CULTURAL ENVIRONMENT

INTERNATIONAL BUSINESS II

BUSINESS FUNCTIONS VS CULTURE

Cultural Problems

Managing Workforce

Marketing Output

Purchasing Supplies

Dealing with regulators

Securing Funds

CULTURAL ANALYSISUnderstanding the cultures & physical characteristics of groups of people is useful because

• business employs, sells to, buys from, is regulated and is owned by people.

• An international company must consider these differences in order to predict & control its relationships & operations.

• A company first should determine differences in business practices adjustments necessary.

THE NATION AS A DEFINITION OF SOCIETY

• Similarity among people is a cause & effect of national boundaries. (Belonging sense)

• Nations include subcultures, ethnic groups, races, classes. (Challenge Segmentation)

• National Identity (certain characteristics physical, demographic & behavioural norms that may affect a company’s methods of conducting business)

• Nationality is not the only basis on which to group people . Everyone belongs to various other groups based on profession, age, religion, and place of residence.

• Country-by-country analysis has limitations because:– Not everyone in a country is alike.– Variations within some countries are great.– Similarities link groups from different countries– Data bases are scarce- Non-reliable-Outdated.

THE NATION AS A DEFINITION OF SOCIETY

PHYSICAL ATTRIBUTES• Physical differences can affect business decisions such as

whether & how to change a product, how high to place production machinery, & which advertising message to use. (Images-Frequency-Comparative Ads)

• (Ready to serve food, Cleaning, Shampoo, Packing, Sizing, Digital, Fool-Proof, Organic, Friendly Products)

• Physical attributes to take into account:– An individual’s size.– Age distribution.

THE CONCEPT OF CULTURECulture consists of specific learned norms based on attitudes, values & beliefs, all of which exist in every society.

• It can’t be easily isolated from such factors as economic & political conditions & institutions.

• Cultural value systems are set early in life & are difficult to change, but change may come through:– Choice or imposition. – Contact with other cultures.

MAIN CULTURAL DIFFERENCESLanguage: When people from different areas speak the

same language, culture is transmitted more easily. Factors to take into account:(Negotiation-Promoting-Advertising)

◦ Spoken language.◦ Silent language.

Religion: Is a strong moulder of values. When a religion is dominant in an area, it is apt to have great political, legal & economic influence. It is also apt to limit acceptance of products or business practices.

◦ Christian - Hindu – Judaic – Muslim - Buddhist.

EnglishSpanishFrenchChineseMalaysianPortugueseRussianArabicOther

LANGUAGES OF THE WORLD

RELIGIONS OF THE WORLD

BEHAVIORAL PRACTICES AFFECTING BUSINESS• Group Affiliations: Populations are subdivided into

groups.– Ascribed: Determined by birth. Gender, age, family, caste

& ethnic, racial or national origin.– Acquired: Include those based on religion, political

affiliation, profession and other associations. Reflect status, class.

• Role of competence: In some societies, a person’s acceptability for jobs & promotion is based primarily on competence. Prevention of discrimination is important.

• Importance of different group membership: Country by country attitudes vary toward:– Gender based groups Male & female roles.– Age based groups Respect for age.– Family based groups Family ties.

• Importance of Work: Explained by the interrelationship of the cultural & economic environments of the particular country.

The motives for working are different in different places.

BEHAVIORAL PRACTICES AFFECTING BUSINESS

MOTIVATION

• A fulfilled need is no longer a motivator.• Materialism leads to work.• Work leads to productivity and economic growth.

• Importance of Work:Attitudes toward work may change as economic gains are achieved.

– Protestant Ethic Work viewed as a means of salvation.– Belief in success & reward.– Work as a habit Problems with free time.– High need achievement Material or career success. – Lower need achievement Prefer social relations.

The ranking of needs differs among countries.

BEHAVIORAL PRACTICES AFFECTING BUSINESS

Which is the mostprestigious profession

in your country?

• Importance of Occupation: The perception of what jobs are best.

• Self Reliance: – Superior subordinate relationships.

• Autocratic.• Democratic.• Free-rein.

– Trust.– Attitudes of self-determination vs. fatalism.– Individual vs. group.

BEHAVIORAL PRACTICES AFFECTING BUSINESS

STOP AND THINK ABOUT THE FOLLOWING:

• Do you know which language is spoken in Monaco?

• What’s the first thing that comes to your mind when you hear the word Mexico?

• What do Canada, U.S.A and England have in common?

Communications: ◦ Language Complex & reflective of environment.◦ Silent Language Colour associations, sense of appropriate

distance, perception of time, status cues and body language.

