It would be cliché to begin by saying that we are in a global economy. Everyone knows that, with the possible exception of the tin-foil hat crowd.
Successful marketing strategies in this de facto global economy require a symphonic approach, otherwise, a cacophony will result and failure is almost certain.
Every aspect of a company’s marketing strategy must be carefully analyzed and reviewed. There are faux pas in domestic marketing campaigns. Obviously the opportunities to fail in foreign campaigns are significantly higher.
Western businesses focus on fundamentals such as strategy, research, product development, pricing, promotion and distribution. While these are certainly equally important in overseas markets other factors must be brought into the equation.
Perhaps culture is the most important. A country’s culture and business expectations within that culture must be well understood. If we cannot master the culture of the country in which we want to do business, we are setting ourselves up for failure.
Beyond the cultural, there are differences in legal systems, rules of conduct, differences in relationships, and many other considerations depending on the country.
Culture and the Rules of Conduct
Understanding the basis for ethical standards across two cultures permits us to understand the differences and parlay that understanding into a means of managing those inevitable differences. It is important to understand that some cultures might view similar practices with differing levels of approbation or condemnation. This is the problem managers engaged in cross-cultural transactions face on a daily basis. How can differences in ethical behavior be anticipated and managed? How can cultural conflict be avoided when different ethical standards meet in a business transaction?
The Foreign Corrupt Practices Act forbids US companies to engage in practices that are illegal in the United States. For example, bribery to obtain business is a criminal act, no matter where it takes place. In some countries, bribery is the norm and virtually no business can be concluded without bribery. To illustrate the point, bribes are tax deductible in Germany.
There are six key questions, the answers to which can give managers insight into the cultural values of a given country.
- What does the society believe about people; that is, are they essentially good, bad or both?
- In interpersonal relationships is the greatest value placed on the individual or the group
- What is the value of personal space in the society? In other words, are people comfortable being extremely close to one another or is some degree of physical distance required for comfort?
- How does the society perceive its relationship with nature? Should man dominate nature or live in harmony with nature?
- What is the attitude toward change? Does the culture place a high value on stability and maintaining the status quo or is it progressive and open to change?
- What is the cultural orientation relative to time: past present or future?
The answers to the above questions can serve as the basis for anticipating conflict situations.
Most managers like clear guidelines upon which they can base decisions and more importantly, defend the decisions they make. Regrettably, there is no possibility of having rules and guidelines to aid managers in decision making when cross-cultural ethics are in play.
For example, the Chinese view gift-giving as a sign of respect, a sign that the business relationship is very much valued. In the United States it may easily be viewed as a bribe.
Cultural values in the United States go back to our country’s Puritan origins. Individual rights are at the apex of our culture. Conversely, other cultures value the group or the society above the individual. This is true of many Asian countries, such as China, Taiwan, the Koreas, the Philippines, etc. Most Asian countries value society’s needs ahead of individual needs.
The foundation of capitalistic system is the individual’s right to choose. This makes our markets competitive and we believe that competition is the best way to organize an economy. This is not the case with many foreign countries. They engage in business to be sure, but the paradigm is often totally alien to us.
The Philippines, for example, does not allow foreign businesses to own more than 40 percent of a corporation. The remaining 60 percent must be owned by natural Filipino citizens. This is no doubt a cultural holdover from the Filipino experience with its Spanish conquerors and nearly 500 years of Spanish rule. Bribery is a way of life and deeply rooted in the culture.
Other problems arise from a culture’s orientation toward time. The Chinese, for example, show a high regard for their ancestors and often pray to deceased relatives for help. The concept of time is elongated in the Chinese culture and stands in sharp contrast to Americans who have little concern for the past, live in the present and plan for the future. Never underestimate the potential for conflict inherent in these dissimilar attitudes.
Culture is the foundation for ethical behavior and a country’s culture ultimately determines what is ethical and what is not ethical. With an insightful understanding of the answers to the six questions posed earlier, US managers can begin to develop insights that can suggest appropriate courses of action in business dealings in foreign countries.
A sound understanding of cultural differences can avoid costly problems and potential failure. It is highly recommended to employ an expert on the other’s culture and business practices. This will provide the best opportunity for a successful outcome.