"This whole thing about cultural differences is simply bunk! The real issue is about market access!" Discuss this statement using examples you have encountered during the lectures, seminars and your own research

“This whole thing about cultural differences is simply bunk! The real issue is about market access!” Discuss this statement using examples you have encountered during the lectures, seminars and your own research

Introduction:

“International business is all commercial transactions, private and governmental between two or more countries”. When a company operates internationally it adds foreign conditions to its domestic ones making the external environment more diverse. Is this whole thing only about market access?

When entering a new culture, market access is not the only thing a business should look for. Culture plays a vital role and should be acknowledged and never ignored.

There is no one definition for culture. Emile Littré at the end of the nineteenth century, defined in his French dictionary culture to be a ‘cultural, farming activity’. As early as the eighteenth century, the Germans defined culture or Kultur in reference to civilization. Culture has also been defined as a set of accepted behaviour patterns, values, assumptions and shared common experiences.

There are as many as 164 different definitions of culture. Most anthropologists however view culture as “the sum total of beliefs rules, techniques, institutions, and artifacts that characterize human populations”. In addition, they identify some common elements of culture:

Most important point is that culture cannot be present at birth but is learnt through experience.
Various aspects of culture are built in
Culture is shared
Culture defines the boundaries of different groups.

Figure .1.

The diagram below shows the different elements of culture

Models of culture

The iceberg concept of culture

Hoft (1995) describes culture as being like an iceberg (Fig.2). The tip of it is primarily in awareness (Surface culture), while nine-tenths of it hidden below the surface, (Deep culture), and is primarily out of awareness. Deep culture is the most crucial part and is the one which outsiders find difficult to spot.

Every culture is defined by the powerful and invisible dimensions of deep culture which consists of norms and values and the implicit basic assumptions. The iceberg model implies that the “visible dimensions of surface culture are simply expressions of the deeper culture dimensions” which we cannot see, hence, we are unable to understand what the foundations are. For this reason, understanding different cultural backgrounds becomes difficult. however must be understood and acknowledged before they can be managed.

‘’Culture is the way in which a group of people solve problems.’’

Figure 2. The Iceberg Model (Hoft 1995)

Trompenaars (1993) describes the ‘onion-like’ model. Trompenaars portrays culture to consist of three layers which can be peeled of layer by layer. The first outer layer consists of artefacts and products, the second layer norms and values and the third inner implicit layer of the onion represents basic assumptions.

Figure 3. The onion-like model Trompenaars F.(1993)

A set of basic assumptions is developed by each and every different culture which is measured by dimensions. Cultures distinguish themselves from each other in the ...

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Figure 2. The Iceberg Model (Hoft 1995)

Figure 3. The onion-like model Trompenaars F.(1993)

A set of basic assumptions is developed by each and every different culture which is measured by dimensions. Cultures distinguish themselves from each other in the way they deal with these dimensions.

Geert Hofstede’s model of cultural dimensions (The Hofstedes’s Studies)

Geert Hofstede carried out a study in forty countries on IBM, a multi-national company. His aim was to identify the basic dimensions of differences between national cultures and he discovered four such dimensions.

Power distance: ‘this is the extent to which an unequal distribution of power is accepted by members of a society’. It is about hierarchy. Hofstede’s findings revealed that the countries with low power distance included Australia, Israel, Denmark and Sweden and those with high power distance were the Philippines, Mexico, Venezuela, India and Brazil.

Femininity-masculinity: ‘this dimension refers to the extent to which highly assertive masculine values predominate (acquisition of money at the expense of others) versus showing sensitivity and concern for others’ welfare and the quality of life’. Japan Australia, Venezuela, Italy and Mexico were found to be high on this dimensions compared to countries such as Thailand, Finland, Denmark, Sweden and Yugoslavia.

Uncertainty avoidance: ‘is the extent to which members of a society feel threatened by ambiguous situations and have created beliefs and institution which try to avoid these’. Greece, Portugal, Japan, Peru and France were countries which had high on uncertainty avoidance while Denmark, Sweden, Britain, the USA and India were low on this dimension.

Individualism-collectivism: refers to the ‘tendency to take care of oneself and one’s family versus the tendency to work together for the collective good’. Hofstede found the USA, Australia, Britain, Canada and the Netherlands to be high on this dimension and Venezuela, Columbia, Taiwan, Mexico and Greece low on this dimension.

Monochronic and Polychronic Approaches to Time

Edward T. and Mildred Reed Hall carried out a study involving in-depth, open-ended interviews. They wanted to give good advice to American business men who were to travel and work abroad. From their research they developed several dimensions of difference all associated with either communication, or space, or time.

Chonemics is the study of time. It is the way in which people in different cultures structure, interpret, and understand the time dimension.

Monochronic (M-time) and polychronic (P-time) are two extreme behaviours of task scheduling described by Hall (1983). Examples of monochromic people are the Americans at work. They do one thing at a time. During a business meeting, all those who have attended focus on their work with no interruptions. It is scheduling that orders life in M-time cultures (U.S.A). Tasks, Schedules and procedures are oriented in M-time. Time is seen as a product, which can be managed, controlled, spent, wasted and served, and is also seen as a scale with a past, present and future.

