International Marketing 17th Edition Cateora - Test Bank

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FALSE

Adaptation does not require business executives to forsake their ways and change to local customs; rather, executives must be aware of local customs and be willing to accommodate those differences that can cause misunderstandings.

FALSE

The self-reference criterion (SRC) is especially operative in business customs. If we do not understand our foreign counterpart’s customs, we are more likely to evaluate that person’s behavior in terms of what is familiar to us.

TRUE

Business customs can be grouped into imperatives, customs that must be recognized and accommodated; electives, customs to which adaptation is helpful but not necessary; and exclusives, customs in which an outsider must not participate.

FALSE

Imperatives are business customs that must be recognized and accommodated. Apart from imperatives, business customs can be grouped into electives, customs to which adaptation is helpful but not necessary; and exclusives, customs in which an outsider must not participate.

TRUE

Cultural electives relate to areas of behavior or to customs that cultural aliens may wish to conform to or participate in but that are not required. The majority of customs fit into this category.

FALSE

Although judgment and intuition are important tools for making decisions, most U.S. managers believe decisions must be supported and based on accurate and relevant information.

TRUE

Compatible with the views that one controls one’s own destiny and that advancement is based on merit is the prevailing idea of wide sharing in decision making.

TRUE

Perhaps most fundamental to Western management practices is the notion that competition is crucial for efficiency, improvement, and regeneration.

FALSE

In high Power Distance Index (PDI) countries such as Mexico and Malaysia, understanding the rank and status of clients and business partners is much more important than in more egalitarian (low PDI) societies such as Denmark and Israel.

TRUE

Although the international businessperson is confronted with a variety of authority patterns that can complicate decision making in the global environment, most are a variation of three typical patterns: top-level management decisions, decentralized decisions, and committee or group decisions.

FALSE

As businesses grow and professional management develops, there is a shift toward decentralized management decision making.

TRUE

Committee decision making is by group or consensus. In the committee decision setup, every committee member must be convinced of the merits of the proposition or product in question.

TRUE

Research has shown that commitment of workers to their companies tended to be higher in countries higher in individualism (IDV) and lower in power distance.

FALSE

Communication in a high-context culture depends heavily on the contextual (who says it, when it is said, how it is said) or nonverbal aspects of communication, whereas the low-context culture depends more on explicit, verbally expressed communications.

TRUE

E-mail use and usage rates by managers are also affected by culture. That is, businesspeople in high-context cultures do not use the medium to the same extent as those in low-context cultures.

FALSE

M-time, or monochronic time, typifies most North Americans, Swiss, Germans, and Scandinavians. Most low-context cultures operate on M-time.

TRUE

P-time, or polychronic time, is more dominant in high-context cultures, where the completion of a human transaction is emphasized more than holding to schedules. P-time is characterized by the simultaneous occurrence of many things and by “a great involvement with people.” P-time allows for relationships to build and context to be absorbed as parts of high-context cultures.

FALSE

Despite the substantial prejudices toward women in foreign countries, evidence suggests that prejudice toward foreign women executives may be exaggerated and that the treatment local women receive in their own cultures is not necessarily an indicator of how a foreign businesswoman is treated.

TRUE

A key to success for both men and women in international business often hinges on the strength of a firm’s backing. When a female manager receives training and the strong backing of her firm, she usually receives the respect commensurate with the position she holds and the firm she represents.

TRUE

The issue took on proportions greater than that of nondisclosure because it focused national attention on the basic question of ethics. The business community’s defense was that payoffs were a way of life throughout the world: If you didn’t pay bribes, you didn’t do business.

TRUE

The distinction between bribery and extortion depends on whether the activity resulted from an offer or from a demand for payment. Voluntarily offered payment by someone seeking unlawful advantage is bribery. It is extortion if payments are extracted under duress by someone in authority from a person seeking only what he or she is lawfully entitled to.

FALSE

Lubrication payments accompany requests for a person to do a job more rapidly or more efficiently; subornation is a request for officials to turn their heads, to not do their jobs, or to break the law.

FALSE

Lubrication payments accompany requests for a person to do a job more rapidly or more efficiently; subornation is a request for officials to turn their heads, to not do their jobs, or to break the law.

