Transcript Slide 1

Culture, Management Style
And
Business Systems
Modular:
Afjal Hossain
Assistant Professor, Department of Marketing
PSTU
McGraw-Hill/Irwin International Marketing, 13/e
Required Adaptation
• Adaptation is a key concept in international
marketing.
• As a guide to adaptation, all who wish to deal with individuals, firms, or
authorities in foreign countries should be able to meet 10 basic criteria:
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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
10) ability to integrate oneself into the environment
Degree of Adaptation
• Essential to effective adaptation is awareness
of one’s own culture and the recognition that
differences in others can cause anxiety,
frustration, and misunderstanding of the host’s
intentions.
• The self-reference criterion (SRC) is especially
operative in business customs.
• The key to adaptation is to remain American
but to develop an understanding of and
willingness to accommodate the differences
that exist.
Cultural Imperatives
• The business customs and expectations that must
be met and conformed to or avoided if
relationships are to be successful.
• Friendship motivates local agents to make more
sales.
• The significance of establishing friendship cannot
be overemphasized, especially in those countries
where family relationships are close.
• In some cultures a person’s demeanor is more
critical than in other cultures.
• What may be an imperative to avoid in one culture
is an imperative to do in another.
Cultural Electives and Exclusives
• 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.
– A cultural elective in one county may be an
imperative in another.
– Cultural electives are the most visibly different
customs and thus more obvious.
• Cultural exclusives:
– Those customs or behavior patterns reserved
exclusively for the locals and from which the
foreigner is barred.
Authority and Decision Making: PDI
• "Power distance is the extent to which less
powerful members of institutions and
organizations within a country expect and accept
that power is distributed unequally."
• Power distance describes also the extent to
which employees accept that superiors have
more power than they have. Furthermore that
opinions and decisions are right because of the
higher position some has.
• In countries with high power distance employees
are too afraid to express their doubts and
disagreements with their autocratic and
paternalistic bosses. The index for power
distance describes the dependence of
relationships in a country
Authority and Decision Making: PDI
Hi PDI
Low PDI
Hierarchical
Value Equality
Social Role and Inheritance = Power
Knowledge and respect = Power
Manipulation is more common
More egalitarian views
Higher distrust of others (not in their group) stronger
boundaries
More trusting of others
Less written/formal information
Tasked centered: What needs to be done
Knowledge is situational; relational
Knowledge is more transferable (codified)
More internal understanding of what is communicated: less
direct
Rule oriented, people play by external rules
More long term relationships
More short term relationships
Power is coercive rather than legitimate
Power is more legitimate
Those who hold power are entitled to such
Employees are less afraid to question superiors
Authority and Decision Making: PDI
• Influencers of the authority structure of business:
– High PDI Countries
• Mexico, Malaysia
– Low PDI Countries
• Denmark, Israel
• www.kwintessential.co.uk/map/hofstede-power-distanceindex.html
• Three typical authority patterns:
– Top-level management decisions
– Decentralized decisions
– Committee or group decisions
Management Objectives and
Aspirations
• Culture influences affect the attitude of managers
towards innovation, and conducting business. To fully
understand the management style of a country we
must understand that nations values:
– Personal security and job mobility
• Relate directly to basic human motivation and therefore have
widespread economic and social implications.
– Personal life
• Worldwide study of individual aspirations, (David McClelland).
– Greece, work gets in the way of enjoying life
– America, work ethic = standard of living
– Japan, work = sense of purpose
• Is profit more important than personal life
Management Objectives and
Aspirations
• Culture influences affect the attitude of
managers
towards
innovation,
and
conducting business. To fully understand the
management style of a country we must
understand that nations values:
– Affiliation and social acceptance
• In some countries, acceptance by neighbors and
fellow workers appears to be a predominant goal
within business.
– In Asian countries high importance is placed on fitting in with a
group
» Question: What do you do for a living
» American Answer: I’m an engineer (Individualist)
» Japanese Answer: I work for Mitsubishi (Collective)
– Power and achievement
• South American countries business leader = social or
political power
• America, business leaders = money
Annual Hours Worked
Britain
1,719
Canada
1,776
Germany
1,480
Hong Kong
2,287
Japan
1,842
Norway
1,399
Singapore
2,307
United States
1,979
Contextual Background of Various Countries
• Insert Exhibit 5.1
Contextual Background of Various Countries
• High Context Culture: Communication
depends heavily on the contextual or
nonverbal aspects of communication
– Who says it
– When it is said
– How it is said
• Low Context Culture: Communication
depends on more explicit, verbally expressed
communication
– Germans, very low context oriented: Just give
the facts, very frank and blunt
Communication Styles
• Face-to-face communication:
– Managers often fail to develop even a basic
understanding of just one other language.
