Discussion Questions for Chapter 5

Culture, Management Style, and Business SystemsDiscussion Questions

1. Define:Cultural imperative SubornationCultural adiaphora Principle of utilitarian ethicsCultural exclusive Principle of justice or fairnessM-time Silent language FCPA P-time

2. “More than a toleration of an alien culture is required . . . there is a need for affirmative acceptance as different but equal.” Elaborate.

Adaptation is one of the key concepts for success in international marketing. Through this “affirmative acceptance as different but equal,” adaptation becomes easier. One gains an appreciation of the outlook of those with whom one is dealing.

3. “We should also bear in mind that in today’s business-oriented world economy, the cultures themselves are being significantly affected by business activities and business practices.” Comment.

The business activities and the culture of a nation are intermixed. A change in one results in a change in another. When a foreign culture encounters the domestic culture, there is a mixing of cultures. When a foreign business encounters another, the result is the same because business and culture are inextricably intertwined.

4. “In dealing with foreign businesses, the marketer must be particularly aware of the varying objectives and aspirations of management.” Explain.

The marketer cannot judge what he feels that the objectives of management of a foreign firm are by what they are in a similar firms of his own country. With every firm in our country, the objectives and aspirations of management are different. Therefore, it is quite likely that they are quite different in foreign countries. The marketer must deal with a company in a way to correspond with the objectives of the company, or it is possible that he might lose his dealings with that company.

5. Suggest ways in which persons might prepare themselves to handle unique business customs that may be encountered in a trip abroad.

The businessman should:

a. Learn all he can about foreign cultures by reading, visiting with foreigners and those who have traveled or lived in the countries he will visit.

b. Condition and sensitize himself by projecting himself into possible situations and analyzing his learned belief patterns.

c. Seek advice from consultants, ambassadors, and others who can provide professional guidance.

6. Business customs and national customs are closely interrelated. In what way would one expect the two areas to coincide and in what ways would they show differences? How could such areas of similarity and difference be identified?

COINCIDEa. Language usedb. Methods of carrying on business must coincide with local customs

c. Religious effectd. Political effect

1. Laws2. Taxes

DIFFERa. Subject matter b. Degree of technicalities involvedc. Business customs are continually changing—national customs do notd. Business customs cause some change in national customs

One would have to examine each possible difference and similarity to determine whether or not they exist.

7. Identify both local and foreign examples of cultural imperatives, adiaphora, and exclusives. Be prepared to explain why each example fits into the category you have selected.

Domestic examples:

a. Cultural imperatives: It is imperative that one pay income tax, license one’s car, or wear a coat and tie to a fine restaurant, not belch in public, etc.

b. Cultural adiaphora: One may or may not attend church, one may eat local foods, but doesn’t have to.

c. Cultural exclusives: An African wouldn’t join the KKK. A foreigner couldn’t sell firearms for the purpose of overthrowing the government.

Foreign examples:

a. Cultural imperatives: Not wearing shorts in Mazatlan, Mexico; not doing business on Saturday in Israel.

b. Cultural adiaphora: An American businessperson in Mexico may or may not drink tequila or eat burritos.

c. Cultural exclusives: It would be inappropriate for an American to go to Vietnam and act like a Moslem.

8. Contrast the authority roles of top management in different societies. How will the differing views of authority affect marketing activities?

There are three main different types of authority patterns: (1) top management decision making, (2) decentralized decision making, and (3) committee decision making. In Europe, top management makes most of the major decisions. One of the reasons for this is their belief that subordinates are generally inadequate people. In the United States, the subordinates are given more responsibility and top management doesn’t have complete responsibility of decision making. This is what can be called more decentralized decision making. In the Far Eastern countries, group decision making predominates because of their culture.

The marketing approach to each of these different situations is quite varied. The problem is to determine what system is being used, and who is in authority.

