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Culture - MBA 635 - Summer Term 2011

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Introductions
When looking for definitions of culture I found many different variations. If you survey a number of people, it is likely no two answers would be alike. In fact, in n 1952 Kroeber and Kluckhohn complied a list of 164 definitions of culture. For our purposes, I have listed the one in the book.Culture: acquired knowledge that people use to interpret experience and generate social behaviorCulture is defined by several characteristics, learned, shared, transgenerational, symbolic, patterned, and adaptiveCulture gives a community a certain identity of their own. It can be seen as a common bond that ties groups of people together. In the corporate world it is important to recognize this bond and both the similarities and differences in culture for several reasons. Business has gone global with advancements in technology. Barriers of travel and communication have been reduced and many companies are going international. With this occurrence, it is important for businesses to integrate their organizational culture in with the culture of their employees, their most valuable asset.
Much of the information I found regarding culture and the analysis is centered around Hofstede’s cultural dimensions. I am going to review these since it has been a few days since we first heard about these in class. We are going to use the dimensions in our presentation today to look at different countries and compare the cultures within those countries. -Power distance:Looks at how people view the unequal distribution of power (if you have a high power distance you don’t mind large distribution)-Uncertainty avoidance:Extent to which people feel threatened by ambiguous situations and have created beliefs and institutions that try to avoid these High uncertainty avoidance (like security)-Individualism: Tendency for people to look after themselves and immediate family only Wealthier countries had higher individualism scores and collectivism happens when people look to groups.-Masculinity: Dominant values in society are success, money, and things compared to quality of life-Long term orientation – not emphasized a book because he had to do another study outside IBM study and add later – shows differences in thinking -persistence  -ordering relationships by status and observing this order  -thrift  -having a sense of shameCommon ground can be used as a starting point in determining the best organizational culture.
Yesterday we heard about the increase of globalization. With globalization comes exposure to new cultures and environments. It is important for companies to understand these new dimensions. G6 countries formed in 1975: US UK France Germany Italy JapanBRIC –rising economic powersBrazilRussiaIndiaChinaBy 2050 their combined economies could trump current richest countries of the world. These four account for more than 40% of the world's population.This chart shows the advancing BRIC economies and shows the structure using the Hofstede approach. Just some of the things to point out in this chart…-When looking at power distance, the BRIC companies are more accepting of power inequalities so it is important to have a strong power or decision maker in place. -The BRIC countries place importance to collectivism more so than the rest of the world and US specifically. -You can also look at the uncertainty avoidance and see Russia and Brazil may be more resistant to change.
Now we know the importance of awareness between different cultures we are going to look at two specifically – China and Arab culture…
China is believed to have the oldest continuous civilization. China has over 4,000 years of verifiable history. Beijing is the capital of China and is the focal point for the country. The official language is standard Chinese, which is derived from the Mandarin dialect. Most business people speak English. There are many dialects in China however there is only one written language. A Communist form of government rules China. The Chinese government promotes atheism although the constitution guarantees freedom of religion. The Chinese practice a variety of religions, however, Confucianism; despite not being a formal religion is practiced widely throughout the country.China is the most densely populated county in the world with approximately 1.34 billion people as of 2011. Almost 100 percent of the population are ethnic or Han Chinese. There are strict rules regarding childbirth and each couple is limited to only one child.
China scored very high on Hofstede’s Power Distance Index, with a sore of 80, while the United States scored 40, and the world average was 55 and the average of other Asian nations of 60. This suggests that China respects people in positions of power or authority MUCH more than in the USA, and more than the world average.This is indicative of a high level of inequality of power and wealth within the society. This condition is not necessarily forced upon the population, but rather accepted by the society as their cultural heritageThere is a high degree of formality between Chinese leaders and followers. It is expected in Chinese culture that leaders will have privileges that others will not. Business and political leaders are seen as being knowledgeable and strong and are depended on to make sound decisions. On the other hand, the United States, Hofstede’s score indicates that there is greater equality between societal levels, including government, organizations, and families.
The Chinese score of 40 on the Uncertainty Avoidance index indicates that the Chinese have a very high tolerance for uncertainty, or a high risk appetite. A Low Uncertainty Avoidance ranking indicates the country has less concern about ambiguity and uncertainty and has more tolerance for a variety of opinions. This is reflected in a society that is less rule-oriented, more readily accepts change, and takes more and greater risks. However, this is counter to some of the characteristics of China. This low uncertainty avoidance index may be reflecting China’s extremely high Long-Term Orientation (LTO) orientation (118 ranking). This Dimension indicates a society's time perspective and an attitude of persevering; that is, overcoming obstacles with time, if not with will and strength.
On average, the Chinese and United State’s have similar rankings indicating that the countries both experience a high degree of gender differentiation of roles.However, while the male dominates a significant portion of the society and power structure, this generates a female population that becomes more assertive and competitive (i.e. women begin shifting towards the male role model and away from the stereotypical female role). Overall, both countries place higher value on masculine characteristics like success, money and possessions.
