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An Overview of Marketing Culture, Management Style, and Business Systems 10 basic criteria for adaptation: 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 Ability to integrate oneself into the environment Required Adaptation Be aware of local customs and be willing to accommodate those differences that can cause misunderstanding Awareness of one’s own culture and the recognition that difference in others Self-reference criterion Remain yourself, but develop an understanding and willingness to accommodate the differences Cultural imperatives: business customs and expectations that must be met, conformed to, recognized, and accommodated if relationships are to be successful Cultural electives: areas of behavior or customs that cultural aliens may wish to conform to or participate in but that are not required Cultural exclusive: customs or behavior patterns reserved exclusively for the locals and from which the foreigner is barred and must not participate Degree of Adaptation 3 If we do not understand our foreign counterpart’s customs, we are more likely to evaluate that person’s behavior in terms of what is familiar to us. For example, from an American perspective, a Brazilian executive interrupting frequently during a business meeting may seem quite rude, even though such behavior simply reflects a cultural difference in conversational coordination. When different cultures meet, open tolerance and a willingness to accommodate each other’s differences are necessary. 3 “Master of destiny” viewpoint – “the American dream” ; self-dependence Independent enterprise as the instrument of social action A corporation an entity with rules and continuity of existence Personnel selection and reward based on merit The need to select the best-qualified persons for jobs Decisions based on objective analysis Objectivity in decision making and accuracy of data The Impact of American Culture on Management Style 4 Independent enterprise 4 Wide sharing in decision making Decentralized decision making Never-ending quest for improvement Change is not only normal but also necessary improvement Competition produces efficiency Competition improves society and organizations The Impact of American Culture on Management Style 5 Authority and Decision Making power distance index Business size, ownership, public accountability, and cultural values Influence the authority structure of business. How about the other cultures??? 6 Can you think how Power distance index influence authority and decision making?? Authority and Decision Making power distance index Business size, ownership, public accountability, and cultural values Influence the authority structure of business. Three typical patterns: Top-level management decisions: absolute control Decentralized decisions: Executives at different levels of management to exercise authority over their own functions Committee or group decisions How about the other cultures??? 7 Management Objective and Aspirations Security and Mobility: personal security and job mobility relate directly to basic human motivation Ambiguity features of “security” different meanings across different cultures Personal Life Indulgence vs. Restraint Affiliation and Social Acceptance: the degree to which acceptance by neighbors and fellow workers appear to be a predominant goal within business IDV Power and Achievement: In countries where power seems to be a more important motivating force, many business leaders are not only profit oriented but also use their business positions to become social and political leaders. How about the other cultures??? 8 8 Exhibit 5.1: Annual Hours Worked 9 20002010 United Kingdom17001647 Canada17751702 Germany14731419 Netherlands14351377 Japan18211733 Norway14551414 United States18141778 South Korea25122193 Mexico18881866 Italy18611778 50 weeks a year, normally, if we work 40 hours, it will be 2000 hours a year. Let’s look at these numbers. The lowest comes from the Netherlands, people work only around 1400 hours a year, that is less than 30 hours a week. On the other side of the coin, the highest is from South Korea, who work more than 2000 hours a year, even in 2000, they work more than 2500 hours. More than 50 hours a week. 9 Communication Styles Face-to-Face Communication: High-context/low-context continuum High-context culture: depends on contextual or nonverbal aspects of communications Low-context culture: depends on explicit, verbally expressed communications How about the other cultures??? 10 High-Context CultureLow-Context Culture Value traditionsTend to make many shallowers, short-term relationships Foster long-lasting relationshipsRequire explicit communication since they lack additional context Rely on non-verbal signsCommunication is more direct and confrontational Tend to be non-confrontational and more in-direct (e.g., rejection is to be interpreted from non-explicit communication).Are more individualistic Require little explanationRequire all the information in the message Are more collectivisticCan change quickly Have strong boundaries Are slow to change 11 Communication Styles Face-to-Face Communication: High-context/low-context continuum High-context culture: depends on contextual or nonverbal aspects of communications Low-context culture: depends on explicit, verbally expressed communications Internet Communications: Nothing about the Web will change the extent to which people identify with their own languages and cultures; thus, language should be at the top of the list when examining the viability of a company’s website How about the other cultures??? 12 Once a message is posted, it can be read anywhere, at any time. As a consequence, the opportunity to convey an unintended message is infinite. 