MANAGING ACROSS CULTURES

Part 1	Social and Cultural Environments

•	Basic Aspects of Society and Culture

•	Analytical Approaches to Cultural Factors

•	Impact on Marketing Industrial Products

•	Impact on Marketing Consumer Products

•	Cross-cultural Complications and Suggested Solutions

Sources:		

1.	We Europeans   -   R. Hill
2.	Global Marketing Management  -  W. Keegan

SOCIAL AND CULTURAL ENVIRONMENTS

“I believe only in French culture, and regard everything else in Europe which calls itself 'culture' as a misunderstanding.  I do not even take the German kind into consideration.”  
FRIEDRICH WILHELM NIETZSCHE   1844 – 1900

Culture has always been a source of disagreement and misunderstanding.
What does Nietzsche mean when he says "culture"? As you will soon see, the meaning of culture to a manager nowadays is quite different than it was to Nietzsche, who is probably referring to art, literature, and perhaps even music in the quote above. All of these elements of “high” and “low” culture are important, but as managers know, culture is about much more than art. It is definitely a major influence on what happens in the marketplace.

In Europe, where scones, croissants, and strudels have long been the pride of bakers and pastry chefs, trend-conscious consumers have started gobbling up American-style baked goods. It seems the Europeans are discovering what Americans have known all along: In addition to being tasty, brownies, muffins, and cookies are perfectly suited to on-the-go lifestyles that include snacking while traveling on the metro or riding a bicycle. Also, American baked goods have a shelf life of more than one day, unlike many traditional European baked goods such as fresh cream tarts. European bakers, many of whom regard pastries from across the Atlantic as inferior, had to make some adjustments to accommodate changing taste buds.
American companies have also experienced some culture shock. While British consumers snapped up soft, moist Otis Spunkmeyer muffins, the American company's managers soon discovered that the word “spunk” is slang for "semen" in Britain and other countries. After the disk jockey of a national radio show asked on the air “Who is going to eat a product with a name like that?” the company sent him a free sample. The result was favorable publicity in the form of an on-air endorsement for the goodies. Now, some bakeries that sell the muffins put stickers reading “American Muffin” over the offending word. A good pastry is a good pastry no matter where it comes from and no matter what country it's sold in. Any company making good pastries will have a market in Europe.
The warm reception in Europe for American baked goods shows that many products can achieve success outside the borne-country cultural environment. This part of the course focuses on the social and cultural forces that shape and affect individual and corporate behavior in the marketplace. The conceptual orientation is that the cultures of the world are characterized by both differences and similarities. Thus, the task of the global manager is twofold. Managers must be prepared to recognize and understand the differences between cultures and then incorporate this understanding into the management planning process so that strategies and marketing management programs are adapted when necessary. At the same time, managers should take advantage of shared cultural characteristics and avoid unneeded and costly adaptations of the marketing mix,
Global managers must recognize and deal with the differences in the social and cultural environments of world markets. Here, we focus on the important differences in world markets and the equally important similarities that express the fact of cultural universals. To help managers better understand social and cultural dynamics in the global marketplace, several useful analytical approaches are explained (Maslow's hierarchy, Hotstede's cultural typology, the self-reference criterion, and diffusion theory included). Also, suggested solutions to cross-cultural difficulties and a review of cross-cultural training procedures currently being used in global companies are thoroughly considered.

BASIC ASPECTS OF SOCIETY AND CULTURE

Anthropologists and sociologists define culture as “ways of living”, built up by a group of human beings, that are transmitted from one generation to another. A culture acts out its ways of living in the context of social institutions, including family, educational, religious, governmental, and business institutions. Culture includes both conscious and unconscious values, ideas, attitudes, and symbols that shape human behavior and that are transmitted from one generation to the next. In this sense, culture does not include one-time solutions to unique problems, or passing fads and styles. As defined by organizational anthropologist Geert Hofstede, culture is “the collective programming of the mind that distinguishes the members of one category of people from those of another.”