China scored lowest on the Individualism index. They are also the lowest on this dimension of any of the Asian nations. Related to the high level of emphasis on a Collectivist society by the Communist rulers.Their ranking of 20 means that the China is a collectivist society as compared to an individualist culture. This is shown in their close, long-term commitments to family, extended family, or extended relationships. Loyalty is paramount in this culture and overrides most other societal rules. On the other hand, the USA is one of only 7 nations that had the Individualism as their highest ranking. This indicates that the population has an individualistic attitude and relatively lose bonds with others. The culture in the US is more self reliant and people tend to look out for themselves and their close family members.
We chose to look at Coca-Cola and McDonalds as examples of products that are distributed across many cultures and geographic locations.Note the similar product and marketing messages between China and the US.
Overall, note the similar product and marketing messages in these various print and TV ads as compared to what would be seen in the US.Based on page 131 in the textbook, this what we would expect for products that are either at the very high-end or at the very low-end (i.e. product and marketing messages that are similar worldwide).Examples from page 131 in textbook: luxury cars are marketed similarly world wide as are impulse purchases, novel products, fast foods, Coca Cola soft drinks, Levi Jeans, pop music, etc… However, it must be noted that in most cases it is necessary to modify products as well as the market approach for the regional or local market (i.e. localization). For instance, in China and other Asian countries, marketing campaigns should be more indirect and subtle, emphasizing group references, shared responsibility, and interpersonal trust. (As compared to US marketing campaigns that emphasize individual achievement, are direct and expressive, and appeal to US values of success through personal hard work).
The Arab world extends from Morocco, all the way across North Africa to the Persian Gulf. It is pretty much equal to the Area known as the Middle East and North Africa (MENA).These countries are religiously and ethnically diverse, and there are a large number of Arab Christians in countries such as Egypt and Jordan. Although the Muslim faith dominates the Arab world, Arabs actually make up only 10-15% of the Muslim world.Therefore, to be an Arab is a cultural trait, not a racial one, and Arabs do not come from any particular race or lineage.In fact, any person who adopts the Arabic language may be called an Arab, and there are 22 Arab countries in total and over 200 million Arabs worldwide.
Hofstede’s cultural study of the Arab World includes the countries of Egypt, Iraq, Kuwait, Lebanon, Libya, Saudi Arabia, and the United Arab Emirates. As a reminder, these are generalizations and there are always exceptions.
The Arab World scored highest on the power distance index, with an identical ranking to China. This suggests that like China, Arabs respect people in positions of power or authority more than in the USA, and more than the world average.Again, the high power distance ranking indicates a high level of inequality of power and wealth within the Arab society. Arab populations expect and accept that leaders will separate themselves from the group, and this contrasts with the US, whose score indicates that there is greater equality between societal levels, including government, organizations, and families.
The Arab World’s score on the Uncertainty Avoidance index indicates that the Arab world has a low tolerance for uncertainty, or a low risk appetite. To minimize and reduce uncertainty, the Arab world adopts and implements very strict rules, policies, regulations and laws. According to Hofstede, the combination of high power distance and uncertainty avoidance creates a societies where leaders have ultimate power and authority, and the rules, laws, and regulations developed by those in power, reinforce their own leadership or control. In comparison, the USA has a greater risk appetite, and leaders does not attempt to control all outcomes and results of events.
The score on the masculinity index suggests that he Arab world places higher value on feminine-like characteristics, such as caring for others and quality of life, while the USA and China place higher value on masculine characteristics like success, money and possessions. Arabs tend to be more tender hearted than Americans or the Chinese. Their decisions and actions are often based off of emotion, while the USA has a more logic oriented decision process.The ranking also indicates that while Arab women are limited in their rights, this may be due more to their emphasis on the Muslim religion, rather than a cultural paradigm.
The Arab world, like China, scored lowest on the individualism index, and is a collectivist society. This is shown in their close, long-term commitments to family, extended family, or extended relationships. Also like China, in the Arab world, Loyalty overrides most societal rules. Aside from family and extended family, the collectivist nature of the Arab world is most prominent in their religious beliefs and practices, which make up the foundation for their societal structureAnd again, the USA ranking is indicative of an individualistic culture that is self reliant, with relatively loose bonds with others.
Now, on to marketing to the Arab world. McDonalds is huge in the middle east. If you are interested in the Mc Arabia pictured on the slide, you can get it anywhere throughout the middle east except for Israel, and you have the choice between chicken and kofta, which is beef with spices.
Now, here we have a McDonalds commercial shown throughout the middle east. At the end of the commercial, if you listen closely you here the words “anabahebu,” which means I love you in Arabic, as compared to American slogan, “I’m loving it.”
Coke also has a large presence in Arab countries. Now lets watch two Arabic coke commercials, that come from two completely different time periods.
The first coke commercial is from the 1940’s.
This coke commercial is more modern and features a famous Lebanese signer.
