Cultural Dynamics in Assessing

Global Markets
Chapter 4

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
LO1 The importance of culture to an international
marketer
LO2 The origins of culture
LO3 The elements of culture
LO4 The impact of cultural borrowing
LO5 The strategy of planned change and its
consequences

4-2
4-3
Concept II

Conscious Versus Unconscious

4-4
Conscious Versus Unconscious
Culture’s Pervasive Impact

▪ Culture influences every part of our lives

▪ Cultures impact on birth rates
• Birthrates have implications for sellers of diapers,
toys, schools, and colleges.

4-8
Culture’s Pervasive Impact
▪ Culture influences every part of our lives
▪ Cultures impact on birth rates
o Culture is a very important part of international marketing;
it affects us from the time we wake up in the morning till
we go to bed and even while we sleep the products we
use are impacted by culture.
o Culture impacts birthrates; eg: contraception is not
permitted by religion in primarily strict Catholic or Muslim
nations.
o Rich and developed countries are not adding to their
population due to lifestyle, higher education levels as well
as women in the workforce. This will be reflected in a
decline in birthrates in the developed world.

4-9
Interview shows preparation
To Go International
Culture effect in acting a role

https://fb.watch/1zuWmdwx1-/
-2:44
‫ حلواني من الدقي 😅 العالمي أحمد مالك في ضيافة‬..🤔 ‫اللي بنى استراليا كان في األصل ايه؟‬
‫معكم_منى_الشاذلي‬#
CBC Egypt

4-10
4-11
Culture’s Pervasive Impact
▪ Consumption of different types of food influences
culture
• Chocolate by Swiss, seafood by Japanese preference,
beef by British, wines by France and Italy

▪ Even diseases are influenced by culture

• stomach cancer in Japan, and lung cancer in Spain

4-12
Culture’s Pervasive Impact
▪ Different types of food are consumed in different cultures
(Exhibit 4.2).
o In hot, tropical countries, spicy food is eaten as spices preserve
the food even without refrigeration.
o The geography of the country also shapes food habits, the
Japanese eat a lot of fish and seafood since that is the primary
source of food for a country made up of tiny islands in the
pacific ocean.
o The French are famous for wines and champagne because the
weather and soil are conducive for grape farming.

▪ Diseases also follow food habits such as lung cancer in Spain

due to excessive smoking, liver disease in Germany due to
consumption of fatty foods (Exhibit 4.3).

4-13
Exhibit 4.2 Patterns of Consumption (annual per capita) Source: EuroMonitor International, 2010,
2012
4-14
4-15
Three Definitions of Culture
Culture is the sum of the “values, rituals, symbols,
beliefs, and thought processes that are learned,
shared by a group of people, and transmitted from
generation to generation”.

“software of the mind, problem-solving tool”

(Hofstede).

“An invisible barrier… a completely different way of

organizing life, of thinking, and of conceiving the
underlying assumptions about the family and the
state, the economic system, and even Man
himself” (Hall)
4-16
Three Definitions of Culture
Culture is the sum of the “values, rituals, symbols,
beliefs, and thought processes that are learned,
shared by a group of people, and transmitted
from generation to generation”

“software of the mind, problem-solving tool”

(Hofstede)
“An invisible barrier… a completely different way
of organizing life, of thinking, and of conceiving
the underlying assumptions about the family and
the state, the economic system, and even Man
himself” (Hall)
4-17
Three Definitions of Culture
Culture is the sum of the “values, rituals, symbols,
beliefs, and thought processes that are learned,
shared by a group of people, and transmitted from
generation to generation”
“software of the mind, problem-solving tool”
(Hofstede)

“An invisible barrier… a completely different way of

organizing life, of thinking, and of conceiving the
underlying assumptions about the family and the
state, the economic system, and even Man himself”
(Hall)
4-18
4-19
Origins of Culture:
▪ We as humans and consumers are able to adapt to
changing environments through innovation.
Individuals can learn culture from social institutions
through socialization (where one is raised and how)
and acculturation (adjusting to a new culture).
▪ We also learn and adapt to a culture through role
modeling, or imitation of peers.
▪ People also make decisions about consumption and
production through application of their cultural-
based knowledge.

