Cross Cultural Management

VISHNURAJ CR
ANJANA KS
ANJALY GOKUL

1. Cultural Environment of Business
Business-Culture Interface
Humans need to communicate in order to interact with one another and culture helps to regulate such interaction
and communication. The same is true in the world of business since there too people interact and communicate
with one another. The interface between business and culture can be understood from the following points.
a) Culture creates people: It is the culture which generally determines the ethos of people. It trends to train
people along particular line which puts a personality stamp on them like Indian, American, Britishers and
Japanese etc. There are sub cultures within a culture. When people with different cultural background
promote, own and manage organizations then the organization themselves tend to acquire distinct cultures
like culture of ‘Tata’ group of companies is different from that of ‘Birla’s’.
b) Culture and Globalization: As one moves from one country to another country there comes an element of
‘Cultural shock’, ie; confusion, disorientation, and emotional upheaval. So, to overcome ‘Cultural shock’
there is need for understanding and appreciating cultural differences across the countries.
c) Attitude to Business: Businessmen have some basic set of philosophies to guide to their actions, Beliefs,
value system, concerning what is right and what are basic to business activity. Attitude of people towards
business is largely determined by their culture.
d) Attitude to work: How to worker looks at his/her work depends on his/her culture. Motivation, morale and
other related aspects of human resource management are based on worker’s attitude to work.
e) Family: The family is one of the chief agencies of social life. The family is important for various reasons
such as inheritance, property right, protection, morality, care of sick and aged and for transmission of
cultural values, nuclear families have become common now in our society in place of joint family system.
With big families being broken up, family business is slowly turning into limited companies. All these
developments are important to business.
f) Cultural Resources: Cultural resources means heritage and our country is rich in cultural heritage. South
East Asia and Central Asia received culture from India along with other things like rice, cotton, sugarcane,
Spices and even game of chess. Even decimal system is the invention of Indian mathematician. Sanskrit
literature is one of the greatest contributions India has made to the culture of mankind.
g) Time Dimension: It refers to people’s orientation- Past, Present and future. Time dimension is another
aspect of culture that influences business. Societies which are oriented towards past tend to preserve past
heritage. Our society is a good example of past and future orientation.
Self-Reference Criterion:
Self- reference criterion is often defined as an unconscious reference to one’s own cultural values, experiences
and knowledge as a basis for decision. That is to say that one’s own culture pr company knows the best how to

do things. People may make the wrong business decision in foreign country by thinking how they would handle
the same situation if they were in their home country.
Risk of Self-Reference Criterion:
The risk and problems created by self-reference criterion are as follows:
1) Failing to React in Time due to Unawareness of the Importance or Necessity for Actions: The SRC will
result in failure to take the right action at the right time since the person or manger will react to situations
by applying his/her own experience in his/her home country and not on the basis of requirement of the
situation of the host country.
2) Offensive Behavior to Host in Some situation: Some actions are taken on the basis of the SRC may at the
time result in offensive behavior to the host.
3) Discounting the differences in culture between countries: Ignoring the differences in culture in different
countries will eventually lead to strikes and lockouts and may finally result in a firm being banned. An
example of this was the closure of coco-cola factory in south India. The people of coco-cola misjudged
the situation and presumed that every part of the country would be same. They bribed the officials and did
not assemble the water recycling plant. This resulted in water shortage in that area and as a result, the
closure of the factory.
4) Inability to assess a foreign market in its true light: SRC will result in an incorrect assessment of the
foreign market and decisions made in that light with result in certain future.
5) Ethnocentrism: SRC will sometimes results in ethnocentrism which will influence the evaluation of the
appropriateness of marketing mix for a foreign market. Ethnocentrism presumes that one’s own company
or culture known how to do things best.
Meaning and elements of Culture:
Culture is the characteristics and knowledge of a particular group of people, encompassing language, religion,
cuisine, social habits, music and arts.
Elements of culture:
The cultural components are as follows:
a) Language: The lifestyle and philosophy of a particular group are reflected by its language. People tend to
think and behave differently due to different languages adopted in their societies. It also helps in depicting
the cultural history and personality of the individuals
b) Religions: Another component of the culture is religion. On this earth the code of contact of individuals
belonging to different religions is different. This is because different religions dictate different ways of

living as per their belief. The religious philosophy strongly influences the values, attitudes and behaviors
of individuals. There are many religions followed all over the world, out of which Hinduism, Islam,
Christianity, Buddhism, Judaism and Animism are the major six.
c) Attitudes and values: Attitudes and values of the individuals belonging to different societies are also the
components of the culture. These attitudes and values shape the behavior of the people and thus are
important for the development of the group or society. Attitudes and values of the individuals concerning
the work, time, wealth gain, material gain and other achievements are very crucial.
d) Social organization: Based on the cultural values and expectation, individuals plan their roles and activities
in the society. The main considerations are given to social and reference group, supervisor subordinate
relationships, family relationships, cultures origin and history, friendship, gender roles, government
powers and so on.
e) Education: As a component of cultural existence education of the individuals is governed by the culture
and propagating norms. In few cultures, the focus is on is getting the religious education first and then the
rest. Some cultures focus on getting both the religious as well as the commercial education.
f) Customs: The behavior of the individuals or groups in different situations are governed by the customs.
The customs are the significant component of the culture as these are transformed from one generation to
the next.
Cultural adaptation:
Cultural adaptation is a relatively new concept used to define the specific capacity of human beings and human
societies to overcome changes of their natural and social environment by modifications to their culture. The scale
of culture changes depends on the extent of habitat changes and could vary from slight modifications in livelihood
systems (productive and procurement activity, mode of life, dwellings and settlements characteristics, exchange
systems, clothing, and so on) to principal transformation of the whole cultural system, including its social, ethnic,
psychological, and ideological spheres.
Acculturation:
Acculturation is a process through which a person or group from one culture comes to adopt practices and values
of another culture, while still retaining their own distinct culture. This process is most commonly discussed in
terms of a minority culture adopting elements of a majority culture, as is typically the case with immigrant groups
that are culturally or ethnically distinct from the majority in the place to which they have immigrated.
Cultural Shock:
Culture shock is the term we use to describe the feelings of confusion and uncertainty that are experienced when
you come into contact with a culture that is vastly different from your own. Culture shock can be commonly seen

in foreign students, immigrants and refugees. Even students who stay in their home countries suffer from culture
shock as they make the transition into the foreign environment known as college.
Stages of cultural shock:
1. The Honeymoon Stage
The first stage of culture shock is often overwhelmingly positive during which travelers become infatuated with
the language, people and food in their new surroundings. At this stage, the trip or move seems like the greatest
decision ever made, an exciting adventure to stay on forever.
2. The Frustration Stage
Frustration may be the most difficult stage of culture shock and is probably familiar to anyone who has lived abroad
or who travels frequently. At this stage, the fatigue of not understanding gestures, signs and the language sets in
and miscommunications may be happening frequently. Small things losing keys, missing the bus or not being able
easily order food in a restaurant may trigger frustration. And while frustration comes and goes, it’s a natural
reaction for people spending extended time in new countries.
3. The Adjustment Stage
Frustrations are often subdued as travelers begin to feel more familiar and comfortable with the cultures, people,
food and languages of new environments. Navigation becomes easier, friends and communities of support are
established and details of local languages may become more recognizable during the adjustment stage.
4. The Acceptance Stage
Generally, though sometimes weeks, months or years after wrestling with the emotional stages outlined above the
final stage of culture shock is acceptance. Acceptance doesn’t mean that new cultures or environments are
completely understood, rather it signifies realization that complete understanding isn’t necessary to function and
thrive in the new surroundings. During the acceptance stage, travelers have the familiarity and are able to draw
together the resources they need to feel at ease.
Cultural transmission:
Cultural transmission is the process of learning new information through socialization and engagement with those
around you. The cultural transmission of knowledge is a broad concept, and it refers to knowledge that is gained
through non-biological means. As a means of communication, cultural transmission is a one-way system in which
culture is passed onto a person through certain channels. The process of receiving information about your culture
or society is what is known as enculturation.
Cultural conformity:

Cultural conformity implies individuals of the society conforming to the existing cultural norms. Each individual
has a certain role in the society and cultural conformity occurs when a person conforms to the responsibility of
the required role. Mangers of the business firm should know the nature of cultural conformity while making
important business decisions. It becomes difficult for them to market new products, services or idea if a society
blindly conform to the existing norms. In such a scenario, special efforts would be required to change the attitude
of people.
Cultural Lag:
Cultural lag refers to the phenomenon that occurs when changes in material culture occur before or at a faster rate
than the changes in non-material culture. In other words, cultural lag is when technological change, or something
similar like tools, develops faster than society can process those changes.
Ogburn's Theory of Cultural Lag
The concept of cultural lag was first developed in 1922 by sociologist Williams F. Ogburn. Ogburn noticed that
material culture tends to develop and advance at a faster rate than non-material culture. Material culture is the
physical and tangible aspects of culture including technology, buildings, and tools. Non-material culture is the
aspect of culture that isn't physical, nor is it tangible. Non-material culture includes cultural values, morals, and
religion.
Cultural Traits:
Cultural trait is a characteristic of human action that's acquired by people socially and transmitted via various
modes of communication. Cultural traits are things that allow for a part of one culture to be transmitted to another.
The smallest unit of culture is called a trait. According to Hoebel, trait is a reputedly irreducible unit of learned
behavior pattern or material product thereof. Traits of the material culture would include such things as the nail,
the screwdriver; the pencil etc and the nonmaterial culture would be shaking hands, saluting the flag or driving.
Each culture includes thousands of traits.
Cultural stereotypes:
A fixed impression which may have little basis in fact but is nevertheless perpetuated by persons unwilling to
look more deeply into the matter. This means that a person has an opinion about someone before they have even
met them. For example, an Asian student walks in to the room and aromatically assumes they are a genius. The
definition of stereotype is any commonly known public belief about a certain social group or a type of individual.
Stereotypes are often confused with prejudices, because like prejudices a stereotype is based on a prior
assumption. Stereotypes are often created about people of specific cultures or races. Almost every culture or race
has a stereotype, including Jewish people, Blacks, Irish people and Polish people, among others.