The Search for Cultural Universals

In addition to agreeing that culture is learned, not innate, most anthropologists share two additional views. First, all facets of culture are interrelated: influence or change one aspect of a culture and everything else is affected. Second, because it is shared by the members of a group, culture defines the boundaries between different groups.
Culture consists of learned responses to recurring situations. The earlier these responses are learned, the more difficult they are to change. Taste and preferences for food and drink, for example, represent learned responses that are highly variable from culture to culture and can have a major impact on consumer behavior. Preference for color is culturally influenced as well. For example, although green is a highly regarded color in Moslem countries, it is associated with disease in some Asian countries. White, usually associated with purity and cleanliness in the West, can signify death in Asian countries. Red is a popular color in most parts of the world (often associated with full flavor, passion, or virility); it is poorly received in some African countries. Of course, there is no inherent attribute to any color of the spectrum; all associations and perceptions regarding color arise from culture.
Attitudes toward whole classes of products can also be a function of culture. For example, in the United States, consumers have a cultural predisposition for product innovations that have a "gadgetry" quality. Thus, the electric knife, the electric toothbrush, and a host of other "labor-saving" small appliances find ready market acceptance even though many are purchased, used for a while, and then quietly put away and never used again. There is unquestionably a smaller predisposition to purchase such products in other developed markets such as Europe.
This difference is a result of cultural differences. Income levels also influence consumer behavior and attitudes around the world. Indeed, a basic question that must be answered by managers who want to understand or predict behavior is, "How much do social and cultural factors influence behavior independent of income levels?" Sometimes, the influence is strong. For example, U.S. companies introduced fluffy, frosted cake mixes in the United Kingdom where cake is eaten at tea-time with the fingers rather than as a dessert with a fork. Green Giant Foods attempted to market corn in Europe, where the prevailing attitude is that corn is a grain fed to hogs, not people. In both instances, cultural differences resulted in market failures.
Nevertheless, the demand for convenience foods, luxury consumer products, electronic products, disposable products, and soft drinks in the United States, Europe, Asia, Africa, and the Middle East suggests that most consumer products have broad almost universal, appeal. As communication continues to shrink the world, more and more products will be marketed and consumed globally This implies that an important characteristic of culture  -  that it defines boundaries between people  -  will not limit the global reach of companies that want to extend their operations globally. This does not suggest, however, that these companies can ignore cultural factors. The fact that there is a global market for a product does not mean that one can approach the market in different countries identically. Cultural sensitivity to differences spells the difference between global success and failure.
An important quest for the global manager is to discover cultural universals. A universal is a mode of behavior existing in all cultures. Universal aspects of the cultural environment represent opportunities for global marketing managers to standardize some or all elements of a marketing program. A partial list of cultural universals, taken from cultural anthropologist G. Murdock's classic study includes the following: athletic sports, body adornment, cooking, courtship, dancing, decorative art, education, ethics, etiquette, family feasting, food taboos, language, marriage, mealtime, medicine, mourning, music, property rights, religious rituals, residence rules, status differentiation, and trade. The astute global marketing manager often discovers that much of the apparent cultural diversity in the world turns out to be different ways of accomplishing the same thing.
Music provides one example of how these universals apply to marketing. Music is part of all cultures, accepted as a form of artistic expression and source of entertainment. However, music is also an art form characterized by widely varying styles. Therefore, although background music can be used effectively in broadcast commercials, the type of music appropriate for a commercial in one part of the world may not be acceptable or effective in another part. A jingle might use a bossa nova rhythm for Latin America, a rock rhythm for North America, and "high life" for Africa. Music, then, is a cultural universal that global marketing managers can adapt to cultural preferences in different countries or regions.
Because music is a cultural universal, it should come as no surprise that the music business is going global. However, this does not mean that the world's music is uniform. In countries like Turkey and China, over 90 percent of all music played is local. Even in the United States, 75 percent of music is local. Does this mean that the music business in Turkey is entirely local? Certainly not  -  the global music companies are in Turkey giving the Turkish people the music that they want and using their know-how and experience about the process of serving music markets: identifying and signing artists, and building a repertoire; introducing and promoting artists; recording, packaging, and distributing recordings; and so on. Thus, even though the content of the Turkish music market may be largely unique, the process of creating value for customers in Turkey is identical to the process of creating value anywhere. Moreover, the one constant in every market is change, and the clear trend in global music markets is toward new sounds and acts.
The global managers in the business are always alert to the potential of extending a successful act across national boundaries. For example, Kadja Nin, a vocalist from Burundi who sings in Swahili and French, has been positioned as a new sound-sensuous and international. Many feel that she has great potential for global markets.
Increasing travel and improving communications mean that many national attitudes toward style in clothing, color, music, food, and drink are converging. The globalization of culture has been capitalized on, and even significantly accelerated, by companies that have seized opportunities to find customers around the world. Coca-Cola, Pepsi, Levi Strauss, McDonald's, IBM, Heineken, and BMG Entertainment are some of the companies breaking down cultural barriers as they expand into new markets with their products. Similarly, new laws and changing attitudes toward the use of credit are providing huge global opportunities for financial service providers such as American Express, VISA, and MasterCard International. The credit card companies will have to use communications efforts to persuade large numbers of people to use the cards. The propensity to "pay with plastic" is currently much lower in the rest of the world than in the United States.

The Anthropologist's Standpoint

The way a person thinks, feels, and acts has some relation to his or her experience of the world. It does not matter if (normal) actions and opinions are thought of as bizarre by outsiders. Successful global managers must understand human experience from the local point of view  -  and become insiders with cultural empathy in the process  -  if they are to understand the dynamics of markets outside the home country.
Any systematic study of a new geographic market requires a combination of tough-mindedness and generosity. The appreciation of another way of life cannot develop when one is defensive about one's own way of life; it is necessary to be secure in one's own convictions and traditions. In addition, generosity is required to appreciate the integrity and value of other ways of life and points of view to overcome the prejudices that are a natural result of the human tendency toward ethnocentricity. When people from other countries complain that the Americans, Japanese, French, British, Chinese, etc., are haughty, patronizing, or arrogant, home-country ethnocentricity is probably contributing to the problem. Global managers need to develop an objective standpoint that recognizes diversity and seeks to understand its origins. There are many paths to the same end in life. The global manager knows this and rejoices in life's rich diversity.

