Culture, Management Style, and Business Systems Chapter 5

Adaptation to customs Global Perspective “Do Blonds Have More Fun in Japan” pg. 123 Adaptation The willingness to adapt to other customs is essential in international marketing Degree of Adaptation: This does not mean that businesses discard their methods of conducting business, rather that executives need to be aware of differences and willing to adapt to the differing customs

Types of Customs 3 Types of Customs 1. Cultural Imperatives Business customs and expectations that MUST be met in order to conduct successful business transactions in other countries/cultures 2. Cultural Electives Business customs and expectations that are OPTIONAL, in which business executives may participate/conform in, but is not required. May help to establish rapport and respect when participation occurs Majority of customs fall into this category

Types of Customs 3. Cultural Exclusives Customs that are reserved exclusively for the locals, where foreign participation is EXCLUDED –Example: Foreign business people criticizing local politicians, business practices where it is acceptable for the local to do so

The Impact of American Culture on Management Style Most widely accepted views regarding U.S. culture: “Master of destiny” viewpoint Independent enterprise as the instrument of social action Personnel selection and reward based on merit Decisions based on objective analysis Wide sharing in decision making Never-ending quest for improvement Competition yielding efficiency

Management Styles around the World Types of Decision Making Approaches 1. The authoritative approach Top level management decision making is usually found in smaller businesses where centralized decision-making is possible 2. The delegated approach Decentralized decision making is usually found in large size businesses with highly developed management systems (U.S.) Allows executives at different levels to exercise authority over their own functions 3. The committee approach Decisions are made by consensus or in a group (Japan)

Management Objectives & Aspirations Understanding how managers’ objectives and aspirations affect their business outlook is critical 4 Important areas to understand: 1. Security and mobility Importance of security and definition differ in many countries (can mean good wages and training; maybe lifetime employment…)

Management Objectives and Aspirations 2. Personal life Personal life takes precedent over other motivators (wages, status) 3. Affiliation and Social acceptance Accepted by peers –Important element of the group decision making process 4. Power & Achievement

Communication Styles Edward T. Hall ideas on Communication Styles: Crossing Borders 5.2 pg. 133 – “A Classic – Edward T. Hall’s Language (Symbolism) of Space” Exhibit 5.2 pg. 135 “Contextual Background of Various Countries” Face-to-face communications –Low Context: depends heavily on verbal communication (Swiss, Germany, U.S.) –High Context: depends heavily on nonverbal communications –See Crossing Borders 5.3 pg. 136 “When Yes Means No…”

Importance of Communication when adapting to business customs Communication Translation and interpretation (See Crossing Borders 5.4 pg. 137 “You Say You Speak English”) Formality and tempo P-time vs. M-time M-time (monochronic) – concentrate on one thing at a time P-time (polychronic) – completion of a transaction is more important than sticking to a schedule

Gender Bias in International Business Is there a gender bias against women managers when operating in International arenas? Most evidence indicates that when women are trained and backed by their corporation, resistance from other cultures is either minimized or negated completely Comparative statistics of women in managerial positions worldwide (approximations): U.S. – 43% Britain – 33% Switzerland – 28% Germany – 9.2%

Business Ethics Bribery & Extortion Bribery Voluntary payment offered by individual(s) seeking an unlawful advantage –SEC regulates U.S. Companies domestically and internationally –“Transparency International” – organization dedicated to curbing corruptions worldwide –See Exhibits 5.4 and 5.5 pg. 145 Extortion Payments are extracted under duress by someone in an authoritative position (host country) –See Crossing Borders 5.6 pg. 146 “Bangladesh at the bottom…”

Business Ethics Subordination & Lubrication Subordination Involves giving large sums of money Lubrication Involves giving small amounts of money, or gifts… Foreign Corrupt Practices Act (FCPA) Important act that prohibits U.S. businesses from paying bribes openly or using middlemen or agents to bribe on behalf of the U.S. business

Relationship-Oriented vs. Information-Oriented Cultures Relationship Orientation Japan and other Asian countries Information Orientation U.S., Great Britain See Exhibit 5.6 pg. 151 “Dimensions of Culture, A Synthesis”

Business Customs on the Internet Points to be aware of: A message on a company’s website is viewed as an “extension” of that company Majority of websites are seen worldwide and translation can often convey incorrect meaning or offend other cultures Approximately 78% of website is written in English Companies must pay attention to symbols, icons or any non-verbal messages on their websites