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International Marketing MKT630

Lesson # 15

INTERNATIONAL CULTURAL AND SOCIAL ENVIRONMENTS

Affect of Cultures on Business Practices

Causes of cultural differences and change:

Cultural value systems are set early in life and are difficult to change. By the age of ten most children

have their basic value system in place, such as;

evil vs good

dirty vs clean

ugly vs beautiful

unnatural vs natural

abnormal vs normal

paradoxical vs logical

irrational vs rational

Culture is transmitted by various patterns:

from parent to child

from teacher to pupil

from social leader to follower

from one age peer to another

Change in culture may come through

choice or imposition

contact with other cultures

Isolation tends to stabilize a culture and contact tends to create cultural borrowing

Language and religion also affect cultural stability

Behavioral practices affecting businesses:

In any culture a variety of behavioral practices affect the way businesses are conducted. Some of the

common behavioral practices affecting businesses are given below;

group affiliations

role of competence

attitudes towards gender, age & family

importance of occupation

communications

language, context

silent language

attitudes towards work

other behavioral differences

degree of self-reliance

preference for autocratic vs consultative management

attitudes towards self-determination vs fatalism

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International Marketing MKT630

Some management styles:

Scholars like Herzberg have researched cultures of countries around the world and have categorized

countries according to business practices;

· Theory "X" - workers are generally irresponsible, unwilling to work and must be persuaded to

perform their obligations

· Theory "Y" - given an appropriate work environment and in absence of exceptional disincentives,

workers are dedicated to their tasks, are generally self motivated

· Decision making

USA - authoritarian

Western Europe - limited co-determination

Japan - with consensus

Latin America paternalistic

· Corporate emphasis

North America - short-term profit

Western Europe - employee & corporate interests

Japan - close cooperation between govt. & business

Latin America - highly govt. regulated

Hofstede's dimensions of national culture:

· Power distance - extent to which power in organizations is unequally distributed

high power distance - centralized tall, pyramid organizations, people at lower strata with lower

qualifications (Philippines, Mexico, South Korea, India)

Low power distance - less centralized, flatter organizations, people at lower strata with higher

qualifications (Austria)

· Uncertainty avoidance - extent to which society feels threatened by uncertain or ambiguous

situations

high uncertainty avoidance - structured organizational activities, more written rules, less risk

taking by managers, lower labor turnover, less ambitious employees (Germany, Japan & Spain)

low uncertainty avoidance (Denmark & Great Britain)

· Individualism - Collectivism

individualism - tendency of people to look after themselves and their immediate family (normally

high in wealthy countries)

collectivism - people belong to groups or collectives and look after each other in exchange for

loyalty (normally high in poor countries)

· Masculinity - Femininity

masculinity - dominant values of society are success, money, advancement (large-scale

enterprises and economic growth considered important, situations of higher job stress and

employees kept under higher degree of control - Japan)

femininity - dominant values of society are caring for others and quality of life (greater

importance on cooperation, friendlier atmosphere, employment security, low job stress and

employees allowed considerable freedom - small scale enterprises and emphasis on conservation

of environment - more women hold higher level jobs - Norway)

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International Marketing MKT630

Culture is a human medium:

there is not one aspect of human life that is not touched and altered by culture

this means personality

how people express themselves (including shows & emotions)

the way they think

how they walk

how problems are solved

how their cities are planned & laid-out

how transportation systems function & are organized

how economics & government systems work & are put together

Cultural influences on consumer behavior:

· Hierarchy of needs, which distorts demand across product categories.

· Culture based values, especially on individualistic or collective orientations, which influence

purchase behavior and decision process (individual vs family)

· Institutions which influence consumer behavior

· Influences through cultural variations in personal factors of consumer behavior, brand loyalty,

consumer involvement, perceived risk, cognitive style.

Level of context needed:

HIGH CONTEXT

· JAPANESE

· CHINESE

· GREEK

· ARABS

· SPANISH

· ITALIAN

· ENGLISH

· NORTH AMERICAN

· FRENCH

· SCANDINAVIAN

· GERMAN

LOW CONTEXT

Impact of national cultures on marketing:

· Material culture & marketing

types of products suitable for individual markets

types of media available

distribution systems / storage facilities

· Imperialism

alien products are agents of change in host culture

· Language as a culture mirror

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International Marketing MKT630

most obvious difference between cultures

English has large vocabulary of commercial & industrial words

Eskimo has many words to describe snow

· Cultural events & marketing opportunities

Eid, Christmas, Chinese New Year etc.

· Cultural sensitivities to products , colors etc.

Reconciliation of cultural differences by international marketer:

Cultural awareness

managers must be aware of what cultural differences are and how these differences would

influence basic functions of management

managers must decide carefully whether and to what extent they should adopt home-country

practices to foreign environment

international managers need to identify the roles that individuals play in process of cultural

change and in acceptance of change

cultural elements which may resist change should be identified and understood before planning

any organizational change

products, services and advertising should also fit needs and perceptions of host culture

grouping countries together

fitting needs to company position

not all companies need to have same degree of cultural awareness

the more a change upsets important cultural values, the more resistance it will face

cost of change may exceed the benefits gained