Cultural Distance: What Is It, And How Does It Impact On Global Marketing Operations?
- March 24, 2016
- Posted by: admin
- Category: blog
In the last few years, international economy research has advanced in the extensive usage of the idea of cultural distance of different nations to explain their wide range of behaviors and associate success of global organizations (Shenkar 2001). Cultural distance in nations can be described as the degree to which the common values and norms in one state vary from those in another country (Chen & Hu 2002).
A stream of literature on international economy that has mostly incorporated cultural distance as a variable of explanation is concerned with global marketing. Much of the research in this literature have estimated the cultural distance between the host nation and country which is targeted for global expansion through the index introduced by Kogut and Singh (1989). Their index is loosely based on the theory of cultural distance presented by Hofstede (1980). Even though the researchers have become extensively critical regarding this index and the ideas put forth by Hofstede (Steenkamp 2001), the mode entry in global market have continually relied upon this exploration as no much progress has been instated in this field.
In the globalized economy of present day, nations have become exceedingly cross-cultural. The culture of global consumerism and its impacts on behaviors of customers must be understood thoroughly to realize their part in global marketing and market researches aimed at infiltrating new arcades. The part that cultural differences play in the current environment of cross-culture is undertaken into reflection for the localization of marketing approaches (Kroeber & Kluckhohn 1952). The establishment of international strategies of marketing and comprehension of cultures of host market is a challenging task for the researchers of new consumerism; it is difficult to comprehend and analyze the requirements of foreign customers. It is necessary to comprehend the factors of cultural proportions to evaluate the influences of culture on the decisions of consumers. This corresponds to the fact that culture significantly manipulates the choices of the consumers as it is based on the value system of that specific culture (Akaka & Alden 2010). This value system of culture functions as a guide for interaction in the associates of the social order and between the costumer and its produces.
The definition of culture, as proposed by Hofstede (2001) is “the combined programming of the thoughts which differentiates the associates of one category or group of people from some other”. This delineation is focused on the etic attitude, where the scholars struggle to find universality or concepts that are free of any specific culture and its corresponding theories. Nonetheless, the emic technique is a substitute method that is focused on the topic being studied and its issues being understood. Culture is defined as the lens by which all occurrences are observed. It decides how these occurrences are embraced and implemented (Luna & Gupta 2001). As a matter of fact, there are a number of models designed for cultural differences that are used to evaluate the structure of culture in groups. These models are applicable in either shared or in specific clusters which act as a model for interpretation of consumer behaviors. This investigation is aimed at evaluating the models of cultural dimension as they have been proposed by Hofstede (2001) along with Schwartz (1994) and their subsequent impacts of cultural distance in global market of consumers.
The culture of a nation has been recognized as a significant dimension in describing the behavior and distinguishing factors in national culture and has been treated as a vital part of understanding of consumer’s behaviors in various countries. Without a doubt, factors of culture of a nation have been associated to several regions of the behavior of an organization. Examples include: decisions regarding foreign investments (Tahir & Larimo 2004), decisions on mode of entry (Arora & Fosturi 2001) along with the decisions regarding development and research in addition to behavior of international consumers. These explorations consist of innovations based on consumers, impulsive purchasing (Kacen & Lee 2002) and attitude towards negotiation (Leung 1988).
Nevertheless, the determination of the impact of culture on consumer behavior is difficult because culture is a broad and complex dimension, the accurate measurement of which is not easy. To simplify its functionalization and to permit at least some factors of culture to be applied more easily, scholars have proposed the utilization of cultural guides (Hofstede 1980) or self-reporting on the individual level. The scores for cultural distance have been derived based on cultural controllers. The totals for cultural distance measure the degree to which the culture of one country is similar to another country’s culture or vice versa (Clark & Pugh 2001).
Cultural Distance Scores
The scholarly writings that are based on the dimensions presented by Hofstede (1980) to evaluate the scores for cultural distance have not resulted in substantial or anticipated outcomes with the interest variables (Kim 2003). As an example, Shenkar (2001) has reviewed the impact of cultural distance on the performance of joint ventures and has found unreliable empirical outcomes. Several kinds of research have reported that global ventures with foreign partners of trade were more prone to failure (Li & Guisinger 1991); on the other hand, some studies have indicated contrasting views. In a similar pattern, Elango (2003) could not find the expected connection between reinsurance operation of the United States and cultural distance. As a matter of fact, Kim (2003) has found that an index of socio-cultural anticipates the globalization processes of internet organizations much better than the scores for cultural distance.
