Cross Cultural Adaptation
for Multinational Executives
outline
• Introduction
• Definitions
• Stage of Cultural Adaptation.
• Culture Theories.
• Cultural Barriers for Multinational Companies.
• Elements of culture
• Examples
Introduction
• During the last decades the increased globalization
has led to the growth of cross – border economic,
business activities and building business relationships
with partners from other countries.
• According to (Hofstede, 1980) in his book Culture's
Consequences: International Differences in Work
Related Values”.
Introduction
• people in business relationships are different, and
their actions, attitude towards each other, as well as
trust, depends on their cultural background.
• therefore It is important to take into account culture
in order to establish and maintain the development
of trade relations across national boundaries .
• culture has a strong influence on the behavior of
companies and individuals.
Introduction
• After the world war II ,trade between Finland and Russia
started based on agreement between the government.
• Which have opened a lot of opportunities for business
sector.
• But they suffered from language barriers .
• there have been some cultural based difficulties in
interaction and communication, and misunderstanding
between Finnish and Russian managers.
Cross-Cultural Adaptation Theory
figure 1. The process of cross-cultural adaptation: the stress-
adaptation-growth dynamic.
Definitions
• Culture: is an imprinted pattern of knowledge,
attitudes, values, perceptions and a set of behaviors
that permeate all life activities . Culture has a great
role in shaping individual behavior & group behavior.
Enculturation
is the process by which person interacted and
socialized into his primary culture, and receiving
knowledge, awareness, and values.
“learning one’s Own culture, as we brought up”
Acculturation
• the process of learning and acquiring the elements of
the host culture.
• losing or putting aside some of the old cultural habits
/ new responses are adopted in situations that
previously would have evoked old ones.
Definitions
• According to (Törnroos 2000) culture can be defined as
ways of doing business within a particular country.
• Business culture definition is reinterpreted in symbolic
terms as “a loose complex of symbols said to define how
people from a given nation do business” (Moore 2004).
Cultural Adaptation
• is considered as a process of adjusting to culturally
dissimilar backgrounds and behaviors of partner
firms resulted from their societal norms held by their
individuals in order to maintain the relationship
development between these partners
The “U-Curve”
Honeymoon stage- Excitement
• Everything is great & wonderful
• New country is exciting.
• New opportunities.
• Positive attitudes.
• “My Dream Come True”.
Hostility or Culture Shock- Frustration
Stage
• Problems may start occurring.
• Excitement turns to disappointment.
• Negative feeling
• Discouraged.
• Confused.
• Stressed
• mistrust.
• feel impatient
feel homesick for your home country
Humor- Integration stage or
Adjustment
• able to get around, both physically, with the
language, and emotionally.
• starting to make sense now.
• don’t feel as lost.
• Sense of humor returns.
• start comparing old culture with new one.
• Routines established.
• Energy comeback.
• will begin to feel more “at home’
Adaptation Stage
• Seek to new learning.
• Feel more motivate.
• understanding of new culture and realize that it is
neither all good or all bad.
• learn to adjust to the differences in culture here.
• When people comeback to his country of birth he
will through a re-entry shock.
• start to feel that you “belong here”.
Cultural Barriers for Multinational
Companies
• Foreign direct investment (FDI) is a market entry
strategy for multi national companies.
• According to OECD report the world out flow (FDI)
reached ($2,169 ) billion in 2007 Through joint
ventures, mergers and acquisitions, and wholly-
owned subsidiaries in foreign countries (Dikova &
Witteloostuijn, 2007).
Cultural Barriers for Multinational
Companies
• Firms face challenges from local cultural values that
are transfer through Social organizing, political
economy).
• According to (Feng,2014) cultural distance remains a
barriers in overseas operation because it can disrupt
collaboration and knowledge learning from
international alliances.
• It Caused to increase higher transaction costs,
reduced knowledge transfer, and poor operational
performance.
Cultural Barriers for Multinational
Companies
Cultural and Language Barriers in the Workplace
• Any organization want to explore business opportunity
in china , Philippines ,and Vietnam must know that body
language and personal space are very important.
• foreign businesses must pay particular attention to
gestures, signs and body movements.
• For example, while Americans and those in Western and
European countries may not find it uncomfortable to
start and end their conversation with a kiss on the cheek
to a woman executive, Chinese, Filipinos and Thai
women Executives feel uncomfortable with this kind of
greeting.
Cultural Barriers for Multinational
Companies
Attitude towards Punctuality
Example: Americans are very strict with time , they
confirmed on deadlines and finishing work on or before
deadline.
On the other hand Indians tend to value flexible
deadlines over strict deadline, they will not view
deadline important unless it has been confirmed.
Cultural Barriers for Multinational
Companies
Foreign banks suffer from the cultural barrier in Vietnam.
• One of the barriers to culture is the level of a person's
confidence in financial institutions
• In Vietnam people do not trust banks, also they do not
deposit their money and gold in banks.
• They also prefer to get loans through their friends and
family.
• So banks are having a hard time breaking through
Vietnam as a developing country.
• Vietnam is a strong potential for establishing banks .
• financial institutions have to learn to deal with this
cultural barrier.
Elements of culture
There are things that all cultures have in common.
Religion :
Is one of important component of culture.
• support values, and beliefs of society (right – wrong).
• Also it consider important for moral living .
Elements of culture
Values:
Are the anther element of cultural ,and include
judgement of what is good, or bad?
Cultural values shape it norms.
Elements of culture
Social Classes
• The purpose of social classes is to rank people in
order of status “money- occupation).
