Business Customs

1
Chapter 5
Business Customs in Global Marketing
2
Cultural Adaptation
Cultural Imperatives
Cultural Adiaphora
Cultural Exclusives
3
Halls Silent Languages
Language of Time
Language of Space
Language of Things
Language of Friendship
Language of Agreements
4
Cultural Differences between Japanese and
American Business
Japanese Business
American Business
Game concept Business is a game in pursuit of
profits under the rules of laws and
contracts Efficiency-oriented and approximate
accuracy simplicity, clarity, and
quickness Quantity-oriented Short-term
performance evaluation Easy layoffs, dismissals
of employees, and selling of businesses
Mutual trust-oriented business business is
based on trusting relationship among people
rather than the rules of game Highly
precision-oriented and perfectionism-high
dependency on human awareness Quality-oriented Mid
-to-long term evaluations Job security
SOURCE Norihiko Shimizu, Todays Taboos may be
gone tomorrow, Tokyo Business, February 1995,
p.51.
5
Cultural Differences between Japanese and
American Business
Japanese Business
American Business
Top down management Low mutual dependence
between employers and employees Control of
business by stockholders and the
management Management by "force" Heavy dependence
on machinery and technology, vs. Light dependence
on human resources Limited loyalty and
incentive-oriented work ethics Excellent
software-based technology development
Heavy dependence on human resources bottom-up
management and teamwork High mutual dependence
between employers and employees Joint management
of business by Employees and Employees Management
by "motivation" Heavy dependence on human
resources Strong loyalty and fewer
incentives Inadequate software development
ability
SOURCE Norihiko Shimizu, Todays Taboos may be
gone tomorrow, Tokyo Business, February 1995,
p.51
6
Corruption Perception Index (Selected Countries
1999)
Country CPI 1999 Country CPI 1999
Denmark (1) 10.0 Brazil (45)
4.1 Finland (2)
9.8 South Korea (50) 3.8 Singapore (7)
9.1 China (58) 3.4 Norway (9)
8.9 Mexico (58) 3.4 Switzerland (9)
8.9 India (72) 2.9 United States (18)
7.3 Russia (82) 2.4 France
(72) 6.6 Nigeria (98) 1.6 Czech
Republic (39)
5-7
The number in parenthesis is rank for 1999,
which is based on 99 counties studied. The
maximum score is 10.00 the minimum score is 0.
A perfect score of 10.00 would be totally corrupt
free country.
Source The 1999 Transparency International
Corruption Perceptions Index (CPI),
http//www.transparency.org/documents/cpi/index.h
tml. (March 2000)
Irwin/McGraw-Hill
7
Bribery?

• Variations on a Theme
• Bribery
• Extortion
• Subornation
• Lubrication

8
Three Ethical Principles
Utilitarian Ethics Does the action optimize
the "common good" or benefits of all
constituencies? Rights of the Parties Does the
action respect the rights of the individuals
involved? Justice or Fairness Does the action
respect the canons of justice or fairness to all
parties involved?
Principle
Question
9
A Decision Tree for Incorporating Ethical and
Social Responsibility Issues into Multinational
Business Decisions
NO
Does the decision efficiently optimize the common
good or benefits of
YES
Are there critical factors that justify
suboptimizing these goals and satisfactions?
YES
SocietyCultureOrderJusticeThe good
lifeOther The Individual?FreedomHealth and
welfareSelf-realizationHuman dignityOpportunity
Other
The Business firm?StockholdersManagementProfits
GrowthOther The Economy?Economic
growthAllocation of resourcesProduction and
distribution of goods and servicesOther
NO
Does the decision respect the rights of
individuals involved.
NO
Reject decision
Are there critical factors that justify the
abrogation of a right.
YES
YES
Does the corporate decision respect the canons of
justice or fairness to all parties involved?
NO
NO
Rejectdecision
Are there critical factors that justify the
violation of a canon of justice?
YES
YES
NO
Accept decision
Rejectdecision
10
The Caux Round Table Principles
General Principles

• ? The responsibilities of businesses Beyond
  shareholders
• toward shareholders.
• ? The economic and social impact of business
• ? Beyond shareholders toward justice and world
  community.
• ? Business behavior Beyond the letter of law
  toward a spirit of
• trust.
• ? Respect for rules.
• ? Support for multilateral trade.
• ? Respect for the environment.
• ? Avoidance of illicit operations.

