1
CHAPTER 3
THE CULTURAL ENVIRONMENT
Chapter Outline
A. Culture Defined
B. The Elements of Culture
1. Language
2. Nonverbal Language
3. Religion
C. Cultural Analysis
D. The Training Challenge
E. Making Culture Work for Marketing Success
1. Embrace Local Culture
6. Coordinate by Region
Chapter Objectives
This chapter focuses on cultural impacts on international business, defining and demonstrating
the effect of culture’s various dimensions on business. As part of this focus, the chapter examines
ways in which cultural knowledge can be acquired and individuals and organizations prepared for
Suggestions for Teaching
The instructor can do various things in simulating the “living culture”. Depending on the
situation, a combination of the following three approaches can be used on a(n)
industry/market/function-specific basis. First, if the class has members from different cultures,
some of the end–of-chapter questions can be discussed from the perspective of different student
2
reactions. Comparisons can be made on the positioning of the same product across cultures; e.g.,
how are sleeping pills marketed or how women are portrayed in advertising.
Students benefit most out of group projects which have (1) pertinent topics and (2) well–chosen
diverse members. These two aspects ensure interest and learning from peers as the project
progresses. Student bodies today portray both cultural background differences as well as exposure
Chapter Summary
A. Culture Defined
Culture is defined as an integrated system of learned behavior patterns that are
distinguishing characteristics of the members of any given society. Culture is inherently
conservative, resisting change and fostering continuity. Problems may arise when a
person encultured in one culture has to adjust to another one. The process of
B. The Elements of Culture
The study of culture has led to generalizations that may apply to all cultures. Such
characteristics are called cultural universals, which are manifestations of the total way of
1. Language
Language has been described as the mirror of culture. Language itself is
multidimensional by nature. This is true not only of the spoken word but also of what
can be called the nonverbal language of international business.
Language capability serves four distinct roles in international marketing:
• Language aids in information gathering and evaluation efforts.
2. Nonverbal Language
Managers must analyze and become fluent in a diversity of culturally derived
behavioral displays. Five key topics—time, space, material possessions, friendship
3. Religion
Religion defines the ideals for life, which in turn are reflected in the values and
attitudes of societies and individuals that shape the behavior and practices of
institutions and members of cultures and are the most challenging for the marketer to
adjust to. Religion provides the basis for transcultural similarities under shared
beliefs and behavior. The impact of these similarities will be assessed in terms of the
dominant religions of the world: Christianity, Islam, Hinduism, Buddhism, and
Confucianism. International marketing managers must be aware of the differences
not only among the major religions but also within them.
Hinduism, in addition to being a religion, is also a way of life predicated on the
caste, or class, to which one is born. While the caste system has produced social
stability, its impact on business can be quite negative.
4. Values and Attitudes
Values are shared beliefs or group norms that have been internalized by individuals.
Attitudes are evaluations of alternatives based on these values. The more rooted
5
5. Manners and Customs
Changes occurring in manners and customs must be carefully monitored, especially
in cases that seem to indicate narrowing of cultural differences between peoples.
Modernization and Westernization are not at all the same, as can be seen in Saudi
Arabia, for example. Both views are superficially right, and both miss the most
6. Material Elements
Material culture results from technology and is directly related to the way a society
organizes its economic activity. It is manifested in the availability and adequacy of
the basic economic, social, financial, and marketing infrastructures. In some parts of
the world, the international firm may have to be an integral partner in developing the
various infrastructures before it can operate, whereas in others it may greatly benefit
6
7. Aesthetics
Each culture makes a clear statement concerning good taste as expressed in the arts
and in the particular symbolism of colors, form, and music. What is and what is not
8. Education
Educational levels of a culture can be assessed using literacy rates and enrollment in
secondary or higher education, information available from secondary data sources.
International firms need to know about the qualitative aspects of education, namely,
varying emphases on particular skills and the overall level of the education provided.
