VIEWPOINT

Why marketers need a newconcept of culture for the global

knowledge economyNigel Holden

Nottingham Business School, Nottingham Trent University,Nottingham, UK

Keywords International marketing, Culture (sociology), Marketing management,Knowledge management

Abstract Marketers are berated for their dependence on Hofstede and his concept of culturewhich stems from nineteenth century anthropology. International marketing studies need a newapproach to culture, which is consistent with the workings of the global knowledge economy. It isargued that it is no longer satisfactory to associate culture with markets perceived as nationalaggregates of characteristics. Rather culture is seen as a knowledge resource waiting to bediscovered in marketing relationships and clusters of affinity. A five-point scheme for thefoundation of a new approach to culture is presented.

IntroductionWhen marketers discuss culture in an international context, the name of Hofstede isinvariably invoked and his dimensions are applied with the authority of holy writ. Justa few recent issues of International Marketing Review reveal that Hofstedes (1980)work has been cited with reference to a staggeringly wide range of marketing topics:

. gender stereotyping in advertising (Odekerken-Schroder et al., 2002);

. service quality (Smith and Reynolds, 2002);

. globalization (Javalgi and White, 2002);

. the country of origin effect (Balabanis et al., 2002; Ahmed et al., 2004);

. new product development (Yeniyurt and Townsend, 2003);

. global product teams (Sivakumar and Nakata, 2003);

. export information utilization (Diamantopoulis et al., 2003);

. standardization of marketing strategy (Ryans et al., 2003);

. the influence of the retail environment (Jin and Sternquist, 2003);

. consumer patronage of ethnic portals (Dou et al., 2003);

. internet buying behaviour (Park and Jun, 2003);

. international business negotiations (Reynolds et al., 2003);

. business negotiations between northern Europeans and the Chinese (Kumar andWorm, 2003);

. negotiation approaches (Lin and Miller, 2003); and

. sales training in Europe (Roman and Ruiz, 2003).

The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at

www.emeraldinsight.com/researchregister www.emeraldinsight.com/0265-1335.htm

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International Marketing ReviewVol. 21 No. 6, 2004

pp. 563-572q Emerald Group Publishing Limited

0265-1335DOI 10.1108/02651330410568015

There is no professor of marketing who competes with Hofstede in terms of citationswhen it comes to the matter of culture and international marketing. So it is interestingthat one of the most cited scholars in the field of international marketing as a disciplineis in fact a non-marketer. The dependence on the Dutch guru is extraordinary. First, heinvestigated work values as mediated via the employees in IBM, which he code-namedHermes, and so the context of his investigations was not a market (i.e. a terrain ofsupply and demand). Second, he was accordingly not scientifically interested in theemployees of Hermes as consumers, negotiators or market intermediaries. Third, hisdata were collected in the mid to late 1960s: they therefore attach to a business world inwhich globalisation, the internet and the knowledge economy were a thing of thefuture.

When the prodigious work Cultures Consequences was published in 1980 (Hofstede,1980), markets and marketing were quite different entities than they are today. Theknow-how of marketing sprang overwhelmingly from consumer behaviour; there wasno such thing as B2B marketing or relational marketing; Levitt (1983) had yet notwritten his seminal article on the globalisation of markets; in Europe, as opposed to theUSA, marketing as a management discipline was not on a secure footing. Internationalmarketing had a hazy profile; it was virtually synonymous as a sub-discipline and amanagement practice with exporting. But by 1980 Johansson and Wiedersheim-Paul(1975) had already produced their influential study on the internationalisation of thefirm. Their paper would lay a foundation for development almost exclusively inEurope of marketing theory in terms of a relationships and network approach.

Hofstede: all too blindly followedAll in all, when Cultures Consequences was published, marketers were notsignificantly interested in culture, but a major research stream was beginning tounfold: the Europe-based IMP Group studied international buyer-seller relationships inindustrial settings, whose members produced their earliest significant writings as ofthe 1970s (see: Hakansson, 1982). The IMP Group were interested in culture in theseinternational relationships, but sensibly they treated it as a natural aspect ofinternational business relationships. They did not regard cultural difference assomething inherently divisive and menacing. However, that invidious way of seeingculture was waiting just round the corner.

