612 week 4 for d2l
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BU 612 Understanding (Cultural and)
Institutional Influences (Week 4)
Cultural Influences (contd) Political, Economic and Regional Influences (text)
Industry InfluencesLegal and Regulatory Influences
Readings?Ch 5, 6; Fernhaber et al. 2007 + Australian Tourism
Next class?Ch 7 and 8; Czinkota et al. 2009
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Culturethe intellectual and social heritage of a specific society
an accepted way of life of a group of people
learned and passed on from generation to generationrepresents a societys shared meanings and traditions reflected in values, attitudes, etc.provides people with a sense of identity
impacts what we consume, how we dispose of it, and all our decisionsaround consumption/disposition
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How is Culture Transmitted?
MassMedia
Church
School
Family
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Hofstedes Cultural Dimensions
Work-related value dimensions
Most influential effort to group nations by cultural values
Surveyed over 116,000 employees in more than 70countries
Created maps of pairs of dimensions
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Discussion Question: note from last classWhen we travel, we often have an unconscious reference to our owncultural values when attempting to understand another culture. This iscalled self- reference criterion.
Use the information provided from Hofstede (1991), create a table thatcompares your own cultural values with those of the country youve beenallocated. Include a general assessment of the extent to which your allocatedcountry is higher or lower context.
Discuss the implications of these comparisons for the set-up andmerchandising of a retail store of your choice (in that country). Also explain theimplications for store personnel.
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Individualism-CollectivismIndividualism
High value on autonomy
Individual achievement
Privacy
Collectivism
High value on groupFamily, clan, organization
Loyalty
Devotion
Conformity
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Masculinity-FemininityMasculinity
Achievement
Success
Assertive acquisition of money/power
Femininity
Relationships
Equality of genders
Caring for disadvantaged
Harmony
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Power DistanceHigh Power Distance
Accept position
Follow authority
Concentrated & centralizedauthority
Hierarchical
Low-Power Distance
Avoid concentration of
authorityDecentralized
Fewer layers of management
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Low Uncertainty Avoidance
Embrace unpredictableLess adherence to rules,procedures, or hierarchies
Risk taking desirable
High Uncertainty
Avoidance
Threatened by ambiguityNeed stable & predictableworkplace
Reliance on rules
Uncertainty Avoidance
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Time OrientationLong-term
PerseveranceFulfilling socialobligationsThrift
Concern for proper waysof doing things
Short-termPursuit of stabilityPursuit of happiness
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Alternative Dimensions(Trompenaars and Hampden-Turner 1995)
Focus on values and relationships
Survey of 15,000 managers
Over 10-year periodFrom 28 countries
Bipolar cultural dimensions, examples include
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culture in which emotions areheld in
people try not to showtheir feelings, act stoicallyand maintain theircomposure
VS.Neutral Emotional
culture in which emotions areexpressed openly and naturally
people smile a great deal,talk loudly when excitedand greet each other withenthusiasm
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public and private space aresimilar in size, individuals guard
public space carefully because itis shared with private space
people often appear to beindirect and introverted,and work and private lifeoften are closely linked
VS.Specific Diffuse
individuals have a large publicspace shared with others and a
small private space they guardclosely and share only with closefriends and associates
people are more open andextroverted, and there is astrong separation of work andprivate life
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Sequential approachPeople do only one activity at a time, keep appointments strictly, prefer tofollow plans as laid out
Synchronous approachPeople tend to multi-task, view appointments as approximate, schedules areseen as subordinate to relationships
Present oriented/future orientedFuture is more importantPresent is more importantBoth time periods equally important
Time
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Beyond Values?Language opens doorsTranslations can be difficult
Non-verbal communication and symbols may differ or be more/lessimportant relative to language
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Influences on Marketing?
Knowledge
Sensitivity
Social
Conventions
Styles
Etic
Emic
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Institutional Influence defined: The institutional environment describes the rules,expectations, and habitualized actions to which
organizations must conform to receive legitimacy (Scottand Meyer 1983).
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Discussion QuestionA useful resource for international marketers is the Global Edge , based at Michigan State University
Go to http://globaledge.msu.edu/countries/ Find your country and read the information available on it.Given the above, what are the key things to consider and be aware of when establishing a business relationship with a potential distributor inyour allocated country? Why? Explain.
http://globaledge.msu.edu/countries/http://globaledge.msu.edu/countries/ -
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Insights from Fernhaber et al. (2007)
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Main legal systemsCommon Law
UK, Canada, the USA, many of the former colonies of the UK
Code Law (aka civil law)Found where common law is not usedBased on an all-inclusive system of written rules of law (civil, commercial andcriminal)
Islamic Law Encompasses religious duties and obligations and the secular aspect of the lawregarding human rightsOften applied with code or common law
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Islamic lawKoran is the basis for Shariah (Islamic law)It encompasses:
religious duties and obligations
patterns of social and economic behavior for all individualsproperty rights, economic decision making and types of economic freedom
The overriding objective of the Islamic system is social justiceAdvocates risk sharingProhibits the payment of interestProhibits investment in activities that violate the Shariah , e.g., thebusiness of alcohol, gambling, casinos
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Marxist-socialist tenetsGovern Eastern European countries commercial legal system
Czech and Poland revised and re-instituted pre World War II commercial legalcodes
USSR and China need an entire commercial legal system with respect toprivate ownership, contracts, due process, and other legal mechanisms
Russia is moving toward a democratic systemChina is attempting to activate a private sector within a multi-componenteconomy, but their legal systems are still nascent
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Please read the pdf file labeled Tourism Australia on D2L.Also, check out this link:http://www.youtube.com/watch?v=rn0lwGk4u9o
Tourism Australia
http://www.youtube.com/watch?v=rn0lwGk4u9ohttp://www.youtube.com/watch?v=rn0lwGk4u9o -
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How does the law impact marketing?Product
Price
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Sales, Service and Distribution
Communications
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IP, counterfeiting and piracyMillions of dollars to establish brand names, designs, trademarks etc.
Inadequate protection from products being counterfeited or pirated as
many countries do not recognize trademarks and patents registered inother countries.McDonald had to buy its trademark back in Japan
In a common-law country, ownership of intellectual property rights isestablished by prior use.
In many code-law countries, ownership is established by registration.A trademark in Jordan belongs to whoever registers it first in Jordan so thereare McDonalds restaurants, Microsoft software, and Safeway groceriesall legally belonging to a Jordanian
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Country differences (e.g.)USA
Operates under the first toinvent rule Protects individual inventorsPatents
Applications secretGranted in up to 24 mos.
Valid for 17 years afterapproval
JapanOperates under the first toregister policy Promotes technology sharingPatents
Applications publicGranted in 4-6 years
Valid for 20 years from timeof application
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Cyber-lawExisting internet law does not completely cover the protection of domainnames, taxes, jurisdiction in cross-border transactions and contractualissues
Countries are drafting legislation to address the myriad legal questions notclearly addressed by current law
Examples of unresolved issues
Cyber squatters register descriptive nouns, geographic names, ethnic groups,
pharmaceutical substances and other similar descriptors and hold them until they aresold at an inflated price
The collection of taxes on sale of products, i.e., when taxes should be collected, wherethey should be collected, and by whom