What is Culture?
Culture is a society’s accepted basis for responding to internal
and external events. Dutch management professor Geert Hofstede describes
culture as the software of the mind and says that it guides
the humans on how to think and behave, it is a problem-solving tool.
Anthropologist and business adviser Edward Hall explain the culture which is
more associated with the foreign marketing managers: The individuals to whom we
were advising, found kept bumping their heads against an invisible
barrier.
We tend to see that what they were up against was a totally
different method of forming life, of thinking, and of perceiving the elemental
molds concerning the family and also the state, the financial system, and even
man himself. The salient arguments in Hall's explanation were that cultural
changes are typically invisible which, if marketers ignore them, harms each
corporation and businesses.
The best foreigner marketers not only understand the cultural
changes related to their businesses, but they also comprehend the origins of
such changes. The possession of such knowledge helps marketers to notice
cultural changes in new markets and forecast changes in current markets. The
foreign marketer must develop products, distribution plan, and promotional
programs with due consideration of each of the five elements, values, rituals,
symbols, beliefs, and thought processes.
Global Marketing Environment
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| Factors that effect Global Marketing Environment. (Photo by Gerd Altmann) |
The culture is dynamic in nature as it is a living process. But
the point is that cultural variation is perpetual seems inconsistent because
another important characteristic of culture is that it is traditional or
conservative and resists change. The dynamic attribute of culture is important
in assessing new markets even though changes face resistance. There are a many
ways societies change. Some have change thrust upon them by war (for example,
the changes in Japan after World War II) or by a natural disaster. Generally,
the change is a result of a society seeking ways to resolve the issues created
by changes in its environment.
International Management
Because of the varied structures, management standards, and
behaviors encountered in foreign business, there is a significant change in the
ways business is conducted. No matter how thoroughly prepared a marketer may be
when approaching an international market, a certain amount of cultural
astonishment arises when differences in the contact level, communications
emphasis, and formality of foreign businesses are met. Ethical values differ
subsequently across the cultures, as do rituals such as sales interactions and
negotiations. In most countries, the foreign trade is also likely to encounter
a fairly high degree of government involvement.
The new breed of international business executives emerging in
recent years has a sharp sensitivity to cultural changes. However, sensitivity
is not enough, the international marketer must be constantly vigilant and
prepared to adapt when necessary. One must always realize that no matter how
long you are in a country, the outsider is not a local, in many countries that
persons may always be treated as an outsider. Finally, one must evade the grave
mistake of assuming that information of one culture will provide acceptability
in another.
Gender Bias in International Business
The gender bias within the geographic point against women managers
in some countries creates hesitancy among U.S transnational firms to task women
the international assignments. Although women represent almost half of the U.S
workforce, they represent comparatively small percentages of the employees who
are chosen for international tasks (only 18 percent). It is true that
in many cultures, like Asian, Middle Eastern, and Latin American, women are not
typically found in upper levels of management, and men and women are treated
very differently.
Legal Systems
Four legacies establish the basis for a majority
of legal systems of the world:
Common Law is derivative from
English law and originates in England, the United States, Canada, and other
countries once under English influence.
Civil or Code Law comes from Roman law.
It is found in Germany, France, Japan, and additionally in non-Islamic and
non-Marxist countries.
Islamic Law, derived from the
interpretation of the Holy Quran and found in Pakistan, Iran, Saudi Arabia, and
other Islamic states.
Commercial Legal System is derivative from
the Marxist-socialist economies of Russia and similarly the republics of the
Soviet Union, Eastern Europe, China, and some other Marxist-socialist states
whose legal system focused on the economic, political, and social policies of
the state.
As every country moves its free market system and enters into the
global market, a commercial legal system is also developing from those
Marxist-socialist tenets. China has announced that it will adopt a
Constitution-based legal system with Chinese characteristics. The
variances among these four systems are of more than theoretical significance
because due process of law may vary largely among and within these legal
systems. Even though, a country's laws may be based on the doctrine of one of
the four legal systems, its individual interpretation may vary significantly
from a fundamentalist interpretation of Islamic law as found in Pakistan to a
blend of several legal systems found in the United States, where both common
and code law is reflected in the laws.
Protection of Intellectual Property Rights
Protection of intellectual property rights is most important in
foreign business. The companies spend millions of dollars for developing brand
names or trademarks to represent quality and design a host of other product
features meant to attract customers to buy their brands to the exclusion of all
others. Millions more are spent on research to develop products, processes,
design, and formulas that provide companies with benefits over their
competitors. Such intellectual or industrial properties are among the more
valuable assets of a company.
One financial group has estimated the brand values such as the
Marlboro brand had a value of $33 billion,
Kellogg's $9 billion, Microsoft $9.8 billion, and
Levi's $5 billion, all have experienced a breach of their intellectual
property from infringing on such assets. Companies must, however, keep a
constant watch on privacy and counterfeiting.
International Commercial Law
When doing business in more than one country, a marketer must
remain vigilant to the diverse legal systems. This problem is especially
bothersome for the marketer who formulates a common marketing plan to be
implemented in several countries. Although variances in languages and customs
may be lodged, legal changes between countries may still present problems for a
marketing program.
Marketing Laws
Almost all countries have developed the marketing laws for
promotion, product development, labeling, pricing, and channels of
distribution. In some countries, there may be only a few laws with lax
enforcement, in others, there may be detailed, complex rules to follow that are
strictly imposed. There often are massive variances in implementation and
understanding among countries having laws covering the same activities.
Marketing Laws leading sales promotions in the European Union present noble
instances of such diversity.
In Austria, best offers, free gifts, or coupons are considered as
cash reductions or discounts and same is prohibited. Premium offers in Finland
are permissible with a significant scope as long as the word free is not used
and consumers are not forced into buying products. France also controls premium
offers, which are for all applied purposes, prohibited there because it is
illegal to sell for less than cost price or to offer a customer a gift or
premium on the conditions to purchase another product. French law does
authorize sales twice a year, in January and August, which can legally last for
4-6 weeks. This event is so common that it is publicized on radio, TV, and even
special police are required to control the crowds.
Cyber Security Law
The internet is by its nature a global enterprise in which no
political or national boundaries are closed. Although this is its strength, it
also creates problems when existing laws do not clearly address the
distinctiveness of the Internet and its related activities. Existing law is
imprecise or does not completely cover such issues as the protection of domain
names, taxes, jurisdiction in cross-border transactions, and contractual
issues. The European Union, the United States, and many other countries are
drafting legislation to address the numerous legal questions not clearly
addressed by current law. But until these laws apply worldwide, companies must
depend on individual country laws which may or may not provide protection.
