Intercultural Management

Course Contents

• The culture and the global society.
• Religion, culture and business.
• Cultural patterns and markets.
• High and Low context culture
• Theories: Edward Hall, Geert Hofstede, Trompenaars
• Intercultural Management
• Countries classification

Available Languages:

In this unit you will: Learn about adapting our marketing approach to different markets.

This will be achieved by:

• Examining how diversity of culture can influence the outcome of a marketing plan.
• Outlining key strategies to dealing with new cultures.
• Detailing major theories on the subject.
• Highlighting important errors to be avoided when dealing with different cultures.

Learning Unit Summary
Idiosyncrasy is one of the most important and difficult aspects in international trade. The exporter negotiates with individuals from countries with very different cultures and habits. If the exporter does not adopt an open and respectful attitude towards these cultures he will hardly achieve success in his business. He should try to learn the idiosyncrasies of each market.

Religion impacts on many areas of International Marketing. It can restrict the types of products consumers may purchase or use. It also influences how the products are promoted.

James A Lee, in the magazine, Harvard Business Review, defines the self-reference criterion (SRC) as an unconscious reference to ones own cultural values, experiences and knowledge as a basis for decisions. The SRC impedes the ability to assess a foreign market in its true light.

Edward Hall divides cultures into two types, according to its context:

• High-context culture. Here context rather than content is of significance. Fewer legal documents are used in these cultures, where one's word is one's bond and this makes negotiations a lot slower.
• Low-context culture. With clear and explicit messages in which written words transmit most of the information. Legal documents are considered essential. Europe and the USA are examples of these cultures. Social position is also a dominant factor and knowledge of it a must for negotiation. Japan and Arab countries are examples of these cultures.

Hofstede Theory is based on the assumption that countries can be compared with each other by rating the following parameters:

• Power-Distance Orientation (distance from power). The extent to which less powerful parties accept the existing distribution of power and the degree to which adherence to formal channels is maintained. Measures the level to which the least powerful in society accept that said power is unevenly distributed.
• Individual vs. Collective Orientation. The level at which behavior is appropriately regulated. Measures the level to which a society groups together. In this way we can have individualist cultures (each individual worries about their own problems or about those of their immediate family) and collectivist cultures (the members of the group act jointly).
• Dominant-Values Orientation (Masculinity or feminity). The nature of the dominant values - e.g., assertiveness, monetary focus, well-defined gender roles, formal structure - vs. concern for others, focus on quality of relationships and job satisfaction, and flexibility. In the case of masculinity, it is expected that the man is competitive, he seeks success while the woman stays at home and looks after the family. In the case of Femininity a type of society is envisaged where the roles of the man and the woman are mixed.
• Uncertainty-Avoidance Orientation (Distance from uncertainty). The degree to which employees are threatened by ambiguity, and the relative importance to employees of rules, long-term employment and steady progression through well defined career ladders. Measures the level to which individuals in a society feel uncomfortable with situations that are abnormal or difficult to understand. The reaction to these situations may be either violent and reactionary or passive and tolerant.
• Short-Term vs. Long-Term Orientation. short-term (involving more inclination toward consumption, saving face by keeping up) vs. long-term (involving preserving status-based relationships, thrift, deferred gratifications).

Fons Trompenaars. The seven dimensions of culture. From the solutions different cultures have chosen to these universal problems, we can further identify seven fundamental dimensions of culture:

• Universalism vs. Particularism. What is more important - rules or relationships?
• Individualism vs. Communitarianism. Do we function in a group or as an individual?
• Specific vs. Diffuse cultures. How far do we get involved?
• Affective vs. Neutral cultures. Do we display our emotions?
• Achievement vs. Ascription. Do we have to prove ourselves to receive status or is it given to us?
• Sequential vs. synchronic cultures. Do we do things one at a time or several things at once?
• Internal vs. External control. Do we control our environment or work with it ?