Managing in cross-cultural environment

It is necessary to introduce the concept of ‘controllable’ and ‘uncontrollable’ factors in international marketing. Control will have to be defined with reference to a company’s management. The company is in a position to control and design marketing mix elements, namely, product, price, place and promotion.

Movement of labor on fairly massive scale has been changing the culture of a country or cities. We can see that large scale migration has caused ‘Asianisation’ of Australia leading to culturally heterogeneous population. In California (USA) diverse ethnic groups currently constitute more than 50% of the total population, outnumbering the local population. Similar pattern is evolving in many urban centers in Europe as well.

Four cultural dimensions in work related values are identified by an eminent researcher. They are,

* Power distance: the extent to which it is expected and accepted that power is distributed unequally. In high power distance cultures managers can exercise more powers without resistance.

* Uncertainty avoidance: the extent people want to avoid uncertain outcome.

* Collectivism: In a collectivist society strong social and family ties provide extensive support to an individual.

* Masculinity/Femininity: Values such as assertiveness, ambition, achievement dominate feminine values viz., relationship and quality of life.

In the context of international business, the diversity of culture assumes importance because people from different cultural background react differently in a business environment. Researchers have found systemic differences between national and ethnic groups.

The rational model makes no acknowledgment of cultural differences. But Arabs, for instance, don’t necessarily make decisions the same way that Canadians do. Therefore, we need to recognize that the cultural background of the decision maker can have significant influence on his or her selection of problems, depth of analysis, the importance placed on logic or whether organizational decisions should be made autocratically by an individual manager or collectively in groups.

Cultures, for example, differ in terms of time orientation, the importance of rationality, their belief in the ability of people to solve problems, and their preference for collective decision making. Differences in time orientation help us understand why managers in Egypt will make decisions at a much slower and more deliberate pace than their American counterparts. Although rationality is valued in North America, that’s not true everywhere in the world. A North American manager might make an important decision intuitively, but he or she knows that it’s important to appear to proceed in a rational fashion. This is because rationality is highly valued in the West. In countries such as Iran, where rationality is not defied, efforts to appear rational are not necessary.

Some cultures emphasize solving problems, while others focus on accepting situations as they are. The United States falls in to the former category; Thailand and Indonesia are examples of cultures that fall into the latter category. Because problem-solving managers believe they can and should change situations to their benefit, America managers might identify a problem long before their Thai or Indonesian counterparts would choose to recognize it as such.

Decision making by Japanese managers is much more group-oriented than in the United States. The Japanese value conformity and cooperation. So before Japanese CEOs make an important decision, they collect a large amount of information, which is then used in consensus-forming group decisions.

There appears to be no significant direct relationship between an individual’s personality and negotiation style, cultural background does seem to be relevant. Negotiating styles clearly vary across national cultures.

The French frequently gain recognition and develop their reputations by thinking and acting against others. As a result, the French tend to take a long time in negotiating agreements, and they aren’t overly concerned about whether their opponents like or dislike them.

The Chinese also draw out negotiations, but that’s because they believe negotiations never end. Just when you think you’ve pinned down every detail and reached a final solution with a Chinese executive, that executive might smile and start the process all over again. Like the Japanese, the Chinese negotiate to develop a relationship and a commitment to work together rather than to tie up every loose end.

Americans are known around the world for their impatience and their desire to be liked. Astute negotiators from others countries often turn these characteristics to their advantage by dragging out negotiations and making friendship conditional on the final settlement

The cultural context of the negotiations significantly influences the amount and type of preparation for bargaining, the relative emphasis on task versus inter-personal relationships, the tactics used, and even where the negotiation should be conducted.

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