Culture and organizational behavior:
Culture and organizational behavior were not always two topics that were considered side by side of one another.
In fact, this concept which may seem common place, and even common sense now, first gathered steam only a
little over twenty years ago. In the 1980s, there was a large push in the area of theory to pay attention to
organizational culture as an important factor in individual organizational success.
Many experts started arguing that developing a strong organizational culture was essential for maximum success.
Most people agree that a solid connection is there, although there remains some degree of argument as to how
influential it really is.
The behavior found within a successful organization will in part be due to, and continually nourished by, a healthy
organizational culture. It's extremely important to know what type of behavior culture has the greatest impact and
how culture works to control the behavior of members of that particular organization. The culture will affect the
organization, just as the opposite is true. Behavior is a learned habit, and the process of socialization that teaches
new employees the habits of those workers already there is one of the major parts of organizational culture.
The behavior of individuals within a culture will depend greatly on the behavior that is encouraged by the higher
ups, and by the general organizational culture that any corporate entity has.
There are always decisions that have to be made about a business that leans the culture, and therefore the behavior
of the employees there, one direction of the other (though most fall somewhere in the middle). The following are
some examples of the different conflicting emphasis that can clash with each other in determining the behavior
of the employees.
· Social Focus vs. Task Focus. The emphasis here determines whether decisions are made on the condition of
improving relationships as the bottom line, or if having the assigned tasks finished is most important.
· Individual vs. Team. This is pretty self-explanatory. Do you encourage team players, or do you only need
individual cogs to do their part?
· Cost Control vs. Happy Customers. This is where many businesses can go wrong. This determines how
concerned individual employees and supervisors should care about happy customers and general service as
opposed to minimizing operating costs, sometimes at the price of customer service.
· Power distances. Is the CEO unreachable to all but the other executives? Does your manager have complete
power over you, or is she/he like a co-worker who simply has final say? This can change attitudes drastically.
These are only a few of the factors of organizational culture that affect organizational behavior and vice versa.
The two influence each other, and often times the culture will help to dictate the behaviour, and the behavior will

come back around to reinforce the organizational culture. The relationship between culture and organizational
behavior is undeniable. To the benefit of some, but to the detriment of others.
Business Implications of cultural differences:
Culture determines so much about how people do things that it's easy to forget you have a culture at all. The
American approach to business can seem like second nature, but if you're doing business abroad, you'll quickly
realize that not everyone wants to do business the way you do. Cultural competence can help you impress
international business partners and avoid making embarrassing mistakes.
• Interpersonal Style
Your interpersonal style governs how you talk to others, how much personal space you expect when talking to a
business colleague, how you feel about eye contact and how warmly you behave toward business partners. Social
skills can make a big difference in business, and if a client is made uncomfortable by your interpersonal style, she
might not want to hire you. Read up on the local culture. In some cultures, it's rude to make direct eye contact,
while in others, business partners stand very close to one another or only shake hands in a limited number of
contexts. It might be inappropriate to ask personal questions about someone's family in the U.S., but in some
cultures, it's expected that you'll inquire about a client's family.
• Time
Americans are used to a fast-paced business climate where deadlines are set in stone. In some cultures, however,
there's a more lax approach to time and deadlines. If you're doing business in such a culture, getting irritated when
you have to wait for a meeting is considered rude and pressuring someone to meet a deadline could alienate
business. Instead, try reading about local culture and mirroring the behavior of business partners native to that
culture.
• Laws
Culture heavily influences the law, and breaking the law where you're doing business can not only lead to legal
problems but alienate your clients as well. You'll need to make certain you're following the laws of the culture in
which you're doing business. Read up on how contracts are handled, for example; in some cultures, a handshake
and a verbal agreement are more common. You'll also want to note how employees are treated, what compensation
is considered fair and if there are any requests of employees considered inappropriate or illegal.
• Business Hierarchy
Not all cultures use a hierarchical business structure, with most rules coming from the top. You may be working
with people who prefer a collaborative style or run a family business. Don't try to impose your approach to
business leadership on members of a foreign culture. Instead, ask them how they prefer to make decisions and get

information about which people you should contact with important information. Contacting the wrong person or
excluding someone can alienate your customers.
Organisation of culture:
The term organization of culture refers to the social structure and the integration of traits, complexes, and patterns
that make up the cultural systems.
Social Structure
The concept of social structure has been defined in different ways by different thinkers and sociologists. Herbert
Spencer was the first thinker who wrote about structure of a society. He came up with biological analogies
(organic structure and evolution) to define the social structure.
According to Radcliff-Brown social structure is a part of the social structure of all social relations of person to
person. In the study of social structure the concrete reality with which we are concerned is the set of actually
existing relations at a given moment of time that link together certain human beings.
Cultural Pattern
Cultural pattern is the way of behavior of the people. A large number of people following certain behavior make
it a custom. This custom when growing popular among the people becomes a precedent and a rule of social life.
This rule of social life is pattern of culture. It is that ideal which is presented as an example to the people. These
people are expected to behave according to cultural patterns. A culture develops patterns of behavior in all social
situations. These patterns are also the normative orders of society. Violation of these patterns is disliked in society
by condemnation.
Cultural Trait
Trait is the smallest unit of a culture. It exists and functions with the organization of other related traits. The parts
of a watch are traits and all the parts when organized together function as a whole in the watch. Hoebel defined
cultural trait as, "a reputedly irreducible unit of feared behavior pattern or material product thereof." Horton and
Hunt gave examples of a nail, the screw driver, the pencil and the handkerchief in material culture. The shaking
of hands, driving to the left and the salute to the flag are the examples of non-material culture.
Cultural Complexes
A complex is intermediate between the trait and the institution: A cluster of related traits is called 'culture
complex'. A number of traits when organized together make a culture complex. A watch, football match, attitudes
and actions, prayer, Hajj, Eids, agriculture system, market system, a political party, a constitution, an industrial
unit, an examination system are the examples of culture complex.

An institution is a series of complexes centering upon an important activity. It means when a number of cultural
complexes unite together on a certain point make an institution. Marriage is an institution with betrothal, nikah,
dowry and marriage party as its complexes.
Cultural Area
It is that geographical area in which a cultural trait is originated. The place where that trait is born is called the
'place of origin'. This trait spreads around through diffusion and covers an area. This area is called cultural area.
UNIT – 2
Culture:
Culture is defined from the way of speaking, dressing styles, believes, norms, values and
thinking level of a particular group of people. Examining culture of a particular country means analysis of a
countries lifestyle, living standard, way in which they do each and every activity from morning to evening. Even
in a particular country because of geographical and religion differences, culture of various groups of people are
different from another. Believes, values, judgement and norms are also included in identifying the terms of
culture.
Objectives of cross cultural marketing
The marketer should determine his international marketing objectives while entering the cross-cultural marketing.
Various options are available to an international marketer. The firm can act as a domestic exporter, or a foreign
importer. It may also solicit another firm to sell abroad. Better opportunities available in the foreign market and
the over capacity of the firm operating only in the domestic market motivate the firm to go abroad. The firm will
work out the following objectives:
1. To determine how consumers in two or more societies are similar and devise suitable strategy.
2. To formulate marketing strategy if cultural beliefs, values and customs of a specific country are different.
Marketing strategies:
Marketing strategies are defined as combination of all goals into one comprehensive plan. An efficient marketing
strategy should be focused on the right product mix in order to achieve maximum profits. Marketing strategies
includes all long and short-term actions taken by marketers to launch a new product, its promotion and growth
for a long time period. The process of framing strategies starts with analysis of internal and external environment
of business. It becomes compulsory to grasp all factors of external environment, such as economy, technology,
culture, legal and political. Culture is one of the most important factors which were ignored in earlier years but
now it is must for every marketer to study culture of a specific group to whom he is offering his product.

