09.06.2009 1 What Is “Culture”? Culture is defined as the shared patterns of behaviors and interactions cognitive constructs interactions, cognitive constructs and affective understanding that are learned through a process of socialization. These shared patterns identify the members of a culture while also distinguishing a culture while also distinguishing those of another group – Center for Culture and Language Learning University of Minesota What is “Culture”? Culture: earned and shared human tt dl f li i d t patterns or models for living; day-to- day living patterns. These patterns and models prevade all aspects of human social interaction. Culture is mankind’s primary adaptive mechanism Addison-Wesley, Fifth Dimension on the Language Classroom
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09.06.2009
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What Is “Culture”?Culture is defined as the shared patterns of behaviors and interactions cognitive constructsinteractions, cognitive constructs and affective understanding that are learned through a process of socialization. These shared patterns identify the members of a culture while also distinguishinga culture while also distinguishing those of another group
– Center for Culture and Language Learning University of Minesota
What is “Culture”?
Culture: earned and shared human tt d l f li i d tpatterns or models for living; day-to-
day living patterns. These patterns and models prevade all aspects of human social interaction. Culture is mankind’s primary adaptive mechanism
Addison-Wesley, Fifth Dimension on the Language Classroom
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What is “Culture”?
Culture is the collective programming f th i d hi h di ti i h thof the mind which distinguishes the
members of one category of people from another
Hofstede, G. (1984). National Cultures and , ( )Corporate Cultures
What is “Culture”?
Culture is a set of beliefs or t d d h d b fstandards, shared by a group of
people, which help the individual decide what is, what can be, how to feel, what to do and how to go about doing it
Goodenough, Ward (1971), Culture, Language and Society
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What is “Culture”?
Culture is the collective fingerprint of id tit C lt l diffour identity . . . Cultural differences
exist, but no culture is globally superior or inferior to another
Jean-Claude Usunier and Julie Anne-Lee (2009), Marketing Across Cultures
What is “Culture”?
Heaven is where the cooks are F h th h i GFrench, the mechanics are German, the policemen are English, the lovers are Italian, and it is all organized by the Italians. Hell is where the policemen are German, the mechanics are French, the cooks are British, the lovers are Swiss and it is all organized by the Italians
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Elements of Culture
LanguageN ti lit
SexS i l lNationality
EducationProfessionEthnic groupReligion
Social classCorporate culture
gFamily
Question for Discussion
Discuss the case of multi-l / lti i t i (language/multi-region countries (e.g. India, Canada, Switzerland); how can people in these countries share a common culture? On which segments of culture?
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What is “Culture”? From a Business Point of View
Culture is about different ways of Culture is about different ways of doing business and different client expectations in different business communities
Barry Tomalin and Mike Nicks (2007), The World’s Business Cultures and How to Unlock Them
International Business: WhyGeneral Philosophical Reasons
Absolute advantage: a condition in which a country can produce a product exclusively, or nonexclusively but more cheaply than others, and therefore possesses an absolutetherefore possesses an absolute advantage for that product
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International Business: WhyGeneral Philosophical Reasons
Comparative advantage: the i i l th t t th t t iprinciple that asserts that countries
should specialize in producing those products in which they have the greatest advantage or the least disadvantage in relationship to other countries. It is job specialization on the international level
Question for Discussion
Explain the following statement:
Companies exploring comparative advantage should be aware that it rarely lasts for very long
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International Business: WhySpecific Reasons
Desire to expand marketsSearch for natural resourcesGlobal marketingProximity to consumerLabor savings
International Business: How
Exporting: General export license/validated export licenselicense/validated export license
Foreign licensing: A company in the parent country (licensor) gives the right to a company in the host country (licensee) to make use of an exclusive patent, t d k t h l Thtrademark, process or technology. The license in granted in exchange for money: a fixed fee or a percentage of profits
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International Business: How
Foreign assembly: A company exports parts from the parent countryexports parts from the parent country to the host country, where final product assembly takes place. Foreign production subsidiaries: a company actually establishes a factory in the host country If it is infactory in the host country.If it is in conjunction with a foreign company it is called a joint venture
International Business: Problems
Communication (see study cases)C lt l diff ( t d )Cultural differences (see study cases)Protectionism and trade barriers
Tariff: a tax levied against an importQuota: the government limits the quantity of foreign goods allowed to enter the countryEmbargo: a government prohibition against the entry of foreign goods
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International Business: Problems
Human Resources: Aquisition and t i itraining
Expatriate managersAcquiring local human resources
Control and accounting standardsControl and accounting standardsGAAP (generally accepted accounting principles)
International Business: Problems
International piracy: generally, t d k d t t (i t ll t ltrademark and patent (intellectual property)rights guaranteed under local law are described as territorial –protection ends at the border.