By the early 1980s a new marketing force swept all before it. It emanated from thatresource-starved fringe of scraggly islands off the east coast . . . of Eurasia, as aformer US ambassador to that country put it (Reischauer, 1984). We are talking ofcourse about Japan. Looking back, it was as if the great Japanese corporations hadovernight swamped the world with their cars, electronic goods and one of their greatsecret weapons marketing mystique. The Japanese seemed to outmanoeuvre theAmericans and the Europeans in the great game of marketing. Kotler et al. (1986) werespurred on to writing their version of Japanese marketing, lamenting and fretting thatJapanese companies were capturing traditional markets, as if US corporations hadsome eternal proprietary claim over them.

All this put culture on the marketing agenda at about the same time as marketersturned to Hofstede, who, as it happened, had quite a lot to say about Japan. From thenon marketers and Hofstede have been commingled. No one raised then the ratherobvious point that the Dutch guru was not viewing other cultures from a marketing

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point of view. Marketers simply devoured Hofstede without realising that theiruncritical acceptance of his models and characterisations had an intellectuallynumbing effect on the treatment of culture and international marketing.

Marketers, of course, cleave to Hofstede because his work remains the mostcomprehensive study of cultural differences with putative relevance to marketers[1].There is general agreement that his dimensions of collectivism and individualism havestood the test of time, but there is less acceptance of uncertainty avoidance and theclassification of societies into masculine and feminine types. But, even if thesedimensions were valid for all time, do they actually help marketers? If Hofstede tells usthat Japan and Germany are both very masculine societies, does that mean that weadopt a similar negotiating style with Japanese and German business partners,especially as they both seemingly evince significant signs of uncertainty avoidance? Ifnot, how can a reading of Hofstede help us to craft our respective negotiating positions?

If we discover from Hofstede that Denmark is a very feminine society, does thatmean that we could create products specifically to complement the putative attitudesand life-styles that go with it? If India is revealed to us as a collective society, does thathave an impact on consumer decisions, and how can we prove it? And if we can proveit, what then? Is it seriously going to change the way we market to India? Probably not.We are still going to depend on our Indian market intermediaries. They know how tohandle the people.

Then, after the collapse of communism in East and Central Europe, there was is a rash of Hofstede-inspired dimensions that purport to reveal values of countries likeRussia, Ukraine, Bulgaria and Hungary. These of course are countries which were notrepresented in the original study, so it is a kind of patriotism, a point of minorchauvinistic honour, to be Hofsteded. If these studies tell us that Poland is slightlymore masculine than Russia (Lotric, 2003), do we modify our marketing approachspecifically to take account of that difference? Somehow I doubt it, though my readingof history tells me there is a fearsome attitudinal gulf between the Russians and thePoles (Davies, 1984) that makes that masculinity difference pale into insignificance.History alerts me to the possibility that it might help me to secure a higher approvalrating with my business relationships in those countries respectively by makinganti-Polish remarks in Russia and anti-Russian ones in Poland.

So what I am suggesting is that Hofstedes great work is, as far as marketers areconcerned, of limited worth. That seems like an unthinkable thing to say. After all, timeand time again marketing scholars like to remind us that there are at least 200definitions of culture in the management literature. Yet they invariably opt, perhapsout of a species of professional safety, for the Hofstede one: the collectiveprogramming of the mind which distinguishes the members of one human group fromanother. But suppose that Hofstede is using a concept of culture that is notappropriate to marketing.

A concept of culture that is out of dateIn other areas of the management literature there are whispers of disaffection with theprevailing concept (see: Osland and Bird, 2000; Holden, 2002; Schneider, 1988), but not,it seems, in marketing writing. For example, Cavusgil and Das (1997) and Usunier(1996, 1998) address the problems of methodology in cross-cultural marketingresearch, but they do not suggest that there may be something restrictive with the

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fundamental concept of culture which informs research designs, methodologies andanalyses. The treatment of culture in standard international marketing texts indicatesthat authors see no need to challenge the status quo, and inertia of this kind, asSullivan (1998) has noted, gives rise to a tendency to build consensus through iterativereplication or trivial refinement that precludes genuine shifts in intellectual direction.

To put these points in context, we must begin with the tradition that Hofstederepresents: a school of thought that regards culture as essence and difference. He isthus linked to a tradition of anthropological studies that has its roots in the nineteenthcentury. According to this essentialist understanding, culture is seen as a relativelystable, homogeneous, internally consistent system of assumptions, values and normstransmitted by socialisation to the next generation. Each culture therefore possessesany number of highly distinctive features that have the effect of making that cultureuniquely different from all other cultures.

