Chapter Three Cultural Foundations MKT568 Global Marketing Management Dr. Fred Miller 3-1

Understanding Culture Academic approaches How are cultures organized? What do they value? History Anthropology Geography Humanities University Studies courses Professional/pragmatic approaches How should managers operate in multiple cultures? Social and professional values Social and professional behavior Intercultural communication and negotiation Multicultural interpersonal interaction International business, management, marketing courses

Sample Essay Question Schmidt’s has chosen to enter the Thai market and is preparing to send a delegation to Bangkok to negotiate a sales contract with the largest Thai mass merchandise retailer. You must prepare a briefing on intercultural communication for this team. Relative to Hofstede’s indexes, Thailand is classified as Feminine, Collectivist, Large Power Distance and High Uncertainty Avoidance. Select three topics from the Cultural Passport video and explain the importance for conducting international business. For each, describe the behavior patterns you would anticipate in Thailand based on the country’s Hofstede values. Explain your reasoning.

Culture Across Countries High vs low context cultures Silent languages Hofstede’s cultural dimensions Gannon’s metaphors Rapaille’s Decoding Cultures

High vs Low Context Cultures 3-2

Hall’s Silent Languages Space Possessions Friendships Agreements Time

Gannon’s Metaphors 1.American football: Individualism and competitive speculation; huddling; ceremonial celebration of perfection. 2.The British house: Laying the foundations; building the brick house; living in the brick house. 3.The German Symphony: 0rchestra; conductors; performance society; education, and politics. 4.The French wine: Purity; classification; composition; compatibility; maturation. 5.The Italian family opera: Pageantry and spectacle; voice expression; chorus and soloists. 6.The Swedish summer house: Love of nature; individualism through self- development; equality. 7.The Japanese garden: Wa and shitaki, harmony and form; seishin, spirit of self-discipline; combining droplets. 8.The Chinese family altar: Confucianism and Taoism; roundness, harmony and fluidity. 9.India: cyclical Hindu philosophy: The cycle of life; the family cycle; the social cycle; the work cycle. 3-7 Source: Martin Gannon, “Cultural Metaphors,” Understanding Global Cultures, pp. v-vii, ©1994 by Martin Gannon. Reprinted by permission of Sage Publications.

Hofstede Calculations and Matrix Low Uncertainty Avoidance High Low Power Distance High

Hofstede Calculations

Power Distance and Individualism Scales - ARGArgentina BRABrazil CHL Chile COL Columbia GRE Greece HOKHong Kong IND India IRA Iran JAP Japan MEXMexico PAK Pakistan PER Peru PHI Philippines POR Portugal SIN Singapore TAI Taiwan THA Thailand TUR Turkey VEN Venezuela YUG Yugoslavia Small Large Power Distance Individualism Collectivist Small power distance collectivist Large power distance collectivist Reprinted by permission of the author from Culture’s Consequences, published by Sage Publications. ©1990 by Gert Hofstede PAK COL VEN TAI PER THA SIN CHL POR HOK YUG MEX PHI GRE TUR BRA IRA ARG JAP IND

Power Distance and Individualism Scales AULAustralia AUTAustria BELBelgium CAN Canada DEN Denmark FIN Finland FRA France GERGermany GBR Great Britain IREIreland ISRIsrael ITA Italy NET Netherlands NZLNew Zealand NOR Norway SAF South Africa SPASpain SWE Sweden SWISwitzerland USAUnited States Small Large Power Distance Individualism Individualist Small power distance individualist Large power distance individualist Reprinted by permission of the author from Culture’s Consequences, published by Sage Publications. ©1990 by Gert Hofstede SPA SAF FRA BEL ITA AUT ISR FIN GER NOR SWI SWE IRE DEN NZL CAN NET GBR USA AUL

Academic/Pragmatic Integration? In the Hofstede matrix using the IDV and PDI scales, how are each of the following groups of countries concentrated? What historical/cultural trends are consistent with these concentrations. Former British Empire countries Asian countries Latin American countries Northern European countries

Cross Cultural Management Managing in a cross cultural environmentcross cultural country cultural and business informationculturalbusiness culture and managerial skills managerial styles in the Triad culture and negotiations limits to adaptation

Hofstede’s Classification of Triad Countries 3-8 Note: “Context” added. Source: Adapted from Hofstede, 1980 Exhibit 3.4

Cross Cultural Issues in Business Which of the following patterns of business behavior would you expect in a Collectivist country with Large Power Distance? Decentralized organizations with autonomous units Centralized, hierarchical organizations Subordinates who expect exact instructions Multiple people and groups involved in decision making Concentration of decision making in top management Multi-track, manager to manager negotiating styles Division managers willing to make their own decisions

Cross Cultural Issues in Business Which of the following patterns of business behavior would you expect in a Feminist country with Weak Uncertainty Avoidance? Willingness to undertake risky ventures Emphasis on reaching quantitative performance goals A zero sum approach to negotiations Concern for interpersonal environment of the firm Integration of professional and personal goals Reluctance to try new approaches A win-win approach to negotiations

Four Stages of Business Negotiations 3-9 Source: Adapted from John L. Graham, “A Hidden Cause of America’s Trade Deficit with Japan,” Columbia Journal of World Business, Fall p. 14.

Cultural Passport Video Explain why each of the following components of the Cultural Passport are important for success in international business. Greeting and addressing people Conversation Body language Sensitivity Table Manners Gender Awareness Negotiating styles Time Contracts Attitudes and Values

Chapter Three Cultural Foundations MKT568 Global Marketing Management Dr. Fred Miller 3-1