9. Do the same for aspirational patterns.

In the United States, management tends to emphasize profit or high wages. In foreign countries, managers are more likely to emphasize security, good personal life, acceptance status, advancement, or power. Individual goals vary from country to country and from manager to manager. By knowing the goals of management, a marketing man can aim the marketing of his product toward these different goals.

10. What effects on business customs might be anticipated from the recent rapid increases in the level of international business activity?

Business customs are bound to be altered in all countries. It is axiomatic in anthropology that when two cultures meet, there is a blending rather than an elimination of one or the other. We would therefore expect business practices to become more standard because of the necessity of dealing in the same ways. This would take much time.

11. Interview some foreign students to determine the types of cultural shock they encountered when they first came to your country.

Individual project.

12. Differentiate between:

Private ownership and family ownership.

Decentralized and committee decision making.

“Private ownership” means ownership by private investors and not government ownership.

“Family ownership” refers to a business dynasty controlled by one or a few families.

“Decentralized decision making” means subordinates have the authority to make certain decisions, with top management making the most important decisions.

“Committee decision making” means emphasis is placed on group participation, with endorsement of a decision by a group.

13. In which ways does the size of a customer’s business affect his business behavior?

The large organizations of the different countries have a professionalized management which is much the same from country to country. In medium-sized businesses, the management is likely to be in direct contact with the workers and customer. The management of the smaller firms is likely to be closely tied to the customs and attitudes of the country. Management is directly responsible for the supervision of employees and comes into direct contact with the customers.

14. Compare three decision-making authority patterns in international business.

The top management decision making is the centralized decision making whereby only the people at the top make the decisions. The reason for this is management’s distrust of the ability of the subordinates.

The decentralized decision making is the system whereby executives at various levels of the business hierarchy are given rather complete decision making authority over their own functions.

The committee decision-making places great emphasis on group participation, group harmony, and group decision making.

15. Explore the various ways in which business customs can affect the structure of competition.

The customs would affect the structure of competition mainly by determining whether or not there is competition in that country. If the industries are government controlled, then there is obviously no competition. There may be different policies on how competition may occur in different countries. Some countries might have a rigid competition requirement, whereas another could have a quite loose competition requirement.

16. Why is it important that the business executive be alert to the significance of business customs?

The business executive must be very sensitive to the cultural variations; he must be alert and prepared to adapt when necessary; he must realize that he is not a native and will always be treated as an outsider. If he does not follow these points, he will be excluded from doing business or will lose out in doing business in different countries.

17. Suggest some cautions that an individual from a high-context culture should take when dealing with someone from a low-context culture. Do the same for low- to high-context situations.

An individual from a high-context culture operating in a low-context culture should be careful about:

a. assuming that he has communicated when he has not.

b. leaving out major elements of communication.

c. depending too much on the spoken word and not enough on writing.

d. becoming frustrated by lack of feedback in interpersonal communication.

An individual from a low-context culture operating in a high-context culture should be careful about:

a. communicating messages he did not intend.

b. becoming frustrated from the imprecision of his counterpart’s communication.

c. expending too much on reports and letters.

d. missing important communication cues.

18. Political payoffs are a problem; how would you react if you faced the prospect of paying a bribe? If you knew that by not paying you would not be able to complete a $10 million contract?

The response to this question is obviously, one deals with an individual’s own code of ethics. In discussing the question, it should be stressed that paying the bribe or any other illegal act is not permissible by most company rules. Further, to do so would violate U.S. law as well as a law in many host countries.

19. Differentiate among the following:

Subornation

Lubrication

Extortion

Bribery

Subornation generally involves large sums of money, frequently not properly accounted for, which are designed to entice an official to commit an illegal act of magnitude on behalf of the one paying the bribe.

Lubrication, on the other hand, involves a relatively small sum of cash, gift, or service made to a low-ranking official in a country where such offerings are not prohibited by law; the purpose of such a gift being to facilitate or expedite a normal, lawful performance of a duty by an official.

