CHAPTER 5
The Cultural Environment
Chapter Outline
• Introduction
• Defining Culture and Its Characteristics
• Elements of Culture
• Language
• Religion
• Values and Attitudes
• Manners and Customs
• Material Elements
• Aesthetics
• Education
• Social Institutions
• Clustering Countries and Regions by Culture
• Hofstede’s Research
• Trompenaars’s Cultural Dimensions
• The GLOBE Project
• Gannon’s Cultural Metaphors
• Sources of Cultural Information
• Cultural Dimensions of Conducting Business in Individual Countries
o Cultural Dimensions of Doing Business in Japan
o Cultural Dimensions of Doing Business in Korea
o Cultural Dimensions of Doing Business in China
o Cultural Dimensions of Doing Business in Arab Countries
o Cultural Dimensions of Doing Business in Latin America
• The Importance of Culture for Managing and Marketing in Overseas Markets
o Management Styles
o Product Development and Management
o Advertising Campaigns
o Communication
Teaching Objectives
After covering this chapter, the student should be able to:
• Define culture and identify the four characteristics of culture that companies doing
business abroad need to recognize.
• Name several elements of culture.
• Name and distinguish among the cultural dimensions proposed by Hofstede and
Trompenaars.
• Identify the primary and secondary sources that can be used to learn about foreign
countries’ cultures.
• Describe the cultural aspects of doing business in various countries, including East Asian
countries, Arab countries, and Latin America.
• Explain why culture is important in global management and marketing.
COMPREHENSIVE LECTURE OUTLINE
I. Introduction. This chapter will discuss the cultural dimension of companies’
international environment.
CLASS ACTIVITY: Use the Cultural Perspective case as an opportunity to allow students to
explore the importance of cultural sensitivity in the success of business activities.
II. Defining Culture and Its Characteristics. Culture is “learned behavior; a way of life
for one group of people living in a single, related, and independent community.” There are four
characteristics of culture that are important:
• Culture is not inherited; it is learned.
• Culture is relatively static and not easily modified.
• It is a responsibility of the global firm to ascertain the level of importance of
various aspects of culture.
• Companies’ operations need to recognize and adjust to the cultural environment
existing in foreign markets served.
DISCUSSION STARTER: REALITY CHECK 1.
Think of some foreign products that are marketed in the United States. Have the foreign
manufacturers used marketing that is sensitive to U.S. culture? Provide some specific
examples.
III. Elements of Culture. Culture affects numerous aspects of a society.
• Language. Verbal and non-verbal communication are two primary types of language.
Language is important to managers in their intra-company communications and when
providing access to local markets through advertising. One way to eliminate language
gaffes is to use backward translation. In this technique, a message is translated from
English into another language, then someone skilled in that foreign language translates it
back into English. This second translation is then compared to the original English
version. Exhibit 5.1 • The Importance of Language in Foreign Countries’ Cultures.
• Religion. Religion is a powerful cultural aspect that must be recognized as companies
manage their overseas operations. Different religions observe different holidays;
weekends and work hours vary according to different religions; companies marketing
food products overseas must be aware of religious differences.
• Values and Attitudes. Values are basic beliefs or philosophies that are pervasive in a
society. Attitudes are feelings or opinions.
• Manners and Customs. Manners and customs refer to the way a society does things that
prevail in foreign countries. Gift-giving is one aspect of manners and customs.
ECONOMIC PERSPECTIVES: Attitudes Toward Work. A country’s culture affects its
attitudes toward work. These attitudes are often legally sanctioned by government. The resulting
policies regarding hours, pay, and vacations will influence various aspects of a nation’s
economic performance.
Suggestion: You could ask students to do this case as individuals or in teams as a class activity.
Have the students read the case presented in the text and discuss employment policies in
countries such as the U.S., China, and India.
• Material Elements. Material culture in a society is often a direct result of technology. It
is best demonstrated by a country’s infrastructures: economic, social, financial, and
marketing.
• Aesthetics. Color, form, and music are the major components of aesthetics. Colors often
represent different things in different countries.
• Education. The level of education held by people in foreign countries is a major factor in
explaining economic growth. The level of education must be such that high-tech products
can be accepted because the market knows how to use them.
• Social Institutions. Social institutions refer to the way people relate to one another
within group settings in a society. Sociologists refer to groups that are important to
individuals as reference groups. Some countries have a high level of social stratification,
which means that the groups at the top of the social pyramid exert a great deal of control
over others at lower levels of the pyramid.
DISCUSSION STARTER: REALITY CHECK 2.
Indicate what reference groups are most important to you. How important are these reference
groups when conducting business in foreign countries? Why?
IV. Clustering Countries and Regions by Culture. There have been several attempts to
group countries and regions of the world according to their cultural dimensions and similarities:
• Hofstede’s Research. Hofstede pioneered research into cultures with a study focusing on
IBM employees in 64 countries. Hofstede’s findings led him to identify clusters of
countries and regions according to five cultural dimensions:
o Individualism vs. Collectivism: the worth of the individual versus the worth of
the groups of which that person is a member.
o Power Distance: egalitarianism (equity) versus authority.
o Masculine vs. Feminine: the extent to which a society values traditionally
masculine attributes (assertiveness and competitiveness) versus traditionally
feminine ones (modesty and caring for others).
o Uncertainty Avoidance: the extent to which societies tolerate risk or are risk
averse.
o Time Orientation: the extent to which a society emphasizes short-run or long-
run time horizons.
