Assignment 1: Discussion Questions—Culture and International Trade

Culture and politics are important parts of the external environmental and vary more across than within countries. These features should be carefully assessed before entering into a foreign market or location with a business venture.

Research the impact of culture and politics on business using your textbook, University online library resources, and the Internet. Respond to the following:

• Why is understanding culture critical for successful international business? Give examples of how understanding culture has been important for an international business.
• Classify and describe at least four different types of political systems that an international business might encounter. What type of political system might have the greatest potential for imposing adverse political risk on an international business? Compare at least one other system to the one you selected and explain why it has less potential for imposing political risk.

Write your response in 400 words or less. Apply current APA standards for writing style to your work. All written assignments and responses should follow APA rules for attributing sources.

By Tuesday, February 5 , 2013, submit your assignment

 

Assignment 2: Case Analysis—Nike and International Labor Practices

There are certain important differences between developed and developing countries, some of which may lead to difficult ethical problems. The case study in this assignment describes Nike’s production strategy that lead to a labor controversy.

Read the following case study:

• Spar, D., & Burns, J. (2000, January 19; revised 2002, September 6). Hitting the wall: Nike and international labor practices. Harvard Business School. HBS Number: 9-700-047

Analyze the case. In your case analysis, address the following:

1. Summarize the basic issues presented in the case.
2. Describe Nike’s business strategy and how it involved controversial manufacturing relations. Discuss the opinions about this strategy.
3. Describe and discuss the conditions in the manufacturing operations for Nike products. Comment on whether the wages in these manufacturing plants were too low. Cite data in support.
4. What other U.S. companies are mentioned in the case? Describe them and their relationship to the labor issues. Does this issue seem to concern only Nike?
5. In your opinion, did Nike take the right steps? Should they and other U.S. shoe manufacturers continue to contract for making shoes in Asia? Should the U.S. government be involved in regulating such operations?

Submit your work in a 4-page Word document. Apply current APA standards for writing style to your work. All written assignments and responses should follow APA rules for attributing sources.

By Saturday, February 9, 2013, deliver your assignment

2 Cross-Cultural Business

Learning Objectives

Helsinki, Finland—Nokia Corporation (www.nokia.com) is the world’s number one manufacturer of mobile handsets. The company’s 112,000 employees in more than 150 countries generate $79 billion in sales annually. Nokia uses its knowledge of cultures to control 40 percent of the global handset market.

Nokia is especially talented at detecting consumer needs in emerging markets. China and India represent Nokia’s first and second largest markets ahead of third-place United States. Nokia knows that in India a buyer selects a handset that has the right look and style and projects the right image. But for a consumer in China, a handset needs to be the right bargain. And Nokia recently finished a year-long study of the handset needs of people who live in Accra, capital city of the African nation Ghana.

Source: Jeffrey Barbee.

Nokia spends around $8 billion a year on research and development. Anthropologists and psychologists first travel the globe for Nokia to learn how people behave and communicate. Personnel at Nokia’s headquarters in Finland then blend these unique insights with emerging global trends to design new handsets. Finally, the company develops phones suitable for a variety of markets but localizes each one with colors, surface textures, services, and ring-tones.

Nokia maintains its competitive edge through careful cultural research. For example, company anthropologists learned that people in rural areas of emerging markets need a phone that can be shared among many users. So Nokia added the capability to save each person’s contacts separately and installed a call tracker that imposes a time or cost limit on each call. Handsets designed for emerging markets also feature menus in local languages, a one-touch flashlight in case of power outages, and a demo program for those who have never used a mobile phone. As you read this chapter, consider how culture influences international business and how company actions affect cultures.1

This chapter is the first of three that describe the links between international business activity and a nation’s business environment. We introduce these topics early because of their strong influence on how commerce is conducted in different countries. In fact, success in international business can often be traced directly to a deep understanding of some aspect of a people’s commercial environment. This chapter explores the influence of culture on international business activity. Chapter 3 presents the roles of political and legal systems , and Chapter 4 examines the impact of economic systems and emerging markets on international business.