Cultural Awareness: Problem areas that can hinder it are:◦ Things learned subconsciously.◦ Stereotypes.◦ Societal subgroups.

Grouping Countries: Some countries are relatively similar to one another, usually because they share many attributes that help mold their culture Cluster.

BEHAVIORAL PRACTICES AFFECTING BUSINESS

Fitting needs to the company position: Need for cultural awareness and extent of international involvement.

Polycentrism: Control is decentralized. Extensive delegation or imitation of proven host country practices. Managers foster local rather than worldwide objectives.

Ethnocentrism: The belief that one’s own group is superior to others. Important factors are ignored, believe home country objectives should prevail, think change is easily introduced. Control is centralized.

RECONCILIATION OF INTERNATIONAL DIFFERENCES

CHANGE KEY FACTORS• The more a change upsets values, the more resistance.• Cost benefit of change.• People are more willing to implement change when they

are involved in the decision to change.• People are more apt to support change when they

expect personal or group rewards.• Managers seeking to introduce change should first

convince those who can influence others Opinion leaders.

• International companies:– Change some things abroad.– Change themselves when encountering foreign

environments.– Learn things abroad that they can apply at home.

CHANGE KEY FACTORS

FRACTURED TRANSLATIONS

Product English Translation

Equivalent to Japanese Spam Liver Putty

Toilet Paper My Fanny Brand

Ready to Eat Pancakes Strawberry Crap Dessert

Antifreeze Spray Hot Piss Brand

Pediatrician’s Slogan Specialist in Deceased Children

SOURCE: Some Strawberry Crap Dessert, dear South China Morning Post, December 9, 1996 p. 12.

English translations made by Japanese firm added to labels to increase prestige for their products being sold in China.

Irwin/McGraw-Hill

WHOSE ENGLISH?

United States United Kingdom

Trunk Boot

HoodBonnet

Convertible Top Hood

Elevator Lift

Toilet W.C.

Bathroom Tub or Shower

Vacuum Hoover

??? Shag

Bloody ???

RELIGIONMarketing in an Islamic Framework

Source: Mushtaq Luqmani, Zahir A Quraeshi, and Linda Delene, “Marketing in Islamic Countries:

A Viewpoint,” MSU Business Topics, Summer 1980, pp. 20-21.

Elements Implications for Marketing

A. Unity. (Concept of Centrality, oneness of God, harmony in life.)

Product standardization, mass media techniques, central balance, unity in advertising copy and layout, strong brand loyalties, a smaller evoked set size, loyalty to company, opportunities for brand extension strategies.

B. Legitimacy. (Fair dealings, reasonable level of profits.)

Less formal product warranties, need for institutional advertising and/or advocacy advertising, especially by foreign firms, and a switch from profit-maximizing to a profit-satisficing strategy.

C. Zakat. (2.5% per annum compulsory tax binding on all classified as “not poor.”

Use of “excessive” profits, if any, for charitable acts; corporate donations for charity, institutional advertising.

CULTURAL FACTORS• Never touch the head of a Thai or pass an object over it. The

head is considered sacred in Thailand.• Avoid using triangular shapes in Hong Kong, Korea, and Taiwan.

It is considered a negative shape.• The number 7 is considered bad luck in Kenya, good luck in

Czech Republic and has a magical connotation in Benin, Africa.• The number 10 is bad luck in Korea.• The number 4 means death in Japan.• Red represents witchcraft and death in many African countries.• Red is a positive color in Denmark.

IT’S NOT THE GIFT THAT COUNTS, BUT HOW YOU PRESENT IT

Japan

Do not open a gift in front of a Japanese counterpart unless asked, and do not expect the Japanese to open your gift.

Avoid ribbons and bows as part of the gift wrapping. Bows as we know them are considered unattractive, and ribbon colors can have different meanings.

Do not offer a gift depicting a fox or badger. The fox is the symbol of fertility; the badger, cunning.

Europe

Avoid red roses and white flowers, even numbers, and the number 13. Do not wrap flowers in paper.

Do not risk the impression of bribery by spending too much on a gift.

IT’S NOT THE GIFT THAT COUNTS, BUT HOW YOU PRESENT IT…

Arab World

Do not give a gift when you first meet someone. It may be interpreted as a bribe.

Do not let it appear that you contrived to present the gift when the recipient is alone. It looks bad unless you know the person well. Give the gift in front of others in less –personal relationships.

Latin America

Do not give a gift until after a somewhat personal relationship has developed unless it is given to express appreciation for hospitality.

Gift should be given during social encounters, not in the course of business.

China

Never make an issue of a gift presentation—publicly or private.

Gifts should be presented privately, with the exception of collective ceremonial gifts at banquets.