Cultural dynamics, business customs, and political environments are important factors to consider for global markets. [1] Culture can be defined as the shared knowledge, beliefs, and habits of a society, which guide how people think and behave. [2] Elements of culture include values, rituals, symbols, language, and thought processes. [3] Cultures are dynamic and can change through cultural borrowing or planned and unplanned changes in response to innovations or ideas.

1. Cultural Dynamics, Business
Customs & Political Environment in
Global Market
Presented By
Siddhartha S Majumder (S-93)
MBA-PT(2010-2013)

2. Cultural Dynamics in Assessing Global Markets
• What is culture?
“sum total of knowledge, beliefs, art, morals,
laws, customs, and habits acquired by humans
as members of society”.
“Software of the mind” culture is a guide for
humans on how to think and behave; it is a
problem-solving tool (Hofstede)

3. Origin of Culture
• Culture resides in the individual’s mind.
• It is the sum of the values, rituals, symbols,
beliefs and thought process.
• Geography (climate, topography, flora, fauna
and microbiology )directly effect on consumer
choice. Which has influenced history,
technology, economies, social institutions
(family, school, media, Govt., Religious) and
our ways of thinking.

4. Elements of Culture
• Cultural Values :
1. Individualism/ collectivism index (IDV), which
focuses on self-orientation
2. Power distance Index (PDI), which focuses on
authority orientation.
3. Uncertainly avoidance index (UAI), which focuses on
risk orientation
4. Masculinity/Femininity Index (MAS), which focuses
on assertiveness and achievement

6. Elements of Culture

8. Elements of Culture
• Rituals: Rituals are patterns of behavior and
interaction
• Symbols: Language as Symbols - the “languages” of
time, space, things, friendships, and agreements.
Aesthetics as Symbols: the arts, folklore, music,
drama, and dance.
• Language: a social institution. English spreads around
the world via school systems and the internet.
• Beliefs : an organized pattern of knowledge that an
individual holds to be true about the world.
• Thought Processes : degree to which ways of thinking
vary across cultures.

9. Cultural Change
• Culture is dynamic in nature; it is a living process. It
change & accept or reject new ideas.
• Cultural Borrowing : acceptance of innovations varies
across cultures. Innovation associated with higher IDV,
lower PDI & UAI.
• Resistance to Change : It is a characteristic of human
culture that resist change. Like working women in
Masculine societies like Saudi Arabia.
• Planned and Unplanned Cultural Change : First,
determine which cultural factors conflict with an
innovation, thus creating resistance to its acceptance.

10. Cultural Change
• Second, change those factors from obstacles to
acceptance into stimulants for change.
• Third, marketers can cause change by introducing an
idea or product and deliberately setting about to
overcome resistance and to cause change that
accelerates the rate of acceptance.
• a strategy of planned change by deliberately changing
those aspects of the culture offering resistance to
predetermined marketing goals

11. Business Customs in Global Marketing
• Business customs are a cultural element of a society
as language & knowledge of the business culture,
management attitudes, and business methods and a
willingness to accommodate the differences.
• Required Adaptation: Adaptation is a key concept in
IM and willingness to adapt is a crucial attitude.
There are ten basic criteria :
(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, and (10) ability to integrate oneself into the
environment.

12. Business Customs in Global Marketing
• Degree of Adaptation : effective adaptation is
awareness of one’s own culture and the recognition.
The self-reference criterion (SRC) is especially
operative in business customs.
• Imperatives, Adiaphora and Exclusives :
 Cultural imperatives refer to the business customs
and expectations that must be met for successful
relationships.
 Cultural adiaphora relates to areas of behavior.
 Cultural exclusives are those customs or behavior
patterns reserved exclusively for the locals and from
which the foreigner is excluded.

13. Business Customs in Global Marketing
• Sources and Level of Authority :
 Top-level management - decision making by small
family business.
 Decentralized - decision making by large-scale
business with highly developed management.
 Committee decision making is by group or
consensus, may be centralized or decentralized basis.
• Management Objectives and Aspirations
• Personal Goals
• Security and Mobility
• Personal Life

14. Business Customs in Global Marketing
• Social Acceptance
• Power
• Communications Emphasis
• Formality and Tempo
• P-Time versus M-Time
• Negotiations Emphasis
• Gender Bias in International Business

15. Political Environment
• Global marketing activities take place within the
political environmental of governmental institutions,
political parties, and organizations through which a
country’s people and rulers exercise power
• The Sovereignty of Nations : In the context of
international law, a sovereign state is independent
and free from all external control; enjoys full legal
equality with other states; governs its own territory;
selects its own political, economic, and social
systems; and has the power to enter into agreements
with other nations.

16. Political Environment
• Stability of Government Policies - 5 political causes
 Forms of Government and Political Parties – 3 forms
of Govt.
monarchy (or dictatorship), aristocracy (or
oligarchy), and democracy.
 Nationalism
 Targeted Fear and/or Animosity
 Trade Disputes
 Political Risks of Global Business
• Confiscation, Expropriation and Domestication

17. Political Environment
• Local-Content Laws
• Import Restrictions
• Tax Controls Price Controls
• Labor Problems
• Political Sanctions
• Violence, Terrorism and War
• Assessing Political Vulnerability
• Sensitive Products and Issues
• Economic Risks
• Exchange Controls

18. Political Environment
• Forecasting Political Risk
• Lessening Political Vulnerability
• Joint Ventures
• the Investment Base
• Licensing
• Planned Domestication
• Political Bargaining
• Political Payoffs
• Government Encouragement