The Pineapple examplepp p
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International Business: A Success Story – Study Case
Makudonarudo and Den Fujita: the success of McDonald’s in the Land of the Rising Sun
What spoke against McDonald’s success in Japan?success in Japan?How did Den Fujita overcome the initial disadvantages?
Benefits of Entering Foreign Markets
Increased Sales: more opportunities during periods of domestic downturnsduring periods of domestic downturns, excellent outlets for excess inventories, and opportunities to utilize productive capacity fully.
Leverage Strengths: larger international k t lti l th ff ti fmarkets multiply the effectiveness of
whatever company resources helped the firm succeed in the domestic market place.
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Benefits of Entering Foreign Markets
Achieving a Competitive Edge
Stay-at-home firms will lose market share to leverage benefits generated by a firm’s international marketing activities
Stay at homes will lose a futureStay-at-homes will lose a future opportunity to enter and grow foreign markets occupied by early-bird competitors
Benefits of Entering Foreign Markets
Achieve Tax Advantages
In the U.S. the Foreign Sales Corporation has been set up to make international marketing activities more profitable by providing firms with certain tax deferrals. For example, if a firm’s p ,subsidiary qualifies for FSC, a portion of its income is exempt from U.S. corporate income tax.
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Benefits of Entering Foreign Markets
P l P d LifProlong Product Life
Increase Profits
Specific Problems to Entering Foreign Markets
Economic/Demographic Influences: a lack of people in age income orlack of people in age, income, or occupational groups likely to buy your products
Technology: underdeveloped infrastructures to facilitate transportation and communication can make it very expensive to market products in foreign countries
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Specific Problems to Entering Foreign Markets
Control Problems: problems in coordinating marketing activities and monitoring competitors in dispersed markets
North West Europe, AnalysisRationalityLogicSystemsPower based on
Southern Europe and South America; AsiaPersonal relationsIntuitionEmotionSensitivityPower based on
achievementindividualistic
SensitivityPower based on senioritycollectivist
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Hofstede’s Framework for Assessing Culture
Hofstede’s studies of the interactions between national cultures and organizational cultures demonstrated that there are national and regional cultural groupings that affect the behaviors of societies andbehaviors of societies and organizations, and that are very persistent across time
Hofstede’s Framework for Assessing Culture
You can use Hofstede’s model to lt l i t i lassess cultural impact on managerial
structures, hierarchical relationships, management of expatriate personnel and variation and consumption patterns across cultures.p
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Hofstede’s Framework for Assessing Culture
Low vs. High Power DistanceThe extent to which the less powerfulThe extent to which the less powerful members of institutions and organizations expect and accept that power is distributed unequally
Low PD (Austria, Israel, Denmark, New Zealand) expect power relations which are more consultative or democratic A sense ofmore consultative or democratic. A sense of equality as human beings prevadesHigh PD (Malaysia): autocratic and paternalistic structures. Power is centralized.
(see “More equal than others, p.20)
Hofstede’s Framework for Assessing Culture
Individualism vs. Collectivism / Independence vs. dependence (Anglo cultures /Latin American)
Refers to the extent to which people are p pexpected to stand up for themselves and to chose their own affiliations, or alternatively act predominantly as a member of a life-long group or organizationIn individual societies people tend to be motivated by personal preferences, needs and rights; personal goals and rational analysis take precedenceprecedenceIn collectivist societies people tend to be motivated by norms and duties imposed by the group; ingroup goals and relational analysis takes precedence.