12 13 Formality and Tempo: The 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 (Edward T. Hall) P-Time: polychronic time high-context cultures, the completion of a human transaction is emphasized more than holding to schedules simultaneous occurrence of many things M-Time: monochronic time low-context cultures, concentrate on one thing at a time How about the other cultures??? 14 Once a message is posted, it can be read anywhere, at any time. As a consequence, the opportunity to convey an unintended message is infinite. 14 The gender bias against women managers exists in some countries Masculinity vs. Femininity: women are not easily accepted in upper-level management roles (https://www.youtube.com/watch?v=NmTCjMoJGcQ) Gender Biases 15 An often asked question is: whether it is appropriate to send women to conduct business with foreign customers in cultures where women are typically not in managerial positions. Corruption: world-wide differences in definition Transparency International (TI): “curbing corruption through international and national coalitions encouraging governments to establish and implement effective laws, policies and anti-corruption programs”. International survey perceptions of corruption (Corruption Perception Index) Cultural influences: collectivistic and high power distance countries Business Ethics 16 Business ethics is complex in the international marketplace because value judgments differ widely among culturally diverse groups. 16 Bribery and Extortion 17 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 to There is no coercion, so neither person is intimidated and both engage in the act voluntarily. There is a clear offender and victim who is intimidated into turning over property to the offender In 2013, Ralph Lauren Corp. discovered that one of its South American subsidiaries had paid bribes to certain Argentinian officials to the tune of about $568,000, to ensure prohibited goods were cleared for import, to be allowed to important certain items without the requisite documentation, and to avoid inspections. When the SEC praises the Ralph Lauren Corp. for responding quickly in reporting violations of the Foreign Corrupt Practices Act, and for cooperating fully in the investigation, the company agreed to pay more than $8.6 million in penalties and interest. Ralph Lauren Corp. 18 Lubrication and Subornation 19 Lubrication: to expedite normal lawful activites 19 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 The fictional Starnes-Brenner Machine Tool Company is an American company that has a sales office in a Latin-American country. Bill is sent abroad to replace Frank, a long-time salesman nearing retirement. During training, Bill discovers that Frank had been bribing the engineer, who is a government official, to the tune of $1,200 per machine to certify that the machines were not flawed. He also paid bribes to the dock boss to speed up the transfer of machines. Frank also routinely paid bribes to promote sales. Bill is shocked and points out that paying a government official is illegal as per the Foreign Corrupt Practices Act. The FCPA is a United States Federal law that makes it illegal for U.S. businesses, citizens, and people of American nationality to influence foreign government officials by paying bribes. This is considered a corrupt practice and is punishable by prison time. Frank responds by saying that the bribery costs are small in comparison to the sales. After living abroad for 10 years, Frank justifies the bribes he paid with the following reasons: Everyone pays a bribe there, and when in Rome you should do as the Romans do. Even in the U.S. there are bribes, albeit in different forms like political dinners, and payments to congressmen and speaking fees with no punishment to those taking the bribes. 20 The fictional Starnes-Brenner Machine Tool Company is an American company that has a sales office in a Latin-American country. Bill is sent abroad to replace Frank, a long-time salesman nearing retirement. During training, Bill discovers that Frank had been bribing the engineer, who is a government official, to the tune of $1,200 per machine to certify that the machines were not flawed. He also paid bribes to the dock boss to speed up the transfer of machines. Frank also routinely paid bribes to promote sales. Bill is shocked and points out that paying a government official is illegal as per the Foreign Corrupt Practices Act. The FCPA is a United States Federal law that makes it illegal for U.S. businesses, citizens, and people of American nationality to influence foreign government officials by paying bribes. This is considered a corrupt practice and is punishable by prison time. Frank responds by saying that the bribery costs are small in comparison to the sales. After living abroad for 10 years, Frank justifies the bribes he paid with the following reasons: Everyone pays a bribe there, and when in Rome you should do as the Romans do. Even in the U.S. there are bribes, albeit in different forms like political dinners, and payments to congressmen and speaking fees with no punishment to those taking the bribes. 21 Frank's transaction with the dock boss was a form of lubrication. Many countries outside the U.S. do not expressedly forbid this practice. The fictional Starnes-Brenner Machine Tool Company is an American company that has a sales office in a Latin-American country. Bill is sent abroad to replace Frank, a long-time salesman nearing retirement. During training, Bill discovers that Frank had been bribing the engineer, who is a government official, to the tune of $1,200 per machine to certify that the machines were not flawed. He also paid bribes to the dock boss to speed up