High- and Low-Context Cultures

E. Hall has suggested the concept of high and low context as a way of understanding different cultural orientations. In a low-context culture, messages are explicit; words carry most of the information in communication. In a high-context culture, less information is contained in the verbal part of a message. Much more information resides in the context of communication, including the background, associations, and basic values of the communicators. In general, high-context cultures function with much less legal paperwork than is deemed essential in low-context cultures. Japan, Saudi Arabia, and other high-context cultures place a great deal of emphasis on a person's values and position or place in society. In such cultures, a business loan is more likely to be based on who you are than on formal analysis of pro forma financial documents. In a low-context culture such as the United States, Switzerland, or Germany, deals are made with much less information about the character, the back-ground, and the values of the participants. Much more reliance is placed on the words and numbers in the loan application.
In a high-context culture, a person's word is his or her bond. There is less need to anticipate contingencies and provide for external legal sanctions because the culture emphasizes obligations and trust as important values. In these cultures, shared feelings of obligation and honor take the place of impersonal legal sanctions. This helps explain the importance of long and protracted negotiations that never seem to "get to the point." Part of the purpose of negotiating for a person from a high-context culture is to get to know the potential partner.
For example, insisting on competitive bidding can cause complications in low-context cultures. In a high-context culture, the job is given to the person who will do the best work and whom you can trust and control. In a low-context culture, one tries to make the specifications so precise that a builder is forced by the threat of legal sanction to do a good job. A building contractor in Japan is likely to say, “What has that piece of paper got to do with the situation? If we can't trust each other enough to go ahead without it, why bother?”
Although countries can be classified as high or low context in their overall tendency, there are exceptions to the general tendency. These exceptions are found in subcultures. The United States, for example, is a low-context culture with subcultures that operate in the high-context mode. The world of the central banker, for example, is a "gentleman's" world, that is, a high-context culture. Even during the most hectic days in the foreign exchange markets, a central banker's word is sufficient for him or her to borrow millions of dollars. Actions initiated on the telephone are confirmed in writing days later. A person's word is relied upon, even though the general rule in the low-context culture is "get it in writing."
Another high-context subculture in the United States is the Mafia, which has imported the high-context culture of Sicily to the United States and has maintained this culture with language, ritual, and a strong sense of distinct identity.
These examples illustrate the ways of a high-context culture in which there is trust, a sense of fair play, and a widespread acceptance of the rules of the game as it is played. 
One of the clearest and most painful instances of a failure of one culture to perceive another culture's motivations and behaviors dates back to the beginnings of World War II. Throughout the war and even to this day, the United States encountered great difficulties in attempting to understand the Empire of Japan, its enemy. In response to the obstacles the United States faced, studies of Japanese culture were commissioned, focusing on Japan's history, tradition, national character, social life and customs, family, personality and mind. Since the end of World War II, Japan has emerged as the leading competitor of the United States; thus, the body of studies and publications has continued to grow over the last 50 years, with the focus shifting somewhat from an emphasis on societal and individual values and motivations to business and corporate culture.
It would be easy to get paranoid about the hazards of doing business across cultures, but, in fact, the main obstacle is attitude. If you are sincere and truly want to learn about a culture, you will find that people respond to your sincerity and interest and will help you acquire the knowledge you need to be effective. If you are arrogant and insincere and believe that you are right and "they" are wrong, you can expect a full measure of trouble and misunderstanding. The best antidote to the problem of misperceiving a situation is a constant vigilance and an awareness that there are many opportunities to err. This should create an attitude of openness to see what is so. Every global manager should strive to suspend judgment and simply listen observe, perceive, and take in the facts.

Communication and Negotiation

The ability to communicate in our own language is, as most of us have learned, not an easy task. Whenever languages and culture change, additional communication challenges will present themselves. For example, "yes" and "no" are used in an entirely different way in Japanese than in Western languages. This has caused much confusion and misunderstanding. In English, the answer yes or 'no" to a question is based on whether the answer is affirmative or negative. In Japanese, this is not so. The answer "yes" or "no" may indicate whether the answer affirms or negates the question. For example, in Japanese, the question, "Don't you like meat?" would be answered yes if the answer is negative, as in, "Yes, I don't like meat." 'The word wakarimashita means both I understand" and I agree." To avoid misunderstandings, Westerners must learn to distinguish which interpretation is correct in terms of the entire context of the conversation. 
The challenges presented by nonverbal communication are perhaps even more formidable. For example, Westerners doing business in the Middle East must be careful not to reveal the soles of their shoes to hosts or pass documents with the left hand. In Japan, bowing is an important form of nonverbal communication that has many nuances. People who grow up in the West tend to be verbal, whereas those from the East are more nonverbal. Not surprisingly, there is a greater expectation in the East that people will pick up nonverbal cues and understand intuitively without being told. Westerners must pay close attention not only to what they hear, but also to what they see when conducting business in such cultures.
Knowledge and understanding of cross-cultural differences is crucial during negotiations. Negotiations put global managers face to face with counterparts from diverse cultural backgrounds, challenging both sides to surmount verbal and nonverbal communications barriers.
Americans bring their cultural ethnocentrism to the negotiating table. There are 10 uniquely American tactics that frequently emerge during negotiations. These tactics may be effective with other Americans, but when used with people from other cultural backgrounds, they require modification. The approaches and the corrections required are:

1.	Americans are typically outnumbered in negotiations.
Solution:	Greater reliance on teamwork and division of negotiating labor

2.	 Americans place a high value on informality and equality of participants in negotiations. This may conflict with the customs and class structures of foreign cultures.
Solution: Respect the customs and class structure of other cultures. Obtain information from self-study and local agents on local attitudes and values.

3.	Pardon my French. Americans are culturally monolingual.
Solution:	Forget about how difficult it is to learn a foreign language and accept that you already have a talent for language. If you are going to be regularly doing business with a particular country, take the time, make the effort, and learn their language. If your contact with a culture is too limited
to justify the time and effort required to learn their language, make sure that you select and develop a good working relationship with a competent interpreter.

4.	Get to the point. Americans are, in comparison to people from other cultures, blunt and impatient.
Solution: Understand that people from other cultures need to develop a sense of connection and personal trust in order to feel comfortable about doing business. This takes time. Take time to get to know your negotiating partner.

5.	Lay your cards on the table. Americans like to state the case up front and are not accustomed to "feeling out" prospective partners.
Solution: Slow down and recognize the need to ask the same question in different ways. Prepare to spend double the time you think is needed to get the information you need.

6.	Don't just sit there, speak up. Americans are uncomfortable with silence during negotiations and often deal with their discomfort by running at the mouth.
Solution: Recognize that silence is golden in many cultures. It is not necessary  -  indeed, it can be detrimental  -  to keep a constant stream of chatter. If there is silence, let it be. Reflect. Take in information that comes from body posture and facial expression. Reflect on the words that have been spoken and on your own objectives and values. In other words, value the silence. Take advantage of it.

7.	Don't take 'no' for an answer. Persistence and the "hard sell" are highly valued in the United States.
Solution: If the answer is "no," stop selling and find out why. Respond to the reasons for the answer "no."

8.	One thing at a time. Americans favor a linear, organized, "left brain" style of negotiating. Point One, Point Two, and so on is not a universal approach.
Solution: Recognize your own right brain capability. Embrace a more holistic approach toward negotiations.

9.	A deal is a deal. This is a projection of an expectation that may not be shared.
Solution: Accept a more gradual, supplemental view of negotiations and joint effort.

10. I am what I am.
Solution: Adopt a more flexible standpoint. Be willing to change your mind
and manner and to adapt to your opposite.