(See “From Chanel chick to individualist,” p.17
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Hofstede’s Framework for Assessing Culture
Masculinity vs. FemininityRefers to the value placed on traditionally male or female valuesMasculine cultures: competitiveness, assertiveness, ambition, personal achievement accumulation of wealth (J )(Japan)Feminine cultures: caring for others, nurturing roles, quality of life. (Sweden)
Hofstede’s Framework for Assessing Culture
Uncertainty AvoidanceThe extent to which members of a societyThe extent to which members of a society attempt to cope with anxiety by minimizing uncertainty.High UA societies: avoidance of ambiguous situations, preference of known stable situations, uncertainty-reducing rules and procedures (Mediterranean societies, Latin A i J )America, Japan)Low UA societies: ambiguity is more accepted. Uncertainty = opportunity. People as individuals are the engine of change
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Hofstede’s Framework for Assessing Culture
Long vs. Short Term OrientationDescribes a society’s “time horizon,” or the esc bes a soc e y s e o o , o eimportance attached to the future versus the past and presentLT societies: values include persistence, ordering relationships by status, thrift, having a sense of shame (China, Japan, Asian countries)ST societies: values include personal t di d t bilit ti t t tsteadiness and stability, normative statements,
protecting one’s face, respect for traditions, and reciprocation of greetings, favors and gifts (Western nations)
(See “Communication Styles,” p.19)
Hofstede’s Framework for Assessing Culture
“Culture is more often a source of conflict than of synergy Cultural differences are a nuissance at best and often a di t ”disaster”
Prof. Geert Hofstede, Emeritus Professor, Maastricht University
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American Culture and the 2008 Financial Crisis -- Hoftstede
A study conducted between 1995-2002 in 17 countries2002 in 17 countriesCompared to their colleagues in 16 other countries US business leaders scored higher on seeking:
Growth of businessP l lthPersonal wealthShort-term profitsPower
American Culture and the 2008 Financial Crisis -- Hoftstede
They were seen as pursuing to a l t t th b i l d ilesser extent than business leaders in other countries the following goals:
Profits 10 years from nowResponsibility towards employeesResponsibility towards employeesCreating something newContinuity of business
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American Culture and the 2008 Financial Crisis -- Hoftstede
The list reflects two aspects of the US ti l lt d ib d inational culture described in
Hofstede’s booksMasculinity – stands for belief in big business and showing off, and a lack of care for others weaker than oneselfShort-term orientation – a lack of understanding of the long-term consequences of one’s own doings
Tomalin’s and Nicks’ Personal Cultural ProfileCommunication Style
Encircles the pointSaves faceAvoids disagreementAddresses issues sideways-on
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Tomalin’s and Nicks’ Personal Cultural ProfileWorking Style
Formal InformalPrefers “dressPrefers business
dressUses surnames and titlesClosed doorPrefers a more
Prefers “dress-down”Uses first namesOpen plan/open doorPrefers a more Prefers a more
formal style of speech
familiar and intimate type of speech
Tomalin’s and Nicks’ Personal Cultural ProfileDiscussion Style
Fast MovingInterrupts more
Slow and MeasuredInterrupts more
Talks more and quicklyConversation has to keep movingDislikes silence
MeasuredNever interruptsPrefers measured tone and pacePauses are acceptableIs tolerant of silence
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Tomalin’s and Nicks’ Personal Cultural ProfileBusiness Attitude
ProgessiveEmbraces change
TraditionalNeeds change toEmbraces change
Likes new technologySeeks new organizational methods
Needs change to be based in present practiceIs cautious in adopting new technologyP f t i d dWants new people Prefers tried and tested solutionsPrefers loyal staff
Tomalin’s and Nicks’ Personal Cultural ProfileLeadership Style
FlatCommunicates
VerticalC i tCommunicates
directlyCommunity decisionTwo-way feedbackStrict line of
Communicates through hierarchyLeader decisionTop-down feedbackDotted line matrix reporting
management reporting
p g
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Tomalin’s and Nicks’ Personal Cultural ProfileBusiness Relationship
RelationshipTakes time in
TaskFocuses on having
building relationshipsWon’t work with you unless he/she likes youTakes interest in understanding
l
gjob doneMay begin with small-scale deals and then build up if original deal is successfulFocuses on task
th thpeople“My business colleague is my friend
rather than on peopleBusiness and friendships don’t mix
Tomalin’s and Nicks’ Personal Cultural ProfileDecision Making Style
IndividualisticRisk taking
CollectiveRisk averseRisk taking
Decides first then persuades othersMakes decisions within budget and job descriptions
Risk averseSeeks consensus, then decidesDecisions and budgets are agreed with higher
tIs accountable for decision and implementation
managementTakes decision agreed by the group
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Tomalin’s and Nicks’ Personal Cultural ProfileBasis for Decision Making
FactsMakes decisions
InstinctsMakes decisionsMakes decisions
based on data and figuresPersonal connections are not importantMaintains strict
it i
Makes decisions based on instinct and intuitionPersonal connections are importantP f t k ithcriteria
Agreements are independent of hospitality or gifts
Prefers to work with existing contactsAgreements are accompanied by hospitality and gifts
Tomalin’s and Nicks’ Personal Cultural ProfileAttitude to Time
ScheduledTime conscious
FexibleR l d b t tiTime conscious
PunctualSchedules by the clockMeetings start/end on time
Relaxed about timeLateSchedules by activityCompleting the business is more important than the schedule/time
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Tomalin’s and Nicks’ Personal Cultural ProfileWork/Life Balance
Live to WorkO ti t d
Work to liveOvertime unusualOvertime expected
Taking work home admiredOut of hours phone contact toleratedWeekend working
Overtime unusualTaking work home criticizedOut of hours phone contact unacceptableg