Marketing scholars have readily taken to this concept. It permits them to view cultureas a national aggregate of features, phenomena and constructs which influence markets,their behaviour and notions of approaching them for marketing purposes. But thedependence on Hofstede means that marketing scholars often build into their models andtaxonomies assumptions about cultural aspects of markets which originate from data onwork values not marketing factors obtaining nearly 40 years ago. It might in fact besaid that this Hofstede-derived approach to culture indeed suits a concept of internationalmarketing which is synonymous with exporting, whereby markets are in effect regardedas culturally essentialistic entities, each (ideally) to be addressed in a distinctive way.Under this guise culture is seen as a complex of non-tariff barriers with locally distinctivemanifestations as diverse as language, ethnocentrism, and buying behaviour. (I recentlyreviewed a paper for IMR, in which that very position was adopted).

But just as globalisation has made the concept of exporting increasingly redundant,so has globalisation made the essentialist concept of culture less and less satisfactory.Here I must emphasise that I am not suggesting that we live in a globalised world inwhich apparent uniformities reduce the impact of cultural differences as traditionallyperceived. The differences remain: the Japanese language remains a redoubtablycomplex mirror of Japanese consumer behaviour; Germany is still a product- andproduction-led business society (for reasons that are connected with that countrysindustrialisation in the latter half of the nineteenth century); the dizzying marketisationof Chinese society does not suggest a waning of guanxi; rather guanxi is if anything anaccelerator of marketisation. The differences remain, but we have to learn to see themin a new way. This is especially challenging to marketers for, as Usunier (1996) hasshown, the impact of cultural differences cuts across several areas of marketing. It isworth producing his taxonomy in Table I.

The immediate challenge for marketers, as I see it, is to develop a concept of culturewhich among other things does not construe cultural difference as a source ofsubversion and antagonism, but recognises that culture does intersect with marketingin the kind of way that Usunier (1996) suggests. The challenge, both conceptually andpragmatically, is to create an understanding that is posited on the conviction thatculture and cultural differences represent resources, whereby barriers and gulfs forthey do exist become converted into inputs to underpin marketing strategy and itsimplementation. This requires not only an intellectual refocusing, but also anattitudinal change; and the latter may well be the harder to effect.

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Culture in standard international marketing writing is often degeneratively perceivedas involving a superordinate clash between my national culture and yours. Thus, ifsomething goes awry with our relationship, it is culture that gets the blame. This isunproductive. The point to grasp is that each marketing relationship creates its ownculture. Seen in this way, culture is no longer to be associated with that vapid andnave formulation the way we do things round here, but is rather to be apprehendedas an infinitely overlapping and perpetually redistributable habitat of sharedknowledge and meanings (Holden, 2002, slightly modified).

Common cognitive ground and culture as a resource in marketingrelationshipsSuch an approach to culture ought to have both pragmatic and intellectual appeal tomarketers, for marketing is a management function par excellence that in its dailyactivities is always changing meanings in order to create common cognitive ground(Nonaka and Takeuchi, 1995): in the case of marketing, with customers literallypossibly in their millions worldwide and diverse market intermediaries. From this itfollows that the important thing about culture for marketers is that it is something thatis either to be created or is waiting to be discovered. In this guise culture is no longerfixed and solid. It is changing with the marketing relationships, but also changes them.

In terms of international marketing strategy development culture in this relationalperspective can even be imagined as a fully active, if only subliminally perceivedinfluence on the nature of standardisation and adaptation. That particular way ofconsidering adaptation and standardisation was not envisaged by Ryans et al. (2003)nor, I assume, by the 100 authors they cite to support their view that this area ofinternational marketing thought lacks solid theory. You cannot have a theory ofstandardisation and adaptation in international marketing that ignores cultural factorsas key variables. The important thing, however, is to be armed with an appropriate

Area of marketing Cultural differences influence . . .

Consumer behaviour Consumers values, attitudes and decision makingMarket research Equivalence and methods in cross-national market surveysOverall marketing strategy Global versus locally produced marketing strategiesTargeting market segments Groups of countries or consumers sharing cultural traitsDefining regional market clusters Organizing for marketing on a regional basisProduct policy Adaptation or standardization of product attributesBrand image Brand and country-of-origin evaluations by consumersPrice policy Bargaining rituals/price quality evaluations/price

strategies towards consumers, competitors and suppliersDistribution channels Channel style and service, producer-distributor relationshipsCommunication World-views (through language) and communication stylesPersonal selling Selling styles, salesforce management, public relations, bribery

and ethical issues in an international contextMarketing negotiations Negotiation strategies, processes and outcomesNational style of marketing Attitude, organization, scheduling, role of emotions and

friendship, communication and interaction style, etc.