Implications of cultural environment for marketing
1. Language: A country’s key to its culture is the language and it is proved as a can be described as an
indication of the culture. Hence, if a company is dealing with other cultures for a long time, it is beneficial for
the growth of the organization to learn language. To influence customers this is must to communicate with them
and to learn language is the first thing required for interaction. Language can then divided into two major
elements:
a) Verbal language: This form of language has several roles in global marketing; it is important in information-
gathering and evaluation efforts, it provides access to local societies, it is becoming ever more important in
company communications and lastly it provides more than the ability to communicate.
b) Non-verbal language:
This, differing from country to country, can also be an important and powerful mean of communication.
Manners and customs: This agent ought to be prudently monitored as in what precisely is disparate amid the
cultures. An example of this agent is whereas in so-called right-hand sophistications (Middle East, amongst
others) the left hand is the ‘toilet hand’ and
employing it to eat, for example, is believed impolite.
2. Technology and material culture
This agent aftermath from knowledge and is undeviating related in what method an area construction its
commercial activity. Technical progression moves in the direction of traditional convergence. Hence, an example
is how black-and-white televisions in the US had a far higher marketplace allocate contrasted alongside Europe
and Japan that seized them nearly a decade to grasp the same level of marketplace share. This though had modified
across the colour television, whereas the ‘lag’ was decreased to five years.
3. Communal institutions
Business, governmental, relations or class connected impact the deeds of customers and the methods in that they
associate to every single other. Exceptionally in Latin and in the Middle East, a manager who gives distinct
treatment to a comparative is believed to be fulfilling an obligation.
4. Education
This agent includes the procedure of transferring skills, thoughts and attitudes, as well as training in particular
disciplines. One intention of education is the transmission of the continuing sophistication and traditions to the
new generation.
5. Values and attitudes
These agents aid ascertain what people contemplate is right or suitable, what is vital and what is desirable.
Associating it to global marketing, the extra imbedded the benefits and attitudes are in central beliefs (i.e.
religion), the extra understanding the globe marketing manager has to be.
6. Aesthetics

This agent mentions towards beauty and good taste in the fine art, music, folklore and drama of a culture. This
agent of a particular sophistication can be vital in the clarification of symbolic meanings of assorted artistic
expressions. Hence, what is and what is not satisfactory could vary melodramatically even in or else exceedingly
comparable marketplaces (i.e. sex in advertising).
7. Religion
The main faiths that are public by a number of nationwide states are; Christianity, Islam, Hinduism, Buddhism,
Confucianism. The faith that is rehearsed most in the Middle East is Islam. Faith can furnish the basis for
transcultural similarities below public beliefs. In assorted states faith is of paramount importance. Faith can
additionally impact the globe marketing strategy undeviating in countless methods such as; Spiritual celebrations
vary considerably amid the states (i.e. Christians wear white dress on the marriage and wear black on creation,
whereas Hindu and Sikhs wear red and bright colours on the occasion of any function and mostly they wear white
on cremation)
8. Cultural Norms
Norms are derived from values and defined as an accepted standard of doing things that most of the people agree
with these can be defined as specific rules that a group of people use for deciding what is appropriate and not
appropriate.
a) Imperative: What an outsider must or must not do
b) Exclusive: What locals may do but an outsider cannot
c) Adiaphorous: What an outsider may or may not do
9. Cultural Variability
a) Power Distance – Power distance means the distance between two people during mutual interaction. We
the Muslims and Indian sub continental people used to be closer during interaction. On the other hand, the
western Christians used to hold a gap between two interactive people. Muslim thinks that westerns are not
friendly and they think Muslims are pushy. But it is because of their culture power distance is barring
here.
b) Uncertainty Avoidance
we are always try to avoid uncertainty and happy with that what can be found certainly. But on the other
hand, westerns are risk lover. They used to take challenges during any action.
c) Masculinity versus Femininity – Culture define the priority of decisions in the family, society and in the
country. In some tribal community live in the northern region of India they are mother lead society, wealth
owner and earning member is mother in the family. As a result, women decide what ought to be, what
have to do. On the other hand, in male dominant society father is the owners of wealth and earning member
of the family. As a result, her father’s decision is the final one. This masculinity and femininity has a great

impact in case of product selection / brand choice and final purchasing decision. As a marketer he must
have to know what types of society he is offering product.
d) Individualism versus Collectivism – Maximum western country is suffering from their individualistic
mentality. I have this, I have done it, I want it, etc. but in our sub continental culture we think collectively.
We have this, we have done it and we need it. This individualistic and collective thinking has a great effect
on their product choice as well as purchase of product.
Marketing Mix Strategies
McCarthy classified various marketing activities into marketing-mix tools of four broad kinds, which he called
the four Ps of marketing: product, price, place, and promotion. Marketing decisions generally fall into the
following four controllable categories:
1. Product
2. Price
3. Place(distribution)
4. Promotion
These 4 Ps are the parameters that the marketing manager can control, subject to the internal and external
constraints of the marketing environment. The goal is to make decisions that center the 4 Ps on the customers in
the target market in order to create perceived value and generate a positive response.
Product, place and people are considered as the strategic Ps of marketing mix since they cannot be changed
overnight. Promotions, price, process and physical appearance are considered as the tactical Ps of marketing mix
because these can be changed more easily.
Product/Service
• Product Variety
• Quality
• Design
• Features
• Brand Name
• Packaging
• Sizes
• Services

A product is seen as an item that satisfies what a consumer demand. It is a tangible good or an intangible service.
Tangible products are those that have an independent physical existence. Typical examples of mass-produced,
tangible objects are the motor car and the disposable razor. A less obvious but ubiquitous mass-produced service
is a computer operating system.
Every product is subject to a life-cycle including a growth phase followed by a maturity phase and finally an
eventual period of decline as sales fall. Marketers must do careful research on how long the life cycle of the
product they are marketing is likely to be and focus their attention on different challenges that arise as the product
moves.
Price
• Discount
• Allowances
• Payment Period
• Credit Terms
The amount a customer pays for the product. The price is very important as it determines the company's profit
and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and depending on the
price elasticity of the product, often it will affect the demand and sales as well. The marketer should set a price
that complements the other elements of the marketing mix.
Promotion
All of the methods of communication that a marketer may use to provide information to different parties about
the product. Promotion comprises elements such as: advertising, public relations , sales organisation and sales
promotion. Advertising covers any communication that is paid for, from cinema commercials, radio and Internet
advertisements through print media and billboards. Public relations is where the communication is not directly
paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and
events. Word-of-mouth is any apparently informal communication about the product by ordinary individuals,
satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an
important role in word of mouth and public relations.
Place
• Channels
• Coverage
• Assortments
• Locations

• Inventory
• Transport
Refers to providing the product at a place which is convenient for consumers to access. Various strategies such
as intensive distribution, selective distribution, exclusive distribution and franchising can be used by the marketer
to complement the other aspects of the marketing mix.
The "seven Ps" is a marketing model that adds to the aforementioned four Ps, including "physical evidence",
"people", and "process". It is used when the relevant product is a service, not merely a physical good.
Physical evidence
The evidence which shows that a service was performed, such as the delivery packaging for the item delivered
by a delivery service, or a scar left by a surgeon. This reminds or reassures the consumer that the service took
place, positively or negatively.
People
The employees that execute the service, chiefly concerning the manner and skill in which they do so.
Process
The processes and systems within the organization that affect the execution of its service, such as job queuing or
query handling.
Relevance of Cultural Factors to Marketing Mix Strategies
a) Verify related motivations in the culture: to analyses that what kind of needs of a family member are
satisfied by a product offered by the company. How these needs are currently satisfied by consumers? Whether
all persons of a specific culture have accepted these needs?
b) Evaluate behavioral patterns: What are the characteristic of purchasing behavior? What forms of division
of labor exist within the family structure? How frequently are products of this type purchased? Does any of
these characteristics conflict with the outcome expected for this product? How strongly ingrained are the
behavior patterns that conflict with those needed for distribution of this product?
c) Determine the cultural values which are relevant for a product: Are there strong values about ethics in
work place, morality, religion, family relations that relate to this product? Weather the product connotes
attributes that are in hindrance with these cultural values? Can these hindrances with values be avoided by
changing the product? Are there positive values in culture with which the product might be identified?
d) Identify the forms of decision-making: Do the members of the culture have a positive approach to decisions
concerning innovations or a negative approach? What is the type of the decision-making procedure? What
sources of data do the members of the culture rely upon? Are the people of these cultures rigid or flexible to
the new innovations and new ideas? What basis do they use in evaluating alternatives?

