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 origin of culture
LO3 The elements of culture
LO4 The impact of cultural borrowing
LO5 The strategy of planned change and its
consequences

4-2
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

4-3
4-4
Culture’s Pervasive Impact
 Consumption of different types of food
influences culture, geography
• Chocolate by Swiss, seafood by Japanese
preference, beef by British, wines by France and
Italy

 Even diseases are influenced by culture

• liver disease in Germany , and lung cancer in
Spain

4-5
Exhibit 4.2 Patterns of Consumption (annual per capita) Source: EuroMonitor International, 2010,
2012
4-6
4-7
Three Definitions of Culture
Culture is a system of “values and norms” that are shared
among a group of people and that when taken together
constitute a design for living
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”
“material and spiritual values”
“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”

4-8
Origins of Culture: Social Institutions
Family
Behaviors

Religious School
Value &
Systems Education
Social
Institutions

Government
Media
Policies

Corporations

4-15
Origins of Culture: Social Institutions
1. Family behavior varies across the world,
2. Religious value systems differ across the
world,
3. School and education, and literacy rates
affect culture and economic growth

4-16
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

4-17
 Cultural
Values

Thought
Rituals
Processes
Elements
of
Culture

Beliefs Symbols

4-18
Cultural Values
 Hofstede, who studied over 90,000 people in 66
countries, found that the cultures differed along six
primary dimensions
1. Power distance
2. Individualism versus collectivism
3. Uncertainty avoidance
4. Masculinity versus femininity
5. Long-term versus short-term orientation
6. Indulgence versus restraint

4-19
Hofstede’s Cultural Dimensions
 Power Distance
• The extent to which less powerful members accept that
power is distributed unequally
• High power distance countries: people blindly obey superiors;
centralized, tall organizational structures (Mexico, South Korea,
India)
• Low power distance countries: flatter, decentralized
organizational structures, smaller ratio of supervisor to employee
(Austria, Finland, Ireland)

4-20
Hofstede’s Cultural Dimensions
 Uncertainty Avoidance
• The extent to which people feel threatened by ambiguous
situations; create beliefs/institutions to try to avoid such
situations
• High uncertainty avoidance countries: high need for security,
strong belief in experts and their knowledge; structure
organizational activities, more written rules, less managerial risk
taking (Germany, Japan, Spain)
• Low uncertainty avoidance countries: people more willing to
accept risks related to unknown, less structured organizational
activities, fewer written rules, more managerial risk taking, higher
labor turnover, more ambitious employees (Denmark and Great
Britain)

4-21
Hofstede’s Cultural Dimensions
 Individualism
• The extent to which people look after themselves and
immediate family only
 Collectivism
• The tendency of people to belong to groups and to look
after each other in exchange for loyalty
• High individualism countries: wealthier, Protestant work ethic,
greater individual initiative, promotions based on market value
(U.S., Canada, Sweden)
• High collectivism countries: poorer, less support of Protestant
work ethic, less individual initiative, promotions based on seniority
(Indonesia, Pakistan, China, Mexico)

4-22
Hofstede’s Cultural Dimensions
 Masculinity
• A cultural characteristic in which the dominant social
values are success, money, and things
 Femininity
• A cultural characteristic in which the dominant social
values are caring for others and quality of life
• High masculine countries: stress earnings, recognition,
advancement, challenge, wealth; high job stress (Germanic
countries)
• High feminine countries: cooperation, friendly atmosphere,
employment security, group decision making; low job stress
(Norway)

4-23
Hofstede’s Cultural Dimensions
 Time Orientation (1988)
• A cultural characteristic dealing with society’s search for
virtue
• Long-term oriented societies: focus on the future, able to adapt
traditions when conditions change, tend to save and invest, focus
on achieving long-term results (Asian countries)
• Short-term oriented cultures: focus on quick results, do not tend
to save, service to others, belief in absolutes, value stability and
leisure (U.S., UK, Spain)

