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Salford Report Cultural Egyptian Customer_new.

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Salford Report Cultural Egyptian Customer_new.

  1. 1. able of Contents Marketing International Business: Branding Communications, and Business Relationships. Mid Term Assignment: Developing Business Relationship in Egypt Marketing International Business: Branding Communications, and Business Relationships. Mid Term Assignment: Developing Business Relationship in Egypt Marketing International Business: Branding Communications, and Business Relationships. Mid Term Assignment: Developing Business Relationship in Egypt Marketing International Business: Branding Communications, and Business Relationships.
  2. 2. Submitted to Dr. Roy Damary (Professor) Salford Business School Date 16th October 2015 Type of Assignment Individual Submitted by: Name of Student Sanjay Vaid Roll No 00436743
  3. 3. Table of Content ABSTRACT_________________________________________________________________ 5 1. INTRODUCTION ________________________________________________________ 6 2. ANALYSIS OF CULTURE AND HOW IT INFLUENCES BUSINESS: ___________ 6 2.1.2 Business/Industry culture: ______________________________________________ 7 2.1.3 Company Culture: ____________________________________________________ 7 2.1.4 Individual Behavior:___________________________________________________ 7 2.2 HIGH- AND LOW-CONTEXT CULTURES _________________________________________ 7 2.2.1 Low-context culture:___________________________________________________ 8 2.2.2 High context cultures: _________________________________________________ 8 2.3 ELEMENTS OF CULTURE ____________________________________________________ 8 The following are included in elements of culture. ________________________________ 8 2.3.1 Language:___________________________________________________________ 8 2.3.1.1 Verbal Language:__________________________________________________ 8 2.3.1.2 Non-verbal Language: ______________________________________________ 9 2.3.2 The sense of time: ____________________________________________________ 10 2.3.3 The Language of Space: _______________________________________________ 10 2.3.4 The Language of Material possession:____________________________________ 10 2.3.5 The language of friendship pattern:______________________________________ 10 2.3.6 The silent language of Agreement:_______________________________________ 11 2.4 MANNERS AND CUSTOMS: _________________________________________________ 11 2.5 TECHNOLOGY AND MATERIAL CULTURE_______________________________________ 11 2.6 SOCIAL INSTITUTIONS: ____________________________________________________ 12 2.7 GENDER BASED GROUPS: __________________________________________________ 12 2.8 PERFORMANCE ORIENTATION: ______________________________________________ 12 2.9 MONOCHRONIC VERSUS POLYCHRONIC CULTURES ______________________________ 13 3.1 IDEALISM VERSUS PRAGMATISM: ____________________________________________ 13 3.2 VALUES AND ATTITUDES:__________________________________________________ 13
  4. 4. 3.3 OTHER FACTORS ________________________________________________________ 13 3.4 HOFSTEDE’S CULTURAL INDEX: _____________________________________________ 14 3.4.1 Power distance: _____________________________________________________ 14 3.4.2 Masculinity _________________________________________________________ 14 3.4.3 Uncertainty avoidance ________________________________________________ 15 3.4.4 Long-term orientation_________________________________________________ 16 3.4.5 Indulgence _________________________________________________________ 16 3.4.6 Individualism _______________________________________________________ 17 SUMMARY ________________________________________________________________ 17 4.0 ANALYSIS OF FOREIGN LANGUAGE COMPETENCE AND HOW IT IS USEFUL IN BUSINESS: _____________________________________________________________ 18 5.0 HOW THE KNOWLEDGE OF EGYPTIAN LANGUAGE AND CULTURE CAN BE USED IN DEVELOPING BUSINESS RELATIONSHIPS WITH EGYPTIAN COMPANY. ___________________________________________________________________________ 20 5.1 SOME BENEFITS AND APPLICATION OF THE KNOWLEDGE OF EGYPTIAN LANGUAGE AND CULTURE: _________________________________________________________________ 20 5.2 SOME OF THE CULTURAL CONSIDERATION BEFORE DOING BUSINESS ENGAGEMENT WITH EGYPTIAN COMPANY:________________________________________________________ 21 5.2.1 Social life:__________________________________________________________ 21 5.2.2 Work Practice: ____________________________________________________ 22 CONCLUSION _____________________________________________________________ 24 BIBLIOGRAPHY___________________________________________________________ 24
  5. 5. Abstract ‘This essay is an attempt by the author to do an analysis of culture and language and its influence on business. For this author has researched and referred to work by various scholars. Further, this essay is in a report format on applying the analysis for developing the business relationship with Egyptian company mentioned in the assignment. Since Culture is a multidimensional and vast area, the methodology used by the author is to relate various analysis with Egypt’s country and business culture and at the end provide an analysis of how one can use knowledge of Egyptian culture and language in developing the business relationship. Authors has based on his research also provided few tip on do and don’t when venturing in to business engagement with the Egyptian company ‘
