Transcript COUNTRY`S CULTURE AFFECTS GLOBAL BUSINESS SUCCESS

COUNTRY’S CULTURE AFFECTS
GLOBAL BUSINESS SUCCESS
KEY DIMENSIONS OF CULTURE
• 1. Power Distance: a society’s level of inequality is
endorsed by the followers as much as the leaders
• 2. Individualism & Collectivism: ties between
individuals are loose, degree of interdependence
among individual members of society
• 3. Masculinity & Femininity: competitiveness,
assertiveness, caring for others
• 4. Uncertainty Avoidance: the extent to which a
culture programs its members to feel uncomfortable
in unstructured situations.
HOSFTEDE
• A – US: INDIVIDUALISTIC: VALUE NEW IDEAS AND INNOVATIONS,
LEADERSHIP MORE PARTICIPATORY, INDIVIDUALS ARE
CONFORTABLE COMMUNICATING VIA IMPERSONAL MEANS.
• B – UK: SENSE OF MODESTY AND UNDERSTATEMENT, TAKES TIME
TO DEVELOP RELATIONSHIPS, MERIT DRIVEN, MEN AND WOMEN
ARE TREATED AS EQUALS.
• C – NETHERLANDS: DIRECT (ALMOST RUDE), EQUAL-RIGHTS
ORIENTED, INTERACTIVE STYLE – DECENTRALIZED POWER,
INDIVIDUALISTIC.
• D – BRAZILIANS: INTERACT PERSONALLY, VALUE LONG-TERM
BUSINESS RELATIONSHIPS, “RULES ARE MADE TO BE
BROKEN”ATTITUDE,
• MEXICO: PERSONAL RELATIONSHIPS VERY IMPORTANT,
TRADITIONS, HIERARCHY AND STATUS, IMPORTANT TO
UNDERSTAND WHAT IT IS NOT BEING SAID, LOYALTY AND
FAMILY VERY IMPORTANT.
• TOTAL REWARDS STRATEGY: JUST AS NATIONAL CULTURES
VALUES CANNOT BE GENERALIZED TO DEFINE AN
INDIVIDUAL’S VALUES, DIFFERENT ORGANIZATIONAL
CULTURES PREFER DIFFERENT REWARDS ELEMENTS.
• Ex: LA will emphasize a long-term horizon, group results and
team achievements.
• Feminine cultures: communicate quality of life and caring for
others, health care and time off.
Issues in Cross Cultural Business
Communication
• Sometimes top managers in MNCs neglect the
significance of the invisible barriers cultural
differences create in business communication.
• National policies aimed at protecting cultural
diversity, culture identity and cultural heritage.
WTO versus national policies.
• Adaptation strategies are more effective than
standardization strategy. Culture matters when
advertising and brands are processed by
consumers.
• If globalization is an inevitable process, then
cross – culturalization will also be inevitable.
• However cultural differences between
nations, and ethnic groups are becoming
stronger.
• Global managers need to be well informed
about cultural differences nationally, locally,
and ethnically in order to be effective in global
markets.
CULTURE IS DYNAMIC IT CHANGES
OVERTIME
• Values, norms and characteristics
• Chinese shopping habits: chinese save money
for future consumption, unlike western
cultures where people spend future money on
present consumption.
• French: restrict retail store size and protect
mom-an-pop retailers
• All market behaviors are culture-bond. Buying
and selling take place within culture.
Key Issues in Cross-Cultural Business
Communication
• Culture influences business communications
and business communications influences
culture.
• Cross-cultural factors impact people’s
shopping for food, practice of giving business
gifts.
• Culture affects the effectiveness of advertising
Cultures & Time
• In a monochronic culture time is important
(US. Western Europe)
• Polychronic culture: business discussions
follow their own logic (LA). It takes much
longer to negotiate!
• People in different cultures have different
market values and behaviors.
• Religion beliefs may have an influence on
negotiation strategies.
• Zero-sum or win-win approach
• Blunders in Cross-Cultural Adverstising
• “Nothing sucks like an Electrolux – vacuum
cleaner
• American Airlines – fly in leather, meant in
spanish – “Fly naked”
Right Color?
• Assuming narrow Western perspectives of
colors as “universal” asn applying it to alien
markets has often led to cultural faux pas.
• Can different colors alter the meanings of the
objects or situations with which they are
associated?
• Can color preferences predict future purchase
behavior ?
Colors
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Greeks – white and black “darkness and light”
Blue denoted heaven
Scarlet and purple signified authority and opulence.
Senators in Rome would wear scarlet or crimson violet
Orange is a sacred color for Hindus and Buddhists
South Africa tribe – yellow associated with new life and green
with fertility
• White: anglo saxon (purity), Chinese (death)
• Yellow represents warmth in the US and infidelity in France
• Purple color of love in China and sin and fear in Japan
Color
• Color signals a product’s attributes for merchandise,
thereby influencing perceptions about price and quality
• In the UK white is perceived as “crap” and dark colors for
expensive high tech products
• Food: clor to be a key factor in affecting the acceptability
of cookies in Argentina
• Apple, Gatorade and M&Ms have used novel coloured
product lines – color is useful in creating a different value
from the environment or the competition
• We live in a world of color!
Color
• Country of origin effects: red strongly related
to China, blue-green by Iranians and Kuwaitis,
USA blue color
• Color signals individual personality and selfimage
• Deodorants for women use greater contrast
and bright colors – packaging design
• Sophisticated colors denote elegance and
intimate communication – Tiffany, LV, Armani
Color
• VW add: black sheep meaning in Italy –
independent self assured, other cultures an
outcast
CHINA
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Chinese consumers suspicious of advertised products, because they perceived that
only bad products needed to be advertised
Appeals that emphasize individualistic benefits are more effective in the USA than
in China.
High Context and Low Context cultures
High Context cultures (collectivist societies China and Japan) the context in which
information is embedded is as important as what is said – people more effectively
reached by image or mood – Infinity add in Japan
Low context: such as USA the information is contained in the verbal messages – it
is important to provide adequate information relating to the product, service,
innovation.