TRUE

Three ethical principles also provide a framework to help the marketer distinguish between right and wrong, determine what ought to be done, and properly justify his or her actions. They are as follows: Utilitarian ethics: Does the action optimize the “common good” or benefits of all constituencies? And who are the pertinent constituencies? Rights of the parties: Does the action respect the rights of the individuals involved? Justice or fairness: Does the action respect the canons of justice or fairness to all parties involved?

FALSE

In the less individualistic cultures, labor and management cooperate—in Germany labor is represented on corporate boards, and in Japan, management takes responsibility for the welfare of the labor force. The individualistic American approach to labor-management relations is adversarial—each side takes care of itself.

TRUE

A fourth kind of capitalism is common in Chinese cultures. Its distinguishing characteristics are a more entrepreneurial approach and an emphasis on guanxi (one’s network of personal connections) as the coordinating principle among firms.

TRUE

Chinese cultures are high on Power Distance Index (PDI) and low on Individualism/Collective Index (IDV), and the strong reciprocity implied by the notion of guanxi fits the available data well.

TRUE

Low-context American culture scores relatively low on power distance and high on individualism, whereas high-context Arab cultures score high on power distance and low on individualism.

TRUE

The most managerially useful aspect of this synthesis of cultural differences is that it allows us to make predictions about unfamiliar cultures. Reference to the three metrics available gives us some clues about how consumers and/or business partners will behave and think.

FALSE

Measures of linguistic distance (any language can be used as the focal one, not just English) are available for every country and indeed, every person. Thus, we would expect that someone who speaks Javanese as a first language to be relationship oriented.

As a guide to adaptation, all who wish to deal with individuals, firms, or authorities in foreign countries should be able to meet 10 basic criteria: (1) open tolerance, (2) flexibility, (3) humility, (4) justice/fairness, (5) ability to adjust to varying tempos, (6) curiosity/interest, (7) knowledge of the country, (8) liking for others, (9) ability to command respect, and (10) ability to integrate oneself into the environment.

Adaptation is a key concept in international marketing, and willingness to adapt is a crucial attitude.

Business customs can be grouped into imperatives, electives, and exclusives.

Cultural imperatives are the business customs and expectations that must be met and conformed to or avoided if relationships are to be successful.

Business customs can be grouped into imperatives, customs that must be recognized and accommodated; electives, customs to which adaptation is helpful but not necessary; and exclusives, customs in which an outsider must not participate.

Business customs can be grouped into imperatives, customs that must be recognized and accommodated; electives, customs to which adaptation is helpful but not necessary; and exclusives, customs in which an outsider must not participate.

Business customs can be grouped into imperatives, customs that must be recognized and accommodated; electives, customs to which adaptation is helpful but not necessary; and exclusives, customs in which an outsider must not participate.

Establishing friendship is an imperative in many cultures. If friendship is not established, the marketer risks not earning trust and acceptance, the basic cultural prerequisites for developing and retaining effective business relationships.

Simon Peters has to dress in formals for the negotiation meeting because it is a cultural imperative for his French counterparts. Cultural imperatives are the business customs and expectations that must be met and conformed to or avoided if relationships are to be successful.

By joking about the ruling monarchy in England in front of a group of visiting English businesspeople, Betty Roberts has violated the cultural exclusive reserved only for the British people. Cultural exclusives are those customs or behavior patterns reserved exclusively for the locals and from which the foreigner is barred.

In some cultures, a person’s demeanor is more critical than in other cultures. For example, it is probably never acceptable to lose your patience, raise your voice, or correct someone in public, no matter how frustrating the situation. In some cultures such behavior would only cast you as boorish, but in others, it could end a business deal.

The most important ideas on which normative U.S. cultural concepts are based are the following: 1) “Master of destiny” viewpoint, 2) Independent enterprise as the instrument of social action, 3) Personnel selection and reward based on merit, 4) Decisions based on objective analysis, 5) Wide sharing in decision making, 6) Never-ending quest for improvement, and 7) Competition producing efficiency.

