IB7013-8, WEEK 8 Global Marketing Environment, NCU, NorthCentral University
IB7013-8, WEEK 8 Global Marketing Environment, NCU, NorthCentral University IB7013-8
Popular in Global Marketing Environment
Popular in General
This 15 page Class Notes was uploaded by JC11 on Saturday April 9, 2016. The Class Notes belongs to IB7013-8 at Northcentral University taught by in Spring 2016. Since its upload, it has received 7 views. For similar materials see Global Marketing Environment in General at Northcentral University.
Reviews for IB7013-8, WEEK 8 Global Marketing Environment, NCU, NorthCentral University
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 04/09/16
NORTHCENTRAL UNIVERSITY ASSIGNMENT COVER SHEET Student: THIS FORM MUST BE COMPLETELY FILLED IN Follow these procedures: If requested by your instructor, please include an assignment cover sheet. This will become the first page of your assignment. In addition, your assignment header should include your last name, first initial, course code, dash, and assignment number. This should be left justified, with the page number right justified. For example: Save a copy of your assignments: You may need to resubmit an assignment at your instructor’s request. Make sure you save your files in accessible location. Academic integrity: All work submitted in each course must be your own original work. This includes all assignments, exams, term papers, and other projects required by your instructor. Knowingly submitting another person’s work as your own, without properly citing the source of the work, is considered plagiarism. This will result in an unsatisfactory grade for the work submitted or for the entire course. It may also result in academic dismissal from the University. JTB70138 Gisela Salas, PhD Global Marketing Environment Assignment 8 Faculty Use Only <Faculty comments here> <Faculty Name> 2 Introduction The changes taking place in the international marketplace are more prevalent than ever. Global firms are subject to competition, large supply sources of supply, rapidly changing political, economic, social, technological, and climatic environments. As global firms begin to operate in this large, fast changing environment, the firms must find new and unique ways to bridge the gap between the current environment and the projected environment. Multinational corporations (MNCs) need to not only to comply with their home country’s laws but the laws within the newly selected operational area. Within the confines of an MNC, the company’s leadership is responsible for finding ways to operate around the globe. Examples that will be discussed are those that include American versus Chinese cultures and the leadership operating within another country’s constraints. In addition to working within constraints of various cultures, leadership and managers’ must take cultural differences into consideration and plan appropriately. By planning for the differences between the cultures, successful business operations can be conducted. This week’s assignment will discuss the following: (a) bridging the gap, (b) leadership, (c) cultural differences, (d) trust in business, and (e) global business responsibility Bridging the Gap To bridge the gap between an American MNC working in China, and local Chinese companies, a number of factors must be taken into consideration. American companies need to be aware of how the Chinese conduct business. One of the main considerations will be the Chinese and their relationship building process. In business, the Chinese focus on building long term business and personal relationships. They often will contact an individual they know from 3 their current business dealings that have an established relationship that has an existing relationship with and bring all parties together. If a trusted company and personnel conduct business with the potential new company this establishes a report as the current business partner vouches for new business in the relationship. This may be difficult avenue for new vendors to establish themselves within until other relationships have been built. As the Chinese people and partners become more comfortable with the individuals in their friendships and partnerships, communications become much more direct, allowing the gap between cultures to be bridged. (Park, Levine, Weber, Lee, Terra, Botero, & Wilson, 2012). The Chinese businessmen and women focus on utilizing high context communication styles and relationships. The high context communication style is a very passive form of communication, offering a bit of interpretation and translation into any conversation. This form of communication leaves a significant area open to guessing and assuming while reading between the lines. While the Chinese may operate on one side of the spectrum, American’s fall on the other side of the spectrum. Americans, in general, are very pointed and direct in their business dealings and require very little context to develop an understanding of what the desires and wants of the company. While low context language is a characteristic