Cultural awareness is key in any
international business activity. Cultural divides should be accounted for in
marketing, negotiations, product design, and other important decisions. One
must analytically consider the best way to promote a product given the target
audience. It is argued that differences among cultures can be explained
according to four dimensions of culture:
1. Individualism – “I” consciousness vs. “we”
consciousness
2. Power Distance – levels of equality in society
3. Uncertainty Avoidance – need for formal rules and
regulations
4. Masculinity – attitude toward achievement, roles of
men and women
This figure shows the cultural dimension
scores of 12 countries. Japan, for
instance, shows the highest Uncertainty Avoidance score and thus might be
receptive to such risk-reducing marketing programs as return privileges and
extended warranties. Since individualism
is highly regarded in the US, promotional appeals the promise empowerment might
be enticing. In Arab countries where Power Distance scores are high, consumers
may respond well to promotions that imply social status.
Doing business in other countries requires
cognizance of the cultural divide. An
international manager must think analytically to eliminate any self-reference
criterion, which is the unconscious reference to one’s own cultural values. This
is the root of most international business problems.
Understanding culture requires constant
monitoring of changes caused by outside events and by the business entity
itself. Resisting ethnocentrism –
thinking one’s own cultural is superior – is also important. One must be careful not to measure other
cultures with one’s own cultural barometer.
Some times a Long-Term vs. Short Term
Outlook dimension also has been considered.
Asian countries score highly on this dimension, while most Western
countries do not. This may help explain
why the Japanese tend to evaluate marketing decisions based on long-term market
share rather than on short-term profit motivations.
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