e) Evaluate the promotional strategies: What role does advertising occupy in the culture? What themes, words,
or illustrations are taboos? What language problems exist in present markets that cannot be translated into this
culture? What types of salespeople do members of the culture accept? Are such salespeople available?
f) Determine appropriate institutions for this product in the minds of consumers: What types of retailers
and intermediary institutions are available? What services do these institutions offer that are expected by the
consumer? What alternatives are available for obtaining services needed for the product but not offered by
existing institutions? How do consumers regard various types of retailers? Will challenges in the distribution
structure be readily accepted? The information contained in this exhibit attempts to relate cultural traits to
marketing decisions. For example, simply
Knowing about the religion or morality of a culture is not enough. What must be analyzed is whether or not
the product was slated to be introduced into the country has any direct or indirect connotations that conflict
with the cultural patterns of the society. Similarly, an examination of advertising, themes, phrases, words, or
expressions should confirm viability of promotional decisions.
Product communication strategies
A product can be marketed abroad only with the help of a communication strategy, which is what conveys
the promotional theme to consumers abroad, allowing them to form perceptions about the product, spelling
out, in turn, the quantitative and qualitative sales for the manufacturers. Keegan has identified five major
product communication strategies; international marketers can choose from to convey the message to
customers in different foreign markets.
communication
Standard
Straight
Extension
Product
Adaption product
invention
Adapt
Communication
adaption
Dual adaption
1. Product and Communications Extension – Straight Extension/ Dual Extension: At one extreme, a
company might choose to market a standardized product using a uniform communications strategy. Early entrants
in the international arena will often opt for this approach. Also, small companies with few resources typically
prefer it. For them, the potential pay-offs of customized products or advertising campaigns usually do not justify
the costs of adaptation. Dual extension might also work when the company targets a ‘global’ segment with similar
needs. The Japanese firm, Shiseido, the world’s sixth-largest cosmetics company by sales volume, sells in Europe,
the Americas and across the Asia- Pacific, including Australia and New Zealand. The company’s strategy is a
Standard Adapt New
product

global multi-brand strategy, with each brand similarly positioned in each market, including near-identical
advertising and packaging.
2. Product Extension – Communications Adaptation: Because of differences in the cultural or competitive
environment, often the same product is used to offer benefits or functions that dramatically differ from those in
the home market. These differences between the foreign and home market drive companies to market the same
product using customized advertising campaigns.
Although it retains the economies of scale in manufacturing, the firm sacrifices potential savings on the
advertising front. Clothing Company Levi’s uses this approach. Although the famous Levi’s brand name carries
clout in many parts of the globe, and the basics such as manufacturing and distribution are pursued by Levi’s
relatively uniformly, there are wide differences in its communication strategies within different markets.
As a consequence, Levi’s produces both global brand positioning ads and localized ads that appeal to specific
markets. For example, for the British market, where Levi’s have a particular status among the young, TV ads
highlight British icons of youth culture including Triumph cars and quirky celebrities, while for the French
market, ads stress the perceived individual nature of French youth.
3. Product Adaptation – Communications Extension: Alternatively, firms might adapt their product but market
it using a standardized communications strategy. Local market circumstances often favour the case of product
adaptation. Another source for product adaptation is the company’s expansion strategy.
Many companies add brands to their product portfolio via acquisitions of local companies. To leverage the
existing brand equity enjoyed by the acquired brand, the local brand is usually retained. Although these factors
lead to product adaptation, similar core values and buying behaviours among consumers using the product might
present an opening for a harmonized communications strategy. e.g., different formulae of petrol to meet each
country’s unique regulations.
4. Product and Communications Adaptation – Dual Adaptation: Differences in both the cultural and physical
environments across countries call for a dual adaptation strategy. In such circumstances, the most viable option
for international expansion is adaptation of the company’s product and communication strategy.
Slim-Fast adapts both product and advertising to comply with varying government regulations for weight-loss
products. When Slim-Fast was first launched in Germany, its ads used a local celebrity. In the U.K., testimonials
for diet ads may not feature celebrities. Instead, the U.K. introduction campaign centered around everyday people.
Also, the product gets adapted to the local markets. In the U.K., banana is the most popular flavour but this flavour
is not sold in continental Europe.

5. Product Invention:
• Usually redesigning of an original product at a lower level of complexity.
• Recognizes the socio-cultural and economic differences from country to country
• Leads to more purchases as a result of the reinvention of the product
Genuinely global marketers try to figure-out how to create products with a global scope rather than just for a
single country. Instead of simply adapting existing products or services to the local market conditions, their
mindset is to zero in on global market opportunities. Black & Decker is a good example of a company that adopts
the product invention approach to international market expansion. Black & Decker aims to bring out new products
that cater to common needs and opportunities around the world to manage its global product development process.
Black & Decker set up a worldwide household board.
APPROACHES IN EPRG MODEL
1. ETHNOCENTRIC ORIENTATION:
The ethnocentric orientation of a firm considers that the products, marketing strategies and techniques applicable
in the home market are equally so in the overseas market as well. In such a firm, all foreign marketing operations
are planned and carried out from home base, with little or no difference in product formulation and specifications,
pricing strategy, distribution and promotion measures between home and overseas markets. The firm generally
depends on its foreign agents and export-import merchants for its export sales.
2. REGIOCENTRIC ORIENTATION:
In regiocentric approach, the firm accepts a regional marketing policy covering a group of countries of the entire
region rather than individual countries. The production and distribution facilities are created to serve the whole
region with effective economy on operation, close control and co- ordination.
3. GEOCENTRIC ORIENTATION:
In geocentric orientation, the firms accept a worldwide approach to marketing and its operations become global.
In global enterprise, the management establishes manufacturing and processing facilities around the world in order
to serve the various regional and national markets through a complicated but well co-ordinate system of
distribution network. There are similarities between geocentric and regiocentric approaches in the international
market except that the geocentric approach calls for a much greater scale of operation.
4. POLYCENTRIC OPERATION:
When a firm adopts polycentric approach to overseas markets, it attempts to organize its international marketing
activities on a country to country basis. Each country is treated as a separate entity and individual strategies are

worked out accordingly. Local assembly or production facilities and marketing organizations are created for
serving market needs in each country. Polycentric orientation could be most suitable for firms seriously committed
to international marketing and have its resources for investing abroad for fuller and long-term penetration into
chosen markets. Polycentric approach works better among countries which have significant economic, political
and cultural differences and performance of these tasks are free from the problems created primarily by the
environmental factors.
UNIT – 3
Management challenges and opportunities of HR diversity
A management system which eliminates the differences found in a multicultural workforce in a manner which
results in the highest level of productivity for both the organization and the individual. In simple words managing
diversity means managing people in the best interest of employee as well as employer.
Managing diversity is an on-going process that explore the various talents and capabilities which a diverse
population bring to an organization, community or society, so as to create a wholesome, inclusive environment,
that is “safe for differences,” enables people to “reject rejection,” celebrates diversity, and maximizes the full
potential of all, in a cultural context where everyone benefits from Multiculturalism, as the art of managing
diversity, is an inclusive process where no one is left out.
Why Manage Diversity
There are various reasons explaining the need to manage diversity. They are:
• A large number of women are joining the work-force.
• Work-force mobility is increasing.
• Young workers in the work-force are increasing
• Ethnic minorities' proportion constantly in the total work-force is increasing.
• International careers and expatriate are becoming common.
Challenges in Managing Diversity
Diversity presents managers with following set of challenges:
1. Individual versus Group Fairness:
This issue is closely related to the “difference in divisive versus better” i.e. how far management should go in
adapting HR programs to diverse employee groups.

2. Resistance to Change:
Long established corporate culture is very resistant to change and this resistance is a major roadblock for women
and minorities seeking to survive and prosper in corporate setting.
3. Resentment:
Equal Employment Opportunities (EEO) was imposed by government rather than self-initiated. The response to
this forced change was in many cases grudging compliance.
4. Group Cohesiveness and Interpersonal Conflict:
Although employee diversity can lead to greater creativity and better problem solving; it can also lead to open
conflict and chaos if there is mistrust and lack of respect among groups. This means that as organizations become
more diverse, they face greater risks that employees will not work together effectively. Interpersonal friction
rather than cooperation may become the norm
5. Segmented Communication Networks:
It has been seen that most communication in the organization occurs between people with some similarities either
by way of gender or by way of same place.
6. Backlash:
Some group in the organization feels that they have to defend themselves against encroachments by those using
their gender or ethnicity to lay claim to organizational resources. Thus, while women and minorities may view a
firms cultural diversity policy as a commitment to improving their chances of advancement.
7. Retention:
The job satisfaction levels of women and minorities are often lower than those of majorities. Therefore, it becomes
difficult to retain such people in an organization.
8. Competition for Opportunities:
Already, there are rising tensions among the disadvantaged groups jockeying for advancement. Employers are
being put into the uncomfortable position of having to decide which disadvantaged group is most deserving.
opportunities of HR diversity
1. New Products and Services:

Diversity generates ideas in geometric progression fueling greater creativity and innovation. It can stimulate
consideration of less obvious alternatives. This results in flurry of new products and services to meet the
customer’s expectation and needs.
2. Better teamwork:
Organizations are operating in such a fashion that it is impossible to function without teamwork. Interacting with
diverse workforce is leading to better ideas and enhancing the morale and motivation in the organization
3. Better Image:
Companies that have diverse workforce are having better image, reputation and patronage than those who do not
encourage diversity. This has huge impact on expansion of business as it can reduce the talent crunch by targeting
the diverse groups.
4. Effective and Happy workforce:
Adept handling of diversity can multiply motivation and enhance productivity due to the satisfaction employees
enjoy on being treated fairly, valued equally and given dignity at workplaces. It reduces the chances of
absenteeism and attrition too as the undue stress, unnecessary frustration or low morale due to being insensitive,
discriminatory etc gets drastically reduced. Hence, many organization are charting diversity initiative not merely
to comply with legal obligations but reap the business benefits especially in term of better recruitment and higher
retention among the talented workforce.
5. Expansion of Markets:
Globalization has brought together heterogeneous teams to enhance the problem solving capabilities and produce
creative solutions leading to expansion of business landscape.
Factors Affecting International HRM or The Global Manager
Global human resource management has become a major component of an effective global business operation. It
has also become vital to the success of many small companies that have expanded internationally for growth.
Several factors drive the systematic management of HR internationally, but the simple necessity to hire, develop
and motivate global workers is chief among them.
The most common obstacles to effective HR management are cross-cultural adaptation, different
organizational/workforce values, differences in management style, and management turnover. Doing business
globally requires that adaptations be made to reflect these factors. It is crucial that such concerns be seen as
interrelated by managers and professionals as they do business and establish operations globally. Figure depicts
the general considerations for HR managers with global responsibilities.

