Chapter 3 culture management style and business systems

1. International Marketing
15th edition
Philip R. Cateora, Mary C. Gilly, and John L. Graham
McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Roy Philip 2
Chapter Objectives
At the end of the session, the students are expected
to know and understand the following:
The Required and Degree of Adaptation
The Impact of American Culture on Management
Styles
The Different Management Styles Around the
World
Ethical and Socially Responsible Decisions

3. 5
Introduction (1 of 2)
• Culture, including all of its elements, profoundly
affects management style and overall business
systems
• Culture not only establishes the criteria for day-
to-day business behavior but also forms general
patterns of values and motivations
Roy Philip 5-3

4. 5
Introduction (2 of 2)
• A lack of empathy for and knowledge of foreign
business practices can create insurmountable
barriers to successful business relations
• Knowledge of the management style – the
business culture, management values, and
business methods and behaviors existing in a
country and a willingness to accommodate the
differences are important to success in an
international market
• Culture has an important influence on strategic
thinking
Roy Philip 5-4

5. 5
Overview
• The necessity for adapting to cultural differences
with imperatives, electives, and exclusives
• Different management styles vary around the
world
• The extent and implications of gender bias in
other countries
• The importance of cultural differences in
business ethics
• The differences between relationship-oriented
and information-oriented cultures
Roy Philip 5-5

6. 5
Required Adaptation
• Adaptation is a key concept in international
marketing
• Ten basic criteria for adaptation
1) Open tolerance
2) Flexibility
3) Humility
4) Justice/fairness
5) Ability to adjust to varying tempos
6) Curiosity/interest
7) Knowledge of the country
8) Liking for others
9) Ability to command respect
10) Ability to integrate oneself into the environment
Roy Philip 5-6

7. 5
Degree of Adaptation
• Essential to effective adaptation
– Awareness of one’s own culture and the
– Recognition that differences in others can cause
anxiety, frustration, and misunderstanding of the
host’s intentions
Roy Philip 5-7

8. 5Imperatives, Electives,
and Exclusives
• Cultural imperatives - Business customs and
expectations that must be met and conformed to or
avoided if relationships are to be successful
– In some cultures a person’s demeanor is more critical than
in others
– Imperatives vary from culture to culture
• Cultural electives - Relate to areas of behavior or to
customs that cultural aliens may wish to conform to or
participate in but that are not required
– A cultural elective in one county may be an imperative in
another
• Cultural exclusives - Customs or behavior patterns
reserved exclusively for the locals
Roy Philip 5-8

9. 5The Impact of American Culture
on Management Style
• “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 producing efficiency
Roy Philip 5-9

10. 5Management Styles
around the World
• Authority and decision making
• Management objectives and aspirations
• Communication styles
• Formality and tempo
• P-time versus M-time
• Negotiation emphasis
• Marketing orientation
Roy Philip 5-10

11. 5
Authority and Decision Making
• Influencers of the authority structure of
business:
– High PDI Countries
• Mexico, Malaysia
– Low PDI Countries
• Denmark, Israel
• Three typical authority patterns:
– Top-level management decisions
– Decentralized decisions
– Committee or group decisions
Roy Philip 5-11

12. 5Management Objectives
and Aspirations
• Security and mobility
– Relate directly to basic human motivation and
therefore have widespread economic and social
implications
• Personal life
– Worldwide study of individual aspirations, (David
McClelland)
• Affiliation and social acceptance
– In some countries, acceptance by neighbors and
fellow workers appears to be a predominant goal
within business
• Power and achievement - South American countries
Roy Philip 5-12

13. 5
Communication Styles
• Face-to-face communication
– Managers often fail to develop even a basic understanding of just
one other language
– Much business communication depends on nonverbal messages
• Internet communications
– Nothing about the Web will change the extent to which people
identify with their own language and cultures
• 78% of today’s Web site content is written in English
• An English e-mail message cannot be understood by 35% of
all Internet users
– Country-specific Web sites
– Web site should be examined for any symbols, icons, and other
nonverbal impressions that could convey and unwanted message
– www.nike.com – a great example of a company with a webpage
for many countries
Roy Philip 5-13

