,
Kadja Nin, a vocalist from Burundi who sings in Swahili and French, has
been positioned as a new sound-sensuous and international. Many feel
that she has great potential for global markets.

Increasing travel and improving communications mean that many national
attitudes toward style in clothing, color, music, food, and drink are
converging. The globalization of culture has been capitalized on, and
even significantly accelerated, by companies that have seized
opportunities to find customers around the world. Coca-Cola, Pepsi, Levi
Strauss, McDonald's, IBM, Heineken, and BMG Entertainment are some of
the companies breaking down cultural barriers as they expand into new
markets with their products. Similarly, new laws and changing attitudes
toward the use of credit are providing huge global opportunities for
financial service providers such as American Express, VISA, and
MasterCard International. The credit card companies will have to use
communications efforts to persuade large numbers of people to use the
cards. The propensity to "pay with plastic" is currently much lower in
the rest of the world than in the United States.



The Anthropologist's Standpoint



The way a person thinks, feels, and acts has some relation to his or her
experience of the world. It does not matter if (normal) actions and
opinions are thought of as bizarre by outsiders. Successful global
managers must understand human experience from the local point of view
- and become insiders with cultural empathy in the process - if they
are to understand the dynamics of markets outside the home country.

Any systematic study of a new geographic market requires a combination
of tough-mindedness and generosity. The appreciation of another way of
life cannot develop when one is defensive about one's own way of life;
it is necessary to be secure in one's own convictions and traditions. In
addition, generosity is required to appreciate the integrity and value
of other ways of life and points of view to overcome the prejudices that
are a natural result of the human tendency toward ethnocentricity. When
people from other countries complain that the Americans, Japanese,
French, British, Chinese, etc., are haughty, patronizing, or arrogant,
home-country ethnocentricity is probably contributing to the problem.
Global managers need to develop an objective standpoint that recognizes
diversity and seeks to understand its origins. There are many paths to
the same end in life. The global manager knows this and rejoices in
life's rich diversity.



High- and Low-Context Cultures



E. Hall has suggested the concept of high and low context as a way of
understanding different cultural orientations. In a low-context culture,
messages are explicit; words carry most of the information in
communication. In a high-context culture, less information is contained
in the verbal part of a message. Much more information resides in the
context of communication, including the background, associations, and
basic values of the communicators. In general, high-context cultures
function with much less legal paperwork than is deemed essential in
low-context cultures. Japan, Saudi Arabia, and other high-context
cultures place a great deal of emphasis on a person's values and
position or place in society. In such cultures, a business loan is more
likely to be based on who you are than on formal analysis of pro forma
financial documents. In a low-context culture such as the United States,
Switzerland, or Germany, deals are made with much less information about
the character, the back-ground, and the values of the participants. Much
more reliance is placed on the words and numbers in the loan
application.

In a high-context culture, a person's word is his or her bond. There is
less need to anticipate contingencies and provide for external legal
sanctions because the culture emphasizes obligations and trust as
important values. In these cultures, shared feelings of obligation and
honor take the place of impersonal legal sanctions. This helps explain
the importance of long and protracted negotiations that never seem to
"get to the point." Part of the purpose of negotiating for a person from
a high-context culture is to get to know the potential partner.

For example, insisting on competitive bidding can cause complications in
low-context cultures. In a high-context culture, the job is given to the
person who will do the best work and whom you can trust and control. In
a low-context culture, one tries to make the specifications so precise
that a builder is forced by the threat of legal sanction to do a good
job. A building contractor in Japan is likely to say, “What has that
piece of paper got to do with the situation? If we can't trust each
other enough to go ahead without it, why bother?”

Although countries can be classified as high or low context in their
overall tendency, there are exceptions to the general tendency. These
exceptions are found in subcultures. The United States, for example, is
a low-context culture with subcultures that operate in the high-context
mode. The world of the central banker, for example, is a "gentleman's"
world, that is, a high-context culture. Even during the most hectic days
in the foreign exchange markets, a central banker's word is sufficient
for him or her to borrow millions of dollars. Actions initiated on the
telephone are confirmed in writing days later. A person's word is relied
upon, even though the general rule in the low-context culture is "get it
in writing."

Another high-context subculture in the United States is the Mafia, which
has imported the high-context culture of Sicily to the United States and
has maintained this culture with language, ritual, and a strong sense of
distinct identity.

These examples illustrate the ways of a high-context culture in which
there is trust, a sense of fair play, and a widespread acceptance of the
rules of the game as it is played.

One of the clearest and most painful instances of a failure of one
culture to perceive another culture's motivations and behaviors dates
back to the beginnings of World War II. Throughout the war and even to
this day, the United States encountered great difficulties in attempting
to understand the Empire of Japan, its enemy. In response to the
obstacles the United States faced, studies of Japanese culture were
commissioned, focusing on Japan's history, tradition, national
character, social life and customs, family, personality and mind. Since
the end of World War II, Japan has emerged as the leading competitor of
the United States; thus, the body of studies and publications has
continued to grow over the last 50 years, with the focus shifting
somewhat from an emphasis on societal and individual values and
motivations to business and corporate culture.