An assessment of any nation’s overall business climate is typically the first step in analyzing its potential as a host for international commercial activity. This means addressing some important questions, such as the following: What language(s) do the people speak? What is the climate like? Are the local people open to new ideas and new ways of doing business? Do government officials and the people want our business? Is the political situation stable enough so that our assets and employees are not placed at unacceptable levels of risk? Answers to these kinds of questions—plus statistical data on items such as income level and labor costs—allow companies to evaluate the attractiveness of a location as a place for doing business.

We address culture first in our discussion of national business environments because of its pivotal role in all international commercial activity. Whether we are discussing an entrepreneur running a small import/export business or a huge global firm directly involved in over 100 countries, people are at the center of all business activity. When people from around the world come together to conduct business, they bring with them different backgrounds, assumptions, expectations, and ways of communicating—in other words, culture .

We begin this chapter by exploring the influence of nation-states and subcultures on a people’s overall cultural image. Next we learn the importance of values, attitudes, manners, and customs in any given culture. We then examine ways in which social institutions, religion, language, and other key elements of culture affect business practices and national competitiveness. We close this chapter with a look at two alternative methods for classifying cultures.

What Is Culture?

When traveling in other countries, we often perceive differences in the way people live and work. In the United States dinner is commonly eaten around 6:00 p.m.; in Spain it’s not served until 8:00 or 9:00 p.m. In the United States most people shop in large supermarkets once or twice a week; Italians tend to shop in smaller local grocery stores nearly every day. Essentially, we are experiencing differences in culture —the set of values, beliefs, rules, and institutions held by a specific group of people. Culture is a highly complex portrait of a people. It includes everything from high tea in England to the tropical climate of Barbados, to Mardi Gras in Brazil, to segregation of the sexes in Saudi Arabian schools.

culture

Set of values, beliefs, rules, and institutions held by a specific group of people.

Before we learn about the individual components of culture, let’s look at one important concept that should be discouraged and one that should be fostered.

Avoiding Ethnocentricity

Ethnocentricity is the belief that one’s own ethnic group or culture is superior to that of others. Ethnocentricity can seriously undermine international business projects. It causes people to view other cultures in terms of their own and, therefore, disregard the beneficial characteristics of other cultures. Ethnocentricity played a role in many stories, some retold in this chapter, of companies that failed when they tried to implement a new business practice in a subsidiary abroad. The failures occurred because managers ignored a fundamental aspect of the local culture, which provoked a backlash from the local population, their government, or nongovernmental groups. As suppliers and buyers increasingly treat the world as a single, interconnected marketplace, managers should eliminate the biases inherent in ethnocentric thinking. For more information on how companies can foster a non-ethnocentric perspective, see this chapter’s Culture Matters feature titled, “Creating a Global Mind-set.”

ethnocentricity

Belief that one’s own ethnic group or culture is superior to that of others.

CULTURE MATTERS: Creating a Global Mind-set

In this era of globalization, companies need employees who function without the blinders of ethnocentricity. Here are some ways managers can develop a global mind-set:

■ Cultural Adaptability. Managers need the ability to alter their behavior when working with people from other cultures. The first step in doing this is to develop one’s knowledge of unfamiliar cultures. The second step is to act on that knowledge to alter behavior appropriately in response to cultural expectations. This can help managers to evaluate others in a culturally unbiased way and to motivate and lead multicultural teams.

■ Bridging the Gap. A large gap can emerge between theory and practice when Western management ideas are applied in Eastern cultures. “U.S. management principles may be accepted throughout the world, but Anglo-Saxon business customs and practices [on which they are based] may not be,” says management adviser Kim Tae Woo. In Asia, Western managers may try implementing “collective leadership” practices more in line with Asian management styles.

■ Building Global Mentality. Companies can apply personality-testing techniques to measure the global aptitude of managers. The Global Mentality Test evaluates an individual’s openness and flexibility in mind-set, understanding of global principles and terminology, and strategic implementation abilities. It also identifies areas in which training is needed and generates a list of recommended programs.

■ Flexibility Is Key. The more behavioral are the issues, the greater is the influence of local cultures. Japanese and Korean managers are more likely than U.S. managers to wait for directions and consult peers on decisions. And Western managers posted in the Middle East must learn to work within a rigid hierarchy to be successful. Although showing respect for others is universally valued, respect is defined differently from country to country.

