The Global Context

LECTURE 5

Culture in a Global Context 2

• Appreciate the importance of International Orientation

• Gain an understanding of the dimensions of Culture

Lecture Objectives

International Orientation

The ‘mind set’ of a firm’s managers will determine the extent to which they Internationalize.

Perlmutter (1969)

• EPRG Framework– Ethnocentrism

– Polycentrism

– Regiocentrism

– Geocentrism

International Orientation

• ETHNOCENTRISIM

(home-country orientation)– the foreign market is seen as a place to

dispose of excess output

– the foreign environment and its opportunities are seen as no different from those of the domestic market

International Orientation

• POLYCENTRISIM

(host-country orientation)– every market where it operates is treated as if it

were unique

– the product is modified to suit the local market

– every market will have its own marketing strategy

International Orientation

• REGIOCENTRISIM

(regional orientation)– management views regions as unique and seeks to

develop an integrated regional strategy

– sees similarities and differences in a world of regions

– is ethnocentric or polycentric in its view of the rest of the world

International Orientation

• GEOCENTRISIM

(world orientation)– the firm will attempt to develop uniform global

strategies

– the firm identifies homogeneous international demand segments that can be targeted with a standard product

International Orientation

Hofstede’s 5 Dimensions Model

• Power Distance (PDI)

The extent to which the less powerful members of society accept that power is distributed unequally

Hofstede’s 5 Dimensions Model

• Individualism (IDV)

Individualism : people look after themselves and their immediate family only.

Collectivism : people belong to in-groups (families, clans, organizations) who look after them in exchange for loyalty.

Hofstede’s 5 Dimensions Model

• Uncertainty Avoidance (UAI)The extent to which people feel threatened by uncertainty and ambiguity and try to avoid these situations.

Hofstede’s 5 Dimensions Model

• Masculinity (MAS)

Masculinity : the dominant values in society are achievement and success.

Femininity : the dominant values in society are caring for others and quality of life.

Hofstede’s 5 Dimensions Model

• Confucian Dynamism (CDI)

The extent to which a society exhibits a pragmatic future-orientated perspective rather than a conventional historic or short-term point of view.

Country Comparisons

Cultural Diversity

• Why People/Organizations Fail– Ethnocentric Orientation

– Ignorance

– Arrogance

– Time Factor

Cultural Diversity

• Success Factors– Geocentric Orientation

– Respect

– Learning

– Language

– Personal Attitude : Humility & Pride

– Personal Qualities : Adaptability & Flexibility

Cultural Diversity

• How to be Successful– Study and Preparation

– Awareness of Cultural Differences

– Commitment to Learn

– Do the Work