of American communication styles, and high context language is representative of the Chinese business practices. High context language requires a significant amount of body language and interpretation of symbolic gestures while low context requires very little interpretation (Zhu, 2009). An American company desiring to move into the Chinese marketplace must recognize the differences between the cultures and study the specific nuances between them. In addition, a 4 strong entry method for an American company moving into the Chinese marketplace is to form a partnership with a local company. As the U.S company partners with a local corporation, the company begins to build rapport. Building rapport in this fashion would significantly benefit an American company. Another area that could be a problem for an American company is the use of children for labor. The estimated total of child laborers being utilized as recently as 2011, is between 2 and 3.5 million children. This includes the number of children forced into labor not only by employers but parents as well. This is a significant issue and is now becoming more prevalent due to the increased media coverage (Minli & Jun Sung, 2011). While American’s and a significant portion of the world see utilizing child labor as a significant issue, the Chinese tend to have a different mindset. In some cases, parents in a Chinese household may be necessary for children to work to help the family keep from starving. In some families this is the only way the family can survive. To bridge this gap, the U.S. company must find an appropriate strategy to conduct business without offending the Chinese. Leadership A man that exuded leadership and a mentor to my own work is Steve Jobs. Apple is one of the most successful global companies in existence due to his perseverance and insightfulness. His character consisted of many qualities that were not appreciated by many, but his level of success was extraordinary. He was a harsh man, driven, and had very little time for other peoples’ opinions. Although, what he did have was a creative side that allowed him to focus upon and blend art, creativeness, and technology. His instruction was very clear and his focus and intention shared with his employees. Jobs was also known for following a path in life and business that were unique. Conforming to a standard other than his own was not part of his plan 5 (Cusumano, 2011). As on of the most controversial leaders and CEOs within the current history, a researcher could debate as to the effectiveness of Job’s leadership. One could assume that his leadership style as unbending and direct as it was potentially lost business for Apple, but his creativity and level of vision could be debated as the reasons why Apple was so successful in the first place (HurleyHanson & Giannantonio, 2013). Cultural Differences Marketers have an increasingly difficult position as they are responsible for not only getting the product out to market but the nuances of the people in the country the product is being marketed within. While it may seem obvious that understanding cultural differences are second nature to a marketer, they are not necessarily so. American marketers, as most American’s in general, have an opinion that other cultures should bend to the will of the American. Other cultures do not appear to be as forward with the same opinion. In many cases, while traveling abroad, other cultures have a tendency to shy away from Americans as we are viewed as unbending, too direct, and often times brash and offensive. While cultural differences should be considered second nature and reflexive, a majority of the time they are not. The statement “all too often cultures are insufficiently studied or wrongly interpreted by newly entering outsiders” is true. Many marketers focus on certain aspects of a culture and then begin to apply the aspect to all others within that culture. The term used for this concept is stereotyping. While culture is generally analyzed and evaluated at a societal or national level, the culture needs to be analyzed at the regional, organizational, and individual level to effectively uncover smaller cultures within a culture (Samaha, Beck, & Palmatier, 2014). One of the main challenges for any MNC is negotiating deals with people or companies 6 within different countries with differing values and beliefs. The challenge while conducting business in a new environment is doing so in a way that will not offend the other culture. With one small slip of the tongue or the perception of the body language being presented, could put an end a deal before it begins. Negotiating in a foreign county can be difficult due to the context, high or low, direct or indirect communication, and the underlying meanings of body language. The variations of each of the items noted can be the make or break decision within a deal (Payne, 2013). While a negotiator may believe a certain culture will act a certain way, there are no clear cut guidelines. In addition, the rules and the line may become very fuzzy, the