■ Want to Know More? Visit the Center for Creative Leadership (www.ccl.org), Intercultural Business Center (www.ib-c.com), and Transnational Management Associates (www.tmaworld.com).

Developing Cultural Literacy

As globalization continues, people directly involved in international business increasingly benefit from a certain degree of cultural literacy —detailed knowledge about a culture that enables a person to function effectively within it. Cultural literacy improves people’s ability to manage employees, market products, and conduct negotiations in other countries. Global brands such as Procter & Gamble (www.pg.com) and Sony (www.sony.com) provide a competitive advantage because consumers know and respect these highly recognizable names. Yet cultural differences often dictate alterations in some aspect of a business to suit local tastes and preferences. The culturally literate manager who compensates for local needs and desires brings his or her company closer to customers and improves the firm’s competitiveness.

cultural literacy

Detailed knowledge about a culture that enables a person to function effectively within it.

As you read through the concepts and examples in this chapter, try to avoid reacting with ethnocentricity while developing your own cultural literacy . Because these two concepts are central to the discussion of many international business topics, you will encounter them throughout this book. In the book’s final chapter (Chapter 16), we explore specific types of cultural training that companies use to develop their employees’ cultural literacy.

National Culture and Subcultures

Rightly or wrongly, we tend to invoke the concept of the nation-state when speaking of culture. In other words, we usually refer to British and Indonesian cultures as if all Britons and all Indonesians were culturally identical. We do this because we are conditioned to think in terms of national culture. But this is at best a generalization. In Great Britain, campaigns for greater Scottish and Welsh independence continue to make progress. And people in remote parts of Indonesia build homes in treetops even as people in the nation’s developed regions pursue ambitious economic development projects. Let’s now take a closer look at the diversity that lies beneath the veneer of national culture.

National Culture

Nation-states support and promote the concept of national culture by building museums and monuments to preserve the legacies of important events and people. Nation-states also intervene in business to preserve national culture. Most nations, for example, regulate culturally sensitive sectors of the economy, such as filmmaking and broadcasting. France continues to voice fears that its language is being tainted with English and its media with U.S. programming. To stem the English invasion, French laws limit the use of English in product packaging and storefront signs. At peak listening times, at least 40 percent of all radio station programming is reserved for French artists. Similar laws apply to television broadcasting. The French government even fined the local branch of a U.S. university for failing to provide a French translation on its English-language Web site.

Cities, too, get involved in enhancing national cultural attractions, often for economic reasons. Lifestyle enhancements to a city can help it attract companies, which benefit by having an easier task retaining top employees. The Guggenheim Museum in Bilbao, Spain (www.guggenheim-bilbao.es), designed by Frank Gehry, revived that old Basque industrial city. And Hong Kong’s government enhanced its cultural attractions by building a Hong Kong Disney to lure businesses that may otherwise locate elsewhere in Asia.

Subcultures

A group of people who share a unique way of life within a larger, dominant culture is called a subculture . A subculture can differ from the dominant culture in language, race, lifestyle, values, attitudes, or other characteristics.

subculture

A group of people who share a unique way of life within a larger, dominant culture.

Although subcultures exist in all nations, they are often glossed over by our impressions of national cultures. For example, the customary portrait of Chinese culture often ignores the fact that China’s population includes more than 50 distinct ethnic groups. Decisions regarding product design, packaging, and advertising should consider each group’s distinct culture. Marketing campaigns also need to recognize that Chinese dialects in the Shanghai and Canton regions differ from those in the country’s interior; not everyone is fluent in the official Mandarin dialect.

Subculture members define themselves by their style (such as clothing, hair, tattoos) and rebel against mass consumerism. London, England’s Camden district is famous for its historic markets and as a gathering place for alternative subcultures such as goth, punk, and emo. Businesses like YouTube help subcultures to spread quickly worldwide. Can you think of a company that targets an international subculture with its products?

Source: © Hemis/CORBIS. All Rights Reserved.