It would be easy to get paranoid about the hazards of doing business
across cultures, but, in fact, the main obstacle is attitude. If you are
sincere and truly want to learn about a culture, you will find that
people respond to your sincerity and interest and will help you acquire
the knowledge you need to be effective. If you are arrogant and
insincere and believe that you are right and "they" are wrong, you can
expect a full measure of trouble and misunderstanding. The best antidote
to the problem of misperceiving a situation is a constant vigilance and
an awareness that there are many opportunities to err. This should
create an attitude of openness to see what is so. Every global manager
should strive to suspend judgment and simply listen observe, perceive,
and take in the facts.



Communication and Negotiation



The ability to communicate in our own language is, as most of us have
learned, not an easy task. Whenever languages and culture change,
additional communication challenges will present themselves. For
example, "yes" and "no" are used in an entirely different way in
Japanese than in Western languages. This has caused much confusion and
misunderstanding. In English, the answer yes or 'no" to a question is
based on whether the answer is affirmative or negative. In Japanese,
this is not so. The answer "yes" or "no" may indicate whether the answer
affirms or negates the question. For example, in Japanese, the question,
"Don't you like meat?" would be answered yes if the answer is negative,
as in, "Yes, I don't like meat." 'The word wakarimashita means both I
understand" and I agree." To avoid misunderstandings, Westerners must
learn to distinguish which interpretation is correct in terms of the
entire context of the conversation.

The challenges presented by nonverbal communication are perhaps even
more formidable. For example, Westerners doing business in the Middle
East must be careful not to reveal the soles of their shoes to hosts or
pass documents with the left hand. In Japan, bowing is an important form
of nonverbal communication that has many nuances. People who grow up in
the West tend to be verbal, whereas those from the East are more
nonverbal. Not surprisingly, there is a greater expectation in the East
that people will pick up nonverbal cues and understand intuitively
without being told. Westerners must pay close attention not only to what
they hear, but also to what they see when conducting business in such
cultures.

Knowledge and understanding of cross-cultural differences is crucial
during negotiations. Negotiations put global managers face to face with
counterparts from diverse cultural backgrounds, challenging both sides
to surmount verbal and nonverbal communications barriers.

Americans bring their cultural ethnocentrism to the negotiating table.
There are 10 uniquely American tactics that frequently emerge during
negotiations. These tactics may be effective with other Americans, but
when used with people from other cultural backgrounds, they require
modification. The approaches and the corrections required are:



1. Americans are typically outnumbered in negotiations.

Solution: Greater reliance on teamwork and division of negotiating labor



2. Americans place a high value on informality and equality of
participants in negotiations. This may conflict with the customs and
class structures of foreign cultures.

Solution: Respect the customs and class structure of other cultures.
Obtain information from self-study and local agents on local attitudes
and values.



3. Pardon my French. Americans are culturally monolingual.

Solution: Forget about how difficult it is to learn a foreign language
and accept that you already have a talent for language. If you are going
to be regularly doing business with a particular country, take the time,
make the effort, and learn their language. If your contact with a
culture is too limited

to justify the time and effort required to learn their language, make
sure that you select and develop a good working relationship with a
competent interpreter.



4. Get to the point. Americans are, in comparison to people from other
cultures, blunt and impatient.

Solution: Understand that people from other cultures need to develop a
sense of connection and personal trust in order to feel comfortable
about doing business. This takes time. Take time to get to know your
negotiating partner.



5. Lay your cards on the table. Americans like to state the case up
front and are not accustomed to "feeling out" prospective partners.

Solution: Slow down and recognize the need to ask the same question in
different ways. Prepare to spend double the time you think is needed to
get the information you need.



6. Don't just sit there, speak up. Americans are uncomfortable with
silence during negotiations and often deal with their discomfort by
running at the mouth.

Solution: Recognize that silence is golden in many cultures. It is not
necessary - indeed, it can be detrimental - to keep a constant
stream of chatter. If there is silence, let it be. Reflect. Take in
information that comes from body posture and facial expression. Reflect
on the words that have been spoken and on your own objectives and
values. In other words, value the silence. Take advantage of it.



7. Don't take 'no' for an answer. Persistence and the "hard sell" are
highly valued in the United States.

Solution: If the answer is "no," stop selling and find out why. Respond
to the reasons for the answer "no."



8. One thing at a time. Americans favor a linear, organized, "left
brain" style of negotiating. Point One, Point Two, and so on is not a
universal approach.

Solution: Recognize your own right brain capability. Embrace a more
holistic approach toward negotiations.



9. A deal is a deal. This is a projection of an expectation that may not
be shared.

Solution: Accept a more gradual, supplemental view of negotiations and
joint effort.



10. I am what I am.

Solution: Adopt a more flexible standpoint. Be willing to change your
mind

and manner and to adapt to your opposite.