negotiator must stay cognizant of the other culture. A personal example to provide a further insight of this existed while serving on active duty as a contracts manager in Afghanistan. The rule of taking gifts from a contractor over $25 was not allowed. The guideline was outlined in the regulations and was a policy throughout the department of defense. While the local national Afghan contractors knew about the rule; it was their custom to bring gifts to those offering a contact for bid. As the solicitation document was advertised for twentyfoot Twalls, an Afghan business owner chose to bring a large gift of flowers to me personally as the deputy commander in theater, otherwise known as the war zone. The flowers were freshly picked from the local lands as their dirt caked roots were still attached when presented. The gesture for me was a bit out of the norm as a U.S. Citizen, in a position of authority, but this concept was customary to them. The procedure was to make the attempt to politely refuse the gift if it exceeded the $25 threshold. If politely declining didn't work and if the person would be highly offended if the gift was refused, an individual could accost the gift and subsequent spread it amongst the office or turn it into the judge advocate general (JAG). After the JAG received the gift, a formal report was created and 7 placed on file. If the gift was valuable, for instance jewelry or silk rugs, the gift was later sold and the funds distributed back to the office. From the military standpoint, this type of gesture was considered to be an improper gift known as a bribe, while the Afghan businessmen may see the offering a purely a custom and polite gesture. Another challenge for any MNC entering a foreign market is what actually constitutes a crime. Each country has a unique set of rules and laws that make up the justice system. The rules from one country to another can vary from slightly different to completely different in nature. An MNC or even just the individuals working within that company can find the way to a jail sentence rather rapidly if laws are not followed. Ignorance and/or not knowing the rules is not an excuse that is acceptable to the lawmakers and enforcers of other countries. It is the individual's responsibility to know and ensure the country's rules are understood prior to traveling and functioning in a given environment. Even if all of the specific rules are not understood, a mitigation technique would involve hiring a local to help walk through the customs and courtesies within each individual country. Recently after conducting an interview with S. Long, (personal communication, December 30, 2015) this concept I found to be true. She was discussing a story of her most recent experiences while working abroad. Ms. Long and her coworker participated in the doctors without borders and found out the customs were very different while working in Saudi Arabia. Ms. Long’s coworker, a British citizen, was unaware of certain laws in Saudi Arabia. As they traveled to one of their sites, her coworker decided to light a cigarette in the back seat of the taxi. After lighting up, the taxi driver pulled over, grabbed her coworker by the hair and beat her so severely she need an emergency room. Even as 8 a British citizen, this woman had little to no rights in this country. She was not pulled out for the actual lighting of a cigarette, but rather that she was a woman and lighting the cigarette. Ms. Long and her coworker put themselves in a hostile situation by not knowing the customs and law in Saudi Arabia. The laws, no matter how obscene they may seem to the rest of the world, Ms. Long’s friend could have been killed without any repercussions of the Saudi government. According to the Saudi government, the taxi driver had every right to discipline a woman that was not conforming to certain standard. Now, this may be an extreme example of culture and a country's custom, any incident could cause issues if the rules and laws are not followed nor translated appropriately. Child slavery and trafficking are significant issues to contend with while working within China's borders. China is a developing country with and overcrowded population. Trafficking, slavery, and child labor will affect those businesses operating in China. A business may come into contact with one or all of these issues while working within the county (Payne, 2013) The important part each business owner must know and understand is how to battle each effectively to avoid unethical business dealings. Trust in Business China and India both have similar cultures in the sense that they are focused on building relationships in business. Trust is a significant factor between entities that are conducting business within the Chinese culture. Not only is the relationship factor a significant attribute of any business wishing to conduct business within China, but reputation is important as well. The Chinese release products and conduct business with corporations that are proven in safety as well as reputation. This also relates