1. Legal and Political Factors
The nature and stability of political systems vary from country to country. U.S. firms are accustomed to a
relatively stable political system, and the same is true in many of the other developed countries in Europe.
Although presidents, prime ministers, premiers, governors, senators, and representatives may change, the legal
systems are well-established, and global firms can depend on continuity and consistency.
However, in many other nations, the legal and political systems are turbulent. Some governments regularly are
overthrown by military coups. Others are ruled by dictators and despots who use their power to require
international firms to buy goods and services from host-country firms owned or controlled by the rulers or the
rulers’ families.
In some parts of the world, one-party rule has led to pervasive corruption, while in others there are so many parties
that governments change constantly. Also, legal systems vary in character and stability, with business contracts
sometimes becoming unenforceable because of internal political factors.
In some countries, laws address issues such as employment discrimination and sexual harassment. In others,
because of religious or ethical differences, employment discrimination may be an accepted practice.
All of these factors reveal that it is crucial for HR professionals to conduct a comprehensive review of the political
environment and employment-related laws before beginning operations in a country. The role and nature of labor
unions should be a part of that review.
2. Economic Factors
Economic factors affect the other three factors political, legal and cultural. Different countries have different
economic systems. Some even still operate with a modified version of communism, which has essentially failed.
For example, in China communism is the official economic approach. But as the government attempts to move
to a more mixed model, it is using unemployment and layoffs to reduce government enterprises bloated with too
many Workers.
Many lesser-developed nations are receptive to foreign investment in order to create jobs for their growing
populations. Global firms often obtain significantly cheaper labor rates in these countries than they do in Western
Europe, Japan, and the United States. However, whether firms can realize significant profits in developing nations
may be determined by currency fluctuations and restrictions on transfer of earnings.
Also, political instability can lead to situations in which the assets of foreign firms are seized. In addition, nations
with weak economies may not be able to invest in maintaining and upgrading the necessary elements of their
infrastructures, such as roads, electric power, schools, and telecommunications. The absence of good
infrastructures may make it more difficult to convince managers from the United States or Japan to take
assignments overseas.

3. Cultural Factors
Cultural forces represent another important concern affecting international HR management. The culture of
organizations was discussed earlier in the text, and of course, national cultures also exist. Culture is composed of
the societal forces affecting the values, beliefs, and actions of a distinct group of people. Cultural differences
certainly exist between nations, but significant cultural differences exist within countries also. One only has to
look at the conflicts caused by religion or ethnicity in Central Europe and other parts of the world to see the
importance of culture on international organizations. Getting individuals from different ethnic or tribal
backgrounds working together may be difficult in some parts of the world. Culture can lead to ethical differences
among countries. Each of the cultural dimensions are follows
a) Power distance
The dimension of power distance refers to the inequality among the people of a nation. In countries such as
Germany, the Netherlands, and the United States, there is a smaller power distance—which means there is
less inequality—than in such countries as France, Indonesia, Russia, and China. As power distance
increases, there are greater status and authority differences between superiors and subordinates.
One way in which differences on this dimension affect HR activities is that the reactions to management
authority differ among cultures. A more autocratic approach to managing is more common in most other
countries, while in the United States there is a bit more use of participatory management
b) Individualism
Another dimension of culture identified by Hofstede is individualism, which is the extent to which people in a
country prefer to act as individuals instead of members of groups. On this dimension, people in Asian countries
tend to be less individualistic and more group-oriented, whereas those in the United States score the highest in
individualism. An implication of these differences is that more collective action and less individual competition
is likely in those countries that deemphasize individualism.
c) Masculinity/Femininity
The cultural dimension masculinity/femininity refers to the degree to which “masculine” values prevail over
“feminine” values. Masculine values identified by Hofstede were assertiveness, performance orientation, success,
and competitiveness, whereas feminine values included quality of life, close personal relationships, and caring.
Respondents from Japan had the highest masculinity scores, while those from the Netherlands had more
femininity-oriented values. Differences on this dimension may be tied to the role of women in the culture.
Considering the different roles of women and what is “acceptable” for women in the United States, Saudi Arabia,
Japan, and Mexico suggests how this dimension might affect the assignment of women expatriates to managerial
jobs in the various countries.

d) Uncertainty Avoidance
The dimension of uncertainty avoidance refers to the preference of people in a country for structured rather than
unstructured situations. A structured situation is one in which rules can be established and there are clear guides
on how people are expected to act. Nations high on this factor, such as Japan, France, and Russia, tend to be more
resistant to change and more rigid. In contrast, people in places such as Hong Kong, the United States, and
Indonesia tend to have more “business energy” and to be more flexible.
A logical use of differences on this factor is to anticipate how people in different countries will react to changes
instituted in organizations. In more flexible cultures, what is less certain may be more intriguing and challenging,
which may lead to greater entrepreneurship and risk taking than in the more “rigid” countries.
e) Long-Term Orientation
The dimension of long-term orientation refers to values people hold that emphasize the future, as opposed to
short-term values, which focus on the present and the past. Long-term values include thrift and persistence, while
short-term values include respecting tradition and fulfilling social obligations. People scoring the highest on long-
term orientation were China and Hong Kong, while people in Russia, the United States, and France tended to
have more short-term orientation.
Differences in many other facets of culture could be discussed. But it is enough to recognize that international
HR managers and professionals must recognize that cultural dimensions differ from country to country and even
within countries. Therefore, the HR activities appropriate in one culture or country may have to be altered to fit
appropriately into another culture or country.
Types of Staffing Policy Approaches in International HRM
In international human resource management, the types of staffing policy approaches are as follows:
• Ethnocentric staffing
• Polycentric staffing
• Geocentric staffing
The ethnocentric policy approach to staffing designates home country nationals as top-ranking employees in
global operations. For instance, executive positions are given to Americans in an office of an American company
located in Indonesia. The main benefit of this staffing policy approach is that it allows the organization to ensure
that the people in the top positions are experienced in the business of the firm. This is especially the case where
the host country does not have enough qualified workers for staffing top positions in the organization. The
ethnocentric staffing policy approach is also used to ensure that the culture of the entire organization is unified
rather than diversified. However, the problem with the ethnocentric policy approach is that it does not fully

support the transfer of local knowledge to the company. Also, this staffing policy approach could block locals
from promotion in the organization.
The polycentric policy approach to staffing assigns home country workers to top positions in the central offices
or headquarters, and overseas local workers to other positions. The main advantage of this policy approach is that
it facilitates organizational learning on local markets. This staffing policy approach also provides better
opportunities for locals to improve their careers through promotion. However, this promotion is limited to key
positions in the local operations and does not include central or corporate top positions. This staffing policy
approach is disadvantageous because it could create knowledge and performance gaps between overseas
managers and managers in the home country.
The geocentric policy approach to staffing assigns job positions to any person best suited for the position,
regardless of the employee’s background, culture or country of origin. The main advantage of this staffing policy
approach is that it is highly flexible. It can increase the firm’s cultural knowledge about the different markets and
countries. However, a disadvantage of this staffing policy approach is that it could be difficult to apply.
Immigration policies, costs of worker relocation and diversity management create pressure on HR management.
staffing policy determinants
(staffing policy determinants based on the PESTEL, above mentioned).
Unit-4
Cross–cultural Communication and Negotiation
Cross –cultural communication (also frequently referred to as inter-cultural communication) is a field of study
that looks at how people from differing cultural backgrounds communicate, in similar and different ways among
themselves, and how they endevour to communicate across cultures.
According to Jandt, “cross-cultural communication is comparing phenomena in diverse cultures.”
Factors affecting cross-cultural communication:
• Language: Among the most often cited barriers to conflict-free cross-cultural business communication is the
use of different languages. It is difficult to underestimate the importance that an understanding of linguistic
differences plays in international business communication. Language failures between cultures typically fall
into three categories:
o Gross translation problem- Gross translation errors, though frequent, may be less likely to cause conflict
between parties than other language difficulties for two reasons.
o Slight distinctions from language to language- The subtle shadings that are often crucial to business
negotiations are also weakened when the parties do not share a similar control of the same language.