  6. 6. 1. Introduction Culture can be defined as "the sum total of the beliefs, rules, techniques, institutions artifacts that characterize a human population." Firm doing business in foreign countries need to be sensitive to cross-culture aspect and adapt to product, services, marketing, customer relationship accordingly. 2. Analysis of culture and how it influences business: Culture develops through recurrent social relationships that are eventually internationalized by the member of the entire group. Culture does not stand still but stands to change over time. Culture has three characteristics it is learned, it is interrelated, and it is shared. Further culture can be said to have three aspects and these are as follows: The visible daily behavior like body language, clothing, lifestyle, drinking and eating habits. Values and Social morals like family values, sex roles, and friendship patterns. Basic cultural assumptions like national identity, ethnic culture, and religion.2.1 Layers of culture In international business the norms of behavior acceptable by members of a firm's international customers, suppliers and employees vary with different countries. Culture provides a common
  7. 7. framework to understand the various individual behavior and their decision-making process. The behavior of a person is affected by three layers of culture and these are National Culture, Business and Industry culture and company culture. 2.1.1 National Culture: National culture gives overall framework of culture concepts and legislations. 2.1.2 Business/Industry culture: Every business is conducted within a competitive framework and within a specific industry. These Industry cultures are related to the branch of industry, and they are similar across borders. 2.1.3 Company Culture: Every organization has an organization cultures in term of the way they operate, the values they uphold, sensitivity to time, etc. Organizations further have a subculture of various function; these are expressed through shared value, beliefs, meaning and behavior of the member of a function in an organization. (Hollensen & Banerjee, 2010). 2.1.4 Individual Behavior: The Individual is effected by other cultural levels and is very important as in international business, individual is the core character that interacts with other characters. 2.2 High- and Low-context cultures Edward T. Hall (Hall, 1960) introduced the concept of high and low context as a way to
  8. 8. understand different cultural orientation. 2.2.1 Low-context culture: Rely on spoken and written language for meaning. 2.2.2 High context cultures: Use and interpret more of the elements surrounding the message to develop their understanding of the message. In high context culture, the social importance and knowledge of the person and social setting add extra information and is perceived by the receiver. Egypt is a low-context country. 2.3 Elements of Culture The following are included in elements of culture. 2.3.1 Language: A countries language is key to its culture and is described as the mirror of the culture. Language is divided into parts verbal and non-verbal. 2.3.1.1 Verbal Language: A very important dimension of language is that it may vary by culture as be to be explicit and implicit. In explicit–language cultures the burden of effective communication rest on the speaker.
  9. 9. In Implicit-language cultures, the burden of effective communication is shared both by speak and listener. 2.3.1.2 Non-verbal Language: The non-verbal communication is of greater importance in high-context countries. In these cultures, people are more sensitive to a variety of different message systems vis-a-vis low- context countries. As per Edward T Hall (Hall, 1960) Non-verbal language message communicates up to 90 percent of the meaning in high-context cultures. The main non-verbal language in international business are as follows:
  10. 10. 2.3.2 The sense of time: The meaning of time in respect to business meetings have a different meaning for different countries. In high context country like Egypt, time is flexible and not seen as a limited commodity. 2.3.3 The Language of Space: Language of space is the conversation distance between people and drastically different for different cultures. Individuals vary in the amount of space they want separating them from each other. In Egypt and the Middle East people would like to stand close to each other when talking as against an Indian, who might prefer more distance and might back away, this might be taken incorrectly as a negative reaction. 2.3.4 The Language of Material possession: The relevance of material possessions and latest technology. This has relevance in both high- context and low-context countries. 2.3.5 The language of friendship pattern: The definition of friends and obligation issued by the term are different in different culture. In terms of business, in high-context countries like Egypt extended social acquaintance and the establishment of appropriate personal relationship are essential to conducting successful
  11. 11. business. 2.3.6 The silent language of Agreement: These are rules of negotiations based on laws and moral practice or informal customs. In high-context countries like Egypt rushing straight into business will not yield rewards as deals are made not only on the basis of best product, service or price but also on the entity or person deemed most trustworthy. 2.4 Manners and customs: Understanding manners and customs are very important before venturing into a new country for business. A manner and customs of might differ from framework of reference of one's base country. 2.5 Technology and material culture Material culture results from technology and is related to how a society organizes economical. Not all counties would be as developed, Egypt would fall in developing country. One should set the expectation of infrastructure like high-speed internet access etc. accordingly and make arrangement before leaving.