Social Behavior

There are a number of social behaviors and comments that have different meanings in other cultures. For example, Americans generally consider it impolite to mound food on a plate, make noises when eating, and belch. However, some Chinese feel it is polite to take a portion of every food served and consider it evidence of satisfaction to belch,
Other social behaviors, if not known, will place the international traveler at a disadvantage. For example, in Saudi Arabia, it is an insult to question a host about the health of his spouse, show the soles of one's shoes, or touch or deliver objects with the left hand. In Korea, both hands should be used when passing objects to another person, and it is considered impolite to discuss politics, communism, or Japan. Also in Korea, formal introductions are very important. In both Japan and Korea, ranks and titles are expected to be used in addressing hosts, In the United States, there is not a clear rule on this behavior, except in select fields such as the armed forces or medicine. In Indonesia, it is considered rude to point at another person with a finger. However, one may point with the thumb or gesture with the chin.
When greeting someone, it is appropriate in most countries to shake hands. In some countries, the greeting includes a handshake and more. In Japan, a handshake may be followed by a bow, going as low and lasting as long as that of the senior person. In Brazil, Korea, Indonesia, China, and Taiwan, a slight bow is also appropriate.
In some countries, the greeting involves more contact. For instance, in Venezuela, close friends greet each other with a full embrace and a hearty pat on the back; in Indonesia, a social kiss is in vogue, and a touching of first the right then the left cheek as one shakes hands. In Malaysia, close friends grasp with both hands; and in South Africa, blacks shake hands, followed by a clench of each other's thumbs, and another handshake.
In most countries, addressing someone as Mr., Mrs., Miss, or Ms. is acceptable, but this is certainly not universal. Monsieur, Madame, and Mademoiselle are preferred in France, Belgium (French speaking part), and Luxembourg; Senor, Senora, and Senorita are the norm in Spain and Spanish-speaking Latin America. It is sometimes the case that conversation occurs as greetings are exchanged. In Sweden, the greeting is "goddag"; in the Netherlands, it is "pleased to meet you"; in the United Kingdom, it is "how do you do"; and in Israel, it is "shalom," Other greetings vary by country. In many countries, men do not shake hands with a woman unless she extends her hand first. In India, women, or a man and a woman, greet each other by placing the palms of their hands together and bowing slightly; and in Mexico simply by a slight bow. In some countries, such as India, it is not advisable for men to touch or talk alone with a woman.
Although many of the social behaviors mentioned vary from the home-country norm, negative judgments should not be made about them. When trying to explain what took so long in closing a deal, home office executives need to understand that drinking tea, socializing, and relationship-building are important components in accomplishing corporate international goals.

Intercultural Socialization

In addition to knowing specific courtesies, personal space, language and communication, and social behavioral differences, there are numerous intercultural socialization behaviors that an international business traveler should learn. Knowing a culture means knowing the habits, actions, and reasons behind the behaviors. It is a mistake to make assumptions about what is culturally proper or incorrect based on your own experiences.  For example, in the United States, the bathtub and toilet are likely to be in the same room. Americans assume that this is the world norm. Some cultures, however, such as that of the Japanese, consider it unhygienic. Other cultures think it unhygienic even to sit on a toilet seat. In many cultures, toilet paper is not the norm. 
It is not always necessary for an international business traveler to understand the "whys" of a culture, but it is important to accept them and to abide by them while on foreign soil. Becoming aware of the culture in which you will be visiting or working will pay excellent dividends.

ANALYTICAL APPROACHES TO CULTURAL FACTORS

The reason cultural factors are a challenge to global managers is that they are hidden from view. Because culture is learned behavior passed on from generation to generation, it is difficult for the inexperienced or untrained outsider to fathom. Becoming a global manager means learning how to let go of cultural assumptions. Failure to do so will hinder accurate understanding of the meaning and significance of the statements and behaviors of business associates from a different culture.
For example, a person from a culture that encourages responsibility and initiative could experience misunderstandings with a client or boss from a culture that encourages bosses to remain in personal control of all activities. Such a boss would expect to be kept advised in detail of a subordinate's actions; the subordinate might be taking initiative on the mistaken assumption that the boss would appreciate a willingness to assume responsibility.
To transcend ethnocentricity and cultural myopia, managers must make the effort to learn and internalize cultural differences. There are several guidelines that will improve the ability to learn about other cultures:

1.	The beginning of wisdom is to accept that we will never fully understand ourselves or others. People are far too complex to be understood. 
2.	Our perceptual systems are extremely limited. We see almost nothing. Our nervous systems are organized on the principle of negative feedback. The only time our control system is brought into play is when input signals deviate from what we have learned to expect.
3.	We spend most of our energy managing perceptual inputs.
4.	When we do not understand the beliefs and values of a particular cultural system and society, things that we observe and experience may seem bizarre.
5.	If we want to be effective in another culture, we must attempt to understand that culture's beliefs, motives and values. This requires an open attitude that allows us to transcend perceptual limitations based on our own culture.

Maslow's Hierarchy of Needs

A. Maslow developed an extremely useful theory of human motivation that helps explain cultural universals. He hypothesized that people's desires can be arranged into a hierarchy of five needs. 

SELF-ACTUALIZATION

ESTEEM

SOCIAL

SAFETY

PHYSIOLOGICAL

As an individual fulfills needs at each level, he or she progresses to higher levels Once physiological? safety, and social needs have been satisfied, two higher needs become dominant. First is a need for esteem. This is the desire for self-respect, self-esteem, and the esteem of others and is a powerful drive creating demand for status-improving goods. The final stage in the need hierarchy is sell-actualization. When all the needs for food, safety, security, friendship, and the esteem of others are satisfied, discontent and restlessness will develop unless one is doing what one is fit for. A musician must make music, an artist must create, a poet must write, a builder must build, and so on.
Maslow's hierarchy of needs is, of course, a simplification of complex human behavior. Other researchers have shown that a person's needs do not progress neatly from one stage of a hierarchy to another. However the usefulness of Maslow's hierarchy is its universality.
The model implies that, as countries progress through the stages of economic development, more and more members of society are operating at the esteem need level and higher, having satisfied physiological, safety, and social needs. It appears that self-actualization needs begin to affect consumer behavior as well. For example, there is a growing tendency in high-income countries to reject material objects as status symbol. The automobile is no longer the classic American status symbol it once was, and many younger consumers are turning away from material possessions. This trend toward rejection of materialism is not, of course, limited to high-income countries.  In India, for example, there is a long tradition of the pursuit of consciousness or self-actualization as a first rather than a last goal in life. However, each culture is different.
For example, in Germany today, the automobile remains a supreme status symbol. Germans give their automobiles loving care.