14. 5American Slangs –
Foreign Interpretations
Roy Philip
• “Let’s do a deal”
• “What’s the bottom line?”
• “Okay” or “That’s okay”
• “That’s a shame”
• “I get a kick from that”
• “Can we close on this?”
• “That is too good to be true”
• Arab=“Let’s do something
unethical”
• Japanese=“What is your
starting bid?”
• Chinese “Not really good,
could be better”
• Indian=“You have insulted
me”
• Japanese= “It hurts”
• Chinese= “We should stop,
cancel this”
• Malaysian= “You must be
cheating me”
5-14

15. 5
Formality and Tempo
• Breezy informality and haste characterize
American business relationships
• Europeans not necessarily “Americanized”
• Higher on Hofstede’s Power Distance Index
(PDI)
– May lead to business misunderstandings
• Haste and impatience most common mistakes
made by Americans in the Middle East
• For maximum success marketers must deal with
foreign executives in acceptable ways
Roy Philip 5-15

16. 5
P-Time versus M-Time
• Monochronic time
– Tend to concentrate on one thing at a time
– Divide time into small units and are concerned with
promptness
– Most low-context cultures operate on M-Time
• Polychronic time
– Dominant in high-context cultures
– Characterized by the simultaneous occurrence of many
things
– Allows for relationships to build and context to be
absorbed as parts of high-context cultures
• Most cultures offer a mix of P-time and M-time behavior
• As global markets expand more businesspeople from
P-time cultures are adapting to M-time.
Roy Philip 5-16

17. 5
Negotiations Emphasis
• Business negotiations are perhaps the most
fundamental business rituals
• The basic elements of business negotiations are
the same in any country
– They relate to the product, its price and terms,
services associated with the product, and finally,
friendship between vendors and customers
• One standard rule in negotiating is “know
thyself” first, and second, “know your
counterpart”
Roy Philip 5-17

18. 5
Marketing Orientation
• The extent of a company’s market orientation
has been shown to relate positively to profits
• Firms in other countries have not been able to
move from the traditional production, product,
and sales orientation to the marketing
orientation
• Research has shown that sometimes in can be
difficult to encourage a marketing orientation
across diverse business units in global
companies
Roy Philip 5-18

19. 5Gender Bias
in International Business
• Women represent less than 20% of the employees who
are chosen for international assignments
• In many cultures (Asia, Middle East, Latin America)
women not typically found in upper levels of
management, and are treated very differently from men
• Prejudices toward women in foreign countries
• Cross-mentoring system instituted by Lufthansa
• Executives who have had international experience are
– more likely to get promoted,
– have higher rewards, and have
– greater occupational tenure
Roy Philip 5-19

20. 5Ethical and Socially
Responsible Decisions
• Difficulties arise in making decisions, establishing policies, and
engaging in business operations in five broad areas
– Employment practices and policies
– Consumer protection
– Environmental protection
– Political payments and involvement in political affairs of the country
– Basic human rights and fundamental freedoms
• Laws are the markers of past behavior that society has deemed
unethical or socially irresponsible
• Ethical principles to help the marketer distinguish between right
and wrong, determine what ought to be done, and justify actions
– Utilitarian Ethics (Does it achieve a common good?)
– Rights of the Parties (Does the actions involve the rights of the
individual?)
– Justice or Fairness (Does the action represent fairness for all?)
Roy Philip 5-20

21. 5A Synthesis – Relationship-Oriented
vs. Information-Oriented Cultures
• Not every culture fits every dimension of culture in a
precise way
• Information-oriented culture
– United States
• Relationship culture
– Japan
• Synthesis of cultural differences allows us to make
predictions about unfamiliar cultures
Roy Philip 5-21

22. 5
Summary (1 of 2)
• Some cultures appear to emphasize the importance of
information and competition while others focus more on
relationships and transaction cost reductions
• Businesspersons working in another country must be
sensitive to the business environment and must be
willing to adapt when necessary
• Understanding the culture you are entering is the only
sound basis for planning
Roy Philip 5-22

23. 5
Summary (2 of 2)
• Varying motivational patterns inevitably affect methods
of doing business in different countries
• The international trader must be constantly alert and
prepared to adapt when necessary
• No matter how long in a country, the outsider is not a
local – in many countries that person may always be
treated as an outsider
Roy Philip 5-23