o Variations based on culture among speakers of the same language- Attitudes toward accents and
dialects also create barriers in international business communication. The view that a particular accent
suggests loyalty or familiarity to a nation or region is widespread in many languages.
• Environment and technology:
The ways in which people use the resources available to them may vary considerably from culture to
culture. Culturally-ingrained biases regarding the natural and technological environment can create
communication barriers. Many environmental factors can have a heavy influence on the development and
character of cultures. Indeed, climate, topography, population size and density, and the relative availability
of natural resources all contribute to the history and current conditions of individual nations or regions.
After all, notions of transportation and logistics, settlement, and territorial organization are affected by
topography and climate.
• Social organization and history:
Social organization, as it affects the workplace, is often culturally determined. One must take care not to
assume that the view held in one's own culture is universal on such issues as nepotism and kinship ties,
educational values, class structure and social mobility, job status and economic stratification, religious
ties, political affiliation, gender differences, racism and other prejudices, attitudes toward work, and
recreational or work institutions.
• Conceptions of authority:
Different cultures often view the distribution of authority in their society differently. Views of authority
in a given society affect communication in the business environment significantly, since they shape the
view of how a message will be received based on the relative status or rank of the message's sender to its
receiver. In other words, conceptions of authority influence the forms that managerial and other business
communications take.
• Non-verbal communication:
Among the most markedly varying dimensions of intercultural communication is nonverbal behavior.
Knowledge of a culture conveyed through what a person says represents only a portion of what that person
has communicated. Indeed, body language, clothing choices, eye contact, touching behavior, and
conceptions of personal space all communicate information, no matter what the culture.
Communication flows in cross-cultural organizations:
• Downward communication: Downward communication occurs when information and messages flow
down through an organization's formal chain of command or hierarchical structure. In other words,
messages and orders start at the upper levels of the organizational hierarchy and move down toward the
bottom levels.

• Upward communication: Communication is a very important part of working in the business
environment. Managers must be able to communicate with employees and employees must be able to
communicate with managers in order to have a profitable business. Upward communication is the flow of
information from front line employees to managers, supervisors, and directors.
Process of cross-cultural communication:
Communication is a two-way process in which there is an exchange and progression of ideas towards a mutually
accepted direction or goal. For this process to materialize, it is essential that the basic elements of communication
be identified. These elements are:
1. Sender/Encoder
2. Message
3. Medium
4. Receiver/Decoder
5. Feedback
1.Sender/Encoder
The person who initiates the communication process is normally referred to as the sender. From his personal data
bank he selects ideas, Encoding of encodes them and finally transmits them to the receiver in the form of a
message. The entire burden of communication then rests upon the sender or encoder. His choice of images and
words, and the combination of the two is what goads the receiver to listen carefully.
2.Message
Message is the encoded idea transmitted by the sender. The formulation of the message is very important, for an
incorrect patterning can turn the receiver hostile or make him lose interest. At this stage the sender has to be
extremely cautious.
3.Medium / Selective transmission
Another important element of communication is the medium or channel. It could be oral, verbal or non-verbal.
Prior to the composition of the message, the medium. channel should be decided. Each medium follows its own
set of rules and regulations. For example, in oral communication one can afford to be a little informal, but when
using the written mode, all rules of communication need to be observed.
4.Receiver/Decoder/ Careful decoding of feedback
The listener receives an encoded message, which he attempts to decode. This process is carried on in relation to
the work environment and the value perceived in terms of the work situation. If the goal of the sender is clear in
the mind of receiver the job of decoding becomes quite easy and the listener finds the message more receptive.
5.Feedback/ Follow-up action

This is the most important component of communication. Effective communication takes place only when there
is feedback. The errors and flaws that abound in business situations are a result of lack of feedback. Let us take a
look at the typical responses of people involved in miscommunication: "This is not what I meant" or "This is not
what I said" or "This was not my intention".
Role of effective communication in cross-cultural management:
• Helps managers to move towards constructive intercultural management
• Determines the success of international business transactions
• Helps in managing diversity
• Helps to meet global demands
• Facilitates team building
• Improves employee’s morale
Challenges of multi-linguistic business environment
Multilingualism can also be defined on the basis of maximal competence and minimal competence. The maximal
competence means speakers are as competent and proficient in one language as they are in others.ie; equally
competent in all languages. The minimal competence on the other hand is based on use.ie; he/she is successful
enough in achieving the goals of effective communication in a particular domain.
In a multicultural team, good teamwork and willingness to understand the other person are even more important
for a healthy company atmosphere. Emerging trends such as internationalism, downsizing, acquisitions, mergers,
joint ventures etc. bring major transformations with them due to which many international businesses face new
challenges with respect to their communication structures. Following are some obstacles to effective cross cultural
communication in multi-linguistic work environment.
1. Lack of communication: Undoubtedly, the chief contributor that leads to poor communication is lack of
communication. Many businesses consider it as one of their major problems. Lack of communication does
not imply to the communication gap due to unsaid words, but also to inaccessible information.
2. Language: The following are the difficulties faced by the businessmen when communicating in the cross-
culture environment.
o Foreign language: with the emerging trend of recruiting best talents from all over the world, the use of
foreign languages is common among many businesses. Often business are more than fifty languages.
However, the company should establish one common language whether English, German, Spanish etc so
that every piece of work related information can be understood by everyone.
o Using inappropriate languages: a language does not only carry’s information. But the subliminal
meanings, vocabulary, stress, tone, Pitch etc can be extracted from this. Use of appropriate languages

damages the relations among the organizational members and lowers the self-confidence of the
employees.
3. Culture: The term "culture" refers to the complex collection of knowledge, folklore, language, rules, rituals,
habits, lifestyles, attitudes, beliefs, and customs that link and give a common identity to a particular group of
people at a specific point in time.All social units develop a culture. Even in two-person relationships, a culture
develops over time. In friendship and romantic relationships, for example, partners develop their own history,
shared experiences, language patterns, rituals, habits, and customs that give that relationship a special
character—a character that differentiates it in various ways from other relationships. Examples might include
special dates, places, songs, or events that come to have a unique and important symbolic meaning for two
individuals.
4. Organization culture: Organizational culture encompasses values and behaviour that "contribute to the
unique social and psychological environment of an organization”. It also represents the collective values,
beliefs and principles of organizational members and is a product of factors such as history, product, market,
technology, strategy, type of employees, management style, and national culture; culture includes the
organization's vision, values, norms, systems, symbols, language, assumptions, environment, location, beliefs
and habits.
5. Different attitudes toward conflict: every business has a different attitude towards a conflict. Some deal
with a positive thinking and some other take it as negative business aspect.
6. Different approaches to completing tasks: people from different cultures possess different methods and
approaches for accomplishing any task. These differences occur due to the various factors that vary from one
culture to another. Some of these factors include availability of resources, distinct awards recognitions,
varying time notions, dissimilar relationship building techniques etc.
7. Difference in decision-making styles: people belonging to different cultures apply different methods and
approaches for making decisions. For e.g.; in various countries of Latin America and southern Europe, a single
person is responsible for taking decisions.
8. Different approaches to knowing: people following different cultures have distinct level of knowledge and
approaches towards epistemology. For eg; companies belonging to Asian culture have a tendency to
emphasize upon the validity of information or knowledge.
Guidelines for effective cross-cultural communication:
• Fluency of host country language
• Learn to neutralize language accents
• Awareness of cross-cultural barriers
• Speak in clear an open language

• Be sensitive to non-verbal communication.
• Show cultural sensitivity.
Types of cross-cultural communication
There are basically 2 types: verbal and non-verbal communication.
Verbal communication consists of words used to communicate messages whereas non-verbal communication is
gestures that give out messages. Spoken and written language are parts of verbal communication which must be
considered highly while in intercultural communication. Cultural factors affect verbal communication as people
can sometimes not be able to speak or write in the language of the receiver. Use of words, accents, slang etc. can
also be different according to their own cultures. Similarly, non-verbal consist of communication that occurs
without words like facial expressions, hand and body movements, eye-contact, use of objects, clothing etc. They
help in making message clear or can give the different message
Verbal communication: The sharing of information between individuals by using speech. Individuals working
within a business need to effectively use verbal communication that employs readily understood spoken words,
as well as ensuring that the enunciation, stress and tone of voice with which the words are expressed is appropriate.
Problems in cross-cultural verbal communication
• Words- Word is the most important component of verbal communication (both oral and written). Verbal
communication is not possible without the use of words. Many times, even a standalone word in itself is
enough to communicate your thoughts to another person. Word has a lot of power and they can be put together
to build larger elements of language such as sentences and phrases. Were spoken, there should be clarity in
words so that there can be proper and effective communication. An important thing to take care in oral
communication is using simple, small and those words which are easy to understand. The way we talk, the
words we choose to use are important aspects of communication.
• Pronunciation-it is the way in which a word or a language is spoken. This may refer to generally agreed-
upon sequences of sounds used in speaking a given word or language in a specific dialect ("correct
pronunciation"), or simply the way a particular individual speaks a word or language. A word can be spoken
in different ways by various individuals or groups, depending on many factors, such as: the duration of the
cultural exposure of their childhood, the location of their current residence, speech or voice
disorders, their ethnic group, their social class, or their education.
• Discourse patterns- The discourse pattern (the logical arrangement of ideas) of an expository text or of an
oral presentation for informational purposes will vary depending on the culture and the native language of the
writer/speaker.