Social Behavior



There are a number of social behaviors and comments that have different
meanings in other cultures. For example, Americans generally consider it
impolite to mound food on a plate, make noises when eating, and belch.
However, some Chinese feel it is polite to take a portion of every food
served and consider it evidence of satisfaction to belch,

Other social behaviors, if not known, will place the international
traveler at a disadvantage. For example, in Saudi Arabia, it is an
insult to question a host about the health of his spouse, show the soles
of one's shoes, or touch or deliver objects with the left hand. In
Korea, both hands should be used when passing objects to another person,
and it is considered impolite to discuss politics, communism, or Japan.
Also in Korea, formal introductions are very important. In both Japan
and Korea, ranks and titles are expected to be used in addressing hosts,
In the United States, there is not a clear rule on this behavior, except
in select fields such as the armed forces or medicine. In Indonesia, it
is considered rude to point at another person with a finger. However,
one may point with the thumb or gesture with the chin.

When greeting someone, it is appropriate in most countries to shake
hands. In some countries, the greeting includes a handshake and more. In
Japan, a handshake may be followed by a bow, going as low and lasting as
long as that of the senior person. In Brazil, Korea, Indonesia, China,
and Taiwan, a slight bow is also appropriate.

In some countries, the greeting involves more contact. For instance, in
Venezuela, close friends greet each other with a full embrace and a
hearty pat on the back; in Indonesia, a social kiss is in vogue, and a
touching of first the right then the left cheek as one shakes hands. In
Malaysia, close friends grasp with both hands; and in South Africa,
blacks shake hands, followed by a clench of each other's thumbs, and
another handshake.

In most countries, addressing someone as Mr., Mrs., Miss, or Ms. is
acceptable, but this is certainly not universal. Monsieur, Madame, and
Mademoiselle are preferred in France, Belgium (French speaking part),
and Luxembourg; Senor, Senora, and Senorita are the norm in Spain and
Spanish-speaking Latin America. It is sometimes the case that
conversation occurs as greetings are exchanged. In Sweden, the greeting
is "goddag"; in the Netherlands, it is "pleased to meet you"; in the
United Kingdom, it is "how do you do"; and in Israel, it is "shalom,"
Other greetings vary by country. In many countries, men do not shake
hands with a woman unless she extends her hand first. In India, women,
or a man and a woman, greet each other by placing the palms of their
hands together and bowing slightly; and in Mexico simply by a slight
bow. In some countries, such as India, it is not advisable for men to
touch or talk alone with a woman.

Although many of the social behaviors mentioned vary from the
home-country norm, negative judgments should not be made about them.
When trying to explain what took so long in closing a deal, home office
executives need to understand that drinking tea, socializing, and
relationship-building are important components in accomplishing
corporate international goals.



Intercultural Socialization



In addition to knowing specific courtesies, personal space, language and
communication, and social behavioral differences, there are numerous
intercultural socialization behaviors that an international business
traveler should learn. Knowing a culture means knowing the habits,
actions, and reasons behind the behaviors. It is a mistake to make
assumptions about what is culturally proper or incorrect based on your
own experiences. For example, in the United States, the bathtub and
toilet are likely to be in the same room. Americans assume that this is
the world norm. Some cultures, however, such as that of the Japanese,
consider it unhygienic. Other cultures think it unhygienic even to sit
on a toilet seat. In many cultures, toilet paper is not the norm.

It is not always necessary for an international business traveler to
understand the "whys" of a culture, but it is important to accept them
and to abide by them while on foreign soil. Becoming aware of the
culture in which you will be visiting or working will pay excellent
dividends.



ANALYTICAL APPROACHES TO CULTURAL FACTORS



The reason cultural factors are a challenge to global managers is that
they are hidden from view. Because culture is learned behavior passed on
from generation to generation, it is difficult for the inexperienced or
untrained outsider to fathom. Becoming a global manager means learning
how to let go of cultural assumptions. Failure to do so will hinder
accurate understanding of the meaning and significance of the statements
and behaviors of business associates from a different culture.

For example, a person from a culture that encourages responsibility and
initiative could experience misunderstandings with a client or boss from
a culture that encourages bosses to remain in personal control of all
activities. Such a boss would expect to be kept advised in detail of a
subordinate's actions; the subordinate might be taking initiative on the
mistaken assumption that the boss would appreciate a willingness to
assume responsibility.

To transcend ethnocentricity and cultural myopia, managers must make the
effort to learn and internalize cultural differences. There are several
guidelines that will improve the ability to learn about other cultures:



1. The beginning of wisdom is to accept that we will never fully
understand ourselves or others. People are far too complex to be
understood.

2. Our perceptual systems are extremely limited. We see almost nothing.
Our nervous systems are organized on the principle of negative feedback.
The only time our control system is brought into play is when input
signals deviate from what we have learned to expect.

3. We spend most of our energy managing perceptual inputs.

4. When we do not understand the beliefs and values of a particular
cultural system and society, things that we observe and experience may
seem bizarre.

5. If we want to be effective in another culture, we must attempt to
understand that culture's beliefs, motives and values. This requires an
open attitude that allows us to transcend perceptual limitations based
on our own culture.



Maslow's Hierarchy of Needs



A. Maslow developed an extremely useful theory of human motivation that
helps explain cultural universals. He hypothesized that people's desires
can be arranged into a hierarchy of five needs.



