International Marketing - Chapter 5: Culture, Management Style, and Business Systems

Chapter 5Culture, Management Style, and Business SystemsInternational Marketing15th edition Philip R. Cateora, Mary C. Gilly, and John L. GrahamImperatives, Electives, and ExclusivesCultural imperatives - Business customs and expectations that must be met and conformed to or avoided if relationships are to be successful In some cultures a person’s demeanor is more critical than in othersImperatives vary from culture to cultureCultural electives - Relate to areas of behavior or to customs that cultural aliens may wish to conform to or participate in but that are not requiredA cultural elective in one county may be an imperative in anotherCultural exclusives - Customs or behavior patterns reserved exclusively for the locals2Roy Philip The Impact of American Culture on Management Style“Master of destiny” viewpointIndependent enterprise as the instrument of social actionPersonnel selection and reward based on meritDecisions based on objective analysisWide sharing in decision makingNever-ending quest for improvementCompetition producing efficiency3Roy Philip Authority and Decision MakingInfluencers of the authority structure of business:High PDI CountriesMexico, MalaysiaLow PDI CountriesDenmark, IsraelThree typical authority patterns:Top-level management decisionsDecentralized decisionsCommittee or group decisions4Roy Philip Formality and TempoBreezy informality and haste characterize American business relationshipsEuropeans not necessarily “Americanized”Higher on Hofstede’s Power Distance Index (PDI)May lead to business misunderstandingsHaste and impatience most common mistakes made by Americans in the Middle EastFor maximum success marketers must deal with foreign executives in acceptable ways 5Roy Philip Contextual Background of Various CountriesRoy Philip 6Exhibit 5.2P-Time versus M-TimeMonochronic timeTend to concentrate on one thing at a timeDivide time into small units and are concerned with promptnessMost low-context cultures operate on M-TimePolychronic timeDominant in high-context culturesCharacterized by the simultaneous occurrence of many thingsAllows for relationships to build and context to be absorbed as parts of high-context culturesMost cultures offer a mix of P-time and M-time behaviorAs global markets expand more businesspeople from P-time cultures are adapting to M-time.7Roy Philip Marketing OrientationThe extent of a company’s market orientation has been shown to relate positively to profitsFirms in other countries have not been able to move from the traditional production, product, and sales orientation to the marketing orientationResearch has shown that sometimes in can be difficult to encourage a marketing orientation across diverse business units in global companies8Roy Philip Business EthicsCorruptionWhat is Corruption?Profits (Marxism)Individualism (Japan)Rampant consumerism (India)Missionaries (China)Intellectual property laws (Sub-Sahara Africa)Currency speculation ( Southeast Asia)Criticisms of Mattel and BarbieSales of Barbie declined worldwide after the global standardizationParents and government did reactMattel’s strategy boosted sales of its competition9Roy Philip The Western Focus on BriberyIn the 1970s, bribery became a national issue with public disclosure of political payoffs to foreign recipients by U.S. firmsThe decision to pay a bribe creates a major conflict between what is ethical and proper and what is profitable and sometimes necessary for businessThe Organization for Economic Corporation and Development (OECD) and Transparency International (TI) are combating the bribery of foreign public officials in international business transactions10Roy Philip Transparency International Corruption Perception IndexRoy Philip 11Exhibit 5.5Bribery – Variations on a Theme (1 of 2)Bribery and ExtortionBribery is voluntary offered payment by someone seeking unlawful advantage is briberyExtortion takes place only if payments are extracted under duress by someone in authority from a person seeking only what he or she is lawfully entitled toSubornation and LubricationLubrication involves a relatively small sum of cash, a gift, or a service given to a low-ranking official in a country where such offerings are not prohibited by lawSubornation involves giving large sums of money, frequently not properly accounted for, designed to entice an official to commit an illegal act on behalf of the one offering the bribe12Roy Philip 5-13Bribery – Variations on a Theme (2 of 2)Agent’s FeesWhen a businessperson is uncertain of a country’s rules and regulations, an agent may be hired to represent the company in that countryThe Foreign Corrupt Practices Act (FCPA)Change will come only from more ethically and socially responsible decisions by both buyers and sellers and by governments willing to take a standSince 1994, US businesses have bowed out of 294 major overseas commercial contracts valued at $145 billion rather than paying bribesEthical and Socially Responsible DecisionsDifficulties arise in making decisions, establishing policies, and engaging in business operations in five broad areasEmployment practices and policiesConsumer protectionEnvironmental protectionPolitical payments and involvement in political affairs of the countryBasic human rights and fundamental freedomsLaws are the markers of past behavior that society has deemed unethical or socially irresponsibleEthical principles to help the marketer distinguish between right and wrong, determine what ought to be done, and justify actionsUtilitarian Ethics (Does it achieve a common good?)Rights of the Parties (Does the actions involve the rights of the individual?)Justice or Fairness (Does the action represent fairness for all?)14Roy Philip Dimensions of Culture – A SynthesisRoy Philip 15Exhibit 5.7