International cultural environment

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International Cultural

Environment

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International Business

• International business is defined as commercial transactions that occur across country borders.




Nature of Culture :

• Learned• Shared• Trans generational• symbolic• Patterned• Adaptive




Cultural Dimension




National Culture

• National culture is the dominant culture within the political boundaries of a country. Formal education is usually thought and business is generally conducted in the language of dominant culture

• most international business take place within the constraints of political boundaries of national state. As such, the domain culture of the nation-state probably has the greatest impact on international business




Business Culture

• For an international manager, business culture – The way Indians, Germans, Japanese, and others do business is more important

• More than cultural differences in business etiquette, business culture represents norms, values, and beliefs that pertain to all aspect of doing business in particular environment.

• Business culture tell people the correct, acceptable way to conduct business in a society.




Occupational and organisational culture:

• Organisational culture refers to the Philosophies, ideologies, values, assumptions, beliefs, expectation, attitudes, and norms that knit an organisation together and are shared by its employees.

• Occupational culture Include different occupational group such as Physicians, professors, lawyers, accountants and craft people have distinct culture




Mechanistic and organic culture

• The mechanistic organisational culture exhibit the values of bureaucracy and feudalism. Organisational work is conceived as a system of narrow specialism and people think of their careers mainly within these specialisation.

• In contrast, in organic culture, formal hierarchies of authority, departmental boundaries, formal rules and regulations and prescribed channels of communication are frowned upon.




Authoritarian and Participative culture:• In the authoritarian culture, power is concentrated on

the leader and obedience to orders and discipline are stressed

• The participative culture is premised on the notion that people are more committed to the decision that are anticipatively made than to those which are imposed them




Dominant and Sub - culture

• Many big companies have a dominant culture and several cell of sub culture which are attached to different roles, functions and levels.

• If the sub culture is accepted a natural conclusion is that very few beliefs, attitudes or values are shared by all organisational members.

• A sub culture could consist of the core values of the dominant as well as the values unique to the department or area to which it relates




Strong, weak and unhealthy culture• A strong culture will have a significant influence on

employee behaviour manifesting in reduced turnover lower absenteeism, increased cohesiveness and positive attitudes. This is so because there is a high agreement among members about what the organisation stands for.

• A weak culture is characterised by the presence of several sub cultures, sharing of few values and behavioural norms by employees and existence of few scared tradition




• There are organisations which have unhealthy cultures. One unhealthy trait is a politicised internal environment that allows influential manager to operate autonomous ‘fiefdoms’ and resist needed change.

• Another feature of unhealthy cultures is that of prompting managers who are good at staying within their budget, exerting close supervisory control over their units and handling administrative detail as opposed to managers who understand vision, strategies and culture building and who are good leaders, motivators and decision makers




Elements Of Culture

• Language• Religion• Education• Supernatural believes• Customs and manners• Attitudes • Aesthetics




Language and culture

• Language has been described as the mirror of the culture. Language itself is multidimensional by nature.”

• Language refers to an abstract system word meaning and symbols for all aspect of culture.

• Language includes speech, written character, numeral, symbols and gesture of non-verbal communication.




• With language one should consider whether or not the national culture is predominantly a high context culture or a low context culture (Hall and Hall 1986). The concept relates to the balance between the verbal and the non-verbal communication.

• In a low context culture spoken language carries the emphasis of the communication i.e. what is said is what is meant. Examples include Australia and the Netherlands.

• In a high context culture verbal communications tend not to carry a direct message i.e. what is said may not be what is meant. So with a high context culture hidden cultural meaning needs to be considered, as does body language. Examples of a high context cultures include Japan and some Arabic nations.




Example

• When Pepsi expanded their market to China, they launched with the slogan, "Pepsi brings you back to life." What they didn’t realize is that the phrase translated to “Pepsi brings your ancestors back from the grave.”




Religion and culture

• Religion refers to a specific and institutionalised set of believes and practice generally agreed upon by a number of person or sects.

• There are nearly 100000 religion across the globe• The nature and complexity of the different religions an

international marketer could encounter is pretty diverse. The organization needs to make sure that their products and services are not offensive, unlawful or distasteful to the local nation. This includes marketing promotion and branding.




Example

• In China in 2007 (which was the year of the pig) all advertising which included pictures of pigs was banned. This was to maintain harmony with the country’s Muslim population of around 2%. The ban included pictures of sausages that contained pork, and even advertising that included an animated (cartoon) pig.

• In 2005 France’s Catholic Church won a court injunction to ban a clothing advertisement (by clothing designers Marithe and Francois Girbaud) based upon Leonardo da Vinci’s Christ’s Last Supper.




Education and Culture

• In broad sense education is the lifelong process of learning through which member of a society acquire knowledge and develop skill, ideas, value, norms and attitudes, which they share with other member of the society

• Education may be understood as the transmitter of culture.

• The level and nature of education in each international market will vary. This may impact the type of message or even the medium that you employ.




Education has considerable implication as well• countries rich in educational facilities attract High-Wage

industry• The market potential depends on education• The level literacy and educational attainment determines

the nature of advertising, packaging, quality of marketing research For example: in countries with low literacy levels, advertisers would avoid communications which depended upon written copy, and would favour radio advertising with an audio message or visual media such as billboards. The labelling of products may also be an issue.




Aesthetics and Culture

• Aesthetic related to the artistic tastes of culture• Aesthetics relate to your senses, and the appreciation of

the artistic nature of something, including its smell, taste or ambience

• One important manifestation of aesthetics is the behaviour of people. International managers should understand aesthetic local values if he or she has to appreciate another culture and the way in which business must address these values in the international trade




Attitudes and culture• attitudes are positive or negative evaluations, feelings,

and tendencies which make an individual behave in a particular way towards people or object.

• Values and attitudes vary between nations, and even vary within nations. So if you are planning to take a product or service overseas make sure that you have a good grasp the locality before you enter the market.

• This could mean altering promotional material or subtle branding messages. There may also be an issue when managing local employees. For example, in France workers tend to take vacations for the whole of August, whilst in the United States employees may only take a couple of week’s vacation in an entire year.




Customs and Manner

• customs are common or established practice• Manners behaviour that are regarded as appropriate in

a particular society• Change occurring in manners and customs must be

carefully monitored, specially in cases that seem to indicate a narrowing of cultural differences between people. Phenomena such as McDonald's and Coke have met with success around the world, but this does not mean that the world is becoming Westernized




• The international manager should understand the manner and customs of host country. Failure to understand and respect local customs and manners may land the manager in trouble, besides loosing business

• For example General Foods' Tang is positioned as a breakfast drink in the United States in France, where orange juice usually is not consumed at breakfast, Tang is positioned as a refreshment




Supernatural Beliefs

• The final dimension of culture refers to the supernatural beliefs

• People in all societies can understand and predict a number of things

• There are certain other thing cannot be predictable. Societies must develop supernatural beliefs system for explaining unexplainable happenings

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Conclusion

• As an organisation moves into a region with different culture it faces many hurdles such as different language, norms and beliefs, tastes and preferences etc., if the organisation does not align itself with the prevailing culture then it cannot fully reap benefits of expansion.

• The importance of cultural understanding with regards to marketing strategy was analysed and it was found that culturally incompatible marketing can backfire and damage an organisation’s reputation in many ways.




Thank You

