Chapter 5 International Marketing

Culture in Management

• culture, including all of its elements, profoundly affects management style and overall business systems

• culture not only established the criteria for day-to-day business behavior but also forms general patterns of values and motivations

Cultural knowledge in management

• a lack of emphathy for and knowledge of foreign business practices can create insurmountable barriers to successful business relations

• knowledge of the management style - the business culture, management values, and business methods and behaviors existing in a country and a willingness to accomodate the differences are important in an international market

• culture has an important influence on strategic thinkin

required adaptation

• adaptation is a key concept in international marketing 

• ten basic criteria for adapatation 

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 environnment

degree of adaptation

• essential to effective adaptation

  • awareness of one’s own culture and the 

  • regonition of local customs and be willing to accomodate those differences that can cause misunderstandings

cultural imperatives

business customs and expectations that must be met and conformed to or avoided if business relationships are to be successful 

• in some cultures a person’s demeanor is more critical than in others 

• imperatives vary from culture to culture

cultural electives

relate to areas of behavior or to customes that cultural aliens may wish to conform to or participate in but that are not required to

• a cultural elective in one country may be an imperative in another

cultural exclusives

customs or behavior patterns reserved exclusively for the locals 

the impact of american culture on management style 

• “master of destiny” viewpoint

• independent enterprise as the instrument for social action

• personnel decision based on merit

• decision based on objective analysis

• wide sharing in decision making

• nerver-ending quest for improvement

• competition producing efficiency

“master of destiny” viewpoint

fundamental to US management and it states that people can substantially influence the future; they are in control of their own destiny

• “Being vs. doing” – deadline, planning, motivation, etc are all influenced by this concept 

independent enterprise as the instrument for social action

a corporation is recognized as an entity that has rules and continuity of existence and is a separate and vital social institution, because of this recognition, it can result in strong feelings of obligation to serve the company 

personnel decision based on merit

emphasizes the need to select the best-qualified persons for jobs, retaining them as long as their performance meets standards of expectations, and continuing the opportunity for upward mobility as long as those standards are met.

decision based on objective analysis

decision must be based on accurate and relevant information. In US business great emphasis is placed on the collection of free flow of information to all levels within the organization and on frankness of expression in the evaluation of business opinions or decisions

wide sharing in decision making

there is the belief that individuals in an organization required, and need the responsibility of making decision for their continued development  

nerver-ending quest for improvement

reflect the belief that change is not only normal but also necessary, that nothing is sacred or above improvement 

• Not in HPD societies because it tends to indicate a perception of differences between superior and subordinates and those who hold power are entitled to priviledges

competition producing efficiency

Adam Smith “the wealth of nations” that by pursuing his own interests he frequently promotes that of the society more effectively than when he really intended to promote.

• This "invisible hand” notion justifies competitive behavior because it improves society and its organizations

management styles around the world

• authority and decision making 

• management objectives and aspirations

• communication styles

• formality and tempo

• p-time vs. m-time

• negotiation emphasis

• marketing orientation

authority and decision making

• influencers of the authority structure of business:

  • high PDI countries; mexico, malaysia

  • low PDI countries; denmark, israel

  • three typycal authority patterns:

    • top-level management decisions

    • decentralized decisions

    • committe or group decisions 

top-level management decisions

generally found in situations in which family or close ownership gives absolute control to wonders and businesses are small enough to allow such centralized decision making; france, venezuela, mexico

decntralized decisions

allows executives at different levels of management to exercise authority over their own functions; germany, us

committe or group decisions

centralized or decentralized

management objectives and aspirations

• security and mobility

  • relate directly to basic human motivation and therefore have widespread economic and social implications

• personal life

  • worldwide study of individual aspirations (david mcclelland)

• affiliation and social acceptance

  • in some countries, acceptance by neighbors and fellow workers appears to be a predominant goal within business 

• power and achievement - south american countries

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 nonverbal messages 

• internet communication

  • nothing on the web will change the extent to which people identify with their own language and cultures

    • 78% of today’s website content is written in english

    • an english email cannot be understood by 35% of all internet users

formality and tempo

• breezy informality and haste characterize american business relationships

• europeans not necessarily “americanized”

• higher on hofstede’s PDI

  • may lead to business misunderstandings 

• haste and impatience most common mistakes made by americans in the middle east

• for maximum success marketers must deal with foreign executives in acceptable ways

p-time (polychronic time)

is more dominant in high-context cultures. P-time is characterized by the simultaneous occurrence of many things and by a "great involvement with people." P-time allows for relationships to build. P-time gives rise to looser time schedules, deeper involvement with individuals, and a wait-and-see-what -develops attitude.

m-time (monochromic time)

cultures include North Americans, Swiss, Germans and Scandinavians. They concentrate on one thing at a time. They are concerned with promptness. Most low-context cultures operate on M-time

negotiation emphasis

• business negotiations are 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 “kno thyself” first, and second, “know your counterpart”

marketing orientation

• the extent of a company’s market orientation has been shown to relate positively to profits

• firms in other countries have not been able to move frmo the traditional production, product, and sales orientation to the marketing orientation

• research has shown that sometimes it can be difficult to encourage a marketing orientation across diverse business units in global companies 

gender bias in international business

• women represent less than 20% of the employees who are chosen for international assigments 

• in many cultures (asia, middle east, latin america) women are not typically found in upper levels of management, and are treated very differently from men

• prejudices toward women in foreign countries

• cross-mentoring syste instituted in Lufthansa

• executives who have had international experience are:

  • more likely to get promoted

  • have higher rewards

  • have greater occupational tenure

ethical and socially responsible 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 

laws are:

the makers of past behavior that society has deemed unethical or socially responsible

ethical principles to help marketer distinguish between right and wrong, determine what ought to be done, and justify actions

• utilitarian ethics (does it achieve a common good?)

• rights of the parties (does the action involve the rights of the individual?)

• justice or fairness (does the action represent fairness for all?)

relationship-oriented cultures

Japanese culture is high context, collectivistic, high-power distance, polychronic (in part), linguistically indirect, and background focused, and it achieves efficiency through reduction of transaction costs,

information-oriented cultures

American culture is low context, individualistic (IDV), low power distance (PDI), monochronic time–oriented, linguistically direct, and foreground focused, and it achieves efficiency through competition

chapter 5 summary 

• some cultures appear to emphasize the importance of information and competition while others focus more on relationship and transaction of cost reductions

• businessperson working in another country must be sensitive to the business environemnt and must be willing to adapt when necessary

• understanding the culture you are entering is the only sound basis for planning