session 1 culture and business

8/6/2019 Session 1 Culture and Business

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Culture and Business

Prof. Atul Tandan

Director, MICA

7/7/06Essec, France


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Cultural Environment

An Understanding of Culture & its Impact on Business


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Flow of Thought

Need for Understanding Culture

Standardisation V/s Adaptation The Classical Dilemma

What is Culture?

Approaches to the study of Culture

Applications of Cultural Insights to Marketing

Summary


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Need for Understanding Culture

Similar Surfaces; Dissimilar Roots ===> CULTURAL MYOPIA


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Standardisation V/s Adaptation

-The Classical Dilemma

Universal Values v/s Local Values Nature of the Product (Consumer Products v/s B2B)


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The Search for Cultural Universals

Universal = Mode of behaviour existing in all cultures

Universal aspects = opportunities to standardize some or allelements of a marketing program


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UNIVERSAL TRENDS shaping Youth attitudes about Cool Globally

Option Overload More Discerning, More Brand Savvy.

Metopia Freedom of Choice & Increased Sense of Control

Individualistic Me-First Culture

Fully Loaded Living Multi-tasking, part time jobs, work hard & party

harder. Stress A Status Symbol

Future Digested Expecting & looking forward to tremendous change,not deterred by the pace of innovation

- Sources of Cool, MTV- Brand Equity Youth Forum

Universals v/s Local Differences


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Universals v/s Local Differences

LOCAL CONNOTATIONS -What youth across the world think is COOL

USA Different & Effortless

CHINA Knowing your own taste

INDIA Being first with new things; Different within Reason

BRAZIL Right Look, Laid Back

- Sources of Cool, MTV- Brand Equity Youth Forum


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What IS Culture ?

The integrated sum total of learned behavioural traits that are

manifest & sharedby members of society

OR

The way in which people in a society collectively attach meanings to

concepts & contexts around them & respond on the basis of those

meanings


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What IS Culture ?

Culture as ways of living

Conscious and unconscious values, ideas, attitudes, and symbols that

shape human behaviour

Culture is learned, not innate

Culture defines the boundaries between different groups

All facets of culture are interrelated


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language has

two parts: the

spoken and the

silent language

social interactions among people; nuclear

family, extended family; reference groups

ideas and

perceptions

that a culture

upholds in

terms of

beauty andgood taste

communitys set of

beliefs that relate to a

reality that cannot be

verified empirically

One of the major vehicles

to channel from one

generation to the next

technologies that

are used to

produce, distribute,

and consume

goods and services

values shape

peoples norms

and standards

Components of Culture


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High & Low Context Cultures

LOW-CONTEXT CULTURE

Messages are explicit

Words carry most of the information in communication

United States, Switzerland, Germany

HIGH-CONTEXT CULTURE

Less information is contained in the verbal part of the message

More information resides in the context of communication

(background, associations, basic values of communicators)

Japan, China, South Korea, Mexico


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High & Low Context Cultures

Factors Low-Context High-

Context USA, Germany

Japan, Mexico

Lawyers - very important - less important

A persons word - get it in writing - his/ her bond

Time - Time is money - everything isdealt with its

own time

Negotiations - quick - lengthy

Competitive Bidding - frequent - infrequent


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Sources of Culture

Social Organisation Way people relate to each other (Extended families, units, kinship)

Material Culture Tools, Artefacts, Technology, Infrastructure

Language Reflects the nature & Values of Society

Aesthetics Expressions of Art Music, Drama, Dancing, Colour & Form

Education - often means common interests and outlook

Religion, Attitudes & Values


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Symbols


Hofstedes Model

Heroes

Rituals

Values Practices

Expressions of culture at

different levels of depth


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Hofstedes Cultural Typology

Culture A better indicator than Material & Structural Conditions ofCultural Attributes.

