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OBJECTIVES Develop an appreciation for differences in cultures and societies across the globe; Identify the impact of culture

on business strategy and its implementation; Introduce research-based frameworks that classify global cultural dimensions; Become familiar with some of the dimensions of cultural differences; Develop and recommend some practical guidelines for doing business in a foreign cultural setting; What is CULTURE? Culture manifests itself in many forms and is present in all interactions within a society. (Calantone, Kim, Schmidt, & Cavusgil, 2006; Kim & Cavusgil, 2006; Nakata Sivakumar, 1996, 2001; Steenkamp, ter Hofstede, & Wedel, 1999) Elements that can be used to define CULTURE: A culture is learned by people. A culture is shared by all members of society. One element of a culture affects other elements of Levels of CULTURE affecting business transactions (Raju, 1995): Buying behavior: perceptions regarding imported products, the value of brand equity in society, the existence and strength of brand loyalty, and the impact of social norms on buying behavior. Consumption characteristics: product vs. service consumption, social class and reference group influences, and urban vs. rural consumption patterns. Disposal: Resale, recycling, and remanufacturing. Roles of CULTURE in Export Marketing: Demand side impact: deals with customers who have different behavioral patterns. Management impact: negotiation skills, levels of initial trust, and the control of middlemen become harder.

the culture.

Gain a more superficial understanding of people and their behavior. Make sure that your message is getting across.

Understanding CULTURES The Six Questions Approach (Kluckholn & Strodtbeck, 1961) n What do members of a society assume about other people? n What do members of a society assume about the relationship between a person and nature? n How do people act in a society? n How are plans formulated and accomplished in a society? n What is the conception of space in a society? n What is the dominant temporal orientation of a society?

Understanding CULTURES The Four Dimensions Approach (Edward T. Hall, 1990) nThe amount of information that needs to be transferred if a message is to be stated. nThe concept of space. nThe importance assigned to time and schedules. nThe speed of information flow between individuals and organizations. nPower distance. nUncertainty avoidance. nIndividualism vs. collectivism. nMasculinity vs. femininity.

Applications of Cultural Understanding in Business n Deal focused versus relationship focused. n Rigid time and scheduling (monochronic) versus fluid time (polychronic). n Informal business culture versus formal business culture. n Low context versus high context. n Expressive/ verbal communication versus reserved/ nonverbal communication.

Common Cultural Differences n Linguistic differences. n Concept of space. n The meanings associated with different aspects of body language. n The value and significance attached to material possessions. n The importance assigned to trust in relationships. n The form of agreements. SELF-REFERENCING A process in which we form judgment about other people by evaluating the against our own past experiences and cultural programming.

Navigating the Cultural Differences n Be open-minded, nonjudgmental, patient, and flexible. n Try to be more formal and polite with foreigners. Formal introductions with full names and titles. n n Identify different ways of shaking hands and acknowledging others. n French prefers quick handshake. n Chinese pump the hand. n Arabs offer a limp hand. n Bowing head slightly or a nod might be customary in many countries (e.g., in Japan and Korea). Navigating the Cultural Differences SOCIALIZING nIf you are invited to a social affair, accept the invitation as a sign of respect for your hosts. nBusiness is not usually discussed during social events, but you never know. n For instance, Korean businessmen may discuss and decide some business matters at such informal social events.

Navigating the Cultural Differences BUSINESS CARDS nPrepare business cards with your information printed in the local language on the reverse side. nDo not bend, write on, or put away the business card while in the company of the presenter. nTry to glance at the information on the business card as you receive it and talk about it briefly. Navigating the Cultural Differences GIFTS n Presenting business gifts may be unusual in the United States, but in many countries gifts are not only accepted but are expected. n Flowers are a must when visiting a French home for dinner. n Chrysanthemums should be avoided (represents mourning). n Do not buy perfume for a woman in Europe unless she or her husband requested that you purchase a certain type for her.

Navigating the Cultural Differences GIFTS n Brand name gift items are appreciated, particularly in Japan and Korea. n Always bring a gift when visiting a home in Japan. Bringing several extra gifts is a great idea. n Wrap non-logo gifts and avoid black-and-white gift wrapping combination is reserved for funerals in many parts of Asia. n Red is appreciated (associated with healing and good health) n It is a good idea to give something with intellectual value (such as book) in the Arab world.

Navigating the Cultural Differences CONTAINER AND PACKAGE SIZE n In Japan, product packages are generally smaller than those in Western countries. n Family packs should have more units in emerging markets than in the United States since there s only an average of less than four family members in the US. n In India, inexpensive, reusable containers must be used. n In Ivory Coast, cylinders are used as measuring cans, and packages with plastic lids become salt and pepper shakers. Navigating the Cultural Differences NUMBERS AND COLORS n The number 7 is positive and number 13 is associated with bad luck throughout Western societies. n The number 4 is associated to death in Japan and some other Asian countries, including Korea. n African countries prefer bold coloring, and they especially favor the colors of their flag. n In Korea, red is strictly avoided in writing a person s name, as they relate the color to bloodshed. n West Germans dislike red because of its association with Communism, while Danes and Czechs like red. Navigating the Cultural Differences SHAPES nIn Columbia and Romania, triangular and circular packages attract customers. nCircular and square shapes are preferred in Taiwan, because they represent completeness and correctness, while a triangle represent complications. Navigating the Cultural Differences CONSUMER PURCHASING BEHAVIOR nIn the United States, men buy diamond rings for their fiancees, however, in Germany, young women tend to buy diamond rings for themselves. nIn Western countries, wives are involved in the purchasing decisions of major items. However,

the role of wives in purchasing decisions is much less significant on Arab countries.

Cultural Attitudes That Work nAvoid Cultural Bias nDevelop Empathy and Sensitivity for Foreign Cultures nThe Importance of Experiential Knowledge nWatch Out for Overgeneralizations nLearning Local Language