Hofstede's Cultural Typology

Organizational anthropologist Geert Hofstede has argued that the cultures of different nations can be compared in terms of four dimensions. The first, power distance, is the extent to which the less powerful members of a society accept that power to be distributed unequally. To paraphrase George Orwell, all societies are unequal, but some are more unequal than others. The second dimension is a reflection of the degree to which individuals in a society are integrated into groups. In individualist cultures, each member of society is primarily concerned with his or her own interest and those of the immediate family. In collectivist cultures, all of society's members are integrated into cohesive in-groups. Masculinity, the third dimension, describes a society in which men are expected to be assertive, competitive, and concerned with material success, while women fulfill the role of nurturer and are concerned with issues such as the welfare of children. Femininity, on the other hand, describes a society in which the social roles of men and women overlap, with neither gender exhibiting overly ambitious or competitive behavior. Hofstede notes that the first three dimensions refer to expected social behavior; the fourth dimension is concerned with man's search for truth. Uncertainty avoidance is the extent to which the members of a society are uncomfortable with unclear, ambiguous, or unstructured situations. Some cultures express strong uncertainty, avoidance with aggressive, emotional, intolerant behavior; they are characterized by a belief in absolute truth. The manifestation of low uncertainty avoidance is behavior that is more contemplative, relativistic, and tolerant.
Although the four dimensions yielded interesting and useful interpretations, they did not provide any insight into possible cultural bases for economic growth. Hofstede was also disturbed by the fact that the surveys used in the research had been developed by Western social scientists. Because many economists failed to predict the explosive economic development of Japan, South Korea, Taiwan, Hong Kong, and Singapore, Hofstede surmised that some cultural dimensions in Asia were eluding the researchers. This methodological problem was remedied by a Chinese Value Survey (CVS), developed by Chinese social scientists. The CVS data supported the first three "social behavior" dimensions of culture identified above, that is, power distance, individualism/collectivism, and masculinity/femininity. Uncertainty avoidance, however, did not show up in the CVS. Instead, the CVS revealed a dimension that had eluded Western researchers. Moreover, this dimension, which Hofstede calls "Confucian Dynamism", concerns several aspects of culture that appear to be strongly linked to economic growth. Hofstede explains that these dimensions concern "a society's search for virtue," rather than a search for truth. Persistence (perseverance) is a general tenacity in the pursuit of a goal. Ordering relationships by status reflects the presence of societal hierarchies, and observing this order indicates the acceptance of complementary relations. Thrift manifests itself in high savings rates. Finally, a sense of shame leads to sensitivity in social contacts. Hofstede notes that these values are widely held within the high-performing countries but that the presence of these values by themselves is not sufficient to lead to economic growth. Two other conditions are necessary: the existence of a market and a supportive political context.

The Self-Reference Criterion and Perception

A person's perception of market needs is framed by his or her own cultural experience. A framework for systematically reducing perceptual blockage and distortion was developed by J. Lee and published in Harvard Business Review in 1966, Lee termed the unconscious reference to one's own cultural values the self-reference criterion, or SRC. To address this problem and eliminate or reduce cultural myopia, he proposed a systematic four-step framework.

1.	Define the problem or goal in terms of home country cultural traits, habits, and norms,
2.	Define the problem or goal in terms of the host culture, traits, habits, and norms. Make no value judgments.
3.	Isolate the SRC influence and examine it carefully to see how it complicates the problem.
4.	Redefine the problem without the SRC influence and solve for the host country market situation.

Euro Disney provides an excellent vehicle for understanding SRC. As they planned their entry into the French market, how might Disney executives have done things differently?

Step 1. Disney executives believe there is virtually unlimited demand for American cultural exports around the world. Evidence includes the success of McDonald's, Coca-Cola, Hollywood movies, and American rock music. Disney has a stellar track record in exporting its American management system and business style. Tokyo Disneyland, a virtual carbon copy of the park in Anaheim, California, has been a runaway success, Disney policies prohibit sales or consumption of alcohol inside its theme parks.

Step 2. Europeans in general, and the French in particular, are sensitive about American cultural imperialism. Consuming wine with the midday meal is a long-established custom. Europeans have their own real castles, and many popular Disney characters come from European folk tales.

Step 3. The significant differences revealed by comparing the findings in steps 1 and 2 suggest strongly that the needs upon which the American and Japanese Disney theme parks were based did not exist in France. A modification of this design was needed for European success.

Step 4. This would require the design of a theme park that is more in keeping with French and European cultural norms.

The lesson that SRC teaches is that a vital, critical skill of the global manager is unbiased perception, the ability to see what is so in a culture. Although this skill is as valuable at home as it is abroad, it is critical to the global manager because of the widespread tendency toward ethnocentrism and use of the self-reference criterion. The SRC can be a powerful negative force in global business, and forgetting to check for it can lead to misunderstanding and failure. While planning Euro Disney, company executives were blindsided by a lethal combination of their own prior success and ethnocentrism. Avoiding the SRC requires one to suspend assumptions based on prior experience and success and be prepared to acquire new knowledge about human behavior and motivation.