4-20
Origins of Culture: Geography
▪ Geography, which includes climate,
topography, flora, fauna, and microbiology,
influences our social institutions
▪ Jared Diamond states that historically
innovations spread faster east-to-west than
north-to-south
▪ Philip Parker reports strong correlations
between the latitude (climate) and the per
capita GDP of countries

4-21
Origins of Culture: Geography
o Geography includes more than just the weather and
temperature, it is also what kind of plants and animals
can be raised in the region and that influences society
and consumption.
o According to Diamond, innovations spread faster from
east to west. Before the advent of transoceanic
shipping, ideas flowed over the Silk Road but not across
the Sahara or the Isthmus of Panama.
o Parket advocates for a strong correlation between
latitude and GDP, for example the GDP of Scandinavian
countries are much higher than South American
countries.

4-22
Origins of Culture: History

▪ The impact of specific events in history can be seen

reflected in technology, social institutions, cultural
values, and even consumer behavior
▪ The military conflicts in the Middle East in 2003 bred
new cola brands, Mecca Cola, Muslim Up, and
Arab Cola

See the cola pictures, Turkey has their own cola called “Cola Turkey,” a coca cola taste
alike, but a local brand. Military conflicts in the Middle East bred these brands, because of
an anti U.S. sentiment.

4-23
Origins of Culture: History

For e.g., American trade policy depended on tobacco being

the original source of the Virginia colony’s economic survival in
the 1600s

4-24
Origins of Culture:
The Political Economy
▪ For most of the 20th Century three
approaches to governance competed for
world dominance:
• Fascism
• Fascism fell in 1945
• Communism
• Communism crumbled in the 1990s
• Democracy/free enterprise

4-25
Origins of Culture: Technology

▪ Technological innovations influence cultural values

▪ Jet aircraft, air conditioning, televisions, computers,
and the internet have all influenced culture

o Every technological innovation has a

profound impact on culture.
o For example, as we have moved from
VHS tapes to DVDs to BluRay it has
impacted our lifestyle, taking up less
space and providing more
convenience.
o The internet has changed the way we
communicate and has made the
world a smaller place.

4-26
Social Institution

4-27
Social Institutions:
Family
Behaviors

Religious School
Value &
Systems Education

Social
Institutions

Government
Media
Policies
Corporations

Social institutions including family, religion, school, the media, government, and
corporations all culture, society and behavior. 4-28
Origins of Culture: Social Institutions

▪ Social institutions including family, religion, school,

the media, government, and corporations all affect
culture
▪ The family, social classes, group behavior, age
groups, and how societies define decency and
civility are interpreted differently within every culture

4-29
Origins of Culture: Social Institutions

1. Family behavior varies across the world, e.g.,

extended families living together to Dad washing
dishes
2. Religious value systems differ across the world, e.g.,
Muslims not allowed to eat pork to Hindus not
allowed to consume beef
3. School and education, and literacy rates affect
culture and economic growth

4-30
Origins of Culture: Social Institutions

4. Media (magazines, TV, the Internet)

influences culture and behavior
5. Government policies influence the thinking
and behaviors citizens of adult citizens, e.g.,
the French government offers new “birth
bonuses” of $800 given to women as an
incentive to increase family size

6. Corporations influence culture via the

products they market, e.g., MTV

4-31
Elements Of Culture

4-32
 Cultural
Values

Thought
Rituals
Processes
Elements
of
Culture

Beliefs Symbols

4-33
Elements of culture:
▪ Underlying the cultural diversity that exists among
countries are fundamental differences in cultural
values , that is, the importance of things and ideas.
The most useful information on how cultural values
influence various types of business and market
behavior comes

from the work of Dutch researcher Geert Hofstede.

4-34
Cultural Values
▪ Hofstede, who studied over 90,000 people
in 66 countries, found that the cultures
differed along four primary dimensions
• Individualism/Collective Index (IDV), which
focuses on self-orientation
• Power Distance Index (PDI), which focuses on
authority orientation
• Uncertainty Avoidance Index (UAI), which
focuses on risk orientation; and

• Masculinity/Femininity Index (MAS), which focuses on

assertiveness and achievement

4-35
Individualism/Collectivism Index

1. The Individualism/Collective Index refers to the

preference for behavior that promotes one’s self-
interest
2. High IDV cultures reflect an “I” mentality and tend to
reward and accept individual initiative
3. Low IDV cultures reflect a “we” mentality and generally
subjugate the individual to the group
4. Collectivism pertains to societies in which people from
birth onward are integrated into strong, cohesive
groups, which protect them in exchange for
unquestioning loyalty
Group culture is more valued in collectivistic countries: Japan, China
and other Confucian cultures are more collectivistic.