Source: Usunier (1996)

Table I.The impact of culturaldifferences on selected

aspects of marketing

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culture concept and to realise that the nature of the relationships the atmosphereassociated with them, their social value to interacting parties as well as economicoutputs cannot be divorced from any concept of product or service adaptation. It isethnocentric to pretend otherwise.

Seen in a relational way, culture then becomes a resource, a form of productiveknowledge about marketing relationships, about which there is always something newto learn. As I have written elsewhere, culture is a dead resource until its value andutility are recognized as knowledge (Holden, 2002; original emphasis). In other words,culture is not just an inalienable feature of a market. It is also an element of ourperception of it and our participation through marketing activities in it. We may saythen that culture is knowledge about specific marketing relationships, butproblematically this knowledge is also globally scattered, yet awkwardly local(Holden, 2002); and, of course, no two marketing relationships are exactly the same.They never occupy the same common cognitive ground; they never share the samemeanings. When in fact we grasp that culture is a summation of knowledge aboutmarketing relationships, not only can we dispense with Hofstede: we have a concept ofculture that is in harmony with the global knowledge economy. Hofstedes conceptemphatically is not.

The approach to culture that I am advancing invalidates to some extent theprevailing essentialist notion, but does not necessarily displace it. Rather itcomplements it. Culture is no longer something one must cope with: it is aknowledge resource in its own right which can serve as input to marketing researchand decisions and which can be also played out in market interactions. Accordingly,this approach also brings marketers away from an export-oriented concept of culture toone that fits the workings of the global knowledge economy, where marketing buildsnetworks which are not just pathways to resources, but clusters of affinity in their ownright, in which arrays of relationships form zones of interest around products andservices and the way in which they are presented to the market.

It is of course quite impossible to map Hofstedes dimensions on these clusters,which have neither fixed geographical boundaries nor temporal permanence. They areby their nature ever expanding, contracting and shifting their centre of gravity,creating an effect that is hyperbolically termed turbulence. But in human terms theseclusters bring together arrays of languages, ethnic affiliations, organisationalcompetencies and market segments which at their various levels of their interactionscreate a new culture, whose defining feature is its own cognitive common ground andits unmappability on a physical, well delineated territory known as a market.

In short, we are talking of culture as a system for meanings which marketing helpsto create and maintain as a function of its relationship management activities. To saythe same thing in pragmatic terms: if you are planning a marketing strategy for China,its implementation will become fused with Chinese society: the strategy, willy-nilly,creates a culture with ones Chinese partners and intermediaries. That fact shouldtherefore be an element in the strategic marketing thinking.

This concept of culture is slippery, polymorphic and certainly cannot be compressedinto four (or five) dimensions. But it does try to take account of the nature of marketingand markets in the global knowledge economy. But what are the benefits of thisapproach to marketing practitioners? The immediate benefit is that it replaces, at leastin part, a view of culture that promotes cultural difference as a barrier and therebyreinforces rather than reduces prejudice and ignorance. The replacement of the old

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concept means that a foreign market is increasingly seen in its own terms but throughthe prism of marketing relationships, the true essence of marketing knowledge. This iswhy the relationship approach to marketing, first conceived by European scholarsmore than 20 years ago, is still so important: it helps to make you see yourself more asan increasingly informed insider within the foreign culture than an outsider fazed withambiguity.

Three examplesLet me cite three examples to contrast the counter-productiveness of the traditionalconcept of culture and the new one I am advocating here. As will be made clear, themarketing-relevant cultural information contained in these three examples could neverhave been deduced by application of the Hofstede model and its underlyingassumptions. The first case concerns Japan.

Some years ago I was involved in studying UK-Japanese buyer-seller relationships(Holden and Burgess, 1994). One of our team interviewed a British marketing managerwho had been to Japan several times and had never changed his opinion of theJapanese since his first visit. He thought that the Japanese and their customs wereludicrous. It never occurred to him that the Japanese can smell a foreigner who thinksthey are stupid at 100 metres. Not surprisingly, he could not understand therefore whythe Japanese partners seemed to be so reluctant to visit the UK. The condescendingbehaviour of the businessman became an element of culture in his relationships withhis Japanese counterparts; and it had negative consequences. Try to imagine, by theway, the quality of his marketing reports, which provided his company with its mainpicture of Japan.