A multitude of subcultures also exists within the United States. Of 300 million U.S. residents, around 80 million are black, Hispanic, and Asian. Frito Lay (www.fritolay.com) was initially disheartened that 46 million U.S. Hispanics were not buying its Latin-flavored versions of Lay’s and Doritos chips. The company looked south of the border to its Mexican subsidiary, Sabritas, and brought four popular brands into the U.S. market, including Sabritones Chile & Lime Puffed Wheat Snacks. The gamble paid off as sales of Frito’s Sabritas brand doubled to more than $100 million over a two-year period.2

Cultural boundaries do not always correspond to political boundaries. In other words, subcultures sometimes exist across national borders. People who live in different nations but who share the same subculture can have more in common with one another than with their fellow nationals. Arab culture, for example, extends from northwest Africa to the Middle East, with pockets of Arabs in many European countries and the United States. Because Arabs share a common language and tend to share purchasing behaviors related to Islamic religious beliefs, marketing to Arab subcultures can sometimes be accomplished with a single marketing campaign.

Quick Study

1. Define culture . How does ethnocentricity distort one’s view of other cultures?

2. What is cultural literacy ? Why should businesspeople understand other cultures?

3. How do nation-states and subcultures influence a nation’s cultural image?

Components of Culture

The actions of nation-states and the presence of subcultures help define the culture of a group of people. But a people’s culture also includes what they consider beautiful and tasteful, their underlying beliefs, their traditional habits, and the ways in which they relate to one another and their surroundings. Let’s take a detailed look at each main component of culture: aesthetics , values and attitudes , manners and customs , social structure , religion, personal communication, education, and physical and material environments.

Aesthetics

What a culture considers “good taste” in the arts (including music, painting, dance, drama, and architecture), the imagery evoked by certain expressions, and the symbolism of certain colors is called aesthetics .

aesthetics

What a culture considers “good taste” in the arts, the imagery evoked by certain expressions, and the symbolism of certain colors.

Aesthetics are important when a company does business in another culture. The selection of appropriate colors for advertising, product packaging, and even work uniforms can improve the odds of success. For example, green is a favorable color in Islam and adorns the national flags of most Islamic nations, including Jordan, Pakistan, and Saudi Arabia. Companies take advantage of the emotional attachment to the color green in these countries by incorporating it into a product, its packaging, or its promotion. Across much of Asia, on the other hand, green is associated with sickness. In Europe, Mexico, and the United States, the color of death and mourning is black; in Japan and most of Asia, it’s white.

Shoe manufacturer Nike (www.nike.com) experienced firsthand the importance of imagery and symbolism in international marketing. The company emblazoned a new line of shoes with the word “Air” written to resemble flames or heat rising off blacktop. The shoes were given various names, including Air Bakin’, Air Melt, Air Grill, and Air BQue. But what Nike did not realize was that the squiggly lines of the “Air” logo resembled Arabic script for “Allah,” the Arabic name for God. Under threat of a worldwide boycott by Muslims, who considered it a sacrilege, Nike apologized and recalled the shoes.

Music is deeply embedded in culture and, when used correctly, can be a clever and creative addition to a promotion; if used incorrectly, it can offend the local population. The architecture of buildings and other structures should also be researched to avoid making cultural blunders attributable to the symbolism of certain shapes and forms.

The importance of aesthetics is just as great when going international using the Internet. Many companies exist that teach corporations how to globalize their Internet presence. These companies often provide professional guidance on how to adapt Web sites to account for cultural preferences such as color scheme, imagery, and slogans.3 The advice of specialist firms can be particularly helpful for entrepreneurs and small businesses because they rarely have in-house employees well-versed in other cultures. To read how small business owners can tailor a Web site to suit local aesthetics and other cultural variables, see the Entrepreneur’s Toolkit titled, “Localize Your Web Site.”

Values and Attitudes

Ideas, beliefs, and customs to which people are emotionally attached are called values . Values include concepts such as honesty, marital faithfulness, freedom, and responsibility. Values are important to business because they affect a people’s work ethic and desire for material possessions. For example, whereas people in Singapore value hard work and material success, people in Greece value leisure and a modest lifestyle. The United Kingdom and the United States value individual freedom; Japan and South Korea value group consensus.

values

Ideas, beliefs, and customs to which people are emotionally attached.