  12. 12. 2.6 Social Institutions: Social Institution like the business, political, family or class related – influence the behavior of people and in a way in which people relate to each other. In Egypt, a manager who gives special treatment to a relative is considered to be fulfilling an obligation. In Europe, this might be considered favoritism and nepotism. By knowing the family relationship in the work place and business transactions embossing questions about nepotism can be avoided. 2.7 Gender based groups: Country-specific differences in attitudes towards gender are quite profound. In countries, such as Egypt, the traditional bias against gender equality is quite strong. Moreover, women can't work at all in some professions. (Daniels, et al., 2010) 2.8 Performance Orientation: In some nation like United States emphasis in work in more on competence than cooperation whereas countries like Egypt, emphasis is more on cooperation.
  13. 13. 2.9 Monochronic versus Polychronic Cultures In Monochromic cultures, people prefer to work sequentially, such as finishing one transaction before taking up another transaction. In Polychronic cultures, people are more comfortable when working simultaneously with multiple tasks. 3.1 Idealism versus Pragmatism: Some cultures tend to focus on whole and then on other parts, other do the opposite. Some cultures prefer to establish overall principle before they try to resolve small issues, and these are labeled as idealism. The cultures were people tend to focus on details rather than abstract principles are characterized as pragmatism. 3.2 Values and attitudes: Our attitude and values help determine what we think is right, what is important and what is desirable. More rooted attitude and values are central beliefs like religion and manager need to be cautious of same. Change is taken positively in Industrial countries whereas in more tradition bound society's change is viewed with great suspicion, especially when it comes to a foreign entity. 3.3 Other Factors There are other factors that have been covered in another assignment which are important like
  14. 14. religious beliefs, aesthetics, dietary preference, Social Class, Ethnic influence, etc. 3.4 Hofstede’s Cultural index: Geert Hofstede (Hofstede, 1983) came up with a model to determine why and how people from various cultures behave the way they do. These dimensions are mentioned below: 3.4.1 Power distance: Power distance deals with inequality in society, and it expresses express the attitude of the culture towards the inequality. ‘Egypt scores high score of 70 in this dimension; this means people accept a hierarchy order in which everybody has a place and which needs no further justification. Hierarchy in organization is seen as inheriting inequalities, centralization is popular, subordinates expect to be told what to do, and the ideal boss is a benevolent autocrat.'(Hofstede, n.d.) 3.4.2 Masculinity Masculinity relates to the degree to which masculinity values such as quality of performance, competition, success and money prevail over ‘feminine' values such as quality of life, maintaining a warm personal relationship, service, care for the weak, preserving the environment and solidarity.