Environmental Sensitivity

Environmental sensitivity is the extent to which products must be adapted to the culture-specific needs of different national markets. A useful approach is to view products on a continuum of environmental sensitivity. At one end of the continuum are environmentally insensitive products that do not require significant adaptation to the environments of various world markets. At the other end of the continuum are products that are highly sensitive to different environmental factors. A company with environmentally insensitive products will spend relatively less time determining the specific and unique conditions of local markets because the product is basically universal.
The greater a product's environmental sensitivity, the greater the need for managers to address country-specific economic, regulatory, technological, social, and cultural environmental conditions.

P		HIGH			
R													FOOD
O
D
U
C
T
								COMPUTERS
A
D
A
P
T
A
T
I				INTEGRATED
O				CIRCUITS
N		LOW					
			LOW											HIGH

					E N V I R O N M E N T A L   S E N S I T I V I T Y

Any product exhibiting low levels of environmental sensitivity  -  integrated circuits, for example  -  belongs in the lower left of the figure. Intel has sold over 100 million microprocessors, because a chip is a chip anywhere around the world. Moving to the right on the horizontal axis, the level of sensitivity increases, as does the amount of adaptation. Computers are characterized by moderate levels of environmental sensitivity.  Variations in country voltage requirements require some adaptation. In addition, the computer's software documentation should be in the local language. At the upper right are products with high environmental sensitivity. Food sometimes falls into this category because it is sensitive to climate and culture. McDonald's has achieved great success outside the United States by adapting its menu items to local tastes.

SOCIAL AND CULTURAL ENVIRONMENTS: IMPACT ON MARKETING INDUSTRIAL PRODUCTS

The various cultural factors described earlier can exert important influences on industrial products marketing around the globe. They must be recognized in formulating a global marketing plan. Some industrial products may exhibit either low levels of environmental sensitivity, as in the case of computer chips, for example, or high levels, as in the case of turbine generators when "buy national" government policy puts foreign bidders at a disadvantage.
Motorola's growth strategy in the 1980s called for entering the Japanese market.  The company wanted to become a supplier to Nippon Telephone and Telegraph (NIT), the national telecommunications company, which was a monopoly at the time (it has since been privatized). Company executives showed considerable savvy as they pursued the business. First, Motorola hired a former U.S. government assistant trade representative with the experience and skill to guide the company's effort. Motorola had a strong competitive position in pagers; to secure MT's business, the company invested in a special assembly line to build pagers to Nippon's specifications. Next, Motorola sought certification to supply mobile telephone equipment. Getting certification in Japan is a difficult process that usually takes at least 18 months. Because of the time and money involved, it is crucial for a company to know what it is doing and why it is doing it. Motorola's understanding of the required approach and persistence paid off; the company was granted the all-important required certification.

SOCIAL AND CULTURAL ENVIRONMENTS: IMPACT ON MARKETING
CONSUMER PRODUCTS

Research studies show that, independent of social class and income, culture is a significant influence on consumption behavior and durable goods ownership. Consumer products are probably more sensitive to cultural difference than are industrial products. Hunger is a basic physiological need in Maslow's hierarchy; everyone needs to eat, but what we want to eat can be strongly influenced by culture. Evidence from the front lines of the marketing wars suggests that food is probably the most sensitive category of consumer product. CPC International failed to win popularity for Knorr dehydrated soups among Americans. The U.S. soup market was dominated by Campbell Soup Company; 90 percent of the soup consumed by households was canned. Knorr, a Swiss company acquired by CPC, has a major share of the European prepared market where bouillon and dehydrated soups accounted for 80 percent of consumer soup sales, Despite CFC's failure to change the soup-eating habits of Americans, the company has achieved great success as a global marketer; sales outside the United States comprise 63 percent of its revenues from food lines.
At Campbell, by contrast, the figures are reversed: 63 percent of food revenues are generated in the United States, and 27 percent from global markets. When the company moved into global markets, it discovered that the attitude of homemakers toward food preparation is a cultural factor in marketing prepared foods. Cooking habits and customs vary from country to country. Campbell's research revealed that Italian housewives devoted approximately 4.5 hours per day to food preparation versus 60 minutes a day spent by their U.S. counterparts. The difference reflected cultural norms regarding the kitchen as well as the fact that a higher percentage of U.S. women work outside the home. The differences if anything are increasing. Since 1990, the use of stoves in meal preparation in the United States has declined 25 percent, whereas a recent survey shows that over 80 percent of Italian men have a hot meal at home for lunch.
Campbell discovered a strong negative opinion of convenience food in Italy. A panel of randomly selected Italian housewives was asked: "Would you want your son to marry a canned soup user?" The response to this question was sobering: All but a small fraction of a percent of the respondents answered, "No." Increased incomes as well as product innovations may have an impact on Italian attitudes toward time and convenience, with a corresponding positive effect on the market for convenience foods. Already, taste improvements in frozen pizza have boosted sales in Italy.
The strategy for North America is very simple. You market locally, manufacture regionally, and resource globally, with common technology, knowledge, and supplies.
Thirst also shows how needs differ from wants. Liquid intake is a universal physiological need. As is the case with food and cooking, however, the particular beverages people want to drink can be strongly influenced by culture. Coffee is a beverage category that illustrates the point. In the United Kingdom, instant coffee has 90 percent of the total coffee market as compared with only 15 percent in Sweden. The other European countries fall between these two extreme points. Instant coffee's large share of the British market can be traced to the fact that, in the hot beverage category, Britain has historically been a nation of tea drinkers. Only in recent times have the British been persuaded to take up coffee drinking. Instant coffee is more like tea than ground coffee in its preparation. Not surprisingly, when the British did begin to drink coffee, they opted for instant because its preparation was compatible with past experience. Another reason for the popularity of instant coffee in Britain is the practice of drinking coffee with a large quantity of milk, so that the coffee flavor is masked. Differences in the coffee flavor are thus bidden, so that a "better cup" of coffee is not really important. In Sweden, however, coffee is the hot beverage of choice. Swedes consume coffee without large quantities of milk, and therefore the coffee flavor is not masked and brewed coffee is preferred.
Soft drink consumption patterns also show conspicuous differences around the globe. Four years ago, the per capita consumption of soft drink products stood at 376 eight-ounce servings in the United States, 203 servings in Germany, 95 servings in Italy, and 88 servings in France. Differences in soft drink consumption are associated in part with much higher per capita consumption of other kinds of beverages in Europe. In France and Italy, for example, 30 to 40 times as much wine is consumed as in America on a per capita basis. The French also prefer mineral water to soft drinks; the converse is true in America, where soft drink consumption surpasses that of water. Germany far exceeds the United States in per capita consumption of beer. Does culture alone account for the difference between the popularity of soft drinks in Western Europe and the United States? No; in fact, several variables, including culture are responsible for the differences, as portrayed in the following equation:

