1. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Chapter 3 Cultural Foundations

3. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Meaning of Culture Culture Defined as the underlying value framework that guides an individual’s behavior Reflected in an individual’s perceptions of observed events, in personal interactions, and in the selection of appropriate responses in social situations Manifests itself in learned behavior as individuals grow up and gradually come to understand what their culture demands of them The modern conception of culture focuses directly on observable behavior Consequently, culture creates a repertoire of behavioral skills

4. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Cultures Across Countries High versus Low Context Cultures High Context Cultures The meaning of individual behavior and speech changes depending on the situation or context Nonverbal messages are full of important and intended meanings When words are spoken “reading between the lines” is important High context cultures can be found in most of the European countries, some of Latin American countries, and in Japan and many of the newly industrializing Asian countries

5. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Cultures Across Countries Low Context Cultures Intentions are expressed verbally A person’s meaning should be explicit not taken for granted Propositions have to be justified and opinions defended openly Low context cultures can be found in the U.S., India, China, Russia, Australia and New Zealand

6. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Cultures Across Countries Five different “Silent Languages” Space Relates to matters such as the distance between two people conversing Material Possessions Usually describes a person’s station in life Friendship Patterns Reflective of a person’s cultural upbringing Agreements Across Cultures Interpreted differently across cultures Time Studies have documented the cultural problems with time perceptions

7. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Cultures Across Countries Avoid Self-Referencing Self-referencing A process by which individuals form judgments about others Involves judging others’ behavior against a person’s own past experiences and that person’s own conception of self Can lead to misperceptions of people from abroad

8. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Cultures Across Countries Hofstede’s Cultural Dimensions Individualism versus Collectivism In a collective society the identity and worth of the individual is rooted in the social system Less in individual achievement High versus Low Power Distance High power distance societies tend to be less egalitarian While democratic countries exhibit low power distance Masculine versus Feminine Captures the degree to which culture is dominated by assertive males Rather than nurturing females and the corresponding values

9. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Cultures Across Countries Hofstede’s Cultural Dimensions (cont’d) Uncertainty Avoidance Rates nations based on the level of risk tolerance or aversion among the people Confucianist Dynamics Distinguishes the long-term orientation of Asian people From the more short-term outlook of Western people

10. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Cultures Across Countries Gannon’s Metaphors Gannon suggested the use of descriptive metaphors for different cultures Suggestive analogues which characterize cultures in such as way as to help managers anticipate what people’s reactions might be in different situations Gannon’s Metaphors offer a mental anchor for the manager Who has to deal with a new culture and cannot foresee all contingencies

11. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Culture and “How to do Business” Culture and Managerial Skills Descriptions of the sequence that connects the context of national culture to the development of managerial skills General culture defines A set of acceptable and unacceptable behaviors Individuals learn to act out these behavioral norms Over time, individuals become skilled at displaying acceptable behaviors And skilled at avoiding unacceptable behaviors Acceptable behavior in the business firm is usually a reflection of acceptable behavior in society Especially if the company is large

12. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Culture and “How to do Business” Culture and Managerial Skills Descriptions of the sequence (cont’d) Successful managers tend to be good at Acceptable behaviors and at avoiding unacceptable behaviors Successes and failures in the past Generate managerial “experience” and successful behavior will be repeated elsewhere

13. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Culture and “How to do Business” Managerial Styles Through the skill development process Cultures tend to generate different managerial styles Managing Subordinates Cultural differences suggest Different types of leadership skills will be needed in managing marketing overseas as opposed to in the home market To help managers cope with or avoid cultural clashes Most companies offer new expatriate managers (and their families) predeparture workshops and briefings About the new culture they are to encounter

14. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Culture and Negotiations Know Whom You Are Dealing With In most negotiations Knowing something about the cultural background of the opposite partner is considered a must Know What They Hear The second caution from experts Is the possibility of discrepancies between what the manager thinks he or she is communicating and what is actually received by the other party Nonverbal communication is always a mysterious ingredient in negotiations Know When to Say What Spend some time to understand the other culture And build a relationships if necessary

15. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Culture and Negotiations Four sequential stages that characterize information exchange Nontask Sounding An initial period when the conversation consists mainly of small talk Designed to get the partners to know each other better Task-Related Exchange of Information An extended period when the main issues are brought out, facts are presented, and positions clarified Persuasion The stage when the parties attempt to make each see the issues their way Concessions and Agreements Toward the end of most negotiations is a period when mutual concessions might be made

16. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Culture and Negotiations Negotiators from different cultures may be classified as Proactive “A” types or reactive “B” types Type “A” Negotiator Starts with the easily agreed-upon small details and works up More dynamic, energetic, and risk-taking entrepreneur Closer to the American manager Type “B” Negotiator First wants to agree on the overall framework of the agreement Slow, seasoned, mature individual who avoids risk Closer to the Japanese manager

17. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. The Limits to Cultural Sensitivity Nonadaptation It is important to recognize that when a country is ready for change A different culture can be attractive There are limits to the effectiveness of cultural sensitivity As an accommodation strategy Attempts at cultural adaptation is prone to misinterpretation And may even create distrust Keeping One’s Center Cultural adaptation Runs the risk of the manager losing his or her bearings

18. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Culture and Industrial Buyers The Business Marketing Task The local marketer should help the buying organization succeed Cultural Conditioning Depending on personality and underlying cultural conditioning Buyers tend to develop styles of dealing with vendors A basic consideration is how the buyer treats the seller A culture’s openness to change influences the buyer’s attitude toward risk Organizational Culture The group decision making involved in many industrial purchases Means that cultural influences will be strong Both from the organizational culture and the culture at large

19. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Culture and Industrial Buyers Relationship Marketing The term applied to a marketing effort involving Various personalized services Creation of new and additional services Customizing a company’s offering to the needs of a special buyer Takes a long-term view Since without it, the effort required to build a relationship is not worth it

20. Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved. Culture and Industrial Buyers Key steps a marketer can take to create a workable relationship Adopt the buyer’s viewpoint The global marketer’s aim is to be useful to the local buying organization Accept and demand transparency Not based on any legally binding contract The relationship has to be based on mutual trust especially across cultures Grow with the relationship The long-term view implies that unavoidable changes caused by unforseen circumstances must be acceptable to both parties Be proactive Make the company useful and irreplaceable to the buyer