International Marketing

15th edition

Chapter 5
Culture, Management Style,
and Business Systems

Philip R. Cateora, Mary C. Gilly, and John L. Graham

Imperatives, Electives,
and Exclusives

Cultural imperatives - Business customs and

expectations that must be met and conformed to or
avoided if relationships are to be successful
In some cultures a persons demeanor is more critical than
in others
Imperatives vary from culture to culture

Cultural electives - Relate to areas of behavior or to

customs that cultural aliens may wish to conform to or
participate in but that are not required
A cultural elective in one county may be an imperative in
another

Cultural exclusives - Customs or behavior patterns

reserved exclusively for the locals
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The Impact of American Culture

on Management Style

Master of destiny viewpoint

Independent enterprise as the instrument
of social action
Personnel selection and reward based on
merit
Decisions based on objective analysis
Wide sharing in decision making
Never-ending quest for improvement
Competition producing efficiency
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Authority and Decision Making

Influencers of the authority structure of
business:
High PDI Countries
Mexico, Malaysia
Low PDI Countries
Denmark, Israel

Three typical authority patterns:

Top-level management decisions
Decentralized decisions
Committee or group decisions
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Formality and Tempo

Breezy informality and haste characterize

American business relationships
Europeans not necessarily Americanized
Higher on Hofstedes Power Distance Index
(PDI)
May lead to business misunderstandings

Haste and impatience most common mistakes

made by Americans in the Middle East
For maximum success marketers must deal with
foreign executives in acceptable ways
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Contextual Background
of Various Countries
Exhibit 5.2

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P-Time versus M-Time

Monochronic time

Tend to concentrate on one thing at a time

Divide time into small units and are concerned with
promptness
Most low-context cultures operate on M-Time

Polychronic time

Dominant in high-context cultures

Characterized by the simultaneous occurrence of many
things
Allows for relationships to build and context to be
absorbed as parts of high-context cultures

Most cultures offer a mix of P-time and M-time behavior

As global markets expand more businesspeople from
P-time cultures are adapting to M-time.
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Marketing Orientation
The extent of a companys market orientation
has been shown to relate positively to profits
Firms in other countries have not been able to
move from the traditional production, product,
and sales orientation to the marketing
orientation
Research has shown that sometimes in can be
difficult to encourage a marketing orientation
across diverse business units in global
companies
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Business Ethics
Corruption

What is Corruption?

Profits (Marxism)
Individualism (Japan)
Rampant consumerism (India)
Missionaries (China)
Intellectual property laws (Sub-Sahara Africa)
Currency speculation ( Southeast Asia)

Criticisms of Mattel and Barbie

Sales of Barbie declined worldwide after the global
standardization
Parents and government did react
Mattels strategy boosted sales of its competition
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The Western Focus on Bribery

In the 1970s, bribery became a national issue with
public disclosure of political payoffs to foreign
recipients by U.S. firms
The decision to pay a bribe creates a major conflict
between what is ethical and proper and what is
profitable and sometimes necessary for business
The Organization for Economic Corporation and
Development (OECD) and Transparency
International (TI) are combating the bribery of
foreign public officials in international business
transactions
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Transparency International
Corruption Perception Index
Exhibit 5.5

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Bribery
5
Variations on a Theme (1 of 2)
Bribery and Extortion
Bribery is voluntary offered payment by someone seeking
unlawful advantage is bribery
Extortion takes place only if payments are extracted under
duress by someone in authority from a person seeking only what
he or she is lawfully entitled to

Subornation and Lubrication

Lubrication involves a relatively small sum of cash, a gift, or a
service given to a low-ranking official in a country where such
offerings are not prohibited by law
Subornation involves giving large sums of money, frequently not
properly accounted for, designed to entice an official to commit
an illegal act on behalf of the one offering the bribe

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Bribery
5
Variations on a Theme (2 of 2)
Agents Fees
When a businessperson is uncertain of a countrys
rules and regulations, an agent may be hired to
represent the company in that country
The Foreign Corrupt Practices Act (FCPA)
Change will come only from more ethically and
socially responsible decisions by both buyers and
sellers and by governments willing to take a stand
Since 1994, US businesses have bowed out of 294
major overseas commercial contracts valued at
$145 billion rather than paying bribes
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Ethical and Socially

Responsible Decisions

Difficulties arise in making decisions, establishing policies, and

engaging in business operations in five broad areas

Employment practices and policies

Consumer protection
Environmental protection
Political payments and involvement in political affairs of the country
Basic human rights and fundamental freedoms

Laws are the markers of past behavior that society has deemed
unethical or socially irresponsible
Ethical principles to help the marketer distinguish between right
and wrong, determine what ought to be done, and justify actions

Utilitarian Ethics (Does it achieve a common good?)

Rights of the Parties (Does the actions involve the rights of the
individual?)
Justice or Fairness (Does the action represent fairness for all?)
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Dimensions of Culture
A Synthesis
Exhibit 5.7

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