SELF-ACTUALIZATION



ESTEEM



SOCIAL



SAFETY



PHYSIOLOGICAL



As an individual fulfills needs at each level, he or she progresses to
higher levels Once physiological? safety, and social needs have been
satisfied, two higher needs become dominant. First is a need for esteem.
This is the desire for self-respect, self-esteem, and the esteem of
others and is a powerful drive creating demand for status-improving
goods. The final stage in the need hierarchy is sell-actualization. When
all the needs for food, safety, security, friendship, and the esteem of
others are satisfied, discontent and restlessness will develop unless
one is doing what one is fit for. A musician must make music, an artist
must create, a poet must write, a builder must build, and so on.

Maslow's hierarchy of needs is, of course, a simplification of complex
human behavior. Other researchers have shown that a person's needs do
not progress neatly from one stage of a hierarchy to another. However
the usefulness of Maslow's hierarchy is its universality.

The model implies that, as countries progress through the stages of
economic development, more and more members of society are operating at
the esteem need level and higher, having satisfied physiological,
safety, and social needs. It appears that self-actualization needs begin
to affect consumer behavior as well. For example, there is a growing
tendency in high-income countries to reject material objects as status
symbol. The automobile is no longer the classic American status symbol
it once was, and many younger consumers are turning away from material
possessions. This trend toward rejection of materialism is not, of
course, limited to high-income countries. In India, for example, there
is a long tradition of the pursuit of consciousness or
self-actualization as a first rather than a last goal in life. However,
each culture is different.

For example, in Germany today, the automobile remains a supreme status
symbol. Germans give their automobiles loving care.



Hofstede's Cultural Typology



Organizational anthropologist Geert Hofstede has argued that the
cultures of different nations can be compared in terms of four
dimensions. The first, power distance, is the extent to which the less
powerful members of a society accept that power to be distributed
unequally. To paraphrase George Orwell, all societies are unequal, but
some are more unequal than others. The second dimension is a reflection
of the degree to which individuals in a society are integrated into
groups. In individualist cultures, each member of society is primarily
concerned with his or her own interest and those of the immediate
family. In collectivist cultures, all of society's members are
integrated into cohesive in-groups. Masculinity, the third dimension,
describes a society in which men are expected to be assertive,
competitive, and concerned with material success, while women fulfill
the role of nurturer and are concerned with issues such as the welfare
of children. Femininity, on the other hand, describes a society in which
the social roles of men and women overlap, with neither gender
exhibiting overly ambitious or competitive behavior. Hofstede notes that
the first three dimensions refer to expected social behavior; the fourth
dimension is concerned with man's search for truth. Uncertainty
avoidance is the extent to which the members of a society are
uncomfortable with unclear, ambiguous, or unstructured situations. Some
cultures express strong uncertainty, avoidance with aggressive,
emotional, intolerant behavior; they are characterized by a belief in
absolute truth. The manifestation of low uncertainty avoidance is
behavior that is more contemplative, relativistic, and tolerant.

Although the four dimensions yielded interesting and useful
interpretations, they did not provide any insight into possible cultural
bases for economic growth. Hofstede was also disturbed by the fact that
the surveys used in the research had been developed by Western social
scientists. Because many economists failed to predict the explosive
economic development of Japan, South Korea, Taiwan, Hong Kong, and
Singapore, Hofstede surmised that some cultural dimensions in Asia were
eluding the researchers. This methodological problem was remedied by a
Chinese Value Survey (CVS), developed by Chinese social scientists. The
CVS data supported the first three "social behavior" dimensions of
culture identified above, that is, power distance,
individualism/collectivism, and masculinity/femininity. Uncertainty
avoidance, however, did not show up in the CVS. Instead, the CVS
revealed a dimension that had eluded Western researchers. Moreover, this
dimension, which Hofstede calls "Confucian Dynamism", concerns several
aspects of culture that appear to be strongly linked to economic growth.
Hofstede explains that these dimensions concern "a society's search for
virtue," rather than a search for truth. Persistence (perseverance) is a
general tenacity in the pursuit of a goal. Ordering relationships by
status reflects the presence of societal hierarchies, and observing this
order indicates the acceptance of complementary relations. Thrift
manifests itself in high savings rates. Finally, a sense of shame leads
to sensitivity in social contacts. Hofstede notes that these values are
widely held within the high-performing countries but that the presence
of these values by themselves is not sufficient to lead to economic
growth. Two other conditions are necessary: the existence of a market
and a supportive political context.



The Self-Reference Criterion and Perception



A person's perception of market needs is framed by his or her own
cultural experience. A framework for systematically reducing perceptual
blockage and distortion was developed by J. Lee and published in Harvard
Business Review in 1966, Lee termed the unconscious reference to one's
own cultural values the self-reference criterion, or SRC. To address
this problem and eliminate or reduce cultural myopia, he proposed a
systematic four-step framework.



1. Define the problem or goal in terms of home country cultural traits,
habits, and norms,

2. Define the problem or goal in terms of the host culture, traits,
habits, and norms. Make no value judgments.

3. Isolate the SRC influence and examine it carefully to see how it
complicates the problem.

4. Redefine the problem without the SRC influence and solve for the host
country market situation.



Euro Disney provides an excellent vehicle for understanding SRC. As they
planned their entry into the French market, how might Disney executives
have done things differently?



