Suppose you get a job at Kismet Indemnity, a life insurance company.

In its
45-year history, Kismet has never done any international business. Now its
president, Randall Fraser, wants to expand abroad. You have noted in
meetings that he seems to lack much awareness of the role of culture. Write a
memo to him in which you explain why culture matters in international
business. Be sure to speculate on the effects of various dimensions of culture
on sales of life insurance.

TO: Mr. Randall Fraser, President Kismet

FROM: Raymart M. Copiar
DATE: 11/02/2020
RE: International Expansion and Cultural Implications for Kismet

In an effort to facilitate our globalization, please allow me to summarize what I have read
concerning international business and cultural implications:
■ Culture is the collective mental programming of people. It influences consumer behavior,
managerial effectiveness, and the range of value-chain operations, such as product and service
design, marketing, and sales. Culture is not inherited, not right or wrong, and not about
individual behavior. Culture is like an iceberg in that most of its elements and influence are
hidden below the surface.
■ Culture matters in international business in areas such as developing products and services;
interaction with foreign business partners; selecting foreign distributors; business negotiations;
dealing with customers; preparing for trade fairs; and preparing promotional materials.
■ Be mindful- Cross-cultural differences complicate workplace issues such as teamwork,
employment, pay for performance systems, organizational structures, union-management
relationships, and attitudes toward ambiguity.
■ Service industries and cultural differences- In contact-based services such as life insurance,
providers (Kismet) interact directly with foreign nationals in culture-laden transactions. Cultural
differences may lead to mishaps in the exchange process.
■ Driver of cultural change- Technological advances are a key determinant of culture and
cultural change. Improved transportation and the spread of communications technology have
removed the boundaries that once separated nations.
■ Technology also promotes culture. The Internet emphasizes the role of language in
communications. Globalization promotes common culture and the consumption of similar
products and services worldwide.
■ We may want to employ a cross-cultural framework such as Hofstede’s in order to better
understand certain cultural dimensions such as individualism versus collectivism, power
distance, uncertainty avoidance, masculinity versus femininity, and long-term versus short-term
orientation. Once we have a clearer understanding of our target audience, we may communicate
more effectively. Also, learning from others’ blunders: