Dealing with Cross-Cultural Factors in International Marketing

Three Main Approaches to Dealing with Cross-Cultural Factors in International Marketing:

1. Hofstede’s Dimensions. Geert Hofstede, a Dutch researcher, conducted an interview on a large number of IBM executives in various countries, and the results revealed that cultural differences tend to center around four key dimensions:

•    Individualism vs. collectivism:  This view answers the question: to what extent do people believe in individual responsibility and reward rather than having these measures aimed at the larger group? Conventional thinking dictates that Japan appears to be collective, in reality though it is not, it ranks somewhere in the middle. Indonesia and West Africa rank toward the collectivistic side. The U.S., Britain, and the Netherlands rate toward individualism.

•    Power distance:  To determine power distance, one should ask: To what extent is there a strong separation of individuals based on rank? Power distance seems particularly higher in Arab countries and some Latin American ones, while it is more modest in Northern Europe and the U.S.

•    Masculinity vs. femininity involves a somewhat more vague concept. "Masculine" values involve competition and "conquering" nature by means such as large construction projects, while "feminine" values involve harmony and environmental protection. Japan is one of the more masculine countries, while the Netherlands rank relatively low. The U.S. is close to the middle, slightly toward the masculine side.

•    Uncertainty avoidance pertains to the extent to which a "structured" situation with clear rules is preferred to a more ambiguous one; in general, countries with lower uncertainty avoidance tend to be more tolerant of risk. Japan ranks very high. Few countries are very low in any absolute sense, but relatively speaking, Britain and Hong Kong are lower, and the U.S. is in the lower range of the distribution.

Hofstede’s original work did not address the fifth dimension of long term vs. short term orientation which has been proposed. A concrete example of long-term vs. short-term is in the U.S., managers like to see quick results of their efforts, Japanese managers, on the other hand, are known to take a long term view, often accepting long periods before profitability is obtained.

2. Edward T. Hall’s High vs. low context cultures: In some cultures, "what you see is what you get"—the speaker is expected to make his or her points clear and limit ambiguity. This is the case in the U.S.—if you have something on your mind, you are expected to say it directly, subject to some reasonable standards of diplomacy. In Japan, in contrast, facial expressions and what is not said may provide an important clue to understand a speaker’s meaning. Thus, it may be very difficult for Japanese speakers to understand another’s written communication. The nature of languages may exacerbate this phenomenon—while the German language is very precise, Chinese lacks many grammatical features, and the meaning of words may be somewhat less precise. English ranks somewhere in the middle of this continuum.

3. Ethnocentrism and the self-reference criterion. The self-reference criterion refers to the tendency of individuals, often unconsciously, to use the standards of one’s own culture to evaluate others. For example, Americans may perceive more traditional societies to be "backward" and "unmotivated" because they do not adopt to new technologies or social customs and sought instead to preserve their traditional values. In the 1960s, a supposedly well read American psychology professor referred to India’s culture as "sick" because, despite severe food shortages, the Hindu religion did not allow the eating of cows. The psychologist expressed disgust that the cows were allowed to roam freely in villages while the rest of the population languished in starvation. It turns out though that the cows provided valuable functions by offering milk and fertilizing fields. Ethnocentrism is the tendency to view one’s culture to be superior to others. The important thing here is to consider how these biases may impede in dealing with members of other cultures.