4-36
Power Distance Index
Power distance represents the extent of hierarchy in a society. Countries
that are high in Power Distance such as those in Latin America or Africa,
are cultures that have clear distinctions between superiors and
subordinates and understand and accept that power rests with
superiors.
1. The Power Distance Index measures power
inequality between superiors and subordinates
within a social system
2. Cultures with high PDI scores tend to be
hierarchical and value power and social status
3. High PDI cultures the those who hold power are
entitled to privileges
4. Cultures with low PDI scores value equality and
reflect egalitarian views
4-37
Uncertainty Avoidance Index

1. The Uncertainty Avoidance Index measures the

tolerance of uncertainty and ambiguity among
members of a society
2. High UAI cultures are highly intolerant of ambiguity,
experience anxiety and stress, accord a high level
of authority to rules as a means of avoiding risk
3. Low UAI cultures are associated with a low level of
anxiety and stress, a tolerance of deviance and
dissent, and a willingness to take risks
Countries with high UAI distrust others and rely upon people with power
for information and rules and regulations to reduce risk. For example UAI
countries tend to have many forms to complete and additional steps to
conduct business.
4-38
Exhibit 4.7 Hofstede's Indexes, Language, and Linguistic Distance Source: Geert Hofstede,
Culture's Consequences (thousand Oaks CA: Sage, 2011). 4-39
Rituals and Symbols

▪ Rituals are patterns of behavior and interaction that

are learned and repeated vary from country to
country
• e.g., extended lunch hours in Spain and Greece
▪ Language as Symbols: the “languages” of time,
space, things, friendships, and agreements

4-43
Rituals and Symbols

▪ Rituals are important in every culture.

o How Easter is celebrated in the U.S. with the Easter Bunny’s

visit and a traditional meal, is very different from how it is
celebrated in Mexico, where it is tradition to visit the
tombstones and pay homage to the dead.

o Wedding gowns are typically white in the West, but very

colorful and bright in the country of India where the groom
arrives on a horse with an entourage (refer to the movie
Monsoon Wedding mentioned in the text). Symbols in a
culture include language, both verbal and non-verbal and
includes the perception of time, space and relationships.

4-44
Rituals and Symbols
▪ In Canada, language has been the focus of
political disputes
▪ Differences in language vocabulary varies widely,
even English is different in different countries
▪ Aesthetics as Symbols
• the arts, folklore, music, drama, and dance of a culture
influences marketing

o In Canada, French versus English has been a point of

contention between regions. Aesthetics includes a
country’s music, art, folklore and drama.

4-45
Whose English?
United States

United Kingdom
• Trunk • Boot
• Hood • Bonnet
• Convertible Top • Hood
• Elevator • Lift
• Toilet • W.C.
• Bathroom • Tub or Shower
• Vacuum • Hoover

4-46
4-47
Photo caption:

▪ Dressed in the ritual color of saffron (orange), thousands of

pilgrims of the Lord Shiva descend one of the over 100 Ghats
in Varanasi, India, to perform puja (ritual cleansing of the soul).
Varanasi (also known as Benares or Banaris) is one of the
oldest and holiest cities in India. It is believed to be the home
of Lord Shiva Hindu god) and the location of the first sermon
by Buddha, so followers of numerous religions flock to Varanasi
on a daily basis. Each day at sunrise and sunset, pilgrims
crowd the Ghats (steps to the holy river/Mother Ganga/the
River Ganges) to immerse themselves in the water and
perform puja . On the busiest day of the ritual, some
▪ 5–10 million participate (according to Professor Rika Houston).
Meanwhile, televised rituals such as the Academy Awards and
World Cup soccer draw billions in the form of virtual crowds.

4-48
Exhibit 4.8 Metaphorical Journeys through 23 Nations
Source: Martin J. Gannon, Understanding global Cultures, Metaphorical Journeys through 23 Nations,
2nd ed. Copright 2001.
4-49
Beliefs
▪ Beliefs, which mainly stem from religious
training, vary from culture to culture
• The western aversion to the number 13 or refusing
to walk under a ladder
• Japanese concern about Year of the Fire Horse
• The Chinese practice of Feng Shui in designing
buildings
o In Asian countries such as Japan and China the number 4 represents
death and it is avoided at all costs, some building even skip the
fourth floor and go from 3 to 5.
o Similar to the superstition about the number 13 in the West.
o Other examples of beliefs/superstitions are: not opening an umbrella
in the house (Western) or not passing salt directly to a person
(Eastern).
4-50
Thought Processes
▪ Thought processes also vary across cultures
• “Asian and Western” thinking
• Other examples?

o Nisbett in his book discusses differences between Asian and

Western thinking. Asians (although grouping all Asian countries into
one category is not generally preferred) tend to see the big
picture and have a more long-term orientation. When compared
to people in the West (North America and Europe).