directly back to developing relationships. The Chinese are loyal 9 to the products that have developed positive relationships within the marketplace (Cayla & Arnould, 2008). Relationships are also important for the people of India. Social structures, networks, and norms are areas that the people of India firmly believe in. The structures and networks are set up over time allowing relationships to be built over a period of many years. This concept allows for a certain level of trust to be maintained. Larger nations such as the U.S. are primarily focused upon profit and contracts, and are generally not concerned about other areas outside of profitability (Levien, 2015). The family and social element within both India and China support a barrier to entry for outside firms. An outside firm would best function in this type of environment by developing a relationship with a local business and creating a partnership first and foremost. With the partnership, the local company can serve as the face of that partnership, allowing for an outside firm to perform on the backend. This strategy may or may not be effective if the connection between the two companies is identified by the consumers and the consumers do not approve. Consumers may see this as a betrayal to the overall system, but on the other hand, the opportunity cost may be worth the risk. Global Business Responsibility One of the questions for this week’s assignment takes a look at Milton Friedman’s viewpoint towards corporate responsibility in the global business environment. As a researcher, one must ask, who is Milton Friedman and why do we care? Milton Friedman, according to Wikipedia (2015) was “…an American economist who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and the complexity of stabilization policy.” Milton Friedman’s contention that the only 10 responsibility of a global business is “to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game?” Friedman’s theory was that corporate social responsibility went only as far as to make and increase profits (Wikipedia, 2015). The question was asked is if I personally agree with this philosophy. The answer to this question is no, not at all. Corporations are entities and just as humans, they have responsibility and liabilities. As we can see from the past, companies that were not held accountable and were only in business to make money, did so at a cost to not only other people, but to wildlife and the environment as well. While people that enter into the business world may not consider the responsibilities they need to face if something goes wrong. It’s not a shock to most of the world that most companies would do what they could to not have to be responsible for a potential issue. When it comes to money, greed consistently brings out the worst in people and to defeat this, laws must be put into place to protect land, wildlife, as well as human life. An example of a corporate entity being made to take responsibility, even if saving face is what made the final determination to clean up the mess, was BP. BP’s oil spill in 2010 killed 11 workers, caused injuries to 17 others, created billions in environmental damage, as well as losses to companies in the business of seaside tourism and real estate (Winkler, & Gordon, 2013). Other issues that need to be considered during an oil spill are ties to renewable sources, damage to ecosystems, future economic worries, and safety issues with seafood harvests in oiled areas. In addition, full ecosystems can be lost with the newly polluted water whether the aquatic life rests on the tainted waters or eats the prey living in the ocean that have been tainted (Gill, Ritchie, Picou, LanghinrichsenRohling, Long, & Shenesey, n.d). In addition, businesses closed and weren’t opened. If an area is a tourist attraction is 11 affected by an oil spill in the area and business are not able to take in enough income, the doors will close, and many on a permanent basis. Once the businesses close, people may have to relocate to find employment or begin a new business, lessening the funds in the community even further. Also, those individuals that fish and utilize the sea to provide an income, can also be affected. People that have lived their entire lives providing an income for their families are now faced with dire conditions. The company that had the spill needs to fully compensate individuals for the current and future loss. This issue can become very difficult when attempting to place a figure on the level of damage inflicted. During these types of scenarios, greed can be found on every end. No one wants to give up profit and those with the loss will want to do everything that can be done to acquire every last penny. Finding an equitable adjustment for all parties involved is extremely to do as there are now more individuals involved. Now, companies have to pay attorney’s fees, surveyors, assessors, judges, and the list goes on. In 2010, there was yet another oil spill that was large enough to make the news. There were eleven crew members of Exxon’s Deepwater