In our opinion, the commercials, as well as the last slide demonstrate that the globalization of business has created product offerings that blur cultural lines because, as humans we all share an innate set of needs that cut through all cultures. Despite our differences we still share at least a few similar interests in the food we eat, what we drink, the cars we drive, what kind of music we listen to, what we wear, and what we read, and in many other products that we buy. However, Brads example of the McDonalds add that the Chinese found offensive demonstrates the challenge that global businesses face. That is, how to find find the balance between marketing to the traits that all humans possess, and marketing to traits that are specific to certain cultures.The blurring of cultural lines can be seen like the “Which came first, the chicken or the egg” scenario. Are business successful globally because they appeal to an innate set of needs that all humans possess? Or, is it actually global marketing tactics that are creating needs in cultures that once were not there?I will leave it up for the audience to decide…
Poll: When formalizing a deal in the Middle Ea...\r\n\r\nPress F5 or enter presentation mode to view the poll\r\nIn an emergency during your presentation, if the poll isn't showing, navigate to this link in your web browser:\r\nhttp://www.polleverywhere.com/multiple_choice_polls/LTE3MDMwNTgzNDQIf you like, you can use this slide as a template for your own voting slides. You might use a slide like this if you feel your audience would benefit from the picture showing a text message on a phone.
When doing business in the Middle East, the surest indicator of a successful business relationship has very little to do with the content of the contract or the extent to which the language will hold up in court.Court systems in many of these countries move slowly with inconsistent results, and your business counterparts in many Middle Eastern countries do not put their faith in the legal system to determine the outcome of a conflict. Absolutely essential to the success of the deal is the interpersonal rapport and relationship established during the negotiation stage and at every point thereafter. Failure to understand and cultivate this aspect of the deal increases the risk of failure to a critical degree.

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Culture - MBA 635 - Summer Term 2011 Presentation Transcript

Culture
Mary Ellen DeBardeleben
Eric Liddy
Bradley Newcomer
Shelley Scarbrough
Katey Watkins
Culture
What is culture?
Culture: acquired knowledge that people use to interpret experience and generate social behavior
Characteristics
Importance of understanding culture
Hofstede’s Cultural Dimensions
Power Distance
Uncertainty Avoidance
Individualism
Masculinity
Long term orientation (newest)
BRIC
Closer look
Chinese and Arab culture
China
Chinese: Cultural Dimensions
Chinese: Cultural Dimensions
Chinese: Cultural Dimensions
Chinese: Cultural Dimensions
Coca Cola Ads in China
Chinese Coca Cola TV Commercial
McDonalds in China
McDonalds Chinese TV Commercial
However, its not always this straight forward….
In 2005, McDonalds had to withdraw a TV commercial in Shanghais following complaints that images attacked Chinese people’s dignity.
The commercial showed a man kneeling before the clerk and begging for a discount at a local store. It then shifted its focus to McDonalds with the message that McDonalds offered cheap meals all year-round and there was no need to beg for coupons or discounts.
In Chinese culture, begging is humiliating and many felt the commercial was offensive.
The Arab World
The Arab World: Cultural Dimensions
The Arab World: Cultural Dimensions
The Arab World: Cultural Dimensions
The Arab World: Cultural Dimensions
The Arab World: Cultural Dimensions
Marketing to the Arab World
Arabic McDonalds Commercial
http://www.youtube.com/watch?v=fYsLDhDRUeI&playnext=1&list=PL767ED543728A29AD
Marketing to the Arab World
Arabic Coke Commercial- 1940’s
http://www.youtube.com/watch?v=5QhmpOt5re0
Arabic Coke Commercial- Modern
http://www.youtube.com/watch?v=lAYX6qOgqFI&feature=related
Cultural Differences?
Quiz Time
Arab World Quiz Question
Don’t forget: You can copy-paste this slide into other presentations, and move or resize the poll.
Poll: When formalizing a deal in the Middle Ea...
Questions
Resources
International Management; Culture, Strategy, and Behavior (Luthans and Doh), 7th edition.
http://www.cyborlink.com/besite/china.htm
http://www.geert-hofstede.com/geert_hofstede_resources.shtml
http://www.clearlycultural.com/geert-hofstede-cultural-dimensions/power-distance-index/
http://affiliate-marketing-forums.5staraffiliateprograms.com/marketing-jokes-cartoons-yuk-up/1401-advertising-bloopers-blunders.html
http://www.ad.nccu.edu.tw/ad_research_web/pdf/025-1.pdf
http://myasiancanadian.blogspot.com/2005/06/mcdonalds-ad-pulled-from-chinese-tv.html
http://www.youtube.com/watch?v=5Ith7KvAESI
http://www.fas.org/irp/agency/army/arabculture.pdf
http://www.geert-hofstede.com/hofstede_arab_world.shtml
http://en.wikipedia.org/wiki/McArabia
http://www.youtube.com/watch?v=TVoVZx0ded8
Arab World Quiz Question
When formalizing a deal in the Middle East, it is imperative to:
1. Determine that the contract is iron clad with strict attention to jurisdictional issues of international law to secure a just outcome should there be conflict
2. Solidify the interpersonal trust relationship as this rapport is critical both during the deal and if conflict develops
3. Retain legal counsel in the country in which the business undertakings will primarily take place and ensure that this attorney has a golfing relationship with most members of the judiciary.