4-51
Cultural Sensitivity and Tolerance

▪ Successful foreign marketing begins with

cultural sensitivity —being familiar with
nuances
▪ A new culture can be viewed objectively,
evaluated, and appreciated.

4-52
Cultural Sensitivity and Tolerance

▪ Cultural sensitivity, or cultural empathy, must be

carefully cultivated. For every amusing,
annoying, peculiar, or repulsive cultural trait we
find in a country, others see a similarly amusing,
annoying, or repulsive trait in our culture.
▪ For example, we bathe, perfume, and deodorize
our bodies in a daily ritual that is seen in many
cultures as compulsive, while we often become
annoyed with those cultures less concerned with
natural body odor. Just because a culture is
different does not make it wrong.

4-53
Cultural Sensitivity Has to Be
Cultivated
▪ Cultural sensitivity can be developed by
acquiring knowledge about a culture
including:
• Different meanings of colors, and different tastes
• General facts about a culture
▪ It can also be developed by learning the
more in-depth meaning of cultural facts:
• The meaning of time, and attitudes toward
people
• Developing a degree of insight

4-54
Resistance to Change
▪ Although some cultures embrace change
others are resistant to it
• Working women in masculine societies like Saudi
Arabia
• Lack of acceptance of GM foods (or
“Frankenfood”) in Europe

Typically everyone is resistant to change, some are more

resistant than others. For example, western companies have
tried to change the habit of Indians of eating warm breakfasts.
However, in India, people still continue to do things like using
warm milk in their cereal to have a “warm” breakfast instead of
having cold cereal.
4-55
4-56
 Culture, 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

4-58
Business Customs in Global
Marketing
▪ 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.

▪ Business etiquette is largely driven by cultural norms.

▪ Cultural analysis often pinpoints market

opportunities, gives companies a competitive edge

4-59
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

4-60
Cultural Imperatives, Electives
and Exclusives

4-61
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

o 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).

4-62
Cultural Imperatives, Electives
and Exclusives
▪ Cultural electives:
• areas of behavior or to customs that cultural
aliens may wish to conform to or participate in
but that are not required
o 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.

4-63
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.

5-64
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
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.

4-65
The Impact of American Culture
▪ Ways in which U.S. culture has influenced
management style include, but are not
limited to, the following:
1. Personnel selection and reward based on merit
2. Decisions based on objective analysis
3. Wide sharing in decision making
4. Never-ending quest for improvement
5. Competition yielding efficiency

4-66
American Culture and
Management Style
▪ There are at least three reasons to focus
briefly on American culture and
management style:
1. for Americans, it is important to be aware of the
elements of culture influencing decisions and
behaviors.
2. 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
3. since the late 1990s, American business culture
has been exported around the world

4-67
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:
1. top-level management decisions,
2. decentralized decisions, and
3. committee or group decisions

▪ Management Objectives and Aspirations

• Security and Mobility
• Personal Life
• Affiliation and Social Acceptance
• Power and Achievement

4-68
Insert Exhibit 5.1
Annual Hours Worked

Source: OECD, Labor Market Indicators, 2012.

5-69
The communication process

4-70
context context

context context
4-71
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

4-72
5-73
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.

5-74
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

4-75
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”

4-76
4-77
5-78
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

4-79
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

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.

4-80
5-81
Percent Of Women Executives In Different Countries

5-82
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

4-83
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
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.

4-84
Transparency International
Transparency International - USA

5-85
5-86
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

4-87
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

4-88
A Framework for Ethical Principles

(1) Does the action optimize the

“common good” or benefits of all
Utilitarian constituencies? And, who are the
ethics pertinent constituencies?

(2) Rights of Does the action respect the rights

the parties of the individuals involved?

(3) Justice Does the action respect the

canons of justice or fairness to all
or fairness parties involved?

4-89
5-90
Thank You

4-91