9. Social Institutions
Social institutions affect the ways in which people relate to each other. The family
unit, which in Western industrialized countries consists of parents and children, in a
number of cultures is extended to include grandparents and other relatives. This will
have an impact on consumption patterns and must be taken into account when
conducting market research.
7
10. Sources of Cultural Knowledge
Cultural knowledge can be defined by the way it is acquired. Objective or factual
information is obtained from others through communication, research, and
education. Experiential knowledge can be acquired only by being involved in a
culture other than one’s own. A summary of the types of knowledge needed by the
international manager is provided in Exhibit 3.3.
multicountry, multicultural teams to develop strategies and programs.
Various sources and methods are available to the manager for extending his or her
knowledge of specific cultures. Most of these sources deal with factual information
that provides a necessary basis for market studies. Beyond the normal business
literature, specific country studies are published by governments, private companies,
8
C. Cultural Analysis
The key variable of the model is to try to understand and explain differences among
cultures and subsequently in cross-cultural behavior, the marketer must function of three
constructs:
• cultural lifestyle of individuals in terms of how deeply held their traditional
beliefs and attitudes are, and also which elements of culture are dominant
It has been argued that differences in cultural lifestyle can be accounted for by five major
dimensions of culture. These dimensions consist of:
• individualism–collectivism
The Global Leadership and Organizational Behavior Effectiveness Research Project
(GLOBE) has focused on universals and culture-based differences in perceived
Communication about the innovation takes place through the physical product itself
(samples) or through a new policy in the company. Before the product or policy is
evaluated, information about it will be compared with existing beliefs about the
circumstances surrounding the situation. Adoption tendency refers to the likelihood that
9
D. The Training Challenge
The increase in overall international activity of firms has increased the need for cultural
sensitivity training at all levels of the organization. Today’s training must take into
consideration not only outsiders to the firm but interaction within the corporate family as
well.
The objective of formal training programs is to foster the four critical characteristics of
preparedness, sensitivity, patience, and flexibility in managers and other personnel. These
programs vary dramatically in terms of their rigor, involvement, and, of course, cost.
Environmental briefings and cultural orientation programs are types of area studies
programs. These programs provide factual preparation for a manager to operate in, or
work with people from, a particular country.
cultural environment for a limited amount of time.
E. Making Culture Work for Marketing Success
Culture should not be viewed as a challenge but rather as an opportunity that can be
exploited. Best practice knows no one particular origin, nor should it acknowledge
boundaries.
1. Embrace Local Culture
Many corporate credos include a promise to be the best possible corporate citizens in
every community they operate in.
10
2. Build Relationships
Each country market has its own unique set of constituents who need to be identified
3. Employ Locals in Order to Gain Cultural Knowledge
4. Help Employees Understand You
Employing locals will give a marketer a valuable asset in market development (i.e.,
5. Adapt Products and Processes to Local Markets
6. Coordinate by Region
Joint endeavors build cross–border “esprit de corps,” especially when managers may
have their own markets’ interest primarily at heart.
Key Terms
Culture: An integrated system of learned behavior patterns that are distinguishing
characteristics of the members of any given society.
Acculturation: The process of adjusting and adapting to a specific culture other than one’s
own.
High Context Cultures: Cultures in which the context is at least as important as what is
actually said, for example, Japan and Saudi Arabia have cultures in which what is not said
11
Cultural Universals: These are manifestations of the total way of life of any group of
people, including such elements as bodily adornments, courtship, etiquette, family gestures,
joking, mealtimes, music, personal names status differentiation, and trade.
Lanka.
Buddhism: A religion which sees life as an existence of suffering, with achieving nirvana, a
state marked by an absence of desire, as the solution to suffering. It has 360 million
followers.
Confucianism: A religion based on the teachings of Confucius. It has been characterized as a
code of conduct rather than a religion and has 150 million followers.
Social Stratification: The division of a particular population into classes.
Reference Groups: Groups that provide the values and attitudes that become influential in
shaping behavior.
