Chapter 5 Business Customs in Global Marketing

Cultural Adaptation Cultural Imperatives Cultural Adiaphora Cultural Exclusives

Hall’s Silent Languages Language of Time Language of Space Language of Things Language of Friendship Language of Agreements

Cultural Differences between Japanese and American Business Japanese Business Game concept: Business is a game in pursuit of profits under the rules of laws and contracts Efficiency-oriented and approximate accuracy simplicity, clarity, and quickness Quantity-oriented Short-term performance evaluation Easy layoffs, dismissals of employees, and selling of businesses Mutual trust-oriented business: business is based on trusting relationship among people rather than the rules of game Highly precision-oriented and perfectionism-high dependency on human awareness Quality-oriented Mid-to-long term evaluations Job security SOURCE: Norihiko Shimizu, “Today’s Taboos may be gone tomorrow,” Tokyo Business, February 1995, p.51.

Cultural Differences between Japanese and American Business Japanese Business Top down management Low mutual dependence between employers and employees Control of business by stockholders and the management Management by "force" Heavy dependence on machinery and technology, vs. Light dependence on human resources Limited loyalty and incentive-oriented work ethics Excellent software-based technology development Heavy dependence on human resources bottom-up management and teamwork High mutual dependence between employers and employees Joint management of business by Employees and Employees Management by "motivation" Heavy dependence on human resources Strong loyalty and fewer incentives Inadequate software development ability SOURCE: Norihiko Shimizu, “Today’s Taboos may be gone tomorrow,” Tokyo Business, February 1995, p.51

Corruption Perception Index* (Selected Countries 1999) Country* CPI 1999** Country CPI 1999 Denmark (1) 10.0 Brazil (45) 4.1 Finland (2) 9.8 South Korea (50) 3.8 Singapore (7) 9.1 China (58) 3.4 Norway (9) 8.9 Mexico (58) 3.4 Switzerland (9) 8.9 India (72) 2.9 United States (18) 7.3 Russia (82) 2.4 France (72) 6.6 Nigeria (98) 1.6 Czech Republic (39) 5-7 * The number in parenthesis is rank for 1999, which is based on 99 counties studied. ** The maximum score is 10.00; the minimum score is 0. A perfect score of 10.00 would be totally corrupt free country. Source: “The 1999 Transparency International Corruption Perceptions Index (CPI), “http://www.transparency.org/documents/cpi/index.html. (March 2000) Irwin/McGraw-Hill

Bribery? Variations on a Theme Bribery Extortion Subornation Lubrication

Three Ethical Principles Utilitarian Ethics Does the action optimize the "common good" or benefits of all constituencies? Rights of the Parties Does the action respect the rights of the individuals involved? Justice or Fairness Does the action respect the canons of justice or fairness to all parties involved? Principle Question

A Decision Tree for Incorporating Ethical and Social Responsibility Issues into Multinational Business Decisions Does the decision efficiently optimize the common good or benefits of: NO YES Are there critical factors that justify suboptimizing these goals and satisfactions? The Business firm? Stockholders Management Profits Growth Other The Economy? Economic growth Allocation of resources Production and distribution of goods and services Other Society Culture Order Justice “The good life” Other The Individual? Freedom Health and welfare Self-realization Human dignity Opportunity Other YES NO Does the decision respect the rights of individuals involved. NO Reject decision YES Are there critical factors that justify the abrogation of a right. YES Does the corporate decision respect the canons of justice or fairness to all parties involved? NO NO Reject decision Are there critical factors that justify the violation of a canon of justice? YES YES NO Accept decision Reject decision

The Caux Round Table Principles General Principles  The responsibilities of businesses : Beyond shareholders toward shareholders.  The economic and social impact of business:  Beyond shareholders toward justice and world community.  Business behavior: Beyond the letter of law toward a spirit of trust.  Respect for rules.  Support for multilateral trade.  Respect for the environment.  Avoidance of illicit operations. SOURCE: Joel Makower and business for social responsibility, Beyond The Bottom Line: Putting Social Responsibility to Work for your Business and the World (New York: Simon and Schuster, 1994)

The Caux Round Table Principles Preamble The mobility of employment, capital, products, and technology is making business increasingly global in its transactions and its effects. Laws and market forces are necessary but insufficient guides for conduct. Responsibility for a business's policies and actions and respect for the dignity and interests of its shareholders are fundamental. Shared values, including a commitment to shared prosperity, are as important for a global community as for communities of smaller scale. For these reasons, and because business can be a powerful agent of positive social change, we offer the following principles as a foundation for dialogue and action by business leaders in search of business responsibility. In so doing, we affirm the necessity for moral values in business decision making. Without them, stable business relationships and a sustainable world community are impossible. SOURCE: Joel Makower and business for Social Responsibility, Beyond the Bottom Line : Putting Social Responsibility to Work for your Business and the World (New York: Simon and Schuster, 1994)

Elements of Culture Material Culture Social Institutions Technology Economics Social Institutions Social Organization Education Political Structures Humans and The Universe Belief Systems Aesthetics Graphic and Plastic Arts Folklore Music, Drama, and Dance Language

Cultural Factors Never touch the head of a Thai or Pass an object over it The head is considered sacred in Thailand. Avoid using triangular shapes in Hong Kong, Korea, and Taiwan. It is considered a negative shape. The number 7 is considered bad luck in Kenya, good luck in the Czech Republic and has a magical connotation in Benin, Africa. The number 10 is bad luck in Korea. The number 4 means death in Japan. Red represents witchcraft and death in many African countries. Red is a positive color in Denmark. SOURCE: Business America, July 12, 1993

Cultural Differences between Japanese and American Individual Lifestyles Americans A Culture of Self-expression Japanese A Culture of Self-restraint Cultural Background Clear expression of joy and sorrow Unequivocal expression of “Yes/No” Strong self-assertion Strong personality Excellent negotiating skills Priority of self-interest Ambiguous expression of Joy/Sorrow Equivocal expression of “Yes/No” Weak self-assertion Weak personality Poor negotiating skills Priority of harmony with others Reticence Modesty Reserve Punctiliousness Politeness Obligation SOURCE: Norihiko Shimizu, “Today’s Taboos may be gone Tomorrow,” Tokyo Business, February 1995, p.50.

Cultural Differences between Japanese and American Social Life American Society Dignity of Individuals Japanese Society “In the Same Boat” Concept Dignity of individuals Individual work ethic Great individual freedom Respect for rules An open and transparent society Multi-cultural society A society excelling in creativity and versatility Individual decisions over consensus A society which pursues the ideal Human relations oriented Dependence on the group Lack of individual freedom Low regard for rules A closed society, lacking in transparency Mono-cultural society An orderly and uniform society Dependence on consensus A society which pursues harmony with reality SOURCE: Norihiko Shimizu, “Today’s Taboos may be gone Tomorrow,” Tokyo Business, February 1995, p.50.

Cultural Change Pas de Franglais Old New Prime Time Heures de grande ecoute (hours of largest audience) Air Bag Coussin gonflable de protection (Inflatable cushion of protection) Cookie Sable americain Trans. (American cookie) SOURCE: Adapted from “La Guerre Franglaise,” Fortune, June 13, 1994, p. 14.