Elements of culture
Social organizing
• Aim to create social structure by organizing culture
into smaller units to help people to work together
and to meet their basic needs.
• Family is considered the essential unit of social
organizing.
Elements of culture
Customs & Tradition
• to provide a culture with rules of behavior (written
,and unwritten).
Elements of culture
Arts and literature
Help to pass ,and teach about culture’s values, and
behaviors. To Promote culture pride.
Elements of culture
Government
• People form governments to provide for their
common needs, and keeping order in society.
• Largest form of government is the nation , which it
has many divers people following a set of rules.
The Best Top Brand
Become Part of The
Culture
Starbucks Middle East
• When the Starbucks launched in the middle east
especially in Saudi Arabia , it faced immediate
friction. Because of the decency laws concerning
women.
• So they changed the iconic mermaid in seated into a
crown on waves.
• Also in Saudi Arabia divided its stores into male
Section ,female “family Section” for Women.
Starbucks in Japan
Fukuoka
• Japanese building design is idiosyncratic, and have
low roofs.
• most of them have indirect references to Shintoism
which is the country’s religion.
• So they hired local designer in order to create the
right atmosphere.
• Fukuoka , in Kyushu used around 2000 wood blocks
that interlock to give the impression of forest
atmosphere to fit with the spirit of Shintoism
honoring nature.
Starbucks in Japan
Meguro
• Starbucks in Meguro looks like craft store with the
traditional Japanese “teahouse”.
• Also the served “Matcha” (ground tea leaves) and
cookie crumble with white pudding, because all
Asian consumers are usual take the beverages with
solids mixed in.
KFC in China
• KFC is a good example of cross cultural business.
• As we know it is an American fast food brand has
been successfully operating in china.
KFC has made a great effort in:
1. Product innovation to cater to Chinese taste.
2. Translate the name of meals portfolio.
3. Showed respect to different aspect of Chinese cultural
,and made some changes in their product , and services
considering Chinese taste , values , dining habits , and
language.
McDonald's Adapts Around the World
In China
• China is a big market for McDonald's. it has 2.700
stores in it.
• McDonald's adapts in china by changing their menu
to serve the local tastes ,and preferences
• by uses meat from chicken thighs in its chicken
burgers because it's the locals' preference. Grilled
Chicken Burger is a meal offered during Chinese New
Year. which is served with crispy fries and Chinese
towers with 12 animal marks.
• In 2001 it also offered Corn Soup and Vegetable and
Seafood Soup.
McDonald's adaptation
Germany
• Germans love to eat meat, its burgers combine
Nürnberger sausages with beef also serve beer.
Indonesia
• The majority of the population in Indonesia is
Muslim.So MacDonald’s adapted by replacing pork
with fish, and serve rice over bread with some spicy
meals that local’s prefer.
McDonald's adaptation
India
India has a very large consumer, and MacDonald’s adapted
its menu to serve the local tastes and preferences by:
1. Beef replaced with chicken “due to the region issue”.
2. It offers Masala Grilled veggie Burger.
3. In 2013 they opened its first vegetarian restaurant to
serve the local vegetarian consumers.
4. Also a baked menu item with curried vegetables.
McDonald's adaptation
Morocco
Used pita bread sandwiches , and use the traditional
spices such as coriander and cumin.
It offers special menu for Ramadan. They call it f'tor
(end of fasting) and the meal consists of a Big Mac,
milk, dates and traditional Moroccan soup.
McDonald's adaptation
Japan
• In the began MacDonald’s retained the menu of the
U.S.
• But slowly it replaced and added menu items to cater
to Japanese preferences. The company introduced
Green Tea ice cream, Rice Burger, Seaweed Shaker
and Teriyaki Burger.
• also added shrimp burgers, shrimp nuggets,
milkshakes flavored with green tea and breakfast
meal with hotdogs.
Brand Failures to adapt
with Differences Culture
Dunkin Donuts- Thailand
• Dunkin Donuts had to apologize after their
advertisement which used a woman in black face
(Make-up).
• This ad used to promote Dunkin Donut “Charcoal
donut”.
• A group of human rights called this racist.
• The chief executive of the company defended the
campaign.
• withdrew the TV spot immediately that features the
imagery, and apologized for the crime.
Coca Cola ad campaign
• Coca cola campaign (share a coke) is considered a brilliant
campaign.
• The aim of this campaign is sharing your favorite drink with
your loved ones, and add your name ,and your loved ones
name on the can.
• But in Israel it becomes very difficult to conceptualize the
concept of individualizing the coke bottles especially in a
country where cultural identity is bound by religion and
ethnicity.
• The problem appeared when one Arab-Israeli citizen accused
coke for not printing any Arabic name among the popular
Israeli names.
• Coca Cola responded to this by telling the customers that they
can get their names printed at designated stores.
Braniff International
Airlines Company
• Braniff International airlines
company was created a
campaign to promote their
upholstered seats in order to
attract first class customers
under the slogan (Fly in
Leather).
• but had a negative impact on
the company as the meaning
of the word means in Spanish.
Beer Wolf
• Coors beers faced a
tough time in Spain
when they promote a
new invented called
Beer Wolf .
• They depended on the
slogan ‘Turn it loose’
which unfortunately
meant ‘You will suffer
from diarrhea’ in the
native language.
HSBC Bank
HSBC Bank spent $10 million
to change its tagline into
“The world’s private bank” to
be more translation-friendly.
This rebranding move comes
after their previous “Assume
Nothing” campaign was
translated as “Do Nothing” in
multiple countries.