Step 1. Disney executives believe there is virtually unlimited demand
for American cultural exports around the world. Evidence includes the
success of McDonald's, Coca-Cola, Hollywood movies, and American rock
music. Disney has a stellar track record in exporting its American
management system and business style. Tokyo Disneyland, a virtual carbon
copy of the park in Anaheim, California, has been a runaway success,
Disney policies prohibit sales or consumption of alcohol inside its
theme parks.



Step 2. Europeans in general, and the French in particular, are
sensitive about American cultural imperialism. Consuming wine with the
midday meal is a long-established custom. Europeans have their own real
castles, and many popular Disney characters come from European folk
tales.



Step 3. The significant differences revealed by comparing the findings
in steps 1 and 2 suggest strongly that the needs upon which the American
and Japanese Disney theme parks were based did not exist in France. A
modification of this design was needed for European success.



Step 4. This would require the design of a theme park that is more in
keeping with French and European cultural norms.



The lesson that SRC teaches is that a vital, critical skill of the
global manager is unbiased perception, the ability to see what is so in
a culture. Although this skill is as valuable at home as it is abroad,
it is critical to the global manager because of the widespread tendency
toward ethnocentrism and use of the self-reference criterion. The SRC
can be a powerful negative force in global business, and forgetting to
check for it can lead to misunderstanding and failure. While planning
Euro Disney, company executives were blindsided by a lethal combination
of their own prior success and ethnocentrism. Avoiding the SRC requires
one to suspend assumptions based on prior experience and success and be
prepared to acquire new knowledge about human behavior and motivation.



Environmental Sensitivity



Environmental sensitivity is the extent to which products must be
adapted to the culture-specific needs of different national markets. A
useful approach is to view products on a continuum of environmental
sensitivity. At one end of the continuum are environmentally insensitive
products that do not require significant adaptation to the environments
of various world markets. At the other end of the continuum are products
that are highly sensitive to different environmental factors. A company
with environmentally insensitive products will spend relatively less
time determining the specific and unique conditions of local markets
because the product is basically universal.

The greater a product's environmental sensitivity, the greater the need
for managers to address country-specific economic, regulatory,
technological, social, and cultural environmental conditions.

















P HIGH

R FOOD

O

D

U

C

T

COMPUTERS

A

D

A

P

T

A

T

I INTEGRATED

O CIRCUITS

N LOW

LOW HIGH



E N V I R O N M E N T A L S E N S I T I V I T Y



Any product exhibiting low levels of environmental sensitivity -
integrated circuits, for example - belongs in the lower left of the
figure. Intel has sold over 100 million microprocessors, because a chip
is a chip anywhere around the world. Moving to the right on the
horizontal axis, the level of sensitivity increases, as does the amount
of adaptation. Computers are characterized by moderate levels of
environmental sensitivity. Variations in country voltage requirements
require some adaptation. In addition, the computer's software
documentation should be in the local language. At the upper right are
products with high environmental sensitivity. Food sometimes falls into
this category because it is sensitive to climate and culture. McDonald's
has achieved great success outside the United States by adapting its
menu items to local tastes.



SOCIAL AND CULTURAL ENVIRONMENTS: IMPACT ON MARKETING INDUSTRIAL
PRODUCTS



The various cultural factors described earlier can exert important
influences on industrial products marketing around the globe. They must
be recognized in formulating a global marketing plan. Some industrial
products may exhibit either low levels of environmental sensitivity, as
in the case of computer chips, for example, or high levels, as in the
case of turbine generators when "buy national" government policy puts
foreign bidders at a disadvantage.

Motorola's growth strategy in the 1980s called for entering the Japanese
market. The company wanted to become a supplier to Nippon Telephone and
Telegraph (NIT), the national telecommunications company, which was a
monopoly at the time (it has since been privatized). Company executives
showed considerable savvy as they pursued the business. First, Motorola
hired a former U.S. government assistant trade representative with the
experience and skill to guide the company's effort. Motorola had a
strong competitive position in pagers; to secure MT's business, the
company invested in a special assembly line to build pagers to Nippon's
specifications. Next, Motorola sought certification to supply mobile
telephone equipment. Getting certification in Japan is a difficult
process that usually takes at least 18 months. Because of the time and
money involved, it is crucial for a company to know what it is doing and
why it is doing it. Motorola's understanding of the required approach
and persistence paid off; the company was granted the all-important
required certification.



SOCIAL AND CULTURAL ENVIRONMENTS: IMPACT ON MARKETING

CONSUMER PRODUCTS



Research studies show that, independent of social class and income,
culture is a significant influence on consumption behavior and durable
goods ownership. Consumer products are probably more sensitive to
cultural difference than are industrial products. Hunger is a basic
physiological need in Maslow's hierarchy; everyone needs to eat, but
what we want to eat can be strongly influenced by culture. Evidence from
the front lines of the marketing wars suggests that food is probably the
most sensitive category of consumer product. CPC International failed to
win popularity for Knorr dehydrated soups among Americans. The U.S. soup
market was dominated by Campbell Soup Company; 90 percent of the soup
consumed by households was canned. Knorr, a Swiss company acquired by
CPC, has a major share of the European prepared market where bouillon
and dehydrated soups accounted for 80 percent of consumer soup sales,
Despite CFC's failure to change the soup-eating habits of Americans, the
company has achieved great success as a global marketer; sales outside
the United States comprise 63 percent of its revenues from food lines.