Y = f (A, B, C, D, E, F, G)
where

Y = consumption of soft drinks

f = function of

A = influences of other beverages' relative prices, quality, and taste

B = advertising expenditure and effectiveness, all beverage categories

C = availability of products in distribution channels

D = cultural elements, tradition, custom, habit

E = availability of raw materials (particularly of water)

F = climatic conditions, temperature, and relative humidity

G = income levels

To be sure, culture affects the demand for soft drinks. Note, however, that it is only one of several variables. Therefore, culture is an influencing, rather than a determining, factor. If a soft drink marketer in Western Europe launches an aggressive marketing program (including lower prices, more intensive distribution, and heavy advertising), consumption can be expected to increase. However, it is also clear that any effort to convert Europeans to soft drinks will run up against cultural tradition, custom, and competition from widely available alternative beverages. Culture in this case is a restraining force, but, because culture is changing so rapidly, it is a restraint that can be overcome. For example, Coca-Cola used promotion and a massive sampling effort to increase 1992 unit case volume of Coke Light in Italy by 73 percent of 1991. In Germany, Coke's third largest global market, 1992 unit case volume increased by 6 percent over 1991, despite a recession and dislocations due to unification; unit case volume in the former East Germany grew 20 percent. In France, the 1992 marketing effort focused on availability and greater consumer acceptance, resulting in a 6 percent increase in unit case volume.
The penetration of the U.S. beverage market by bottled water producers is another excellent example of the impact of an effective creative strategy on a firmly entrenched cultural tradition. Prior to the 1980s, drinking bottled water was not an important part of U.S. culture. The general attitude in the United States was, "Why pay for something that is free?" Source Perrier SA, the French bottled water firm, decided to take aim at the U.S. market. It hired B. Nevin, an experienced American marketing executive, and gave him a free hand to formulate a creative strategy.
Nevin decided to reposition Perrier from an expensive, imported bottled water (which no sane, red-blooded American would touch) to a competitively priced, low-calorie beverage in the soft drink market. To back up this positioning, Nevin launched a major consumer advertising campaign, lowered prices, and moved the product from the gourmet section of the supermarket to the soft drink section. The strategy boiled down to significant adjustment of three marketing mix elements: price, promotion, and place. Only the product was left unchanged.
The campaign succeeded beyond even the most optimistic expectations, essentially creating an entirely new market. By the mid-1980s, the $2.2 billion bottled water category had become the fastest-growing segment of the U.S. beverage industry. Perrier's annual U.S. sales grew from about $40 million to $800 million, and Perrier commanded 80 percent of the U.S. bottled water market. The success of this strategy was rooted in two indisputable facts: Americans were ready for bottled water, and the tactics were brilliantly executed. The results illustrate how the restraining force of culture can be changed by a creative marketing strategy grounded in market possibilities.

CROSS-CULTURAL COMPLICATIONS AND SUGGESTED SOLUTIONS

Global marketing activities are conducted in an ever-changing environment that blends economic, cultural, and social forces. Stepping out of the global perspective for a moment, we should acknowledge one thing: Even when the parties to a commercial transaction belong to the same low-context society and the terms of the deal are spelled out “in black and white”, different understandings of the respective obligations of the parties will often occur.
Business relationships between parties of different cultures and/or nationalities are subject to additional challenges. Parties from different countries may have trouble coming to contract terms because of differences in the laws governing their respective activities and problems of enforcement across international boundaries. No matter what is stated in a contract, taking another party to court for breach of contract will probably require a suit in the defendant's own home turf which may be an insurmountable advantage for the home-country participant.
When a party from a high-context culture takes part in a business understanding, the proceedings are likely to be further complicated by very different beliefs about the significance of formal business understandings and the ongoing obligations of all parties. The business environment in many countries outside the Triad markets can be characterized by all manner of "hostile" elements: natural and human-induced catastrophes, political problems, foreign exchange inconvertibility, widely fluctuating exchange rates, depressions, and changes in national economic priorities and tariff schedules. One cannot predict precisely how the most carefully laid plans will go awry, only that they will. Managers with dealings outside the home market must build mutual trust, rapport, and empathy with business contacts; all are required to sustain enduring relationships. Appointing a host country national to a position as sales representative will not automatically guarantee success. If a corporation constantly shuffles its international staff it risks impeding the formation of what we might call high-context subcultures between home office personnel and host nationals. This diminishes the company's chances of effectively dealing with the business crises that will inevitably occur.
Mexico's government imposed severe foreign exchange restrictions during a recent financial crisis. Companies that had sold products or services to Mexican parties on terms other than “confirmed irrevocable international letter of credit” learned that they would have a lengthy wait before receiving payment in U.S. dollars or other hard currencies. Mexican companies dependent on essential ingredients, spare parts, and other critical foreign supplies had to deal with a rationed supply of foreign exchange to pay for new orders. In this situation, personal relationships superseded contractual obligations. In some instances, government officials needed to be convinced that a certain transaction deserved a priority allocation of foreign exchange. Some foreign sellers had to accept payment in Mexican products or in pesos that had to be invested in Mexico. Such contingencies arise routinely as companies conduct business around the globe. Solutions often result from individual initiative: personal ties create opportunities for both sides to keep a business relationship alive.
India is an important supplier of crude and processed agricultural and forest product raw materials to world markets. Small family-owned enterprises collect, process, and sell these materials. Typically, months before the crop is in, sellers are required to contract with foreign buyers for later delivery of these products. The buyers, in turn, make long-term contractual commitments to their own customers. It is not possible for the Indian firms to hedge reliably by making forward crop purchases; there are no regulated commodity exchanges for these products. The farmers and forest product collectors do not have the resources to cover their sales if the crop fails. There are major problems during most growing seasons: Natural disaster or insufficient plantings result in short crops; strikes, protracted power shortages, or the lack or spare parts result in excessive shipment delays and reduced capacity. Business down-turns, or unexpected changes in required inventory levels may prompt buyers to request that shipments be held back or prices be reduced. Of course, such actions will cause the supplier severe financial hardship. Sometimes, the supplier is unable to comply precisely with the terms of the contract and therefore provides a. substitute order (usually without advance notice). The hope is that the buyer will inadvertently pay before discovering the switch and then reluctantly accept the merchandise with only minor adjustment.
Ongoing business between India and its global customers is, of course, perpetuated by mutual interest, but personal relationships are what make it possible. False rumors, supplier defaults, and customer cancellations are prevalent. Therefore, the greatest importance is assigned to contacts and business associates who can be fully trusted and whose culture-influenced perceptions are understood and predictable. Indian society is at least as ethnically and culturally diverse as that in Europe, and business practices are probably even more varied than in Europe.