The influx of values from other cultures can be fiercely resisted. Many Muslims believe drugs, alcohol, and certain kinds of music and literature will undermine important Islamic values. This is why nations under Islamic law (including Iran and Saudi Arabia) exact severe penalties against anyone possessing illegal items such as drugs and alcohol. Deeply held conservative values are why the Arab world’s reality TV programs tend to be short-lived. In Bahrain, the local version of “Big Brother” was canceled after people objected to the program’s format, which involved young unmarried adults of both sexes living under the same roof. The Lebanon-based program “Hawa Sawa” (“On Air Together”) was shut down because its “elimidate” format (in which a young man would gradually eliminate young women to finally select a date) was perceived by many people as too Western.4

ENTREPRENEUR’S TOOLKIT: Localize Your Web Site

When going global with an Internet presence, the more a company localizes, the better. Online customers want an experience corresponding to their cultural context offline. Here are a few tips for entrepreneurs launching an online presence.

■ Choosing Colors. A black-and-white Web site is fine for many countries, but in Asia visitors may think you are inviting them to a funeral. In Japan and across Europe, Web sites in pastel color schemes often work best.

■ Selecting Numbers. Many Chinese-speaking cultures consider the number four unlucky, although eight and nine symbolize prosperity. Be careful that your Web address and phone numbers do not send the wrong signal.

■ Watching the Clock. If marketing to countries that use the 24-hour clock, adjust times stated on the site so it reads, “Call between 9:00 and 17:00” instead of “Call between 9 a.m. and 5 p.m.”

■ Avoiding Slang. English in Britain is different from that in the United States, Spanish in Spain is different from that in Mexico, and French in France is different from that in Quebec. Avoid slang to lessen the potential negative impact of such differences.

■ Waving the Flag. Using national flags as symbols for buttons that access different language versions of your site should be done carefully. Mexican visitors to your site may be put off by a Spanish flag to signify the site’s Spanish-language version, for example.

■ Doing the Math. Provide conversions into local currencies for buyer convenience. For online ordering, be sure your site calculates any shipping costs, tax rates, tariffs, and so on. Also allow enough blanks on the order form to accommodate longer international addresses.

■ Getting Feedback. Finally, talk with customers to know what they want to accomplish on your Web site. Then thoroughly test the site to ensure it functions properly.

Attitudes are positive or negative evaluations, feelings, and tendencies that individuals harbor toward objects or concepts. Attitudes reflect underlying values. For example, a Westerner would be expressing an attitude if he or she were to say, “I do not like the Japanese purification ritual because it involves being naked in a communal bath.” The Westerner quoted here might hold conservative beliefs regarding exposure of the body.

attitudes

Positive or negative evaluations, feelings, and tendencies that individuals harbor toward objects or concepts.

Similar to values, attitudes are learned from role models, including parents, teachers, and religious leaders. Attitudes also differ from one country to another because they are formed within a cultural context. But unlike values (which generally concern only important matters), people hold attitudes toward both important and unimportant aspects of life. And whereas values remain quite rigid over time, attitudes are more flexible.

It seems a “European” attitude has sunk into the psyche of young people there as companies from different countries merge, industries consolidate, and nations grow closer together in the European Union. Many young people in Europe today consider themselves to be “European” as much as they identify with their individual national identities. Still, the underlying values of young Europeans tend to remain similar to those of their parents. Such cultural knowledge can help managers decide whether to adapt promotions to local attitudes for maximum effectiveness.

Let’s now look at how people’s attitudes differ toward three important aspects of life that directly affect business activities: time, work and achievement, and cultural change.

Attitudes Toward Time

People in many Latin American and Mediterranean cultures are casual about their use of time. They maintain flexible schedules and would rather enjoy their time than sacrifice it to unbending efficiency. Businesspeople, for example, may arrive after the scheduled meeting time and prefer to build personal trust before discussing business. Not surprisingly, it usually takes longer to conduct business in these parts of the world than in the United States or northern Europe.

