Getting it right! Socio – cultural perspective in Business

Team Presentation for Exec. MBA ICFAI

agenda• How important are socio-cultural factors• Important socio-cultural factors• Two cases– Daimler Chrysler– Walmart

• Conclusion

Why is it important?

• Business Strategies adopted and their impact• Human resources part of society and hence

impact of society on human resources needs to be understood

• Validate and understand stereotypes for marketing and business strategy purposes

IMPORTANT SOCIO-CULTURAL FACTORS

Society

Lower

Middle

Upper

Hierarchical

Restrictive

Homogenous

open or closed

systems

Multidimensional

Groups

Primary

Secondary Formal Informal

family

friends

Consumer action shopping

formal

social

familyEconomic wellbeing

Emotional support

Suitable lifestyle

Socialization

Family

bachelorhood

honeymooners

Parenthood

Post parenthood

dissolution

What is cultureLearned

Shaped by biological, environmental, physiological with implicit and explicit guidelines

dynamicBeliefs vary on family dynamics, gender roles etc.

RegularitiesCan be analyzed using scientific methods

Language

Aesthetics

Religion

Education

Dimensions of culture

Classifications of culture

Power Distance

Masculinity vs Feminity

Uncertainty avoidance

Individualism vs

Collectivism

Long term orientation

Influences of culture

Logic Pre-logic

InductiveDeductive

AbstractConcrete

Alphabetical An-alphabetical

Communication & Culture

PepsiThe general tag line ‘Come alive with the Pepsi Generation’ translates to ‘Pepsi will bring your ancestors back from the dead’ in Taiwan.

Schweppes‘Schweppes Tonic Water’ translates to ‘Schweppes Toilet Water’ in Italy.

General MotorsThe ‘Chevy Nova’ translates to ‘It doesn’t go‘ in Spain.

Rolls RoyceThe Rolls Royce ‘Silver Mist’ translates to ’Silver Animal Droppings‘ in Puerto Rico.

Language

Habits

Etiquette

Managing Cross-cultural differences

Time sensitiveness

Flexibility

Ethnocentrism

Culture shock - Adler

Contact

Disintegration

Reintegration

Autonomy

independence

New culture – Does not respond positively

Confusion – does not know how to come to terms with new culture

Either regresses or adapts

Understands new culture / moves away from ethnocentrism

Cherishes new culture and accommodates it with his own worldview

TWO CASES

The German MisadventureCore strengths in the US Market

Centralized distribution system with high tech technology like RFID

Standardized and proven customer service methods

Challenges in German Market

Opposition from german suppliers for centralized distribution system

Failure to understand german culture and shopping habits

Lack of strong vendor relations

US Market

German Market

Failed mergerStrengths of Daimler Benz

Detailed planning and precise implementation

Well defined management structure

Challenges in the US

Fast paced trial and error

Non-hierarchical org structure in Chrysler conflicted with top-down approach

Lengthy reports and extended discussions did not suit US teams

Conclusions

• Understand the unique features of the target country – national/ethnic/organizational/ professional

• Map cultural differences and similarities between source and target cultures

• Top management should facilitate and address culture shock

• Get outside help if needed

Thank You!

後也秋

Herzlichen Danke! Merci beaucoup!