– Much business communication depends on implicit
messages that are not verbalized.
• Internet communications:
– Nothing about the Web will change the extent to which
people identify with their own language and cultures.
– Estimates are that 78% of today’s Web site content is
written in English, but an English e-mail message cannot
be understood by 35% of all Internet users.
– Country-specific Web sites
– Web site should be examined for any symbols, icons, and
other nonverbal impressions that could convey and
unwanted message.
• Formality and tempo
P-Time versus M-Time
• Monochronic time:
– Tend to concentrate on one thing at a time
– Divide time into small units and are concerned with promptness
– Most low-context cultures operate on M-Time
• Polychronic time:
– Dominant in high-context cultures
– Characterized by the simultaneous occurrence of many things
– Allows for relationships to build and context to be absorbed as
parts of high-context cultures.
• Most cultures offer a mix of P-time and Mtime behavior, but have a tendency to be
either more P-time or M-time in regard to
the role time plays.
• As
global
markets
expand
more
businesspeople from P-time cultures are
adapting to M-time.
Negotiations Emphasis
• Business negotiations are perhaps the most
fundamental business rituals.
• The basic elements of business negotiations
are the same in any country.
– They relate to the product, its price and
terms, services associated with the product,
and finally, friendship between vendors and
customers.
• One standard rule in negotiating is “know
thyself” first, and second, “know your
counterpart.”
Gender Bias in International Business
• Women represent only 18% of the employees
who are chosen for international assignments.
• In many cultures women are not typically found
in upper levels of management, and men and
women are treated very differently.
– Asia, Middle East, Latin America
• Prejudices toward women in foreign countries
• Cross-mentoring system
– Lufthansa
• Executives who have had international
experience are more likely to get promoted, have
higher rewards, and have greater occupational
tenure.
Female Directors on Corporate Boards as a % of
Totals
• Insert Exhibit 5.2
Corruption Defined
• Types of Corruption:
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Profits (Marxism)
Individualism (Japan)
Rampant Consumerism (India)
Missionaries (China)
• Criticisms of Mattel and Barbie:
– Sales of Barbie declined worldwide after the
global standardization
– Parents and government did react
– Mattel’s strategy boosted sales of its competition
Bribery: Variations on a Theme
• Bribery and Extortion:
– Voluntary offered payment by someone seeking
unlawful advantage is bribery.
– If payments are extracted under duress by someone
in authority from a person seeking only what he are
she is lawfully entitled to that is extortion.
• Subornation and Lubrication:
– 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.
Bribery: Variations on a Theme (continued)
• Agent’s 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.
– The Foreign Corrupt Practices Act
– Change will come only from more ethically and
socially responsible decisions by both buyers
and sellers and by governments willing to take a
stand.
Ethical and Socially Responsible
Decisions
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In normal business operations, 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
Laws are the markers of past behavior that society has deemed
unethical or socially irresponsible.
Three ethical principles to help the marketer distinguish between
right and wrong, determine what ought to be done, and properly
justify his or her actions:
– Utilitarian Ethics
– Rights of the Parties
– Justice or Fairness
Culture’s Influence on Strategic
Thinking
• British-American
– Individualistic
• Japan & Germany
– Communitarian
• In the less individualistic cultures labor and
management cooperate.
• A competitive, individualistic approach works
well in the context of an economic boom.
• Fourth kind of capitalism – that common in
Chinese cultures
– Predicted by culture
A Synthesis, Relationship-Oriented vs.
Information-Oriented Cultures
• Studies are noting a strong relationship
between Hall’s high/low context and
Hofstede’s Individualism/Collective and
Power Distance indexes.
• Not every culture fits every dimension of
culture in a precise way.
• Information-Oriented Culture
– United States
• Relationship Culture
– Japan
• Synthesis of cultural differences allows us to
make predictions about unfamiliar cultures.