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