Cultural Knowledge: Broad and multifaceted knowledge acquired through living in a certain
culture.
Factual Information: Objective knowledge of a culture obtained from others through
communication, research, and education.
Experiential Knowledge: Knowledge acquired only by being involved in a culture other
than one’s own.
12
1. Culture risk is just as important as commercial or political risk in the international marketing
arena. Why?
Culture risk is just as important as commercial or political risk in the international marketing
arena. International managers face a dilemma in terms of international and intercultural
As examples, anything foreign may be seen in a negative light, another multinational
company’s efforts may have failed, or the government may implicitly discourage the
proposed activity. In order to play down the cultural risk involved in international marketing,
An international manager has two basic choices: adapt company offerings and methods to
those in the market or try to change market conditions to fit company programs. In Japan, a
13
2. You are on your first business visit to one of the South Asian countries. You feel confident about
your ability to speak the language (you studied the language in school and have taken a refresher
course), and you decide to use it. During introductions, you want to break the ice by insisting that
everyone call you by your first name. Speculate as to the reaction.
In many cultures, there are formal and informal rules for human interaction as well as
address. Quite often rules in a given culture do not become evident to an outsider until they
realize something is wrong. In the situation described, the person’s request is probably
of the informal levels of culture.
In countries with a high power distance such as China, Hong Kong, Singapore, and
Indonesia, an act of informal address especially in a formal gathering may be looked upon as
offensive and unacceptable.
3. Gifts should always be chosen with great care. An ideal gift is one that represents the giver’s
own culture while being sensitive to the recipient’s. For example, a Finn may give a Suunto
compass to a Saudi business partner (to help him determine the direction for daily prayers).
Some gifts are not suitable: clocks or other timepieces are symbols of death in China, while
handkerchiefs symbolize tears in Latin America and Korea. What can a company do to
culture-sensitize its staff?
The increase in overall international activity of firms has increased the need for cultural
sensitivity training at all levels of the organization. To foster cultural sensitivity and
14
4. What can be learned about a culture from reading and attending to factual materials?
Objective or factual information is obtained through communication, research, and education.
In most cases they play a supplementary role, providing general or country specific
5. Using a range of training tools, from case studies to web-based activities and exercises,
programs cover such topics as intercultural adaptation, recognizing differences in
communication styles, negotiation strategies, and practical information aspects of business
and daily life. Is that too much?
International managers face a dilemma in terms of international and intercultural competence.
The lack of adequate foreign language and international business skills has resulted in lost
6. Jack Daniel’s whiskey uses its core American values of authenticity, masculinity, and
fraternalism successfully in other English-speaking countries like the United Kingdom,
Australia, and South Africa. How they can interpret the values of the brand to be more
approachable in a culture like China? (For example, is very status-oriented in terms of the
middle class.)
Internet Exercises
1. Many companies, such as Intercultural Group, provide cross-cultural consulting, coaching, and
training. Using the company’s website (www.interculturalgroup.com), assess the different ways
such consultants can play an important role in mastering cultural competency.
Companies that specialize in cultural training and providing information about adjusting to
the international marketplace from the cultural point of view provide both general and
company specific advice and training. As seen from the website, the consultants work with
2. The company recently said on its blog that over 60 percent of Twitter users are based outside
the United States, and it now provides its interface in French, German, Italian, Spanish, and
Japanese (with more languages likely to follow). Twitter said that introducing different
language versions dramatically increased the number of users signing up from countries
speaking those languages—and just as people search predominantly in their own language,
they tweet in it too. Why? (The International Search Summit
16
with foreign customers, they view themselves as global companies with local customers.
English may well be the most used common language of business transactions and
interaction, but its use cannot be taken for granted. Over 90% of the world’s population has a
mother tongue other than English. Cultural myopia (or worse still, chauvinism) will not
generate the type of long-term relations needed in business. Also, although many do speak it
as a second language, they may have difficulties in comprehending it (especially if the