• Trompenaars’s Cultural Dimensions. Building on the work of Hofstede, Fons
Trompenaars added a number of cultural variables to the theory:
o Universalism vs. Particularism refers to the importance of rules versus
relationships in a society.
o Neutral vs. Emotional involves the extent to which persons within a society
emotionally express themselves.
o Specific vs. Diffuse refers to the compartmentalization of roles.
o Achievement vs. Ascription refers to how rewards in a society are handed out.
• The GLOBE Project. The Global Leadership and Organizational Behavior Effectiveness
(GLOBE) project involved surveying thousands of business executives from 61 countries
about nine cultural dimensions. Exhibit 5.2 • GLOBE Constructs and Corresponding
Questionnaire Items. Some of these items are based on Hofstede’s work, while others
were added to obtain a more comprehensive and richer portrait of the cultural dimension
of doing business. Exhibit 5.3 • GLOBE Results on Nine Constructs for Six Regional
Groupings.
• Gannon’s Cultural Metaphors. M. Gannon believes that it is extremely difficult for
executives to learn much about cultures through “do’s” and “don’ts.” He suggests that it
would be more productive to gauge a specific culture by using an image—metaphor—
that depicts how people in a specific culture think and behave.
DISCUSSION STARTER: REALITY CHECK 3.
Choose a country with which you are unfamiliar and research its rankings on Hofstede’s
dimensions. What specific business practices would you expect to find in that country based on
the rankings? Read some business literature about that country and see whether your
expectations are fulfilled.
V. Sources of Cultural Information. Companies considering conducting business overseas,
and those already doing business abroad, have a number of sources they can access to learn more
about the culture of foreign countries.
• Primary sources include employees, executives, training programs, and consulting firms.
• Various secondary sources are also helpful (e.g., The U.S. Department of Commerce
Country Commercial Guide).
DISCUSSION STARTER: REALITY CHECK 4.
Choose one of the above sources and read the write-up on any five countries of your choice.
How much information is provided about their cultures? Are there any similarities among
your choices?
VI. Cultural Dimensions of Conducting Business in Individual Countries. Although it is
more important to have an overall flexible and open attitude about foreign cultures, individual
countries have specific business customs that are worth learning.
• Cultural Dimensions of Doing Business in Japan
• Cultural Dimensions of Doing Business in Korea
• Cultural Dimensions of Doing Business in China
• Cultural Dimensions of Doing Business in Arab Countries
• Cultural Dimensions of Doing Business in Latin America
ETHICAL PERSPECTIVES: Right or Wrong? It Depends on the Culture. Use the Ethical
Perspectives case as an opportunity to discuss the impact of cultures on ethics. Cultures around
the world have different paradigms describing what is ethical or unethical when conducting
business in overseas markets. Consider examples of business practices from France, Latin
America, and Muslim countries.
DISCUSSION STARTER: REALITY CHECK 5.
Find someone who is a native of a foreign country and now works in the United States (or
your home country). Ask that person about customs and business practices in the U.S., and
how these compare with customs and business practices in his or her native country. How
easily do you think you would adapt if you worked in that person’s country?
VII. The Importance of Culture for Managing and Marketing in Overseas Markets.
When managing people and resources in a foreign country, close attention to host-countries’
cultures is critical.
• Management Styles. U.S. companies have management styles that frequently conflict with
the management styles preferred in other cultures.
• Product Development and Management. When developing new products, management
styles must be considered along with many other aspects of marketing strategies. Products
that are wildly successful in home-country markets may need to be modified for an
international market. There are many examples of American brands that have not been
successful in foreign markets because their names were not culturally acceptable.
• Advertising Campaigns. Like brands, advertising campaigns must be carefully tailored to
local cultures.
• Communication. Communication is a key function in business, and culture has an impact on
communication styles. The use of jargon is usually inappropriate, as it greatly increases the
risk of misunderstanding. Exhibit 5.4 • Examples of U.S.-Based Business Jargon that
Would Not Be Understood by Foreign Business Representatives.
DISCUSSION STARTER: REALITY CHECK 6.
Choose three or four ads from a U.S. magazine or website and describe the cultural factors to
which each ad appeals. Do you think the ads are successful from a cultural standpoint? Why
or why not?
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Assignments
End-of-Chapter Discussion Questions
1. What are the four characteristics of culture that global marketers must
recognize? Answer: Culture is not inherited; it is learned. Culture is
2. Name four elements of culture and briefly indicate why they are important
when marketing products and services internationally. Answer: Language
3. How do Gannon’s cultural metaphors differ from how Hofstede uses
culture to classify countries? Answer: M. Gannon believes that it is
4. What are some important secondary sources that companies can consult to
learn about the cultures of other countries? Answer: Companies
5. What are some cultural factors that U.S. companies must recognize when
doing business in Latin America? Answer: When doing business in Latin
6. What types of managerial decisions in foreign countries are driven by
cultural factors? Answer: When managing people and resources in a
Mini-Case Synopsis and Questions
For a person who is assigned the task of developing a cultural map of Ecuador to
be included in the prospectus to potential clients, there are multiple questions about
the country that need to be answered.
Questions:
1. What sources about Ecuador should you consult to obtain cultural
information about this country that will need to be included in your cultural
map? Selected rankings of Ecuador on Hofstede’s, Trompenaars’s and
2. What other aspects of Ecuadorian culture, other than its predominant
religion and language, might affect that country’s culture? It also will be
Point/Counterpoint, Interpreting Global Business News, and Portfolio Projects
Students’ answers to these assignments will vary widely. Their writing should
reflect an understanding of the chapter’s basic concept, thorough research, and
logic and critical thinking skills.