horizon drilling rig killed, and others injured in a significant accidental spill. This large spill affected thousands of fishermen, marine life and organisms, as well as marshes and the lands along the coast of Louisiana, Mississippi, Alabama, and Florida. During this spill 4.4 million barrels of oil were discharged, and while Exxon was able to clean up a significant portion of the oil, the effects of the spill will be seen for decades to come (Griggs, 2011). While BP and Exxon were charged with cleaning up the mess they created, there were mandated to pay out current as well as potential future losses as well. The companies were sued by hundreds of people, from employees to family members of employees, to land owners, to 12 wildlife associations. The damage that was caused was greater than anyone could have imagined and while that is a significant issue, the fact that the U.S. Federal Government had to assist the people affected by the spills. The government assisted with ensuring individuals were properly taken care of and housed, fed, and clothed during the time of crisis. The question that needs to be asked was; why are government funds, otherwise known as taxpayer dollars are being utilized to clean up a mess created by an extremely large global organization (Mancuso, Alemayehu, Fox, & Fulk, 2014). 13 Conclusion The changes taking place in the international marketplace are more prevalent than ever. Global firms are subject to competition, large supply sources of supply, rapidly changing political, economic, social, technological, and climatic environments. As global firms begin to operate in this large, fast changing environment, the firms must find new and unique ways to bridge the gap between the current environment and the projected environment. Multinational corporations (MNCs) need to not only to comply with their home country’s laws but the laws within the newly selected operational area. Within the confines of an MNC, the company’s leadership is responsible for finding ways to operate around the globe. Examples that will be discussed are those that include American versus Chinese cultures and the leadership operating within another country’s constraints. In addition to working within constraints of various cultures, leadership and managers’ must take cultural differences into consideration and plan appropriately. By planning for the differences between the cultures, successful business operations can be conducted. This week’s assignment will discuss the following: (a) bridging the gap, (b) leadership, (c) cultural differences, (d) trust in business, and (e) global business responsibility 14 References Cayla, J., & Arnould, E. J. (2008). A cultural approach to branding in the global marketplace. Journal of International Marketing, 16(4), 86112. doi:10.1509/jimk.16.4.86 Cusumano, M. A. (2011). The legacy of Steve Jobs. Communications of The ACM, 54(12), 26 28. doi:10.1145/2043174.2043184 Czinkota, M. R., & Ronkainen, I. A. (2013). International Marketing. Mason: SouthWestern Gill, D., Ritchie, L., Picou, J., LanghinrichsenRohling, J., Long, M., & Shenesey, J. (n.d). The Exxon and BP oil spills: a comparison of psychosocial impacts. Natural Hazards, 74(3), 19111932. Griggs, J. W. (2011). BP Gulf of Mexico oil spill. SPILL. Energy Law Journal, 32(1), 5779 HurleyHanson, A. E., & Giannantonio, C. M. (2013). Staying hungry, staying foolish: academic reflections on the life and career of Steve Jobs. Journal of Business & Management, 19(1), 79 Levien, M. (2015). Social capital as obstacle to development: brokering land, norms, and trust in rural India. World Development, 747792. doi:10.1016/j.worlddev.2015.04.012 Mancuso, L. C., Alemayehu, B., Fox, M. A., & Fulk, H. K. (2014). Covered in oil—again. Entrepreneurial Executive, 191934. Milton Friedman. (2015). In Wikipedia. Retrieved January 1, 2016 from https://en.wikipedia.org/ wiki/Milton_Friedman Minli, L., & Jun Sung, H. (2011). Child labor in the People’s Republic of China: an ecological systems analysis. International Social Work, 54(4), 565. doi:10.1177/0020872810382804 Park, H. S., Levine, T. R., Weber, R., Lee, H. E., Terra, L. I., Botero, I. C., & Wilson, M. S. (2012). Individual and cultural variations in direct communication style. International Journal of Intercultural Relations, 36179187. doi:10.1016/j.ijintrel.2011.12.010 Payne, R. J. (2013). Global issues. New Jersey: Pearson Education, Inc. Samaha, S. A., Beck, J. T., & Palmatier, R. W. (2014). The role of culture in international relationship marketing. Journal of Marketing, 78(5), 7898. doi:10.1509/jm.13.0185 Winkler, D. T., & Gordon, B. L. (2013). The effect of the BP oil spill on volume and selling prices of oceanfront condominiums. Land Economics, 89(4), 614631 15 Zhu, Y. (2009). Managing business relationships in New Zealand and China: A semantic perspective. Management International Review, 49(2), 225248. Retrieved from http://www.springer.com/business+%26+management/journal/11575 Personal interview. Sarah Long (2015)
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'