The “master of destiny” philosophy is fundamental to U.S. management thought. Simply stated, people can substantially influence the future; they are in control of their own destinies. This viewpoint also reflects the attitude that though luck may influence an individual’s future, on balance, persistence, hard work, a commitment to fulfill expectations, and effective use of time give people control of their destinies.

The very strong belief in the United States that business decisions are based on objective analysis and that managers strive to be scientific has a profound effect on the U.S. manager’s attitudes toward objectivity in decision making and accuracy of data. Although judgment and intuition are important tools for making decisions, most U.S. managers believe decisions must be supported and based on accurate and relevant information.

The acceptance of the idea that independent enterprise is an instrument for social action is the fundamental concept of U.S. corporations. A corporation is recognized as an entity that has rules and continuity of existence and is a separate and vital social institution.

In individualistic cultures, where one’s effort determines more of one’s destiny, issues of fairness in opportunity loom large. For example, heavy workloads distributed unequally between employees in collectivist countries are seen less onerous and unfair than similar workloads in individualist cultures, where such conditions lead to lower morale and higher turnover.

Adam Smith in his The Wealth of Nations wrote one of the most important sentences in the English language: “By pursuing his own interests he frequently promotes that of the society more effectually than when he really intended to promote it.” This “invisible hand” notion justifies competitive behavior because it improves society and its organizations.

Fundamental to Western management practices is the notion that competition is crucial for efficiency, improvement, and regeneration.

Top-level management decision making is generally found in situations in which family or close ownership gives absolute control to owners and businesses are small enough to allow such centralized decision making. Decision-making participation by middle management tends to be deemphasized; dominant family members make decisions that tend to please the family members more than to increase productivity.

As businesses grow and professional management develops, there is a shift toward decentralized management decision making. Decentralized decision making allows executives at different levels of management to exercise authority over their own functions.

Committee decision making is by group or consensus. Committees may operate on a centralized or decentralized basis, but the concept of committee management implies something quite different from the individualized functioning of the top management and decentralized decision-making arrangements.

Because Asian cultures and religions tend to emphasize harmony and collectivism, group decision making predominates there.

Decentralized decision making allows executives at different levels of management to exercise authority over their own functions, and title or position generally takes precedence over the individual holding the job.

European companies, particularly in the more hierarchical (Power Distance Index) countries, such as France and Italy, have a strong paternalistic orientation, and it is assumed that individuals will work for one company for the majority of their lives.

To the Japanese, personal life is company life. Many Japanese workers regard their work as the most important part of their overall lives.

Research has shown that commitment of workers to their companies tended to be higher in countries higher in individualism (IDV) and lower in power distance (PDI).

According to Max Weber, at least part of the standard of living that we enjoy in the United States today can be attributed to the hard-working Protestant ethic from which we derive much of our business heritage.

Communication in a high-context culture depends heavily on the contextual (who says it, when it is said, how it is said) or nonverbal aspects of communication, whereas the low-context culture depends more on explicit, verbally expressed communications.

Communication in a high-context culture depends heavily on the contextual (who says it, when it is said, how it is said) or nonverbal aspects of communication, whereas the low-context culture depends more on explicit, verbally expressed communications.

By replying “No, I did not like the food,” the client exhibits his low-context culture of being linguistically direct. People from low-context cultures deliver their opinion without much social padding.

Estimates are that 78 percent of today’s website content is written in English, but an English e-mail message cannot be understood by 35 percent of all Internet users. The solution to the problem is to have country-specific websites, like those of IBM and Marriott.

While using first names in business encounters is regarded as an American vice in many countries, nowhere is it found more offensive than in France. France is higher on Hofstede’s Power Distance Index (PDI) than the United States, and such differences can lead to cultural misunderstandings.

Haste and impatience are probably the most common mistakes of North Americans attempting to trade in the Middle East. Most Arabs do not like to embark on serious business discussions until after two or three opportunities to meet the individual they are dealing with.

M-time, or monochronic time, typifies most North Americans, Swiss, Germans, and Scandinavians. These Western cultures tend to concentrate on one thing at a time. They divide time into small units and are concerned with promptness. M-time is used in a linear way, and it is experienced as almost tangible, in that one saves time, wastes time, bides time, spends time, and loses time.