SOURCE Joel Makower and business for social
responsibility, Beyond The Bottom Line Putting
Social Responsibility to Work for your Business
and the World (New York Simon and Schuster,
1994)
11
The Caux Round Table Principles
Preamble

• The mobility of employment, capital, products,
  and technology is making business increasingly
  global in its transactions and its effects.
• Laws and market forces are necessary but
  insufficient guides for conduct.
• Responsibility for a business's policies and
  actions and respect for the dignity and interests
  of its shareholders are fundamental.
• Shared values, including a commitment to shared
  prosperity, are as important for a global
  community as for communities of smaller scale.
• For these reasons, and because business can be a
  powerful agent of positive social change, we
  offer the following principles as a foundation
  for dialogue and action by business leaders in
  search of business responsibility. In so doing,
  we affirm the necessity for moral values in
  business decision making. Without them, stable
  business relationships and a sustainable world
  community are impossible.

SOURCE Joel Makower and business for Social
Responsibility, Beyond the Bottom Line Putting
Social Responsibility to Work for your Business
and the World (New York Simon and Schuster,
1994)
12
Elements of Culture

• Material Culture
• Technology
• Economics
• Social Institutions
• Social Organization
• Education
• Political Structures
• Humans and The Universe
• Belief Systems
• Aesthetics
• Graphic and Plastic Arts
• Folklore
• Music, Drama, and Dance
• Language

13
Cultural Factors

• Never touch the head of a Thai or Pass an object
  over it
• The head is considered sacred in Thailand.
• Avoid using triangular shapes in Hong Kong,
  Korea, and Taiwan. It is considered a negative
  shape.
• The number 7 is considered bad luck in Kenya,
  good luck in the Czech Republic and has a magical
  connotation in Benin, Africa.
• The number 10 is bad luck in Korea.
• The number 4 means death in Japan.
• Red represents witchcraft and death in many
  African countries.
• Red is a positive color in Denmark.

SOURCE Business America, July 12, 1993
14
Cultural Differences between Japanese and
American Individual Lifestyles
CulturalBackground
JapaneseA Culture of Self-restraint
AmericansA Culture of Self-expression
Clear expression of joy and sorrow Unequivocal
expression of Yes/No Strong self-assertion Stron
g personality Excellent negotiating
skills Priority of self-interest
Reticence Modesty Reserve Punctiliousness Polite
ness Obligation
Ambiguous expression of Joy/Sorrow Equivocal
expression of Yes/No Weak self-assertion Weak
personality Poor negotiating skills Priority of
harmony with others
SOURCE Norihiko Shimizu, Todays Taboos may be
gone Tomorrow, Tokyo Business, February 1995,
p.50.
15
Cultural Differences between Japanese and
American Social Life
Japanese SocietyIn the Same Boat Concept
American SocietyDignity of Individuals
Dignity of individuals Individual work
ethic Great individual freedom Respect for
rules An open and transparent society Multi-cultu
ral society A society excelling in creativity and
versatility Individual decisions over consensus A
society which pursues the ideal
Human relations oriented Dependence on the
group Lack of individual freedom Low regard for
rules A closed society, lacking in
transparency Mono-cultural society An orderly and
uniform society Dependence on consensus A
society which pursues harmony with reality
SOURCE Norihiko Shimizu, Todays Taboos may be
gone Tomorrow, Tokyo Business, February 1995,
p.50.
16
Cultural Change
Pas de Franglais Old New Prime
Time Heures de grande ecoute (hours of
largest audience) Air Bag Coussin gonflable de
protection (Inflatable cushion of
protection) Cookie Sable
americain Trans. (American cookie)
SOURCE Adapted from La Guerre Franglaise,
Fortune, June 13, 1994, p. 14.