Constructs or Indices of Research

Power Distance Social Equality or vice a versa

Individualism Individual Responsibility v/s Integration

Masculinity-

Emphasis on work goals, as opposed to personal goals and nurturance Uncertainty Avoidance Openness or Resistance to Change

Confucian Dynamism Professional Hierarchy v/s Social Obligations


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Power

Distance

Individualism vs

collectivism

Masculinity Vs

Femininity

Uncertainty

avoidanceLong term

orientation

Hofstedes

Cultural

Factors

High : Korea,

Japan, MexicoLow: India,

Australia, US,

Germany

High Individualism : US, Australia, Great Britain, Canada

Low Individualism: Japan, Venezuela, Thailand, Japan, Mexico, China

Feminine:

Netherlands, France,

Sweden

Masculine: Japan,

Mexico, Britain,

Germany

High : France,

Japan, Mexico

Low: India,

Hong Kong, US,

Great Britain

Long Term: Hong

Kong, Japan

Short Term: Great

Britain, US, Germany

Hofstedes Cultural Factors


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Some Issues?

Is face important?

Independence or interdependence?

Egalitarian or hierarchical?

Task focused or relationship focused?

How important are connections?

Status, titles, and family relationships?

Gender-based expectations?

Attitudes towards time?

How important is relationship building in the target culture andhow is it accomplished?

Decision making: hierarchical or consensual?

Negotiation tactics?

How is conflict resolved?


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Culture and Business

Business Environment

Internal and External factors

JVs, M&A, Global Alliance, etc.

Socio-Economic Organisations

Marketing Environment

Consumption characteristics

Buying behavior

Access

Distribution

Products and Services


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CompanyPolicy

Factors in the

naturalenvironment National Culture

Local Community

NGOs Political Context

National Economy

Markets (labor, finance)

Markets (labor, material, finance)

Monetary Machinery

Inflation

Decisions made

by competitors

Decisions made

by suppliers

Decisions made by customers

Infrastructure

(transport,

communications)

Technology

Stakeholder

& resources

Capital

Community

Human

Resource

International

Impact

Industry Culture

National Laws and

regulation

National trade and

economic policies

Trade unions, trade

organizations,

consumer groups

Foreign

Intervention

International laws and

regulations

International

Economy

External Factors


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Culture and Marketing Mix

Product

Policy:Certain products are more culture-bound than others

e.g. Food &Beverages and Life-style products .

Pricing: Pricing policies are driven by four Cs:

CustomersCompany (costs, objectives, strategy)

Competition

Collaborators (e.g., distributors)

Distribution:

Cultural variables do dictate distribution strategies.Promotion:Cultural influence on communication strategy

Local cultural taboosFolklores, Mores and Norms


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Protocols and Relationship

Building

Dietary and dining customs

Gifts: Expected?

What kind is appropriate? How does one receive gifts?

Appropriate Dress Styles,

Colors, etc. Current events

Taboo subjects


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Application of cultural insights to marketing

The AXE Effect - Happy Dussera


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Application of cultural insights to marketing

HSBC

Headline: -

MEXICO - Wards off hunger

INDIA - Wards off evil

Subhead: Never underestimate the importance of local knowledge


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Japanese hotel

Please take advantage of

the chambermaid

Taiwanese Tailor shop

Ladies may have a fit upstairs

English for all?

Norwegian

cocktail lounge

ladies are

requested not to

have children at

the bar


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Current Practices

Training!!

70% of US companies provides no cross-cultural

training.

Employees for international assignments

Flexible work timings

Clear Communicators

Comfortable in new situations

And culturally mindful


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GLOBE (Global Leadership and

Organizational Behavior Effectiveness)

Explores cultural values and impact on organizational

leadership

Uncertainty avoidance, power distance, and collectivism as

in Hofstedes constructs.

Other Dimensions :

collectivism II

gender egalitarianism

assertiveness future orientation

performance orientation

humane orientation


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Ultimately

Think Globally. Act

Locally.~ Derek Torrington, 1994

Learn Globally and Deliver Locally

session 1 culture and business

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