Most low-context cultures operate on M-time. P-time, or polychronic time, is more dominant in high-context cultures, where the completion of a human transaction is emphasized more than holding to schedules. P-time is characterized by the simultaneous occurrence of many things and by “a great involvement with people.”

Rick is most likely to be from Japan because he, unlike his American counterparts, is not time-bound and driven by schedules that thwart the development of friendships. P-time, or polychronic time, is more dominant in high-context cultures, where the completion of a human transaction is emphasized more than holding to schedules. In Japan, where appointments are adhered to with the greatest M-time precision but P-time is followed once a meeting begins.

The P-time system gives rise to looser time schedules, deeper involvement with individuals, and a wait-and-see-what-develops attitude.

M-time, or monochronic time, typifies most North Americans, Swiss, Germans, and Scandinavians. These Western cultures tend to concentrate on one thing at a time.

A firm whose marketing orientation is based on the belief that consumers and businesses alike will not buy enough without prodding is selling oriented.

It is important to remember that the negotiating process is complicated, and the risk of misunderstanding increases when negotiating with someone from another culture.

The important thing for the U.S. manager to learn is adjustment to P-time in order to avoid the anxiety and frustration that comes from being out of synchronization with local time. As global markets expand, however, more businesspeople from P-time cultures are adapting to M-time.

The gender bias against female managers that exists in some countries, coupled with myths harbored by male managers, creates hesitancy among U.S. multinational companies to offer women international assignments. The most frequently cited reason is the inability for women to succeed abroad. Unfortunately, such attitudes are shared by many and probably stem from the belief that the traditional roles of women in male-dominated societies preclude women from establishing successful relationships with host-country associates.

The individualism so important to Americans can also be seen as a kind of corruption. In India many attribute the decline in the society there to the rampant consumerism, such as that promoted on MTV. Such rampant consumerism is what kept the American economy afloat right after the turn of the century.

Many in sub-Saharan Africa view Western intellectual property laws as a kind of exploitation that prevents treatment of AIDS for millions.

Among its various activities, TI conducts an international survey of businesspeople, political analysts, and the general public to determine their perceptions of corruption in 182 countries in the Corruption Perception Index (CPI).

Transparency International’s CPI is also proving useful in academic studies of the causes and consequences of bribery. Higher levels of bribery have been found in low-income nations and nations with a communist past, both aspects of the political economy.

The decision to pay a bribe creates a major conflict between what is ethical and proper and what appears to be profitable and sometimes necessary for business. Many global competitors perceive payoffs as a necessary means to accomplish business goals.

According to studies conducted by Transparency International, higher levels of bribery have been found in low-income nations and nations with a communist past, both aspects of the political economy. Additionally, higher levels of bribery have been found in collectivistic (IDV) and high power distance (PDI) countries.

Japan’s successes in reducing corruption in its business system are all the more remarkable because of its relationship-oriented culture, which would be predicted by many to favor bribery.

Extortion occurs when payments are extracted under duress by someone in authority from a person seeking only what he or she is lawfully entitled to.

Lubrication involves a relatively small sum of cash, a gift, or a service given to a low-ranking official in a country where such offerings are not prohibited by law. The purpose of such a gift is to facilitate or expedite the normal, lawful performance of a duty by that official.

The distinction between bribery and extortion depends on whether the activity resulted from an offer or from a demand for payment. It is extortion if payments are extracted under duress by someone in authority from a person seeking only what he or she is lawfully entitled to.

Subornation generally involves giving large sums of money—frequently not properly accounted for—designed to entice an official to commit an illegal act on behalf of the one offering the bribe.

The Foreign Corrupt Practices Act (FCPA) prohibits U.S. businesses from paying bribes openly or using intermediaries as conduits for a bribe when the U.S. manager knows that part of the intermediary’s payment will be used as a bribe.

Three ethical principles provide a framework to help the marketer distinguish between right and wrong, determine what ought to be done, and properly justify his or her actions. Simply stated, they are as follows: (1) Utilitarian ethics: Does the action optimize the “common good” or benefits of all constituencies? And who are the pertinent constituencies? (2) Rights of the parties: Does the action respect the rights of the individuals involved? (3) Justice or fairness: Does the action respect the canons of justice or fairness to all parties involved?