Thus, it might be contended that scores for cultural distance gather society into a frame that may be excessively insufficient. Without a doubt, ‘measurements, on which most scores for cultural distance are based, have been condemned as outdated and too consolidated to capture society’ (McSweeney 2002) even before they are diminished into a solitary cultural distance score. Nevertheless, it is swift to release the utilization of scores for cultural distance as they have been observed to be helpful in numerous occurrences. For example, signiﬁcant connections were found between scores for cultural distance and an association’s external venture approach (Tahir and Larimo 2004). While substantial relationship was found between the attachment of a subsidiary to its guardian organization (Luo 2001) and an association’s procurement execution. Along these lines, it is possible that there are speciﬁc settings in which scores for cultural distance in light of Hofstede’s measurements are fitting and different connections in which different types of cultural distance may be more suitable. All things considered, it merits inspecting elective approaches to operationalize culture.
Another elective that has not been recommended beforehand is the utilization of the structure of cultural values proposed by Schwartz (1994) as a premise from the estimation of cultural distance. Schwartz (1994) proposed seven cultural areas in view of all inclusive human value sorts. Schwartz’s value measurements offer a few potential points of interest contrasted with Hofstede’s dimensions (Schwartz 1994). The dimensions of Schwartz’s values in which he has argued to have incorporated dimension proposed by Hofstede (Schwartz 1994) deliver a substitute way to estimate cultural distance that could be applicable in varied contexts.
Case in point, Jackson (2001) contended that Hofstede’s independence measurement is oversimpliﬁed and recommended that Schwartz’s populist measurement may be more proper in clarifying the moral attributions in nation classiﬁed as more eccentric. Keeping in mind the end goal to research the value of Schwartz’s scores for cultural distance, it is important to comprehend the basic measurements of both structures.
Javidan et al. (2004), for occurrence, perceived independence/community which is one of the cultural measurements proposed by Hofstede. The observed participants who wore American students, particularly male were found to be more individualistic in their methodology when contrasted with the Asian students who were more focused on groups showing a “we” approach in their messages. This study demonstrated that authoritative communication through web confirmed the impact of diverse cultural attributes on the behaviors of students’ example, having a place with distinctive national cultures. Besides, Chiou (1999) directed statistical surveying in Taiwan and the United States which discovered that customers in nonconformist cultures and utilized items to show their internal values. While in collectivist cultures, the purchasers were more affected to use the items to strengthen the social connections.
In a global public relations circumstance, the vicinity of distance component was additionally affirmed by different scientists, where distance assumed an indispensable part as far as item emergency. For instance, the Coca-Cola emergency related to pollution occurred in Belgium in the year of 1999. The item was reviewed as the purchasers griped about the sporadic taste and smell in the packaged items. Because of warning signs of reported ailment, the Health Ministry of Belgium banned the results of the Coca-Cola Company.
The Chief Executive Officer of Coca-Cola apologized to the Health Ministry of Belgium, and posted notes in daily papers and tended to buyers through media. On June 22nd, 1999, the Health Ministry of Belgium lifted the prohibition on Coca-Cola Company, and the organization gave premiums to 72,000 buyers (Johnson & Peppas 2003).
Steenkamp, J. et al. (2001) concentrated on the impact of national culture on forming purchaser recognitions. He contends that the relationship between the calculated meaning of Hofstede’s measurement and its usage to quantify cultural measurements is frail and unclear. The scores depend on the specimens recorded from IBM workers, who don’t speak to their own particular nation in the exploration. This model can be actualized in little scale businesses and less developed nations. Moreover, he additionally expresses that Hofstede’s examination is more focused on business-related values which makes the information time and setting particular.
Essentially, McSweeney (2002) contends that Hofstede’s examination showed restriction of the review led on constrained population of one association namely IBM. In spite of the fact that the review was directed in 66 nations where IBM auxiliaries were found, the information used to fabricate national culture examinations was significantly constrained to criticisms from deals in addition to promoting workers of IBM. The overview was coordinated on a discussion-related and hierarchical premise which ignored the actuality of the workers, which could show the degree to which they can speak to their nationality and their individual cultures. The feeling of clarity in Hofstede’s examination as for national culture is vague. Normal propensity relying upon survey reactions from the workers in a solitary venture, neglected to legitimize Hofstede’s case that national normal inclination of purchasers matches the normal inclination of the general population in that particular multifaceted environment.