Training in Cross-Cultural Competency

Personal relationships are an essential ingredient for the international businessman. One third of a Peace Corps volunteer's training is devoted to learning about ways things are done in the host country (particularly personal relationships). The international businessman should have comparable preparation and a willingness to at least consider the merits of accommodating to the host culture's ways of doing business. The stakes are high: Experts estimate that between $2 and $2.5 billion worth of business is lost each year because of employee mistakes that occur in other cultures.
Samsung, GE, AT&T, and other large companies that are globalizing are taking steps to train managers and sensitize them to other ways of thinking, feeling, and acting. The goal is to improve their ability to deal effectively with customers, suppliers, bosses, and employees from other countries and regions. Managers must learn to question their own beliefs, to overcome the SRC, and to adapt the way they communicate, solve problems, and even make decisions. Multicultural managers must learn to question and to reevaluate their feelings concerning such rudimentary management issues as leadership, motivation, and teamwork; this means an examination of some extremely fundamental and personal systems of belief. Finally, managers must earn to overcome stereotypes they hold regarding individuals of various races and religions from other countries; managers must also diplomatically deal with stereotypes others may have about them.
Samsung Group, South Korea's largest company, recently launched an Internationalization campaign. Prior to departing for overseas assignments, managers attend a month-long “boot camp”, where the topics range from Western table manners to sexual harassment. Hundreds of promising Samsung junior managers spend a year in Western countries pursuing an unusual assignment: goofing off. International exposure is important, but you have to develop international taste. You have to do more than visit. You have to goof off at the mall, watch people, and develop international tastes. Park Kwang Moo, an employee at Samsung's trading subsidiary, did not get to spend time in malls: His assignment was to visit the former Soviet Union. He spent his first 6 months immersed in language study, then traveled to all 15 former Soviet republics. Park's superiors were delighted with the hugh report he filed when he returned, despite the fact that there was very little in it about business issues per se. A director at the trading company noted that the report was mostly about Russians' drinking habits and idiosyncrasies. “But” he noted, “in 20 years, if this man is representing Samsung in Moscow, he will have friends and he will be able to communicate, and then we will get the payoff.”
Another widely used approach to accomplish sensitization is the use of workshops, incorporating case studies, role playing, and other exercises designed to permit participants to confront a relevant situation, contemplate what their own thoughts and actions would be in such a situation, and analyze and learn from the results. Participants must be able to understand and evaluate their motivations and approaches. Often, role-playing will bring out thoughts and feelings that otherwise might go unexamined or even unacknowledged. A variety of other techniques have been used for cross-cultural training; the common goal is to teach members of one culture ways of interacting effectively in another culture.
Becoming internationally adept and culturally aware should be a goal of any professional who aspires to do business abroad. This generally means a conscious effort in training and professional development by organizations. The Canadian International Development Agency (CIDA) provides an excellent model. CIDA hosts a 5-day pre-departure briefing for Canadians that includes travel information, introduction to the geographical area of the host country, and presentations by a host national or a returnee. Cross-cultural communication, information for family members, and information on skills transfer are also included.
If you cannot attend a formal training and orientation session or program, at the minimum you should take advantage of the written, audio, and visual material available on the country you will be visiting. Brigham Young University publishes a series called Culturgram on more than 140 areas of the world. A Culturgram is a product of native commentary and original, expert analysis. It is a general introduction to the culture of a world area or country. 
Culture, a society's “programming of the mind”, has both a pervasive and changing influence on each national market environment. Global managers must recognize the influence of culture and must be prepared to either respond to it or change it. Human behavior is a function both of a person's own unique personality and that person's interaction with the collective forces of the particular society and culture in which he or she has lived. A number of concepts can help guide anyone seeking insight into cultural issues. Nations can be classified as high- or low-context cultures; communication and negotiation styles can differ from country to country. Maslow's hierarchy, Hofstede's typology, and the sell-reference criterion can provide clues about cultural differences and similarities.
Global management and marketing has played an important role in influencing the rate of cultural change around the world. This is particularly true of food, but it includes virtually every industry, particularly in consumer products. Soap and detergent manufacturers have changed washing habits, the electronics industry has changed entertainment patterns, clothing marketers have changed styles, and so on. Although culture can also affect characteristics of industrial products, it is more important as an influence on the management and marketing process, particularly in the way business is conducted. Global managers have learned to rely on people who know and understand local customs and attitudes for management expertise. Even so, many persons doing business in a new culture avail themselves of training opportunities to help avoid potential cross-cultural complications.