COUNTRY’S CULTURE AFFECTS GLOBAL BUSINESS SUCCESS KEY DIMENSIONS OF CULTURE • 1. Power Distance: a society’s level of inequality is endorsed by the followers as much as the leaders • 2. Individualism & Collectivism: ties between individuals are loose, degree of interdependence among individual members of society • 3. Masculinity & Femininity: competitiveness, assertiveness, caring for others • 4. Uncertainty Avoidance: the extent to which a culture programs its members to feel uncomfortable in unstructured situations. HOSFTEDE • A – US: INDIVIDUALISTIC: VALUE NEW IDEAS AND INNOVATIONS, LEADERSHIP MORE PARTICIPATORY, INDIVIDUALS ARE CONFORTABLE COMMUNICATING VIA IMPERSONAL MEANS. • B – UK: SENSE OF MODESTY AND UNDERSTATEMENT, TAKES TIME TO DEVELOP RELATIONSHIPS, MERIT DRIVEN, MEN AND WOMEN ARE TREATED AS EQUALS. • C – NETHERLANDS: DIRECT (ALMOST RUDE), EQUAL-RIGHTS ORIENTED, INTERACTIVE STYLE – DECENTRALIZED POWER, INDIVIDUALISTIC. • D – BRAZILIANS: INTERACT PERSONALLY, VALUE LONG-TERM BUSINESS RELATIONSHIPS, “RULES ARE MADE TO BE BROKEN”ATTITUDE, • MEXICO: PERSONAL RELATIONSHIPS VERY IMPORTANT, TRADITIONS, HIERARCHY AND STATUS, IMPORTANT TO UNDERSTAND WHAT IT IS NOT BEING SAID, LOYALTY AND FAMILY VERY IMPORTANT. • TOTAL REWARDS STRATEGY: JUST AS NATIONAL CULTURES VALUES CANNOT BE GENERALIZED TO DEFINE AN INDIVIDUAL’S VALUES, DIFFERENT ORGANIZATIONAL CULTURES PREFER DIFFERENT REWARDS ELEMENTS. • Ex: LA will emphasize a long-term horizon, group results and team achievements. • Feminine cultures: communicate quality of life and caring for others, health care and time off. Issues in Cross Cultural Business Communication • Sometimes top managers in MNCs neglect the significance of the invisible barriers cultural differences create in business communication. • National policies aimed at protecting cultural diversity, culture identity and cultural heritage. WTO versus national policies. • Adaptation strategies are more effective than standardization strategy. Culture matters when advertising and brands are processed by consumers. • If globalization is an inevitable process, then cross – culturalization will also be inevitable. • However cultural differences between nations, and ethnic groups are becoming stronger. • Global managers need to be well informed about cultural differences nationally, locally, and ethnically in order to be effective in global markets. CULTURE IS DYNAMIC IT CHANGES OVERTIME • Values, norms and characteristics • Chinese shopping habits: chinese save money for future consumption, unlike western cultures where people spend future money on present consumption. • French: restrict retail store size and protect mom-an-pop retailers • All market behaviors are culture-bond. Buying and selling take place within culture. Key Issues in Cross-Cultural Business Communication • Culture influences business communications and business communications influences culture. • Cross-cultural factors impact people’s shopping for food, practice of giving business gifts. • Culture affects the effectiveness of advertising Cultures & Time • In a monochronic culture time is important (US. Western Europe) • Polychronic culture: business discussions follow their own logic (LA). It takes much longer to negotiate! • People in different cultures have different market values and behaviors. • Religion beliefs may have an influence on negotiation strategies. • Zero-sum or win-win approach • Blunders in Cross-Cultural Adverstising • “Nothing sucks like an Electrolux – vacuum cleaner • American Airlines – fly in leather, meant in spanish – “Fly naked” Right Color? • Assuming narrow Western perspectives of colors as “universal” asn applying it to alien markets has often led to cultural faux pas. • Can different colors alter the meanings of the objects or situations with which they are associated? • Can color preferences predict future purchase behavior ? Colors • • • • • • Greeks – white and black “darkness and light” Blue denoted heaven Scarlet and purple signified authority and opulence. Senators in Rome would wear scarlet or crimson violet Orange is a sacred color for Hindus and Buddhists South Africa tribe – yellow associated with new life and green with fertility • White: anglo saxon (purity), Chinese (death) • Yellow represents warmth in the US and infidelity in France • Purple color of love in China and sin and fear in Japan Color • Color signals a product’s attributes for merchandise, thereby influencing perceptions about price and quality • In the UK white is perceived as “crap” and dark colors for expensive high tech products • Food: clor to be a key factor in affecting the acceptability of cookies in Argentina • Apple, Gatorade and M&Ms have used novel coloured product lines – color is useful in creating a different value from the environment or the competition • We live in a world of color! Color • Country of origin effects: red strongly related to China, blue-green by Iranians and Kuwaitis, USA blue color • Color signals individual personality and selfimage • Deodorants for women use greater contrast and bright colors – packaging design • Sophisticated colors denote elegance and intimate communication – Tiffany, LV, Armani Color • VW add: black sheep meaning in Italy – independent self assured, other cultures an outcast CHINA • • • • • Chinese consumers suspicious of advertised products, because they perceived that only bad products needed to be advertised Appeals that emphasize individualistic benefits are more effective in the USA than in China. High Context and Low Context cultures High Context cultures (collectivist societies China and Japan) the context in which information is embedded is as important as what is said – people more effectively reached by image or mood – Infinity add in Japan Low context: such as USA the information is contained in the verbal messages – it is important to provide adequate information relating to the product, service, innovation.