The second case concerns the merger between Daimler and Chrysler. The hugeGerman car maker was only too aware that international mergers have a nasty habit offailing or seriously underperforming. Determined not to make the same mistakes,Daimler set up a team of specialists to study 100 industrial mergers. Nevertheless, theso-called marriage made in heaven quickly got into problems: antagonisms betweentop German and US managers, major lay-offs, which of course were not going tohappen; and even quibbles among the German and American managers about the sizeof business cards. So how could it have all gone wrong?

First of all, these outcomes cannot be blamed on the team studying industrialmergers. On the other hand, this team consisted I have this on good authority onlyof Germans, who completely miscalculated the contrast in German and Americanmanagement styles. In other words, the study team never left the safe haven of theirown culture. The message for marketers is clear: impose your prior assumptions onhow things shall proceed in cross-cultural interactions and the chances are that thingswill happen you were never prepared for (think of the situation in Iraq today).

The third example concerns my own experiences of management education inRussia in the early 1990s. There, one of my tasks was to teach marketing toconstruction managers. These novices in marketing were not interested in this topicwhatsoever, except when I touched on the international dimensions of the subject.Then they grew attentive because they were desperate to do business abroad, abroadbeing a dimly perceived West that would pour colossal sums of money into thepost-Soviet economy. Exactly what benefits, apart from prestige, Western companieswould actually secure was never made clear. The point I deduced was that I could notbe expected to teach marketing to Russians: how could I, a foreigner, possibly tell one

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Russian how to do business with another? When I made this insight, I simply taughtinternational marketing, suggesting to the managers that the internationaltechniques might be useful for business in Russia.

Behind this story is something that is not immediately obvious; nor will the keylearning point be self-evident. I was able to deduce this insight about this Russianattitude to marketing because I speak Russian. Previous to my involvements in RussiaI had made a point of reading about Russian attitudes to, and knowledge of, marketingin Russian. I was already aware that teaching marketing would not be straightforward,but I was not at all prepared for the particular twist that those construction managersproduced. The point I wish to make here is that in this case, a knowledge of the locallanguage was valuable to me as an instrument of revelation about attitudes tomarketing in the pre- and post-collapse of the USSR.

Over the years the marketing literature has of course been at pains to emphasise theimportance of knowing a foreign language: but overwhelmingly for negotiatingpurposes. There seems to have been little or no recognition in the marketing literatureof the value of foreign language knowledge as a mirror of local marketing thinking andbehaviour. Some readers may be sceptical on the utility of language competence fromthis point of view. But the day is not far off when the marketing profession will have agreat need of it with reference to Arabic and Chinese. The writing is already on thewall, if you think about it.

Culture: a new approach or trivial refinement?If you make a culture (i.e. a foreign market) conform to the Hofstede dimensions, youcan guarantee that something important has not been captured. More to the point: inseveral years of reviewing for International Marketing Review I do not recall one singlecontribution that the infusion of Hofstede concepts has actually enhanced. In manycases their incorporation has in my opinion actually detracted from the quality of somesubmissions.

In a recent issue of International Marketing Review Warren Keegan (2004) observed:

. . .in marketing everything changes, and everything matters so the perfect plan of today canbecome the reason for failure tomorrow if it is not renewed and relevant to current marketneeds and competitive offers.

In line with this sentiment I challenge marketers to renew their concept of culture toone that is relevant for todays global knowledge economy. It will, however, take sometime for marketers to evolve a new approach to suit their needs.

I have suggested the following foundations in this article:. abandon the dependence on Hofstede;. think of culture less in terms of markets perceived as national aggregates and

more in terms of clusters of affinity;. understand that culture is a not an external set of factors characterising a

market, rather that it is a facet of evolving relationships with that market;. recognise that culture is waiting to be discovered in these relationships; and. grasp that the discovery of this culture creates marketing knowledge.

The quest for a new theory or theories of culture that suit international marketing bothas an academic discipline and as a professional activity is long overdue. If marketers

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are not prepared to change their stance on culture, they will surely deliver moreiterative replication or trivial refinement.

Note

1. Marketers may wish to note the global leadership and organizational behavioureffectiveness project (GLOBE) is a multi-phase, multi-method project in whichinvestigators spanning the world are examining the inter-relationships between societalculture, organizational culture, and organizational leadership. Approximately 170 socialscientists and management scholars from 61 cultures/countries representing all majorregions throughout the world are engaged in this long-term programmatic series ofcross-cultural leadership studies. See: www.ucalgary.ca/mg/GLOBE/Public

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