PRINCIPLES OF 
INTERNATIONAL BUSINESS & MARKETING

SCM 950

As Taught by Prof. Tim Richardson School of Marketing and e-Business, Faculty of Business, Seneca College, Toronto, Canada
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This page last updated 2001 May 24

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Class
3
 
 
 
 
 
 
 
 

Class
3

Global Cultural Environment

"Global business means dealing with consumers, strategic partners, distributors, and competitors with different cultural mindsets"
page 105

"In order to grasp the intracacies of foreign markets, it is imperative to get a deeper understanding of cultural differences"
page 106

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Class 3 .
Cultural   Environment
. In this section of the course we will study the Cultural Forces. It is critical to understand the effects of the cultural environment of International Business - even if you do not have the resources to "know" in detail each culture, you need to know the effects.

"Because international business includes people from different cultures, every business ... is subject to cultural problems"

WTGR

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Class 3 .
Cultural   Awareness
        • consumer product
        • industrial product

Cultural Awareness

The degree to which you must be culturally aware in marketing international business products and services depends, to some extent, on whether the product/service is a consumer product or an industrial product.
WTGR

Consumer Products, by virtue of their marketing process 

  • Mass advertising
  • Sales Promotion
  • Personal Selling
tend to require a strong degree of Cultural Awareness since this knowledge relates to the human communication in the selling process.
WTGR

Industrial Products have less requirements, for cultural awareness, in some instances, since the negotiation is based on a situation of which there is little debate which has to do with cultural adaptation. For example, the technical specifications for an industrial ceramic automotive component might be the same in New York as they are in Tokyo or Moscow. What is important, to make this sale, is the price of the component and how it fits the specifications required by the component.

Other industrial products, which end up being part of a package which is evaluated by consumers, do have to incorporate Cultural Awareness, eg. components of clothing products and food products.
WTGR

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Class 3
. Some texts say that "the nation provides a workable definition of culture for international business ..."
In reality, there are many exceptions to this in 2001.
These exceptions are the result of many political boundries breaking down as former conquered countries leave aggregated nations and identify their own independence. Examples include the break-up of Yugoslavia and the former Soviet Union.

WTGR


Cultural Imperialism 

  • French
  • English
  • Dutch
  • Chinese
Language as a Cultural Stabilizer,  "A common language is a unifying force"

Language as one of the three ingredients of a world power
# 3 Linguistic Spread      (# 1 is economic power, # 2 is military strength) 

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Class 3 What languages are most spoken in the world?
 http://www.linguasphere.org/language.html

"Including alternate (second language) as well as primary (mother-tongue) speakers, two languages reached 
approximately one billion (1,000,000,000) speakers by the end of the 20th century.  These are Putonghua or
"Mandarin" Chinese, official language of the most populous nation on earth, and English, now the most widely used and studied language of the world. The title of "the most spoken language on earth" presently alternates between Chinese and English within each twenty-four hour cycle.  When the sun is over the western Pacific, the most spoken language is Chinese.  When the sun is over the Atlantic and China sleeps, the most spoken language is English."

You may also read the good essay on
"what is a language"
 http://www.linguasphere.org/what.html

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Class 3
Six Rules for Doing Business across Cultures

Six Rules for Doing Business across Cultures

  1. be prepared
  2. slow down
  3. establish trust
  4. understand importance of language
  5. respect the culture
  6. understand surface culture and deep culture
Tim Richardson's additional Rules
  • don't use slang expression and metaphors when speaking English to non-English speakers
  • be sensitive to different body language and different meanings of gestures
  • keep the appropriate physical space/distance and eye contact in conversations
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Class 3
Sociocultural   Forces
http://www.sob.cencol.on.ca/faculty/trichard/INTL220/Chpt6/sld001.htm Powerpoint Presentation on culture from
an old text -
culture is learned, it is not innate

Aesthetics - a culture's sense of beauty and good taste
Attitudes and Beliefs

  • attitudes towards time
  • attitudes towards direct speaking and shyness
  • attitudes towards value of silence vs. boldness
  • attitudes towards achievment and work ethic
  • attitudes towards change, and history
Religion
  • attitudes towards importance of religion and its role
  • Protestant work ethic, Confucian work ethic
  • Religion as a political stabilizer p. 54, text
  • Religion as a disruptive force
    • Northern Ireland
    • Israel
Class and Castes
  • India
  • England
Material Culture / Role of Technology
Education
  • brain drain 
  • adult literacy
Language
  • language families of the world, map 
  • non-verbal communication, body language 
    • Silent language 
    • Kinesics
Gift giving, bribes, inducements, "considerations"
attitudes towards respect for government and authority figures
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Class 3
Hofstede
In the text from page 122-126 are discussed several terms which originally were developed by the cultural anthropologist Dr. Geert H. Hofstede. Hofstede is not specifically mentioned in your text so we will provide information about him below.   page 122-126, text

Dr. Geert H. Hofstede, born 1928 in the Netherlands. He is famous for having done a study of the  international cultural aspects of the employees of a large corporation - the intention was that we  would be able to find some generalizations about particular cultures that would help us  understand them, even if we did not have the time to become experts on all aspects of the  particular culture. 

Hofstede is most well known for his work on four dimensions of cultural variability, commonly referred to as "Hofstede's Dimensions." These include: Uncertainty Avoidance, Power  Distance, Masculinity-Femininity, Individualism-Collectivism, Confucian Dynamism. These dimensions were arrived in his 1980  publication, "Culture's consequences: International differences in work-related  values." The study took existing survey data (sample size of 116,000) collected from a  multinational corporation (IBM). 

Hofstede described on a web site of the University of Hawaii 
http://www2.soc.hawaii.edu/com/resources/intercultural/Hofstede.html 

 1.Uncertainty Avoidance 
 2.Power Distance 
 3.Masculinity-Feminity 
 4.Individualism- Collectivism 

An example of Hofstede mentioned in the context of research on cultural diversity and the fact that national
 culture influences how companies think about things   http://blue.temple.edu/~eastern/florin.html
scroll about 2/3rds of the way down the document to the section re: Hofstede

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Class 3
The role of culture, in Int'l Consumer Behaviour
In the text page 108, is a paradigm explaining how the role of culture can be different at each stage of the consumer's consumption behaviour.   page 108, text
The A-B-C-D paradigm was developed by
Dr. P.S. Raju, who serves as a Professor at
University of Louisville, Kentucky

Published in the Journal of Consumer Marketing in 1995, Dr. Raju suggested that we could look at international marketing in terms of the consumption process and how that is effected by cultural considerations.

An online PDF document containing the full description of Dr. Raju's paradigm, and its application to Eastern Europe and the Third World, can be found at
 204.179.122.51/embimages/mlh/cy/07712EC2.PDF 

http://204.179.122.51/embimages/mlh/cy/07712EC2.PDF
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richardson@witiger.com
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