  15. 15. ‘Egypt scores 45 on this dimension and is thus considered a relatively feminine society. In Feminine countries the focus is on ‘working in order to live', managers strive for consensus, people value equality and quality in working lives. Conflicts are resolved by compromise and negotiation. Incentives such as free time and flexibility are favored. Focus is on wellbeing; status is not shown. An effective manager is supportive one, and decision making is achieved through involvement.' (Hofstede, n.d.) 3.4.3 Uncertainty avoidance This refers to degree to which people in a country prefer formal rules and fixed pattern of life such as career structure and laws as means of enhancing security. ‘The extent to which the members of a culture feel threatened by ambiguous or unknown situation and have created beliefs and institutions that try to avoid these in reflected in the score on uncertainty avoidance.’ (Hofstede, n.d.) ‘Egypt scores 80 on this dimension and thus has a high preference for avoiding uncertainty. Countries exhibiting high uncertainty avoidance maintain rigid codes of beliefs and behavior and are intolerant of unorthodox behavior and ideas. In these culture there is an emotional need for rules, time is money, people have inner urge to be busy and work hard, precision and punctuality are norm, innovation may be resisted, security is an important element in individual
  16. 16. motivation.’ (Hofstede, n.d.) 3.4.4 Long-term orientation This dimension looks into the relationship between a society past, and their present and future. Different society's priorities these existential goals differently. Normative societies with low score prefer to maintain time-honored tradition while cultures with high score take a more pragmatic approach. ‘Egypt's very low score of 7 indicate that its culture is very normative. People in such societies have a strong concern with establishing absolute truth; they are normative in their thinking. They exhibit great respect for traditions and have a focus on achieving quick results'. (Hofstede, n.d.) 3.4.5 Indulgence This dimension looks into the extent to which people control their desires and impulse based on the way they are raised. A relatively weak control is called ‘Indulgence' and a relatively strong control is called ‘Restrain.' ‘Egypt scores 4 and is, therefore, a very restrained country. Societies with a low score in the dimension have a tendency to cynicism and pessimism. Restrained societies do not put much emphasis on leisure time and control the gratification of their desire.’ (Hofstede, n.d.)
  17. 17. 3.4.6 Individualism This dimension looks into interdependence a society maintains among its members. In individualist societies, people take care of themselves and their immediate families. In collective societies, people belong to a group that takes care of them. ‘Egypt score 25 on this dimension and is a collective society. This implies that there is a close long-term commitment to the member ‘group,' be that a family, extended family or extended relationship. Loyalty in a collective culture is paramount, and over rides most other society rules and regulations.’ (Hofstede, n.d.) Summary Society culture invariably effects organization culture and certain attributes that distinguish one culture from the other can be used to predict the most suitable, effective and acceptable business practice when dealing with different countries. Classification of culture is necessary to develop business strategies especially marketing, advertising and sourcing. Cultural differentiation helps inappropriate communication based on segregation of countries based on high or low context culture. As MNC's become more transnational, they need to devise strategies to address cultural similarities and differences. By responding to the cultural needs of the local operations, suppliers
  18. 18. and customers, MNC's find that their regional strategies can be used effectively in capturing and maintaining worldwide market share. Further business ethics is more complex in international business. What is commonly acceptable in one country may be completely unacceptable in another country. (Keegan & Green, 2005) (Daniels, et al., 2009) 4.0 Analysis of foreign language competence and how it is useful in business: Verbal language is the most important means of communications. The diversity of cultures around the world is reflected in language. Linguists have been divided in spoken language into four main areas: syntax (the rule of sentence formation), semantics (system of meaning), phonology (system of sound patterns) and morphology (word formation). Unspoken or non- verbal communication includes gestures, touching and other forms of body language that supplement spoken communication. Both spoken and non-spoken aspect of language is included in the broader linguistic field of semiotics, which is the study of their sign and meaning. (Keegan & Green, 2005). An important dimension of language that can vary by culture is the extent to which communication is explicit or implicit. Written communication also is extremely important in
  19. 19. achieving effectiveness. 4.1 Language competency provides following benefits in business: 4.1.1 Language is important in information gathering and evaluation efforts. People are far more convenient in talking in talking in their own language, and this should be taken as advantage. The best intelligence is gathered on a market by becoming part of the market rather than observing it from outside. 4.1.2 Language provides access to local society. 4.1.3 Language capability is increasingly important in company communication, within the corporate family or with channel members. It would be very difficult for a country manager to communicate with his staff through an interpreter. 4.1.4 Language provides more than the ability to communicate; it extends beyond mechanics to the interpretation of context.