• Sociolinguistic uses- Sociolinguistics is the descriptive study of the effect of any and all aspects of society,
including cultural norms, expectations, and context, on the way language is used, and society's effect on
language. It differs from sociology of language, which focuses on the effect of language on society.
Sociolinguistics overlaps considerably with pragmatics
• Cultural presuppositions-in many instances of cross-cultural communication it is important to understand
the cultural presuppositions which lie behind speakers’ words and their expectations and interpretations.
Non-verbal communication
Nonverbal communication (NVC) between people is communication through sending and receiving wordless
cues.It includes the use of visual cues such as body language (kinesics), distance (proxemics) and physical
environments/appearance, of voice (paralanguage) and of touch (haptics).[1]
It can also include the use of time
(chronemics) and eye contact and the actions of looking while talking and listening, frequency of glances, patterns
of fixation, pupil dilation, and blink rate (oculesics).
Components:
1.Paralanguage
Paralanguage is the area of non-verbal communication that emphasizes body language and voice nuances as
means of expressing thoughts and feelings. People normally use paralanguage multiple times per day and are
sometimes not even aware they are doing so. The ability to interpret this kind of human communication correctly
is considered an important competency in both personal and professional settings. Body language often conveys
just as much meaning as spoken words. Good communicators also have the ability to gauge how their own
paralanguage affects others and to alter it so as to gain others' trust and to project confidence.
Various components of paralanguage are as follows:
o Voice qualities- It includes volume, vocal tone, rate of speech, voice pitch, rhythm, pronunciation,
enunciation.
o Voice qualifiers
o Voice characteristics
o Voice segregates/fillers
o Articulation
2.Body language/kinesics:
It is the type of non-verbal communication in which exchange of information takes place through the conscious
or unconscious movement of body, postures, gestures or facial expressions. Apart from the gestures or postures,
facial expressions are also the important mean of communication in body language. The nodding of the head is

one of the body movement that can show acceptance or refusal without much work. For instance, when a friend
of yours ask you about going out for a hangout, you just nod the head either to accept or reject the deal. On the
other hand, facial expressions is another aspect of facial expressions that carries on diverse meaning, opening up
to different interpretations. For example in some countries making a direct eye contact is taken as symbol of
sincerity and honesty, whereas in some countries it is taken as a rude attitude that even ends up as a mess between
two individuals.
Components of body language:
o Gestures: Every culture has hand movements and gestures that convey specific meanings, according to
Andrews University. Some hand movements are innocuous in one culture but aggressive or insulting in
another. For example, people in some cultures, such as the United States, use their index fingers to point.
But in many Asian cultures, pointing with the fingers is rude.
o Facial expressions-it includes upper face, middle face, lower face, the sides of face, eye contact, posture,
dress code.
o Proxemics- Proxemics is a theory of non-verbal communication that explains how people perceive and use
space to achieve communication goals. Introduced by anthropologist Edward T. Hall in the 1960s, the
theory emerged from studies of animal behavior conducted in the 19th and early 20th centuries. Proxemics
is one of five non-verbal communication theories, the others being semiotics (sign language), kinesics (body
language), haptics (touch) and chronemics (time).
o Sign language- Sign language, any means of communication through bodily movements, especially of the
hands and arms, used when spoken communication is impossible or not desirable. The practice is probably
older than speech. Sign language may be as coarsely expressed as mere grimaces, shrugs, or pointing; or it
may employ a delicately nuanced combination of coded manual signals reinforced by facial expression and
perhaps augmented by words spelled out in a manual alphabet.
o Time language- Chronemics is the study of how time is used in communication. Time can be used as a
communication tool in many ways, from punctuality to expectations around waiting and response time, to
general principles around time management. Chronemics has become an area of study primarily for
anthropologists, who look at cultural norms around the use of time, and the way cultures can vary and
converge around different norms.
o Haptics- Haptic communication is a form of nonverbal communication and the way by which people and
animals communicate via touching. Touch is the most effective means to communicate feelings and
emotions. The withholding of touch may communicate a variety of negative feelings.

Cultural Dimensions of Non-Verbal Communication
Researcher has shown that cultures can be located along behavioral dimensions that help to explain why people
act in different ways in various cultures. Most cultural differences in non-verbal behavior are a result of
variations along the seven dimensions discussed in the following section.
Dimensions of intercultural non-verbal communication
Dimension One extreme Other extreme
Context Low context High context
Identity Individualism Collectivism
Power Low power distance High power distance
Gender Femininity Masculinity
Uncertainty Uncertainty avoidance Uncertainty tolerance
Time/future orientation Long-term Short-term
Immediacy Low contact High contact
1.High and low context: The concept of high- and low-context culture relates to how an employee's thoughts,
opinions, feelings, and upbringing affect how they act within a given culture. North America and Western Europe
are generally considered to have low-context cultures. This means that businesses in these places have direct,
individualistic employees who tend to base decisions on facts. This type of businessperson wants specifics noted
in contracts and may have issues with trust. High-context cultures are the opposite in that trust is the most
important part of business dealings. There are areas in the Middle East, Asia and Africa that can be considered
high context. Organizations that have high-context cultures are collectivist and focus on interpersonal
relationships. Individuals from high-context cultures might be interested in getting to know the person they are
conducting business with in order to get a gut feeling on decision making. They may also be more concerned
about business teams and group success rather than individual achievement.
2.Individualism/collectivism: Individualism and collectivism are two western definitions in culture. One of
them is oxymoron in real philosophy that doesn't exist in the western tradition. Culture is supposed to be a
collective term, therefore individualism is not culture, and that's precisely why the Americans don't understand
what culture means to them. Individualism/collectivism determines how people live together, alone, in families,
or tribes, their values and how they communicate.
3.Power distance: The power distance index is defined as “the extent to which the less powerful members of
organizations and institutions (like the family) accept and expect that power is distributed unequally.” In this
dimension, inequality and power is perceived from the followers, or the lower level. A higher degree of the Index

indicates that hierarchy is clearly established and executed in society, without doubt or reason. A lower degree of
the Index signifies that people question authority and attempt to distribute power.
4.Uncertainty: uncertainty avoidance is a society's tolerance for uncertainty and ambiguity. Uncertainty
avoidance is one of five key qualities or dimensions measured by the researchers who developed the Hofstede
model of cultural dimensions to quantify cultural differences across international lines and better understand why
some ideas and business practices work better in some countries than in others.
The uncertainty avoidance dimension relates to the degree to which individuals of a specific society are
comfortable with uncertainty and the unknown. Individuals belonging to those countries also avoid
unconventional ways of thinking and behaving.
5.Future orientation: Time orientation of a culture reflects a preference toward past, present, or future thinking.
It effects how a culture values time and believes they can control it. American culture values focus on the
future. This is the result of many things including the short time our country has been inexistence and the short
time most have been members of our country. There is no long-term commitment of being say French with
thousands of years of history. Most Americans have been in the US for a short time.
6.Gender: In this dimension, masculinity is defined as “a preference in society for achievement, heroism,
assertiveness and material rewards for success.” Its counterpart represents “a preference for cooperation, modesty,
caring for the weak and quality of life.” Women in the respective societies tend to display different values. In
feminine societies, they share modest and caring views equally with men. In more masculine societies, women
are more emphatic and competitive, but notably less emphatic than the men. In other words, they still recognize
a gap between male and female values. This dimension is frequently viewed as taboo in highly masculine
societies.
7.Immediacy: Humans communicate closeness through a series of actions, especially non-verbal actions, called
immediacy behaviours.the immediacy dimension if anchored at one extreme by actions that simultaneously
communicate warmth, closeness, approach, and accessibility and at the other extreme by behaviour expressing
avoidance and distance. Immediate behaviour include smiling, touching, eye contact, open body positions, closer
distances and more vocal animation.
Cross - cultural etiquette
Every culture is different and has different styles of etiquette. Every day deals are lost through misunderstandings,
even between relatively similar cultures. These misunderstandings do not have to be huge to have an effect on
your business – a poor first impression could leave your prospective partner or customer with a bad feeling.
Knowing the right etiquette can help you avoid this and save you a great deal of wasted time and money