4-24
Hofstede’s Cultural Dimensions
 Indulgence vs. Restraint (2010)
• Indulgent: trait related to relative happiness based on
instant gratification
• Restraint: a cultural characteristic based on regulating
and controlling behavior according to social norms
• Indulgent societies: perceived happiness, life in control,
positive emotions, basic needs satisfied (U.S., UK, Australia,
Chile)
• Restrained societies: less happiness, sense of helplessness,
less likely to remember positive emotions, basic needs not
always met (Asia countries, Russia, India, China, Egypt,
Romania)
4-25
 Hofstede’s Cultural Dimensions
Hofstede’s work has been criticized
 Assumes a one-to-one relationship between
culture and nation-state
 Research may be culturally bound
 Informants only worked within a single industry –
computers – and within one company – IBM.
 Certain social classes excluded from research
 Culture is not static
Rituals and Symbols
 Rituals are patterns of behavior and interaction that
are learned and repeated vary from country to
country

4-27
Rituals and Symbols
 Language as Symbols: the “languages” of time,
space, things, friendships, and agreements
 Differences in language vocabulary varies widely,
even English is different in different countries
 In Taiwan, “Come alive with Pepsi” frightened
consumers as it literally meant “Pepsi will bring your
ancestors back from the grave.”
 Aesthetics as Symbols
• The sense of what is beautiful and what is not beautiful
• Visual, style (eg. Meaning of color)

4-28
Cross-Cultural Comparisons

East vs. West:

Key cultural difference: how people perceive reality and reasoning
High-context cultures(East):
– Interpretation of messages rests on contextual cues; e.g., China,
Korea, Japan.
– In this culture, communication is sophisticated, nuanced, and layered.
Less is put in writing, more is left open to interpretation, and
understanding may depend on reading between the lines.
Low-context cultures (West):
• What is meant is what is said. Put the most emphasis on written or
spoken words; e.g., USA, Scandinavia, Germany.
• In this culture, good communication is precise, simple, explicit and
clear

4-30
High- and Low-Context Cultures

• High Context • Low Context

– Information resides in – Messages are explicit
context and specific
– Emphasis on – Words carry all information
background, basic – Reliance on legal
values, societal status paperwork
– Focus on Less emphasis – Focus on non-personal
on legal paperwork documentation of
– personal reputation credibility
 Cross-Cultural
Comparisons
Japanese
High context
IMPLICIT Arabian

Latin American
Spanish
Italian
English (UK)
French
English (US)

Scandinavian

German
Low context
Swiss EXPLICIT

4-32
 Nonverbal Communication
• Nonverbal communication • Chronemics refers to the way in
transfers meaning through body which time is used in a culture.
language and physical space. • In a monochronic time
• Kinesics is body movement and schedule, things are done in a
facial expression. linear fashion.
• Communicating through eye • In a polychronic time schedule,
contact/gaze is oculesics. people multitask and place
• Communicating through bodily higher value on involvement
contact is known as haptics. than on completion.
• Proxemics—people use physical • Chromatics is the use of color
space to convey messages. to communicate messages.
• Intimate distance, personal • Such knowledge can help you
distance, social distance, and avoid embarrassing situations.
public distance.
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
• The Chinese practice of Feng Shui in designing buildings

4-36
Thought Processes
 Thought processes also vary across cultures
• “Asian and Western” thinking
• Other examples?

4-37
Self-Reference Criterion & Ethnocentrism

 Self-Reference Criterion (SRC) is an unconscious

reference to one’s own cultural values, experiences,
and knowledge as a basis for decisions.
 Ethnocentrism is the notion that people in one’s own
company, culture, or country know best how to do
things.
 Both the SRC and ethnocentrism impede the ability
to assess a foreign market in its true light.

4-38
Developing Global Awareness
To be globally aware is to have:
 tolerance of cultural differences and
 knowledge of cultures, history, world market
potential, and global economic, social, and political
trends

4-39