International Marketing (mid ex)
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ipptchap005.pptxCulture, Management Style, and Business Systems
Chapter 5
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
LO1 The necessity for adapting to cultural differences
LO2 How and why management styles vary around the world
LO3 The extent and implications of gender bias in other countries
LO4 The importance of cultural differences in business ethics
LO5 The differences between relationship-oriented and information-oriented cultures
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Business Customs in Global Marketing
Business etiquette is largely driven by cultural norms.
Cultural analysis often pinpoints market opportunities, gives companies a competitive edge
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What we learned in Chapter 4, particularly Hofstede’s cultural value dimensions are applicable to business customs and how business is conducted in various countries. For example, in high power distance countries, authority and hierarchy needs to be respected while conducting business.
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Requires Adaptation
Adaptation is a key concept in international marketing
To successfully deal with individuals, firms, or authorities in foreign countries, managers should exhibit:
open tolerance,
flexibility,
humility,
justice/fairness,
ability to adjust to varying tempos,
curiosity/interest,
knowledge of the country,
liking for others,
ability to command respect, and
ability to integrate oneself into the environment
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Unless marketers remain flexible by accepting differences in basic patterns of thinking, local business tempo, religious practices, political structure, and family loyalty, they are hampered, if not prevented, from reaching satisfactory conclusions to business transactions.
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Cultural Imperatives, Electives and Exclusives
Cultural imperatives:
business customs and expectations that must be met, conformed, recognized and accommodated if relationships are to be successful
Cultural electives:
areas of behavior or to customs that cultural aliens may wish to conform to or participate in but that are not required
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Cultural imperatives are “must do” things in another culture, such as meeting and greeting, exchange of business cards in Asian cultures (eg: China, Japan and Korea). Cultural electives are optional activities that a foreigner may or may not want to engage in, such as drinking aperitifs (strong alcoholic drinks) before lunch in the Czech Republic or coffee in Saudi Arabia, no offense is taken if one refuses to participate in these cultural customs.
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BEIJING, CHINA: German Chancellor Angela Merkel and Chinese Prime Minister Wen Jiabao toast after the EU–China Business Summit at the Great Hall of the People in Beijing. The summit was boosted by the settlement of a trade row that had left 80 million Chinese-made garments piled up in European seaports, unable to be delivered to shops under a quota pact agreed to at the time. Drinking half a bottle is a cultural elective, but taking a sip is more of an imperative in this case.
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Cultural Imperatives, Electives and Exclusives
Cultural exclusives:
customs or behavior patterns reserved exclusively for the locals and from which the foreigner is barred and must not participate
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In general, politics and religion are taboo in conversations many cultures, particularly for foreigners. In Mexico, McDonalds used the national symbol of the Mexican Flag on paper placemats and insulted the people (as you treat anything with the national symbol with the utmost respect). These are cultural exclusives, things you never engage in or do when in another culture.
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The Impact of American Culture
Ways in which U.S. culture has influenced management style include, but are not limited to, the following:
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
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American culture is based on a few basic premises listed above, reward is based on merit and not group performance. Decisions are made objectively not subjectively, it is a competitive business environment where continuous improvement and to get better is the goal.
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American Culture and Management Style
There are at least three reasons to focus briefly on American culture and management style:
for Americans, it is important to be aware of the elements of culture influencing decisions and behaviors.
for those new to American culture, it is useful to better understand business associates from the States as the U.S. market is the biggest export market in the world
since the late 1990s, American business culture has been exported around the world
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For Americans, a self-awareness will help adapt to working with associates in other cultures. This knowledge will help everyone be more patient while conducting business across borders. Just as in the 1980s Japanese management practices were imitated almost everywhere.
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Differences in Management Styles Around the World
Authority and Decision Making
In high-PDI countries subordinates are not likely to contradict bosses, but in low-PDI countries they often do
Three typical patterns exist:
top-level management decisions,
decentralized decisions, and
committee or group decisions
Management Objectives and Aspirations
Security and Mobility
Personal Life
Affiliation and Social Acceptance
Power and Achievement
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Differences in Management Styles Around the World
Differences in Communication Styles
Face to Face Communication
Internet Communication
According to Edward T. Hall, the symbolic meanings of time, space, things, friendships, and agreements, vary across cultures
Hall places eleven cultures along a high-context/low-context continuum
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
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This picture demonstrates office space in the U.S. and Japan, the U.S. is more individualistic, more space between cubicles and Japan more collectivistic.
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Differences in Management Styles Around the World
Formality and Tempo
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
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Differences in Management Styles Around the World
P-Time versus M-Time
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”
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Differences in Management Styles Around the World
Negotiations Emphasis
Differences with respect to the product, its price and terms, services associated with the product, and finally, friendship between vendors and customers
Market Orientation
American companies are embracing the market orientation philosophy
Other countries are still in the traditional production, product and selling orientations
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Gender Bias in International Business
The gender bias against women managers exists in some countries
Women are not easily accepted in upper level management roles in Asia, Middle East, and Latin America (although this is changing)
Gender bias poses significant challenges in cross-cultural negotiations
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Gender bias is an issue in international negotiations. Women may not be easily accepted in certain cultures (eg: Middle East and Latin America). This poses challenges in cross-cultural negotiations.
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Percent of women executives in different countries.
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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
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Business Ethics
Existence of different levels of corruption, bribery, and fraud
The Foreign Corrupt Practices Act 1977: Imprisonment for bribery
Bribery creates a major conflict between ethics and profitability
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Bribery is a problem when conducting business cross-culturally. It is an illegal concept in the U.S and U.S. subsidiaries are not allowed to take bribes. The Foreign Corrupt Practices of 1977 applies to all U.S. companies.
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Bribery: Variations on a Theme
Bribery
Voluntarily offered payment by someone seeking unlawful advantage
Extortion
Payments are extracted under duress by someone in authority from a person seeking only what they are lawfully entitled
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Bribery: Variations on a Theme
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; involves breaking the law
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A Framework for Ethical Principles
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(1) Utilitarian ethics
Does the action optimize the “common good” or benefits of all constituencies? And, who are the pertinent constituencies?
(2) Rights of the parties
Does the action respect the rights of the individuals involved?
(3) Justice or fairness
Does the action respect the canons of justice or fairness to all parties involved?
THE END
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