Importance:
o Business relationships
o Marketing implications
o Negotiations
o Gifts
Cultural Differences in Etiquettes
Some examples of what the different etiquettes mean in different cultures are as follows:
• Clothing-Wearing the appropriate clothing makes a good first impression and sets the tone for how you will
be seen. If you work in an industry in which casual dress is the norm, make sure it is also the norm in the
country and company you are visiting. For example, men tend not to wear suit jackets and ties in Colombia
and the Middle East but are still expected to be dressed smartly. Women may also need to think about the
appropriate skirt length, makeup, jewelry and heel height. When in doubt, it is always best to dress
conservatively, and in dark colors.
• Conversation-Communicating in a foreign country can be difficult. Often you may find that your business
colleague speaks English -- but if they speak imperfectly, you will need to remember not to correct them as
that mat be seen as impolite. You should also determine what makes an appropriate topic of conversation in
the country you are visiting. For example, in Japan, people do not tend to talk about money, and in Switzerland
personal questions are usually not appreciated among mere acquaintances. It is a good idea, however, to learn
a bit about the history of the country or place you are visiting and to be prepared with a few questions about
local culture to use as a conversation starter.
• Greetings-Many countries have their own style of greeting, and there is nothing more off-putting than than
try to kiss someone who is only expecting a handshake or holding out your hand pointlessly while the other
person bows. In many countries, it is also polite to give small gifts when meeting someone. Make sure you
find out the local custom and avoid giving an overly expensive gift that the other person will feel the need to
reciprocate. In many Southeast Asian cultures, business cards are usually exchanged and no one is taken
seriously who does not have a business card. The cards must also be treated with respect, and not shoved
immediately into a pocket.
• Forms of address-While people in the U.S. tend to call colleagues by their first name in all but the most
formal situations, this would be considered rude in many other cultures. When you first meet someone, listen
carefully to how they are introduced to you and then use that form of address. When in doubt, use a person's
title and last name until they invite you to use their first name. Also keep in mind that in some cultures, people
with academic degrees expect to be addressed by this qualification, as in “Professor” Smith. In some cultures,
people with a Ph.D., or doctorate, expect to be addressed as “Doctor Smith”.

• Time and space-In some cultures, it is not expected that people will be on time. If your colleague or customer
is late for a meeting, it is best to take a relaxed view. People from different cultures also have different ideas
about personal space. Standing close or touching another person may be considered appropriate. However,
this may not apply to those of the other sex. For example, in the Middle East, men often hug each other and
hold hands, but do not touch women they are not related too, and the same is true of women. In Mexico, it is
OK to give a friendly pat on the back, but in China you should never touch the other person. While in Thailand
and India, handshakes are fine, but you should never touch a person's head.
Dos and Don’ts of Cross-Cultural Etiquettes
Dos:
o Show respect
o Show you care
o Strike a balance
o Know your geography
o Mind your manners
o Know how to address people
o Clearly enunciate and speak slower
o Define acronyms, slang and Jargon
o Know the appropriate greetings
Don’ts:
o Using rude hand gestures
o Touching
o Appearing self-important
o Asking personal questions
o Discussing religion
o Discussing policies
o Unintentionally causing embarrassment
o Showing the soles of your shoes
o Saying “No”
Cross-Cultural Negotiations
Cross cultural negotiation is one of many specialized areas within the wider field of cross
cultural communications. By taking cross cultural negotiation training, negotiators and sales personnel give
themselves an advantage over competitors.

Factors affecting Cross-Cultural Negotiations:
1. Protocol: There are as many kinds of business etiquette as there are nations in the world. Protocol factors
that should be considered are dress codes, number of negotiators, entertainment, degree of formality, gift
giving, meeting and greeting, etc.
2. Communications: Verbal and non-verbal communication is a key factor of persuasion. The way we
express our needs and feelings using body language and tone of voice can determine the way the other
side perceives us, and in fact positively or negatively contributes to our credibility. Another aspect of
communication relevant to negotiation is the direct or indirect approach to exchanging information.
3. Risk-Taking Propensity - Uncertainty Avoidance: There is always risk involved in negotiations. The
final outcome is unknown when the negotiations commence. The most common dilemma is related to
personal relations between counterparts: Should we trust them? Will they trust us? Certain cultures are
more risk averse than others, e.g. Japan (Hofstede 1980). It means that less innovative and creative
alternatives are available to pursue during the negotiation, unless there is a strong trust-based relationship
between the counterparts.
4. View of Time: In some cultures time is money and something to be used wisely. Punctuality and agenda
may be an important aspect of negotiation. In countries such as China or Japan, being late would be taken
as an insult. Consider investing more time in the negotiating process in Japan. The main goal when
negotiating with an oriental counterpart is to establish a firm relationship, which takes time. Another
dimension of time relevant to negotiation is the focus on past, present or future. Sometimes the past or the
distant future may be seen as part of the present, especially in Latin American countries .
5. Decision-Making System: The way members of the other negotiating team reach a decision may give us
a hint: who we shall focus on providing our presentation. When negotiating with a team, it's crucial to
identify who is the leader and who has the authority to make a decision.
6. Form of Agreement: In most cultures,only written agreements stamp a deal. It seems to be the best way
to secure our interests in case of any unexpected circumstances. The 'deal' may be the contract itself or the
relationship between the parties, like in China, where a contract is likely to be in the form of general
principles. In this case, if any unexpected circumstances arise, parties prefer to focus on the relationship
than the contract to solve the problem.
7. Power Distance: This refers to the acceptance of authority differences between people. Cultures with
low power distance postulate equality among people, and focus more on earned status than ascribed status.
Negotiators from countries like Britain, Germany and Austria tend to be comfortable with shared authority

and democratic structures. When we face a high power distance culture, be prepared for hierarchical
structures and clear authority figures.
8. Personal Style: Our individual attitude towards the other side and biases which we sometimes establish
all determine our assumptions that may lead the negotiation process towards win-win or win-lose
solutions. Do we feel more comfortable using a formal or informal approach to communication? In some
cultures, like America, an informal style may help to create friendly relationships and accelerate the
problem solving solution. In China, by comparison, an informal approach is proper only when the
relationship is firm and sealed with trust.
Role of Cultural Factors in Negotiations
Stages of Negotiation/Process of negotiation
OR
The negotiation process can essentially be understood as a four-stage process. The four stages of the negotiation
process are preparation, opening, bargaining and closure.
Stage 1: Preparation
Preparation is instrumental to the success of the negotiation process. Being well-prepared generates confidence
and gives an edge to the negotiator. Preparation involves the following activities:
(i) Gathering Information: One needs to learn as much as one can about the problem and ascertain what
information is needed from the other side. Understanding clearly the issues involved is also needed.
(ii) Leverage Evaluation: Evaluation of one’s leverage and the other party’s leverage at the outset is important
because there may be a number of things one can do to improve one’s leverage or diminish the leverage of the
other side.
(iii) Understand the people involved: It is important to know the people with whom the negotiation is to take
place. An understanding of their objectives, roles and the issues likely to be raised by them will facilitate better
handling of the situation during the negotiation process.
Pre-negotiation
phase Postnegotiation
phase
Meeting Phase
Introductory
stage
Discussion
Stage
Agreemen
t Stage

(iv) Rapport: It is helpful to establish a rapport with the opponent during the early stages, that is, before the
bargaining process begins is helpful. This was, one can determine early on how cooperative the opponent is going
to be.
(v) Know your objectives: Clarity of objectives is absolutely essential. It needs to be decided in advance how
much you are willing to concede to the opponent and what your priorities are. All arguments and justifications
should be ready.
(vi) Type of negotiation: Anticipate the type of negotiation expected, that is, ascertain whether it will be highly
competitive, cooperative or something unusual; whether the negotiation will be face to face, by fax, through a
mediator, or in some other manner.
(vii) Plan: Decide on the negotiation approach and plan accordingly.
Stage 2: Opening Phase
Here the two sides come face to face. Each party tries to make an impression on the other side and influence their
thinking at the first opportunity. Psychologically, this phase is important because it sets the tone for the negotiation
to a large extent. It involves both negotiating parties presenting their case to each other.
Stage 3: Bargaining Phase
The bargaining phase involves coming closer to the objective you intended to achieve when you started the
negotiation. In this phase, the basic strategy is to convince the other side of the appropriateness of your demands
and then persuading the other party to concede to those demands. For this, one needs to be logical in one’s
approach and frame clearly-thought-out and planned arguments.
Stage 4: Closure Phase
The closing phase of a negotiation represents the opportunity to capitalize on all of the work done in the earlier
phases. The research that has been done in the preparation phase, combined with all of the information that has
been gained is useful in the closing phase. It also involves the sealing of the agreement in which both parties
formalize the agreement in a written contract or letter of intent. Reviewing the negotiation is as important as the
negotiation process itself. It teaches lessons on how to achieve a better outcome. Therefore, one should take the
time to review each element and find out what went well and what needs to be improved.
Pre-Requisites for Effective Negotiation
• Active Listening-Negotiators have the skills to listen actively to the other party during the debate. Active
listening involves the ability to read body language as well as verbal communication. It is important to
listen to the other party to find areas for compromise during the meeting. Instead of spending the bulk of

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