Polychronic people are people such as the Arabs, Africans, Latin American, Asian and the Mediterranean who tend to waste a lot of time by doing several things at the same time. For example, they have meetings, make a phone call, receive phone calls and allow ‘interruptions’ such as having tea.

Monochronic time Polychronic time

Clock time Situational time

Appointememnt Time Flextime

Segmented time Similtaneaous activities

Task-oriented time Relationship oriented perspectives

Achievment tempos Experiental tempos

Future-focused approach Past/Present-focused approach

Tangible outcome orientation Historical orientation

Countries:USA, Switzerland, Germany Countries:Arab, African, latin American, Asian, Mediterannean.

Hall’s research shows that it is important to recognise cultural differences and adapt to these when dealing with other cultures.

Cultural Orientations

International businesses adopt an attitude towards foreign cultures. The following are the three cultural orientations which show how a workforce can alter to a new culture.

Polycentrism

In a polycentric organisation control is decentralised so managers can devolve power out and let local mangers operate in a local culture. Polycentric organisations are so besieged by general differences; therefore they don’t introduce feasible changes. E.g. avoid the transfer of home-country resources that actually may work well abroad.

Ethnocentrism

When an organisation believes that its culture is the best in comparison to other organisations. It is when a company or manager believes that the rules that worked at home should work abroad and ignores important factors, such as the environment and culture. An example of an ethnocentric organisation is McDonald’s. They don’t like change and if they do want to change they think it’s easy.

Geocentricism

A Geocentric organisation is a hybrid of polycentricism and ethnocentrism, it is the middle ground. The organisation takes the good things and bad things of the home country and the host country and tries to unite the two cultures together. Geocentric approach is considered to be the best for businesses entering new markets. But, what happens if the organisation tries to merge two cultures that don’t work together. It is not always the best thing.

Further examples which shows the importance of culture when entering new markets.

Communication - Coping with new markets

Communication is a critical element of culture. Entering new national markets will not be successful without this element.

It is very possible for a false meaning may appear in the target culture which was not intended by the advertiser in the source culture. An example of an advertisement given by Douglas and Dubois (1980) which failed to target consumers is the Brandy advertisement. This advertisement was aimed at the South African Bantu market. A man and a woman where seated at a table with a bottle placed over them. The Bantus people thought that the woman had the bottle on her head since it is the tradition in Africa for women to have them on their heads. An unintentional and puzzling difference between the traditional, ‘local feature of the characters and the situation, and the modern, imported feature of the product arose from this advertisement’4. Hence, clear and successful marketing communication was barred.

Procter & Gamble (P &G) have used an advertisement where a man meets a woman for the first time and he compares her skin to a fine porcelain doll. The advertisement was used to advertise Camay soap in Japan however it was considered to be very rude and disrespectful due to the fact that a Japanese man behaved in such a way. In Japan, this insulted the Japanese people but on the other hand it worked very well in France and in the South American countries where people are more open minded.

A further example is the Vauxhall Nova which was introduced in the Mexican market and failed to target consumers because Nova in Spanish means ‘does not go’.

The latter is a good example which describes a feature of communication which causes problems, written and verbal translation. Words have different meaning in different languages. The meaning of Nova to us in English is bright where as in Spanish it means ‘does not go’.

‘Silent Language’ is another feature of communication which influences culture. Colours for example symbolise different things in different cultures. Black symbolises death in the west where as in Asian countries, white and purple relate to death. Body movements, facial expressions and gestures also influence communication.

Communication is crucial when entering markets with diverse access. Market access fails if communication fails.

Religion

This is an important element of culture which must be respected always. It must be recognized in order to successfully access a market and sell a product. Magazine publishers are unable to sell some of their magazines such as FHM and GQ in Islamic countries because women must cover up, therefore having pictures of women in magazines is unacceptable.

Social activities

GlaxoSmithKline, Novartis and Pfizer are examples of pharmaceutical companies which use language and models to give talks to school children about HIV and AIDS in order to gain market access.

Stereotyping

Stereotyping is a ‘personality type to which we consign people on the basis of their membership of some group’5. This helps to understand people from different cultural backgrounds however care must be taken to ensure personality types are not exaggerated.

Culture shock

Culture shock is the impact people feel when they move into a new environment with a new culture. Students, especially international students feel a sense of excitement, challenge and are not sure 100% sure of what to expect as they move abroad. Culture shock is part of learning and adapting to any new culture.

Conclusion

As can be seen, national cultures affect organizational cultures in specific country settings. Firms must understand and recognise cultural differences so that they can manage them by learning to appreciate the various cultures, and understand the positive impact of being culturally savvy. If this is prepared for prior to venturing into new cultures then firms will be successful and no consequences will have to be faced. Failure to identify cultural differences will lead to failure in market access.