Thurow distinguished between the British-American “individualistic” kind of capitalism and the “communitarian” form of capitalism in Japan and Germany. The business systems in the latter two countries are typified by cooperation among government, management, and labor, particularly in Japan. Contrarily, adversarial relationships among labor, management, and government are more the norm in the United Kingdom, and particularly in the United States.

Thurow distinguished between the British-American “individualistic” kind of capitalism and the “communitarian” form of capitalism in Japan and Germany. The business systems in the latter two countries are typified by cooperation among government, management, and labor, particularly in Japan. Contrarily, adversarial relationships among labor, management, and government are more the norm in the United Kingdom, and particularly in the United States.

American culture is low context, individualistic (IDV), low power distance (PDI), obviously close to English, monochronic time-oriented, linguistically direct, and foreground focused, and it achieves efficiency through competition; therefore, it is categorized as an information-oriented culture.

Japanese culture is high context, collectivistic, high power distance, far from English, polychronic (in part), linguistically indirect, and background focused, and it achieves efficiency through reduction of transaction costs; therefore, it is properly categorized as a relationship-oriented culture.

Adaptation is a key concept in international marketing, and willingness to adapt is a crucial attitude. Adaptation, or at least accommodation, is required on small matters as well as large ones. In fact, small, seemingly insignificant situations are often the most crucial. More than tolerance of an alien culture is required. Affirmative acceptance, that is, open tolerance may be needed as well. Through such affirmative acceptance, adaptation becomes easier because empathy for another’s point of view naturally leads to ideas for meeting cultural differences. As a guide to adaptation, all who wish to deal with individuals, firms, or authorities in foreign countries should be able to meet ten basic criteria:

(1) open tolerance,
(2) flexibility,
(3) humility,
(4) justice/fairness,
(5) ability to adjust to varying tempos,
(6) curiosity/interest,
(7) knowledge of the country,
(8) liking for others,
(9) ability to command respect, and
(10) ability to integrate oneself into the environment.

Business customs can be grouped into cultural imperatives, cultural electives, and cultural exclusives.

(1) Cultural imperatives are the business customs and expectations that must be met and conformed to or avoided if relationships are to be successful. A complicating factor in cultural awareness is that what may be an imperative to avoid in one culture is an imperative to do in another.
(2) Cultural electives relate to areas of behavior or to customs that cultural aliens may wish to conform to or participate in but that are not required. In other words, following the custom in question is not particularly important but is permissible. The majority of customs fit into this category. A cultural elective in one county may be an imperative in another. Cultural electives are the most visibly different customs and thus more obvious. Often, it is compliance with the less obvious imperatives and exclusives that is more critical.
(3) Cultural exclusives are those customs or behavior patterns reserved exclusively for the locals and from which the foreigner is barred. Foreign managers need to be perceptive enough to know when they are dealing with an imperative, an elective, or an exclusive and have the adaptability to respond to each. There are not many imperatives or exclusives, but most offensive behaviors result from not recognizing them.

The very strong belief in the United States that business decisions are based on objective analysis and that managers strive to be scientific has a profound effect on the U.S. manager’s attitudes toward objectivity in decision making and accuracy of data. Although judgment and intuition are important tools for making decisions, most U.S. managers believe decisions must be supported and based on accurate and relevant information. Thus, in U.S. business, great emphasis is placed on the collection and free flow of information to all levels within the organization and on frankness of expression in the evaluation of business opinions or decisions. In other cultures, such factual and rational support for decisions is not as important; the accuracy of data and even the proper reporting of data are not prime prerequisites. Furthermore, existing data frequently are for the eyes of a select few. The frankness of expression and openness in dealing with data, characteristic of U.S. businesses, do not fit easily into some cultures.

Perhaps most fundamental to Western management practices is the notion that competition is crucial for efficiency, improvement, and regeneration. The notion of the “invisible hand,” propounded by Adam Smith, justifies competitive behavior because it improves society and its organizations. Competition among salespeople is a good thing because it promotes better individual performance and consequently, better corporate performance. However, managers and policymakers in other cultures often do not share this “greed is good” view. Cooperation is more salient, and efficiencies are attained through reduced transaction costs. These latter views are more prevalent in collectivistic cultures such as China and Japan.

