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Cultural Distance and the Global Marketers Essay

Culture is the interactive aggregate of common characteristics that influence a group’s response to its surroundings (Hofstede 1980, 19). Culture may be reflected in universal tendencies of persistent preference for particular states of affairs over others, persistent preferences for specific social processes over other and general rules for interpretation of environmental cues, selective attention and responses (Tse. D. , Lee K. Vertinsky I. & Wehrung D. 1998, 82). Introduction It is generally known that culture may provide thorough prescriptions (norms) for specific classes of situations while leaving other spheres relatively unregulated.

National and ethnic cultures are thus distinguished in their degree of regulation of attitudes, behaviour and values, the domain of regulation, and the consistency and clarity of regulation and forbearance of other cultures. Culture influences attributions, values and emotions, which in turn influence the perception of product and service attributes. It is well known that ethics influence the importance attached to product attributes and culture-specific elements have been identified in the content and organization of values.

Culture has been shown to influence attributions in explaining real-life events. Culture is the basic viewpoint and values cherished by a society as a whole and handed down from one generation to the subsequent generations.

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The world has become a global village and the increasing globalization of economic activities in recent years has extended opportunities for the marketing of goods and services abroad. As foreign markets become more and more important contributors to an organisation’s revenue, global marketing strategy is becoming an integral part of companies.

Once a company has chosen which global market to enter, it must then decide on the suitable entry strategy for that market. Among the most important decisions an international company has to make are the timing of market entrance and the suitable level of involvement. A condition for a successful transplant across vastly different cultures, such as from east to west, is the progress over time of a third culture, which is compatible with both of the original cultures, but transcends them to produce a unique venture capital.

For managing cross national or cross cultural partnerships effectively; both nominal and systematic differences in these partnerships must be understood and administered. Unfortunately, it is not always the case that cross-national or cross-cultural partners would attempt to manage such differences. The impact of neglecting or misunderstanding the two kinds of cultural differences can be costly. The Elements of Culture: • Language • Religion • Values • Attitudes • Manners and Customs • Material culture • Aesthetics • Education • Social Institutions • Language Cultural Distance Affecting the Global Markets:

The world is becoming homogeneous, and difference between national markets are not only fading but, for some products, will vanish altogether. This means that marketing has now become a world-encompassing discipline. However, on the other hand, the differences among regions, nations, and ethnic groups in terms of cultures are far from distinguishing but become more noticeable. This means that global marketing is a cross-cultural process which requires marketers to be well informed with cultural differences nationally, locally, and ethnically to be a winner in international markets.

There are scholars who argue that cultural distances have created a progressively more homogenized world market, with an increasing number of customers from diverse geographic locations and cultural backgrounds sharing the same preferences (Levitt, 1983). This perspective is a function of the development of global linkages and infrastructure, and holds that an increased inter-connectedness among the world’s states has resulted in decreased differentiation due to socio-economic factors, with individuals around the world living in a more uniform pattern.

This phenomenon has facilitated the appearance of global brands with relatively standardized marketing strategies employed across cultural and geographic limits. The major underlying assumption of this view is that uniform marketing strategies are feasible in homogenized socio-economic infrastructures and that economic development has led to a convergence in international markets. There is some support regarding the influence of mass media in creating a universal consumer culture, there is also some evidence that firms have begun to position their products to a global customer culture.

Measuring Cultural Differences through Hofstede’s Model: Dr. Geert Hofstede researched on how values in the organizations are influenced by culture. During his phase of working at IBM, he gathered and studied data from 100,000 individuals that he collected from 40 countries (Hofstede 1980, 53). The results from his findings helped him devise a model of cultural differences with 4 main dimensions: Power Distance Index, Individualism vs. Collectivism, Masculinity vs. Femininity and Uncertainty Avoidance. a) Power Distance Index (PDI)

The PDI dimension deals with how disparity and hierarchy are accepted in the cultures. It deals with the fact that individuals are unequal to others in intellectual and physical ways. Countries with high PDI let inequalities cultivate, and signs of status and riches are highly evident. There is a gap between subordinates and supervisors since each consider the other as unequal. The subordinates tend not to begin contact with superiors and often wait to be given directives. Countries with low PDI tend to play down on inequalities and subordinates and superiors sight each other as equivalent.

There is a higher rate of interaction and communication with subordinates regularly expressing their ideas to superiors. PDI plays a big part in organisational behaviour. High PDI firms will be inclined to be more centralised with superiors making all the decisions with no input from subordinates. Low PDI firms will be more decentralised with information being shared, subordinates want to demonstrate their capabilities to superiors by using their initiative. b) Individualism (IDV) vs. Collectivism IDV focuses on the association of a person’s concern for belonging into a group.

Attributes of those with high individualism specify a high dependence for personal space, large and loose relationships. Countries with a high collectivism (or low individualism) have closer ties between individuals; everybody looks out for those in their group. An organisation with a high collectivism rate has a culture with the desire for clean, comfortable and safe work place. c) Masculinity (MAS) Vs. Femininity Masculine values are those concerned with achievement, work and power. A masculine culture would create a high degree of gender discrimination, with male supremacy and greater conflict.

A more feminine culture would indicate a low level of gender discrimination and males and females are treated evenly. d) Uncertainty Avoidance (UA) UA is concerned with how cultures accept vague situations and the level of forbearance for uncertainty. A high UA ranking implies that the nation has a low tolerance for uncertainty and ambiguity, these places an emphasis on rules and regulations that sets to manage the level of uncertainty. A lower UA ranking implies that the nation has a greater readiness to take additional and greater risks with less emotional resistance to change. Cross Cultural Difference between Australia and Indonesia

Looking a Hofstede’s model, there is a clear difference between the 2 cultures; they contrast in 3 out of the 4 dimensions. A study carried out by the Australian Studies Centre of the University of Indonesia in 2001, discovered obstacles that Australians faced when operating in the Indonesian business environment, they found that all Australian managers have an absolutely different outlook to the working environment, communication and relationships with colleagues compared to the Indonesian managers. The major findings from the research concluded that there is a consciousness difference between Western and Eastern values.

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