Extortion is payment extracted under duress by someone in authority from a person seeking only what one is lawfully entitled to.

Bribery is money voluntarily offered by someone seeking unlawful advantage. Lubrication payments are a request for a person to do a job more rapidly or more efficiently, whereas subornation is a request for officials to turn their heads, not do their job, or to break the law. An example of extortion would be a Finance Minister of a country demanding heavy payments under the threat that millions of dollars of investment would be confiscated.

20. Distinguish between P-time and M-time.

Edward Hall defines two kinds of time systems in the world – monochronic and polychronic time. M-time (monochronic) typifies most North Americans, Swiss, Germans, and Scandinavians. In these Western cultures, they tend to concentrate on one thing at a time. They divide time into small units and are concerned with promptness. M-time is used in a linear way and it is experienced as being almost tangible in that we save time, waste time, bide time, spend time and lose time. Most low context cultures operate on M-time.

P-time is more dominant in high context cultures where the completion of a human transaction is emphasized more than holding to schedules. P-time is characterized by the simultaneous occurrence of many things and by “a great involvement with people.” P-time allows for relationships to build and context to be absorbed that are a part of high-context cultures. In Japan there is a mix between P-time and M-time. For appointments, Japan is very M-time but for all other interaction, they are more P-time.

The American desire to “get straight to the point,” to “get down to business” and other indications of directness are all manifestations of M-time cultures. While the P-time system gives rise to looser time schedules, deeper involvement with individuals and a “wait and see what develops” attitude. For example, two Latins conversing would likely opt to be late for their next appointments rather than abruptly terminate the conversation before it came to a natural conclusion.

21. Discuss how a P-time person reacts differently from an M-time person in keeping an appointment.

When business people from M-time and P-time meet, adjustments on both sides need to be made for a harmonious relationship. P-time is characterized by a much “looser” notion of what is “on time” or “late.”

Interruptions are routine, delays to be expected. It is not so much putting things off until “manana” but the concept that human activities are not expected to proceed like clockwork.

One study comparing perceptions of punctuality in the U.S. and Brazil found that Brazilian timepieces were less reliable and public clocks less available than it was in the United States. Researchers also found that Brazilians more often described themselves as late arrivers, allowed greater flexibility in defining early and late, were less concerned about being late, and were more likely to blame external factors for their lateness than were Americans.

Often clarity can be gained by specifying tactfully, for example, whether a meeting is to be on “Mexican time” or “American time.” An American who has been working successfully with the Saudis for many years says he has learned to take plenty of things to do when he travels. Others schedule appointments in their offices so they can work until their P-time friend arrives.

22. What is meant by “laws are the markers of past behavior that society has deemed unethical or socially irresponsible?”

It means that to be ethical does not mean just abiding by the law. Most laws reflect societies’ concern that some type of behavior is not proper and that people do not voluntarily refrain from the offensive behavior, thus, laws are passed. In many countries, the law may help define the borders of minimum ethical or social responsibility, but the law is only the floor above which one’s social and personal morality is tested. Ethical business conduct should normally exist at a level well above the minimum required by law.

23. What are the three ethical principles that provide a framework to help distinguish between right and wrong?

Explain.

There are three ethical principles that provide a framework to help the marketer distinguish between right and wrong, determine what ought to be done, and properly justify his or her actions. They are:

- Utilitarian ethics, i.e., does the action optimize the common good or benefits of all constituencies?

- Rights of the parties, i.e., does the action respect the rights of the individuals involved?

- Justice or fairness, i.e., does the action respect the canons of justice or fairness to all parties involved?

Answers to these questions can help the marketer ascertain the degree to which decisions are beneficial or harmful, right or wrong, or whether the consequences of actions are ethical or socially responsible.

24. Visit Transparency International Web page and check to see how the CPI Index for countries listed in Exhibit 5-2 has changed. Searching TI’s databank, explain why the changes have occurred. The site is found at: http://www.transparency.de.