International Youth Culture
Fast food in China, Levis in India, Sony Walkmans in South Africa, and MTV everywhere helping to foster a ubiquitous youth culture, some argue that the conditions have been created for reduced cultural variation across societies. At the same time, one must not ignore important countertrends, such as the shift toward Islamic fundamentalism in several Muslim countries, the separatist movement in Quebec, or the continuing ethnic strains and separatist movements in Russia. Such countertrends are often a reaction to the pressures for cultural convergence discussed here. In an increasingly modern and materialistic world, some societies are trying to reempha-size their cultural roots and uniqueness.
Implications for Business
International business is different from national business because countries and societies are different. In this chapter we have seen just how different societies can be. Societies differ because their cultures vary. Their cultures are different because of profound differences in social structure, religion, language, education, economic philosophy, and political philosophy. Two important implications for international business flow from these differences. The first is the need to develop cross-cultural literacy. There is a need to appreciate not only that cultural differences exist, but also to appreciate what such differences mean for international business. A second implication for international business centers on the connections among culture, the costs of doing business in a country, and national competitive advantage. There may be a link between culture and national competitive advantage. In this section, we will explore both of these issues in greater detail.
Cross-Cuitura! Literacy
One of the biggest dangers confronting a company that goes abroad for the first time is the danger of being ill-informed. International businesses that are ill-informed about the practices of another culture are unlikely to succeed. Doing business in different cultures requires adaptation to conform with the value systems and norms of that culture. Adaptation can embrace all aspects of an international firm's operations in a foreign country. The way in which deals are negotiated, the appropriate incentive pay systems for salespeople, the structure of the organization, the name of a product, the relations between management and labor, the manner in which the product is promoted, and so on, are all sensitive to cultural differences. What works in one culture might not work in another.
To combat the danger of being ill-informed, international business should consider employing local citizens. Businesses must also ensure that home country executives are cosmopolitan enough to understand how differences in culture affect the practice of international business. Multinational companies can build a cadre of cosmopolitan executives by transferring managers overseas at regular intervals to expose them to different cultures. Hitachi is taking this approach as it transforms itself from a Japanese company into a global company (see the "Management Focus" for details).
An international business must also be constantly on guard against the dangers of ethnocentric behavior. Ethnocentrism is a belief in the superiority of one's own ethnic group or culture. Hand in hand with ethnocentrism goes a disregard or contempt for the culture of other countries. Unfortunately ethnocentrism is prevalent; many Americans are guilty of it, as are many French people, Japanese people, British people, and so on. International businesses must be on continual guard against it.
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