INTERNATIONAL

CULTURAL
ENVIRONMENT
Continue
INSTRUCTOR
Nguyễn Công Hòa (MBA)
 Chapter 4

Cultural Dynamics in
Assessing global Markets
Overview
• The importance of culture to an international
marketer
• Definition and origins of culture
• The elements of culture
• The impact of cultural change and cultural borrowing
• Strategies of planned and unplanned change

3
Definitions and
Origins of Culture
• Traditional definition 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.
• Individuals learn culture in three ways
• Socialization (growing up)
• Acculturation (adjusting to a new culture)
• Application (decisions about consumption and production)

4
 Origins, Elements,
and Consequences of Culture

Exhibit 4.4

5
Geography
• Exercises a profound control
• Includes climate, topography, flora, fauna, and microbiology
• Influenced history, technology, economics, social
institutions and way of thinking
• The ideas of Jared Diamond and Philip Parker
• Jared Diamond
• Historically innovations spread faster east to west than north to south

• Philip Parker
• Reports strong correlations between latitude (climate) and per capita GDP

6
History
• History - Impact of specific events can be seen reflected in
technology, social institutions, cultural values, and even
consumer behavior
• Tobacco was the original source of the Virginia colony’s
economic survival in the 1600s
• American values and institutions influenced by Adam
Smith’s book The Wealth of Nations
• Military conflicts in the Middle East brought about new cola
alternatives such as Mecca Cola, Muslim Up, and Arab Cola.

7
Social Institutions
• School – the most important social institution
• Direct link between a nation’s literacy rate and its economic
development
• Difficult to communicate with a market when a company must
depend on symbols and pictures
• The media – it has replaced family time
• TV and the Internet
• American educational system produces a lower percentage of college
graduates than 12 other countries including Russia, Japan, and France

8
Social Institutions
• Government - influences the thinking and
behaviors of adult citizens
• Propaganda through media
• Passage, promulgation, promotion, and enforcement of laws

• Corporations - most innovations are

introduced to societies by companies
• Spread through media
• Change agents

9
Elements of Culture (1 of 4)
• Values
• Rituals
• Symbols
• Beliefs
• Thought processes

10
Elements of Culture (2 of 4)
• Cultural values – Geert Hofstede
• Individualism/Collectivism Index
• Reflects the preference of behavior that promotes one’s self interest

• Power Distance Index

• Measures the tolerance of social inequality

• Uncertainty Avoidance Index

• Measures the tolerance of uncertainty and ambiguity

• Cultural Values and Consumer Behavior

11
 Hofstede’s Indexes
Language, and Linguistic Distance

Exhibit 4.6

12
Elements of Culture (3 of 4)
• Rituals – patterns of behavior and interaction that are
learned and repeated
• Marriages , funerals, baptisms, graduations
• Symbols
• Language
• Linguistic distance – relationship between language and international marketing

• Aesthetics as symbols
• Insensitivity to aesthetic values can offend, create a negative impression, and, in
general, render marketing efforts ineffective or even damaging

13
Language
• According to www.ethnologue.com:
• A total of 7,413 known living languages exist in the
world
• 311 being spoken in the U.S.; 297 in Mexico, 13 in
Finland, and 241 in China
• EU has 20 official languages
• India alone has 452 known languages!

14
Elements of Culture (4 of 4)
• Beliefs
• Superstitions play a large role in a society’s belief system and
therefore, to make light of superstitions in other cultures can be an
expensive mistake
• The number 13 in the western hemisphere is considered unlucky,
where as the number 8 in China connotes “prosperity”
• The practice of “Feng Shui”
• Thought processes
• Difference in perception between the East and the West
• Focus vs. big-picture

15
Similarities – An Illusion
• A common language does not guarantee a similar interpretation of
word or phrases
• Difference between British and American English
• http://www.woodlands-junior.kent.sch.uk/customs/questions
/americanbritish/index.html
• Just because something sells in one country doesn’t mean it will
sell in another
• Cultural differences among member of European Union a product of centuries of history

16
 Chapter 5

Culture, Management Style,

and Business Systems
Group Work
The Different Management Styles
between East and West
Imperatives, Electives,
and Exclusives
• Cultural imperatives - Business customs and expectations that must
be met and conformed to or avoided if 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 customs that
cultural aliens may wish to conform to or participate in but that are not
required
• A cultural elective in one county may be an imperative in another
• Cultural exclusives - Customs or behavior patterns reserved
exclusively for the locals

