INTERNATIONAL BUSINESS ENVIRONMENT

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INTERNATIONAL BUSINESS ENVIRONMENT

• Cultural issues in the international business
  environment
• Matevž Raškovic
• March 2010

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What is culture?
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Culture and its impact on business
Competitive environment
Competitive environment
Culture is the context in which a company
(people) operates!
STRATEGY
coordination
ORG. CULTURE
STRUCTURE SYSTEMS
NATIONAL CULTURE
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Culture is contextually based!
The common grasshopper (Acrididae)
Culture is an important part of international
business and marketing!!!
USA Pest!
CHINA House pet!
Thailand A snack!
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Culture is

• Collective programming of the mind which
  distinguishes the members of one human group from
  another... Includes system of values and values
  are among the building blocks of culture...
  (Hofstede, 1980)
• Glue that binds groups together. Without cultural
  patterns, organized system of significant
  symbols, people would have difficulty living
  together (De Mooij, 2004)
• Set of control mechanisms plans, recipes,
  rules, instructions for governing behavior
  (Geertz, 1973)
• Includes shared believs, attitudes, norms, roles
  and values found among speakers of a particular
  language who live during the same period in a
  specific geographic region (Triandis, 1995).
• And soo much more

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Hofstede culture software
personhardware
personality culture software
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Characteristics of culture

1. Culture is learned
2. Common to members of a certain group
3. Determines the behavior of group members
4. Culture (customs, values, habits) makes life more
   effective

AN INDIVIDUAL DOESNT HAVE CULTURE! AN INDIVIDUAL
HAS A PERSONALITY!
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Layers of culture
Physical objects, heroes, symbols
artifacts
Habits, routines procedures
a man should have only 1 wife
Values norms
Core believes expectations
Slovene values work, family, security
implicit
walking other ladders
explicit
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Culture ingredients / elements

• Institutions
• Norms
• Values
• Believes
• Religion
• Language
• Education system
• Art and aesthetics
• Material culture and life-style

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Culture as a normal distribution
Culture A
Culture B
Stereotypes
Stereotypes
Norms values
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Levels of culture
TRANSNATIONAL CULTURE
NATIONAL CULTURE
INDUSTRY CULTURE
PROFESSIONAL CULTURE
ORGANIZATIONAL CULTURE
SUBCULTURES
INDIVIDUAL
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Culture and the marketing mix
the plague
Ford Kuga
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Sometimes culture can be weird
MATEVŽ
a Slovene male name
a Slovene national dish
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Context and communication 1/3

• The context explains the degree of directness of
  communication.
• In high context communication message most of the
  info is either part of the context or
  internalized in the person. Very little is made
  explicit. Use of symbolism or indirect verbal
  expressions.
• In low context communication message is direct
  and unambiguous.

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Context and communication 2/3
http//www.youtube.com/watch?v8tIUilYX56E
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Context and communication 3/3
LOW CONTEXT CULTURE HIGH CONTEXT CULTURE
KEY IN COMMUNICATION Direct and explicit message. Indirect message. Use of symbolism and indirect verbal expressions. The interpretation depends on the environmental context and the message recipient
RELATIONSHIPS Short life-span Long life-span. Represents the building blocks of the society. e.g. Guanxi in China
CONTRACTS Written. Once agreement is reached the contract becomes fixed and legally binding Oral, flexible, changing in time e.g. contracts in China
INGROUP VS. OUTGROUP MEMBERS Difficult to identify. It is easy to become part of the society Easy to identify
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Culture focus
http//www.youtube.com/watch?vijpbhile6aYfeatur
erelated
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Hofstedes cultural dimensions

• Power Distance Index (PDI) measures the extent to
  which the less powerful members of a society
  accept that power is distributed unequally.
• Individualism (IDV) measures how the individuals
  define themselves in relationships with close
  others. On the individualist side we find
  societies in which the ties between individuals
  are loose everyone is expected to look after
  him/herself and his/her immediate family. On the
  collectivist side, we find societies in which
  people from birth onwards are integrated into
  strong groups (extended families)

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Hofstedes cultural dimensions

• Masculinity (MAS) versus its opposite,
  femininity, refers to the endorsement of womens
  (security, family, quality of life etc.) vs.
  mens (success, competitiveness, social status
  etc.) values.  
• Uncertainty Avoidance Index (UAI) deals with a
  society's tolerance for uncertainty and
  ambiguity It indicates to what extent a culture
  programs its members to feel either uncomfortable
  or comfortable in novel, unknown, surprising
  situations.
• Long-Term Orientation (LTO) versus short-term
  orientation distinguishes between long-term and
  short-term thinking, e.g. Chinese Confucianism

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Hofstedes cultural dimensions scores by
countries
http//www.geert-hofstede.com/marketing.shtml
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GLOBE typology
Future orientation The extent to which an organization is future oriented and not oriented toward present or past time.
Uncertainty avoidance The degree to which an organization is apt to tolerate uncertainty and unstructured situations.
Power distance The degree to which members of a collective expect power to be distributed equally.
Individualism vs. collectivism It reflects the degree to which individuals are expected to be concerned with the collective (family, department or company, caste, religion, nation) in contrast to personal interests.
Performance orientation The degree to which a collective encourages and rewards group members for performance improvement and excellence.
Assertiveness The degree to which individuals are assertive, dominant and demanding in their relationships with others.
Humane orientation The degree to which a collective encourages and rewards individuals for being fair, altruistic, generous, caring and kind to others.
Gender egalitarianism The extent to which division of tasks, responsibilities and rewards is conditional on biological gender of an employee.
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The GLOBE dimensions of organizational culture
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(No Transcript)
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Consumer ethnocentrism
Slovenia CET-SCALE 53.74 (on 17 to 119 point
scale)
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Culture products 1/2
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Culture products 2/2
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Culture pricing decisions 1/2
Source Hollensen, S. (2008). Global marketing.
Pearson Education.
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Example Kosovo
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Culture distribution 1/2
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Culture distribution 2/2
Japan
USA
Source Hollensen, S. (2008). Global marketing.
Pearson Education.
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Culture advertising
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Example
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Example India
http//www.youtube.com/watch?v0VNjHaeJLKEfeature
related
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Example Serbia
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Example Denmark
http//www.youtube.com/watch?v2xAz8NTQKw8
http//www.youtube.com/watch?vzIWOrzXtjXc