I n t e r n a t i o n a l Business and Trade

Culture,
Management Style,
and
Business Systems

McGraw-Hill/Irwin
International Marketing 14/e Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
 Global Perspective
Do Blondes Have More Fun in Japan?
• Culture, including all its elements, profoundly
affects management style and overall business
systems
– Max Weber (1930)
• Americans
– Individualists
• Japanese
– Consensus oriented & committed to the group
• Central & Southern Europeans
– Elitists and rank conscious
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 Global Perspective
Do Blondes Have More Fun in Japan?
• Knowledge of the management style existing in
a country and a willingness to accommodate the
differences are important to success in an
international market
– Business culture
– Management values
– Business methods
– Behaviors

5-3
 Required Adaptation
• Adaptation is a key concept in international
marketing
• Ten basic criteria for adaptation
1) open tolerance
2) flexibility
3) humility
4) justice/fairness
5) ability to adjust to varying tempos
6) curiosity/interest
7) knowledge of the country
8) liking for others
9) ability to command respect
10) ability to integrate oneself into the environment

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 Degree of Adaptation
• Essential to effective adaptation
– Awareness of one’s own culture and the
– Recognition that differences in others can cause anxiety,
frustration, and misunderstanding of the host’s intentions
• The self-reference criterion (SRC) is especially
operative in business customs
• The key to adaptation is to remain American but
to develop an understanding of and willingness
to accommodate the differences that exist

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 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
► The significance friendship cannot be overemphasized
– 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 electives are most visibly different customs
• Cultural exclusives
– Customs or behavior patterns reserved exclusively for the locals

5-6
 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
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 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

5-8
 Management Objectives
and Aspirations
• Security and mobility
– Relate directly to basic human motivation and therefore have
widespread economic and social implications
• Personal life
– Worldwide study of individual aspirations, (David McClelland)
• Affiliation and social acceptance
– In some countries, acceptance by neighbors and fellow workers
appears to be a predominant goal within business
• Power and achievement
– South American countries

5-9
 Annual Hours Worked
Exhibit 5.1

5-10
 Communication Styles
• Face-to-face communication
– Managers often fail to develop even a basic understanding of just one
other language
– Much business communication depends on implicit messages that are
not verbalized

• Internet communications
– Nothing about the Web will change the extent to which people identify
with their own language and cultures
► 78% of today’s Web site content is written in English
► An English e-mail message cannot be understood by 35% of all Internet users
– Country-specific Web sites
– Web site should be examined for any symbols, icons, and other
nonverbal impressions that could convey and unwanted message

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 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
– Middle East
• For maximum success marketers must deal with foreign
executives in acceptable ways
– Developing friendships

5-12
 Contextual Background
of Various Countries
Exhibit 5.2

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 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
– Have a tendency to be either more P-time or M-time in regard to the role
time plays
• As global markets expand more businesspeople from
P-time cultures are adapting to M-time.

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 Speed is Relative
Exhibit 5.3

5-15
 Negotiations Emphasis
• Business negotiations are perhaps the most
fundamental business rituals
• The basic elements of business negotiations are
the same in any country
– They relate to the product, its price and terms, services
associated with the product, and finally, friendship between
vendors and customers
• One standard rule in negotiating is “know
thyself” first, and second, “know your
counterpart”

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 Marketing Orientation
• A company’s marketing orientation has been
positively related to profits (U.S.)
• Other countries have more traditional approach
– Production orientation (consumers will prefer products that are
widely available)
– Product orientation (consumers will favor products that offer the
most quality performance, or innovative features)
– Selling orientation (consumers and businesses alike will not buy
enough without prodding)
• Encouraging a marketing orientation across
global business units can be difficult

5-17
 Gender Bias
in International Business
• Women represent only 18% of the employees who are
chosen for international assignments
• In many cultures women not typically found in upper
levels of management, and are treated very differently
from men
– Asia, Middle East, Latin America
• Prejudices toward women in foreign countries
• Cross-mentoring system
– Lufthansa
• Executives who have had international experience
– More likely to get promoted,
– Have higher rewards, and have
– Greater occupational tenure

5-18
 Few and Far Between – Female
Directors on Corporate Boards
Exhibit 5.4

5-19
 Corruption Defined
• Types of 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

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 The Western Focus on Bribery
• 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
• OECD Convention on combating the bribery of
foreign public officials in international business
transactions
• Transparency International (TI)

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 Transparency International
Corruption Perception Index
Exhibit 5.5

5-22
 Transparency International
Bribe Payer’s Index
Exhibit 5.6

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 Bribery –
Variations on a Theme
• Bribery and Extortion
– Voluntary offered payment by someone seeking unlawful advantage is
bribery
– If payments are extracted under duress by someone in authority from a
person seeking only what he are she is lawfully entitled to that is
extortion

• 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

5-24
 Bribery –
Variations on a Theme
• 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
– Change will come only from more ethically and socially
responsible decisions by both buyers and sellers and by
governments willing to take a stand

5-25
 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
– Rights of the Parties
– Justice or Fairness

5-26