By contrast, people in Japan and the United States typically arrive promptly for meetings, keep tight schedules, and work long hours. The emphasis on using time efficiently reflects the underlying value of hard work in both these countries. Yet people in Japan and the United States sometimes differ in how they use their time at work. For example, U.S. employees strive toward workplace efficiency and may leave work early if the day’s tasks are done, reflecting the value placed on producing individual results. But in Japan, although efficiency is prized, it is equally important to look busy in the eyes of others even when business is slow. Japanese workers want to demonstrate their dedication to superiors and coworkers—an attitude grounded in values such as the concern for group cohesion, loyalty, and harmony.

Attitudes Toward Work

Whereas some cultures display a strong work ethic, others stress a more balanced pace in juggling work and leisure. People in southern France like to say they work to live, while people in the United States live to work. They say work is a means to an end for them, whereas work is an end in itself in the United States. Not surprisingly, the lifestyle in southern France is slower-paced. People tend to concentrate on earning enough money to enjoy a relaxed, quality lifestyle. Businesses practically close down during August, when many workers take month-long paid holidays, usually outside the country.

People tend to launch their own businesses when capital is available for new business start-ups and when the cultural stigma of entrepreneurial failure is low. In European countries, start-ups are considered quite risky and capital for entrepreneurial ventures can be scarce. Moreover, if an entrepreneur’s venture goes bust, he or she can find it very hard to obtain financing for future projects because of the stigma of failure. This remains true despite some progress recently. The opposite attitude tends to prevail in the United States. Reference to prior bankruptcy in a business plan is sometimes considered a valuable learning experience (assuming lessons were learned). As long as U.S. bankers or venture capitalists see promising business plans, they are generally willing to loan money. Today, many European nations are working to foster an entrepreneurial spirit similar to that of the United States.

Attitudes Toward Cultural Change

A cultural trait is anything that represents a culture’s way of life, including gestures, material objects, traditions, and concepts. Such traits include bowing to show respect in Japan (gesture), a Buddhist temple in Thailand (material object), relaxing in a tearoom in Kuwait (tradition), and practicing democracy in the United States (concept). Let’s look more closely at the role of cultural traits in causing cultural change over time and the relation between international companies and cultural change.

cultural trait

Anything that represents a culture’s way of life, including gestures, material objects, traditions, and concepts.

CULTURAL DIFFUSION

The process whereby cultural traits spread from one culture to another is called cultural diffusion . As new traits are accepted and absorbed into a culture, cultural change occurs naturally and, as a rule, gradually. Globalization and technological advances are increasing the pace of both cultural diffusion and cultural change. Satellite television, videoconferencing, and videos on the Internet increase the frequency of international contact and expose people of different nations to new ideas and practices.

cultural diffusion

Process whereby cultural traits spread from one culture to another.

WHEN COMPANIES CHANGE CULTURES

International companies are often agents of cultural change. As trade and investment barriers fall, for example, U.S. consumer-goods and entertainment companies are moving into untapped markets. Critics in some of these places charge that in exporting the products of such firms, the United States is practicing cultural imperialism —the replacement of one culture’s traditions, folk heroes, and artifacts with substitutes from another.

cultural imperialism

Replacement of one culture’s traditions, folk heroes, and artifacts with substitutes from another.

Fears of cultural imperialism still drive some French to oppose the products of the Walt Disney Company (www.disney.com) and its Disneyland Paris theme park. They fear “Mickey and Friends” could replace traditional characters rooted in French culture. McDonald’s (www.mcdonalds.com) is also sometimes charged with cultural imperialism. It is reported that the average Japanese child thinks McDonald’s was invented in Japan and exported to the United States. Chinese children consider “Uncle” McDonald “funny, gentle, kind, and understanding.” Meanwhile, politicians in Russia decried the Snickerization of their culture—a snide term that refers to the popularity of the candy bar made by Snickers (www.snickers.com). And when the Miss World Pageant was held in India, conservative groups criticized Western corporate sponsors for spreading the message of consumerism and portraying women as sex objects.