  20. 20. 5.0 How the knowledge of Egyptian language and culture can be used in developing business relationships with Egyptian company. 5.1 Some benefits and application of the knowledge of Egyptian language and culture: 5.1.1 The knowledge of Egyptian language and culture would help be better informed, planned, prepared, sensitive and proactive in dealing with the Egyptian company. 5.1.2 We would have a better understanding of the customs, gestures, values, etiquettes, gender etiquette, communication, dress code, dietary preference, etc. which help us when dealing with them. 5.1.3 This knowledge would further help create a bond with Egyptian company by making relationship personalized and the business customized. 5.1.4 The knowledge would also help in reducing the gap between the Egyptian company's expectation and the actual outcome and vice-versa. 5.1.5 The knowledge would be applied when in negotiation with Egyptian company for a favorable outcome along with a sustainable relationship. 5.1.6 The knowledge would further help in avoiding any untoward situation with Egyptian
  21. 21. companies, Local authority or any member of value chain. 5.1.7 Better understanding of language – verbal and non-verbal would not just help communication but written communication would help in ensuring that the contract, written communication, emails, proposal, etc. are thoroughly examined, and there is no communication or understanding GAP. 5.1.8 From a far-sighted perspective this knowledge would be useful in local recruitment and reporting in case the UK Company decides to set up a subsidiary in Egypt. 5.2 Some of the cultural consideration before doing business engagement with Egyptian company: 5.2.1 Social life: One would also learn that while Egypt is in Northern Africa but culturally it's part of Middles East. Prepare for a slower way of life, including decision-making. People follow Islamic calendar. Five national holidays are fixed, whereas Ramadan and Islamic New Year are approximate depending on lunar observations. (Hodgetts, et al., 2008)
  22. 22. 5.2.2 Work Practice: 5.2.2.1 The workweek is from Saturday through Wednesday, with no business conducted on Thursday and Friday (Muslim holiday) Business hours vary, but typically in summer are 8 am to 2 pm and in winter 9 am to 1 pm and 5 to 7 pm. Paperwork includes two dates western and Arabic. 5.2.2.2 The form of greeting make a wide use of elaborate and ritualized forms of greeting and leave-taking. A business executive may wait the assigned meeting before admitted to an Egyptian's office. Moreover, during the meeting, there can be continuous interruption, visitors might arrive and start talking with the host, and messenger may come in and go out on a regular basis. The business professional is expected to take all these activity perfectly normal, composed and ready to continue the discussion as soon as the host is prepared to do so. 5.2.2.3 Egyptians attach a great deal of importance to status and rank. When meeting with them. One should pay deference to the senior person first. Also, one should never criticize another person publicly. Mutual respect is required at all times. 5.2.2.4 Initial meetings typically are used to get to know the other party. A business-related meeting may not occur until the third or fourth meeting.
  23. 23. 5.2.2.5 It is important never to display the feeling of superiority, it makes the other person feel inferior. 5.2.2.6 Patience is critical to the success of business transactions. This time consideration should be built into all negotiation, thus avoiding frustration or any undesired situation by putting too much effort to reach a quick outcome. 5.2.2.7 Important decisions usually are made in person, not by correspondence or telephone. Hence, MNC's person presence often is a prerequisite for success. There are many influencers. However, the final decision is taken by the person at the top, and this person would rely on personal impression, trust, and rapport. 5.2.2.8 Much of what gets done is a result of going through administrative process channels in the country. It is often difficult to set aside a lot of the red tape and an effort to do so can be seen as disrespect for legal and government institutions. 5.2.2.9 As mentioned above in Hofstede index that Egypt is a collective society hence group loyalty are paid high importance. One should not take credit for something that is a joint effort.
  24. 24. 5.2.3.0 We should avoid bringing up the subject of business before getting to know your host. This is considered rude. (Keegan & Bhargava, 2010) 5.2.3.1 We should avoid pursuing the subject of politics or religion. 5.2.3.2 It is considered taboo to ask a question or make comments concerning a man's wife or female children. Conclusion Knowledge of Culture and language are very important in International business. It not only helps is establishing the business relationship but also sustaining the relationship. One needs to be thoroughly trained in cultural and language knowledge before venturing in business association with foreign organizations overseas. Special emphasis needs to be given to written form of documents and communication in foreign language apart from verbal communication and business antiquates. Bibliography Daniels, J. D., Radebaugh, L. H., Sullivan, D. P. & Salwan, P., 2010. International Business Enviroment and Operations. Twelth ed. s.l.:Dorling Kindersley (India) Pvt. Ltd. Hall, E. T., 1960. The Silent Language in overseas business. Haward Business Review, pp. 87 - 97.
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