Consequently, another program of research has emerged which classifies culture into nine main dimensions for example avoidance of uncertainty, power distance, collectivism of the institute, collectivism of the internal group, egalitarianism of gender, assertiveness, orientation in the future, orientation of the performance, positioning of personnel and six major features of leadership attitude (House et al. 2004). This project called GLOBE, a short form for Global Leadership and Organizational Behavior Effectiveness, has focused mainly on the execution of leadership attitudes in varying contexts of cultures (House & Javidan 2004). This program has evaluated culture into two unique perspectives, i.e. values pertinent to a culture and the practices that exist in the culture
In accordance with House et al. (2004), initially, the culture of a society might impact an implicit belief which develops the theory of cultural leadership (CLT). After that, the behavior of leadership and its attributes are affected by culture of the society directly. At third step, the characteristics and behaviors of the leader translate into his/her effectiveness and acceptance. Nonetheless, this aforementioned relation is guided by the theory of cultural leadership. The cultural dimensions of GLOBE are applicable on the levels of both, the society and the organization.
As indicated by Okazaki et al. who investigated how soft offer versus hard offer strategies of promoting were deciphered by purchasers of Japan versus buyers of the Unites States. Utilizing execution introduction and confidence which are two measurements of culture in GLOBE study, Okazaki evaluated the viability of the advertisements in two social orders. The outcomes demonstrated a variable reaction over the two cultures. The hard offer methodologies are more enticing for American purchasers while soft offer promoting methodologies are more positive for the Japanese shoppers. This study demonstrates that the US buyers are more confident and have faith in values that are performance-oriented. Nonetheless, the Japanese buyers will probably be annoyed by hard offering promotions as they see these advertisements to be excessively forceful. This study shows different measurements of GLOBE, for example, decisiveness and execution introduction. It additionally gives a thought regarding the point of view of promoting considering distinctive cultural practices and values.
By the aforementioned association models, culture can be divided into cultural practices and values, relating to buyer behavioural example impacted by their own particular culture. The cultural distinction should be distinguished in the worldwide marketing circumstance, in light of the fact that it gives a thought of comprehension cross-nation cultures which validates a more profound conception of utilization example in a particular circumstance. The knowledge of cultural distance additionally manufactures a relationship between the item or administration and the shoppers. As an illustration which shows cultural contrast assuming a critical part in controlling shopper conduct is in the ladies’ excellence area.
In any case, Unilever entered the excellence market, however picked not to rival L’Oreal specifically. On the other hand, it ordered ladies into distinctive conviction fragments who contradict against magnificence generalizations. Dove advanced its item with its ‘Battle for Authentic Beauty’ where pictures of ladies don’t coordinate the tall, dainty and youthful class. The brand made an alternate conviction framework by elevating workshops to help young ladies with body-related low self-regard. Dove effectively made a popularity-based perspective in the psyche of the shoppers about magnificence and distinguished the market fragment by tapping the ladies’ culture in view of convictions. Execution of this methodology has driven Dove to be a noteworthy player in this market section (Jobber 2010).
In conclusion, it has been perceived that culture assumes a vital part in shopper conduct. The marketers adjust and institutionalize their item as indicated by the culture, with the goal that they can portion, target, and position their item in a particular assembly or in the market in general. The associations who neglected to distinguish the cultural distance in purchasers, battled with the idea of brand situating in the worldwide market context. The brand selection procedure of a purchaser is affected by individual values and expressions in their buys. The uniqueness of the buyers influences the brand value and their recognitions about the brand.
The idea of “Glocalisation” in which “Globalization” coincides with “Localisation” is the key to help the marketers to alter their worldwide brands as indicated by the needs of the host nation and suit the nearby cultures. Advertising is amongst the most critical culturally bound apparatus of the marketing mix. It is the most grounded connection between the organizations and its shoppers in marketing communications. The words and pictures utilized as a part of promotion can impact the customer with respect to their culture, as the publicizing effort does not rely upon any specific nation or district.