The international businessperson is confronted with three typical patterns of decision making: top-level management decisions, decentralized decisions, and committee or group decisions. Top-level management decision making is generally found in situations in which family or close ownership gives absolute control to owners and businesses are small enough to allow such centralized decision making. As businesses grow and professional management develops, there is a shift toward decentralized management decision making. Decentralized decision making allows executives at different levels of management to exercise authority over their own functions. This approach is typical of large-scale businesses with highly developed management systems, such as those found in the United States. A trader in the United States is likely to be dealing with middle management, and title or position generally takes precedence over the individual holding the job.

Edward Hall defines two time systems in the world: monochronic and polychronic time. M-time, or monochronic time, typifies most North Americans, Swiss, Germans, and Scandinavians. These Western cultures tend to concentrate on one thing at a time. They divide time into small units and are concerned with promptness. M-time is used in a linear way, and it is experienced as almost tangible, in that one saves time, wastes time, bides time, spends time, and loses time. Most low-context cultures operate on M-time. P-time, or polychronic time, is more dominant in high-context cultures, where the completion of a human transaction is emphasized more than holding to schedules. P-time is characterized by the simultaneous occurrence of many things and by “a great involvement with people.” P-time allows for relationships to build and context to be absorbed as parts of high-context cultures.

The extent of a company’s marketing orientation has been shown to relate positively to profits. Although American companies are increasingly embracing this notion (and marketing in general), firms in other countries have not been so fast to change from the more traditional production (consumers prefer products that are widely available), product (consumers favor products that offer the best quality, performance, or innovative features), and selling (consumers and businesses alike will not buy enough without prodding) orientations. Recently researchers have empirically verified that for various complex reasons, including cultural explanations, a marketing orientation is less prevalent in a number of other countries; and it can be difficult to encourage such an orientation across diverse business units in global companies.

The gender bias against female managers that exists in some countries, coupled with myths harbored by male managers, creates hesitancy among U.S. multinational companies to offer women international assignments. Despite the substantial prejudices toward women in foreign countries, evidence suggests that prejudice toward foreign women executives may be exaggerated and that the treatment local women receive in their own cultures is not necessarily an indicator of how a foreign businesswoman is treated. A key to success for both men and women in international business often hinges on the strength of a firm’s backing. When a female manager receives training and the strong backing of her firm, she usually receives the respect commensurate with the position she holds and the firm she represents. For success, a woman needs a title that gives immediate credibility in the culture in which she is working and a support structure and reporting relationship that will help her get the job done. In short, with the power of the corporate organization behind her, resistance to her as a woman either does not materialize or is less troublesome than anticipated. Once business negotiations begin, the willingness of a business host to engage in business transactions and the respect shown to a foreign businessperson grow or diminish depending on the business skills he or she demonstrates, regardless of gender.

The distinction between bribery and extortion depends on whether the activity resulted from an offer or from a demand for payment. Voluntarily offered payment by someone seeking unlawful advantage is bribery. For example, it is bribery if an executive of a company offers a government official payment in exchange for the official incorrectly classifying imported goods so the shipment will be taxed at a lower rate than the correct classification would require. However, it is extortion if payments are extracted under duress by someone in authority from a person seeking only what he or she is lawfully entitled to. An example of extortion would be a finance minister of a country demanding heavy payments under the threat that a contract for millions of dollars would be voided.

American culture is low context, individualistic (IDV), low power distance (PDI), obviously close to English, monochronic time-oriented, linguistically direct, and foreground focused, and it achieves efficiency through competition; therefore, it is categorized as an information-oriented culture. Alternatively, Japanese culture is high context, collectivistic, high power distance, far from English, polychronic (in part), linguistically indirect, and background focused, and it achieves efficiency through reduction of transaction costs; therefore, it is properly categorized as a relationship-oriented culture. All these traits are so even though both the United States and Japan are high-income democracies. Both cultures do achieve efficiency but through different emphases. The American business system uses competition, whereas the Japanese depend more on reducing transaction costs.