Sensitivity to the cultures in which they operate can help companies avoid charges of cultural imperialism. Firms must focus not only on meeting people’s product needs, but also on how their activities and products affect people’s traditional ways and habits. Rather than view their influence on culture as the inevitable consequence of doing business, companies can take several steps to soften those effects. For example, policies and practices that are at odds with deeply held beliefs can be introduced gradually. Managers could also seek the advice of highly respected local individuals such as elders, who fulfill key societal roles in many developing countries. And businesses should always make clear to local workers the benefits of any proposed change.

An area in which U.S. companies may be changing other cultures is fairness in the workplace. Just a few years ago, sexual harassment lawsuits were a peculiar phenomenon of U.S. culture. Increased awareness of this issue in other nations coincides with the international outsourcing of jobs. As U.S. companies outsource jobs to other nations, they are being held accountable for how these subcontractors treat their employees. In the process, U.S. companies export values of the U.S. workplace, such as what constitutes harassment.5

Here, a customer in Dubai visits an outlet of Sweden-based IKEA. Sweden historically dominated other Scandinavian nations, including Denmark. Now some in Denmark say IKEA is a “cultural imperialist” for portraying Denmark as Sweden’s doormat because it assigns Danish names to doormats and rugs, but reserves Swedish names for expensive items such as beds and chairs. IKEA says the product names are simply a coincidence.

Source: © Ed Kashi/CORBIS. All Rights Reserved.

WHEN CULTURES CHANGE COMPANIES

Culture often forces companies to adjust their business policies and practices. Managers from the United States, for example, often encounter cultural differences that force changes in how they motivate employees in other countries. Although it’s a time-consuming practice, managers sometimes use situational management—a system in which a supervisor walks an employee through every step of an assignment or task and monitors the results at each stage. This technique helps employees fully understand the scope of their jobs and clarifies the boundaries of their responsibilities.

Other types of changes might also be needed to suit local culture. Vietnam’s traditional, agriculture-based economy means people’s concept of time revolves around the seasons. The local “timepiece” is the monsoon, not the clock. Western managers, therefore, modify their approach and take a more patient, long-term view of business by modifying employee evaluation and reward systems. For example, individual criticism should be delivered privately to save employees from “losing face” among coworkers. Individual praise for good performance can be delivered either in private or in public, if done carefully. The Vietnamese place great value on group harmony, so an individual can be embarrassed if singled out publicly as being superior to the rest of the work unit.

IS A GLOBAL CULTURE EMERGING?

What does the rapid pace of cultural change worldwide mean for international business? Are we witnessing the emergence of a new, truly global culture in which all people share similar lifestyles, values, and attitudes? The rapid pace of cultural diffusion today is causing cultures to converge to some extent. The successful TV show, American Idol, where young people compete for a chance to become a celebrity, is one example of global pop culture. The U.S. show is one of 39 clones around the world based on the original British show, Pop Idol. The same company helped develop and market The Apprentice, which is seen in 16 countries.6

It might be true that people in different cultures are developing similar perspectives on certain issues. But it seems that just as often as we see signs of an emerging global culture, we discover some new habit unique to one culture. When that happens, we are reminded of the roles of history and tradition in defining culture. Though values and attitudes are under continually greater pressure from globalization, their transformation will be gradual rather than abrupt because they are deeply ingrained in culture.

Quick Study

1. What is meant by a culture’s aesthetics ? Give several examples.

2. How can businesses incorporate aesthetics into their Web sites?

3. Compare and contrast values and attitudes . How do cultures differ in their attitudes toward time, work, and cultural change?

4. Describe the process of cultural diffusion . Why should international businesses be sensitive to charges of cultural imperialism ?

Manners and Customs

When doing business in another culture, it is important to understand a people’s manners and customs. At a minimum, understanding manners and customs helps managers avoid making embarrassing mistakes or offending people. In-depth knowledge, meanwhile, improves the ability to negotiate in other cultures, market products effectively, and manage international operations. Let’s explore some important differences in manners and customs around the world.

Manners

Appropriate ways of behaving, speaking, and dressing in a culture are called manners . In Arab cultures that stretch from the Middle East to northwest Africa, for example, one does not extend a hand to greet an older person unless the elder first offers the greeting. In going first, a younger person would be displaying bad manners. Moreover, because Arab culture considers the left hand the one used for personal hygiene, using it to pour tea or serve a meal is considered very bad manners.

 

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