At Campbell, by contrast, the figures are reversed: 63 percent of food
revenues are generated in the United States, and 27 percent from global
markets. When the company moved into global markets, it discovered that
the attitude of homemakers toward food preparation is a cultural factor
in marketing prepared foods. Cooking habits and customs vary from
country to country. Campbell's research revealed that Italian housewives
devoted approximately 4.5 hours per day to food preparation versus 60
minutes a day spent by their U.S. counterparts. The difference reflected
cultural norms regarding the kitchen as well as the fact that a higher
percentage of U.S. women work outside the home. The differences if
anything are increasing. Since 1990, the use of stoves in meal
preparation in the United States has declined 25 percent, whereas a
recent survey shows that over 80 percent of Italian men have a hot meal
at home for lunch.

Campbell discovered a strong negative opinion of convenience food in
Italy. A panel of randomly selected Italian housewives was asked: "Would
you want your son to marry a canned soup user?" The response to this
question was sobering: All but a small fraction of a percent of the
respondents answered, "No." Increased incomes as well as product
innovations may have an impact on Italian attitudes toward time and
convenience, with a corresponding positive effect on the market for
convenience foods. Already, taste improvements in frozen pizza have
boosted sales in Italy.

The strategy for North America is very simple. You market locally,
manufacture regionally, and resource globally, with common technology,
knowledge, and supplies.

Thirst also shows how needs differ from wants. Liquid intake is a
universal physiological need. As is the case with food and cooking,
however, the particular beverages people want to drink can be strongly
influenced by culture. Coffee is a beverage category that illustrates
the point. In the United Kingdom, instant coffee has 90 percent of the
total coffee market as compared with only 15 percent in Sweden. The
other European countries fall between these two extreme points. Instant
coffee's large share of the British market can be traced to the fact
that, in the hot beverage category, Britain has historically been a
nation of tea drinkers. Only in recent times have the British been
persuaded to take up coffee drinking. Instant coffee is more like tea
than ground coffee in its preparation. Not surprisingly, when the
British did begin to drink coffee, they opted for instant because its
preparation was compatible with past experience. Another reason for the
popularity of instant coffee in Britain is the practice of drinking
coffee with a large quantity of milk, so that the coffee flavor is
masked. Differences in the coffee flavor are thus bidden, so that a
"better cup" of coffee is not really important. In Sweden, however,
coffee is the hot beverage of choice. Swedes consume coffee without
large quantities of milk, and therefore the coffee flavor is not masked
and brewed coffee is preferred.

Soft drink consumption patterns also show conspicuous differences around
the globe. Four years ago, the per capita consumption of soft drink
products stood at 376 eight-ounce servings in the United States, 203
servings in Germany, 95 servings in Italy, and 88 servings in France.
Differences in soft drink consumption are associated in part with much
higher per capita consumption of other kinds of beverages in Europe. In
France and Italy, for example, 30 to 40 times as much wine is consumed
as in America on a per capita basis. The French also prefer mineral
water to soft drinks; the converse is true in America, where soft drink
consumption surpasses that of water. Germany far exceeds the United
States in per capita consumption of beer. Does culture alone account for
the difference between the popularity of soft drinks in Western Europe
and the United States? No; in fact, several variables, including culture
are responsible for the differences, as portrayed in the following
equation:





Y = f (A, B, C, D, E, F, G)

where



Y = consumption of soft drinks



f = function of



A = influences of other beverages' relative prices, quality, and taste



B = advertising expenditure and effectiveness, all beverage categories



C = availability of products in distribution channels



D = cultural elements, tradition, custom, habit



E = availability of raw materials (particularly of water)



F = climatic conditions, temperature, and relative humidity



G = income levels



To be sure, culture affects the demand for soft drinks. Note, however,
that it is only one of several variables. Therefore, culture is an
influencing, rather than a determining, factor. If a soft drink marketer
in Western Europe launches an aggressive marketing program (including
lower prices, more intensive distribution, and heavy advertising),
consumption can be expected to increase. However, it is also clear that
any effort to convert Europeans to soft drinks will run up against
cultural tradition, custom, and competition from widely available
alternative beverages. Culture in this case is a restraining force, but,
because culture is changing so rapidly, it is a restraint that can be
overcome. For example, Coca-Cola used promotion and a massive sampling
effort to increase 1992 unit case volume of Coke Light in Italy by 73
percent of 1991. In Germany, Coke's third largest global market, 1992
unit case volume increased by 6 percent over 1991, despite a recession
and dislocations due to unification; unit case volume in the former East
Germany grew 20 percent. In France, the 1992 marketing effort focused on
availability and greater consumer acceptance, resulting in a 6 percent
increase in unit case volume.