19
The Impact of American Culture
on Management Style
• “Master of destiny” viewpoint
• Independent enterprise as the instrument of social action
• Personnel selection and reward based on merit
• Decisions based on objective analysis
• Wide sharing in decision making
• Never-ending quest for improvement
• Competition producing efficiency

20
Power of Distance Index (PDI)
A measure of how a culture, such as a country,
business or team, recognizes hierarchy. A totalitarian
regime has a high power distance index, while a
democracy has a low index. An entrepreneurial
startup likely has a lower PDI than a well-established
decades-old company, although companies like Apple
and Google attempt to maintain a low PDI. The index
was conceived by Geert Hofstede, Emeritus Professor
of Maastricht University.

21
Authority and Decision Making
• Influencers of the authority structure of business:
• High PDI Countries
• Mexico, Malaysia
• Low PDI Countries
• Denmark, Israel
• Three typical authority patterns:
• Top-level management decisions
• Decentralized decisions
• Committee or group decisions

22
Formality and Tempo
• Breezy informality and haste characterize American business
relationships
• Europeans not necessarily “Americanized”
• Higher on Hofstede’s Power Distance Index (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

23
 Contextual Background of Various
Countries

Exhibit 5.2

24
High context VS Low context

High context: Compare low-context preferring to

communicate in person, rather than by electronic
methods such as email

Low context: Compare high-context tending to

communicate by electronic methods such as e-mail,
rather than in person

25
P-Time versus M-Time
• Monochronic time
• Tend to concentrate on one thing at a time
• Divide time into small units and are concerned with promptness
• Most low-context cultures operate on M-Time
• Polychronic time
• Dominant in high-context cultures
• Characterized by the simultaneous occurrence of many things
• Allows for relationships to build and context to be absorbed as parts of high-context
cultures
• Most cultures offer a mix of P-time and M-time behavior
• As global markets expand more businesspeople from
P-time cultures are adapting to M-time.

26
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
from the traditional production, product, and sales
orientation to the marketing orientation
• Research has shown that sometimes in can be
difficult to encourage a marketing orientation across
diverse business units in global companies

27
Business Ethics Corruption
• What is Corruption?
• Profits (Marxism)
• Individualism (Japan)
• Rampant consumerism (India)
• Missionaries (China)
• Intellectual property laws (Sub-Sahara Africa)
• Currency speculation ( Southeast Asia)
• Criticisms of Mattel and Barbie
• Sales of Barbie declined worldwide after the global standardization
• Parents and government did react
• Mattel’s strategy boosted sales of its competition

28
The Western Focus on Bribery
• In the 1970s, bribery became a national issue with public
disclosure of political payoffs to foreign recipients by U.S. firms
• The decision to pay a bribe creates a major conflict between
what is ethical and proper and what is profitable and sometimes
necessary for business
• The Organization for Economic Corporation and Development
(OECD) and Transparency International (TI) are combating the
bribery of foreign public officials in international business
transactions

29
 Transparency International
Corruption Perception Index

Exhibit 5.5

30
Bribery –
Variations on a Theme (1 of 2)
• Bribery and Extortion
• Bribery is voluntary offered payment by someone seeking unlawful advantage
is bribery
• Extortion takes place only if payments are extracted under duress by someone
in authority from a person seeking only what he or she is lawfully entitled to
• Subornation and Lubrication
• 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
31
 Bribery –
Variations on a Theme (2 of 2)
• Agent’s Fees
• When a businessperson is uncertain of a country’s rules and
regulations, an agent may be hired to represent the company in
that country
• The Foreign Corrupt Practices Act (FCPA)
• Change will come only from more ethically and socially
responsible decisions by both buyers and sellers and by
governments willing to take a stand
• Since 1994, US businesses have bowed out (withdraw) of 294 major overseas commercial contracts valued at
$145 billion rather than paying bribes

5-32
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 markers of past behavior that society has deemed unethical or
socially irresponsible
• Ethical principles to help the 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 actions involve the rights of the individual?)
• Justice or Fairness (Does the action represent fairness for all?)

33
 Dimensions of Culture –
A Synthesis
Exhibit 5.7

34
Thank you
Nguyễn Công Hòa (MBA)
Mobile: 0949.288.786
Email: hoanc@uel.edu.vn