Chapter 5. MANAGING ACROSS CULTURES
Strategic Predispositions
Most MNCs have a cultural strategic predisposition toward doing things in a particular way. Four distinct predispositions have been identified: ethnocentric, polycentric, regiocentric, and geocentric.
A company with an ethnocentric predisposition allows the values and interests of the parent company to guide strategic decisions. Firms with a polycentric predisposition make strategic decisions tailored to suit the cultures of the countries where the MNC operates. A regiocentric predisposition leads a firm to try to blend its own interests with those of its subsidiaries on a regional basis. A company with a geocentric predisposition tries to integrate a global systems approach to decision making.
By the same token, a predisposition toward any of these profiles can provide problems for a firm if it is out of step with the economic or political environment.
Meeting the Challenge
A number of factors are moving companies to facilitate the development of unique strategies for different cultures, including:
1. The diversity of worldwide industry standards such as those in broadcasting, where television sets must be manufactured on a country-by-country basis. 2. A continual demand by local customers for differentiated products, as in the case of consumer goods that must meet local tastes. 3. The importance of being an insider, as in the case of customers who prefer to “buy local.” 4. The difficulty of managing global organizations, as in the case of some local subsidiaries that want more decentralization and others that want less. 5. The need to allow subsidiaries to use their own abilities and talents and not be restrained by headquarters, as in the case of local units that know how to customize products for their market and generate high returns on investment with limited production output.
The globalization versus national responsiveness challenge is even more acute when marketing cosmetics and other products that vary greatly in consumer use. For example, marketers sell toothpaste as a cosmetic product in Spain and Greece but as a cavity fighter in the Netherlands and United States. Moreover, the way in which the marketing message is delivered also is important. For example: • Germans want advertising that is factual and rational; they fear being manipulated by “the hidden persuader.” The typical German spot features the standard family of two parents, two children, and grandmother.
• The French avoid reasoning or logic. Their advertising is predominantly emotional, dramatic, and symbolic. Spots are viewed as cultural events—art for the sake of money—and are reviewed as if they were literature or films. • The British value laughter above all else. The typical broad, self-deprecating British commercial amuses by mocking both the advertiser and consumer.
The need to adjust global strategies for regional markets presents three major challenges for most MNCs. First, the MNC must stay abreast of local market conditions and sidestep the temptation to assume that all markets are basically the same. Second, the MNC must know the strengths and weaknesses of its subsidiaries so that it can provide these units with the assistance needed in addressing local demands. Third, the multinational must give the subsidiary more autonomy so that it can respond to changes in local demands. Cross-Cultural Differences and Similarities
Parochialism and Simplification
Parochialism is the tendency to view the world through one’s own eyes and perspectives. This can be a strong temptation for many international managers, who often come from advanced economies and believe that their state-of-the-art knowledge is more than adequate to handle the challenges of doing business in less developed countries. In addition, many of these managers have a parochial point of view fostered by their background.
Simplification is the process of exhibiting the same orientation toward different cultural groups. For example, the way in which a U.S. manager interacts with a British manager is the same way in which he or she behaves when doing business with an Asian executive.
Moreover, this orientation reflects one’s basic the difference between the cultures in Malaysia and the United States. Malaysia has what could be called a high-context culture, which possesses characteristics such as:
1.Relationships between people are relatively long lasting, and individuals feel deep personal involvement with each other.
2.Communication often is implicit, and individuals are taught from an early age to interpret these messages accurately.
3. People in authority are personally responsible for the actions of their subordinates, and this places a premium on loyalty to both superiors and subordinates. 4. Agreements tend to be spoken rather than written. 5. Insiders and outsiders are easily distinguishable, and outsiders typically do not gain entrance to the inner group.

Similarities across Cultures
Many Differences across Cultures
■ Cultural Differences in Selected Countries and Regions
Doing Business in China
Doing Business in Russia
Doing Business in India
Doing Business in France
Doing Business in Brazil
Doing Business in Arab Countries