The penetration of the U.S. beverage market by bottled water producers
is another excellent example of the impact of an effective creative
strategy on a firmly entrenched cultural tradition. Prior to the 1980s,
drinking bottled water was not an important part of U.S. culture. The
general attitude in the United States was, "Why pay for something that
is free?" Source Perrier SA, the French bottled water firm, decided to
take aim at the U.S. market. It hired B. Nevin, an experienced American
marketing executive, and gave him a free hand to formulate a creative
strategy.

Nevin decided to reposition Perrier from an expensive, imported bottled
water (which no sane, red-blooded American would touch) to a
competitively priced, low-calorie beverage in the soft drink market. To
back up this positioning, Nevin launched a major consumer advertising
campaign, lowered prices, and moved the product from the gourmet section
of the supermarket to the soft drink section. The strategy boiled down
to significant adjustment of three marketing mix elements: price,
promotion, and place. Only the product was left unchanged.

The campaign succeeded beyond even the most optimistic expectations,
essentially creating an entirely new market. By the mid-1980s, the $2.2
billion bottled water category had become the fastest-growing segment of
the U.S. beverage industry. Perrier's annual U.S. sales grew from about
$40 million to $800 million, and Perrier commanded 80 percent of the
U.S. bottled water market. The success of this strategy was rooted in
two indisputable facts: Americans were ready for bottled water, and the
tactics were brilliantly executed. The results illustrate how the
restraining force of culture can be changed by a creative marketing
strategy grounded in market possibilities.









CROSS-CULTURAL COMPLICATIONS AND SUGGESTED SOLUTIONS



Global marketing activities are conducted in an ever-changing
environment that blends economic, cultural, and social forces. Stepping
out of the global perspective for a moment, we should acknowledge one
thing: Even when the parties to a commercial transaction belong to the
same low-context society and the terms of the deal are spelled out “in
black and white”, different understandings of the respective
obligations of the parties will often occur.

Business relationships between parties of different cultures and/or
nationalities are subject to additional challenges. Parties from
different countries may have trouble coming to contract terms because of
differences in the laws governing their respective activities and
problems of enforcement across international boundaries. No matter what
is stated in a contract, taking another party to court for breach of
contract will probably require a suit in the defendant's own home turf
which may be an insurmountable advantage for the home-country
participant.

When a party from a high-context culture takes part in a business
understanding, the proceedings are likely to be further complicated by
very different beliefs about the significance of formal business
understandings and the ongoing obligations of all parties. The business
environment in many countries outside the Triad markets can be
characterized by all manner of "hostile" elements: natural and
human-induced catastrophes, political problems, foreign exchange
inconvertibility, widely fluctuating exchange rates, depressions, and
changes in national economic priorities and tariff schedules. One cannot
predict precisely how the most carefully laid plans will go awry, only
that they will. Managers with dealings outside the home market must
build mutual trust, rapport, and empathy with business contacts; all are
required to sustain enduring relationships. Appointing a host country
national to a position as sales representative will not automatically
guarantee success. If a corporation constantly shuffles its
international staff it risks impeding the formation of what we might
call high-context subcultures between home office personnel and host
nationals. This diminishes the company's chances of effectively dealing
with the business crises that will inevitably occur.

Mexico's government imposed severe foreign exchange restrictions during
a recent financial crisis. Companies that had sold products or services
to Mexican parties on terms other than “confirmed irrevocable
international letter of credit” learned that they would have a lengthy
wait before receiving payment in U.S. dollars or other hard currencies.
Mexican companies dependent on essential ingredients, spare parts, and
other critical foreign supplies had to deal with a rationed supply of
foreign exchange to pay for new orders. In this situation, personal
relationships superseded contractual obligations. In some instances,
government officials needed to be convinced that a certain transaction
deserved a priority allocation of foreign exchange. Some foreign sellers
had to accept payment in Mexican products or in pesos that had to be
invested in Mexico. Such contingencies arise routinely as companies
conduct business around the globe. Solutions often result from
individual initiative: personal ties create opportunities for both sides
to keep a business relationship alive.

India is an important supplier of crude and processed agricultural and
forest product raw materials to world markets. Small family-owned
enterprises collect, process, and sell these materials. Typically,
months before the crop is in, sellers are required to contract with
foreign buyers for later delivery of these products. The buyers, in
turn, make long-term contractual commitments to their own customers. It
is not possible for the Indian firms to hedge reliably by making forward
crop purchases; there are no regulated commodity exchanges for these
products. The farmers and forest product collectors do not have the
resources to cover their sales if the crop fails. There are major
problems during most growing seasons: Natural disaster or insufficient
plantings result in short crops; strikes, protracted power shortages, or
the lack or spare parts result in excessive shipment delays and reduced
capacity. Business down-turns, or unexpected changes in required
inventory levels may prompt buyers to request that shipments be held
back or prices be reduced. Of course, such actions will cause the
supplier severe financial hardship. Sometimes, the supplier is unable to
comply precisely with the terms of the contract and therefore provides
a. substitute order (usually without advance notice). The hope is that
the buyer will inadvertently pay before discovering the switch and then
reluctantly accept the merchandise with only minor adjustment.

Ongoing business between India and its global customers is, of course,
perpetuated by mutual interest, but personal relationships are what make
it possible. False rumors, supplier defaults, and customer cancellations
are prevalent. Therefore, the greatest importance is assigned to
contacts and business associates who can be fully trusted and whose
culture-influenced perceptions are understood and predictable. Indian
society is at least as ethnically and culturally diverse as that in
Europe, and business practices are probably even more varied than in
Europe.



Training in Cross-Cultural Competency



Personal relationships are an essential ingredient for the international
businessman. One third of a Peace Corps volunteer's training is devoted
to learning about ways things are done in the host country (particularly
personal relationships). The international businessman should have
comparable preparation and a willingness to at least consider the merits
of accommodating to the host culture's ways of doing business. The
stakes are high: Experts estimate that between $2 and $2.5 billion worth
of business is lost each year because of employee mistakes that occur in
other cultures.

Samsung, GE, AT&T, and other large companies that are globalizing are
taking steps to train managers and sensitize them to other ways of
thinking, feeling, and acting. The goal is to improve their ability to
deal effectively with customers, suppliers, bosses, and employees from
other countries and regions. Managers must learn to question their own
beliefs, to overcome the SRC, and to adapt the way they communicate,
solve problems, and even make decisions. Multicultural managers must
learn to question and to reevaluate their feelings concerning such
rudimentary management issues as leadership, motivation, and teamwork;
this means an examination of some extremely fundamental and personal
systems of belief. Finally, managers must earn to overcome stereotypes
they hold regarding individuals of various races and religions from
other countries; managers must also diplomatically deal with stereotypes
others may have about them.

Samsung Group, South Korea's largest company, recently launched an
Internationalization campaign. Prior to departing for overseas
assignments, managers attend a month-long “boot camp”, where the
topics range from Western table manners to sexual harassment. Hundreds
of promising Samsung junior managers spend a year in Western countries
pursuing an unusual assignment: goofing off. International exposure is
important, but you have to develop international taste. You have to do
more than visit. You have to goof off at the mall, watch people, and
develop international tastes. Park Kwang Moo, an employee at Samsung's
trading subsidiary, did not get to spend time in malls: His assignment
was to visit the former Soviet Union. He spent his first 6 months
immersed in language study, then traveled to all 15 former Soviet
republics. Park's superiors were delighted with the hugh report he filed
when he returned, despite the fact that there was very little in it
about business issues per se. A director at the trading company noted
that the report was mostly about Russians' drinking habits and
idiosyncrasies. “But” he noted, “in 20 years, if this man is
representing Samsung in Moscow, he will have friends and he will be able
to communicate, and then we will get the payoff.”

Another widely used approach to accomplish sensitization is the use of
workshops, incorporating case studies, role playing, and other exercises
designed to permit participants to confront a relevant situation,
contemplate what their own thoughts and actions would be in such a
situation, and analyze and learn from the results. Participants must be
able to understand and evaluate their motivations and approaches. Often,
role-playing will bring out thoughts and feelings that otherwise might
go unexamined or even unacknowledged. A variety of other techniques have
been used for cross-cultural training; the common goal is to teach
members of one culture ways of interacting effectively in another
culture.

Becoming internationally adept and culturally aware should be a goal of
any professional who aspires to do business abroad. This generally means
a conscious effort in training and professional development by
organizations. The Canadian International Development Agency (CIDA)
provides an excellent model. CIDA hosts a 5-day pre-departure briefing
for Canadians that includes travel information, introduction to the
geographical area of the host country, and presentations by a host
national or a returnee. Cross-cultural communication, information for
family members, and information on skills transfer are also included.

If you cannot attend a formal training and orientation session or
program, at the minimum you should take advantage of the written, audio,
and visual material available on the country you will be visiting.
Brigham Young University publishes a series called Culturgram on more
than 140 areas of the world. A Culturgram is a product of native
commentary and original, expert analysis. It is a general introduction
to the culture of a world area or country.

Culture, a society's “programming of the mind”, has both a pervasive
and changing influence on each national market environment. Global
managers must recognize the influence of culture and must be prepared to
either respond to it or change it. Human behavior is a function both of
a person's own unique personality and that person's interaction with the
collective forces of the particular society and culture in which he or
she has lived. A number of concepts can help guide anyone seeking
insight into cultural issues. Nations can be classified as high- or
low-context cultures; communication and negotiation styles can differ
from country to country. Maslow's hierarchy, Hofstede's typology, and
the sell-reference criterion can provide clues about cultural
differences and similarities.

Global management and marketing has played an important role in
influencing the rate of cultural change around the world. This is
particularly true of food, but it includes virtually every industry,
particularly in consumer products. Soap and detergent manufacturers have
changed washing habits, the electronics industry has changed
entertainment patterns, clothing marketers have changed styles, and so
on. Although culture can also affect characteristics of industrial
products, it is more important as an influence on the management and
marketing process, particularly in the way business is conducted. Global
managers have learned to rely on people who know and understand local
customs and attitudes for management expertise. Even so, many persons
doing business in a new culture avail themselves of training
opportunities to help avoid potential cross-cultural complications.