SOCIO-CULTURAL ENVIRONMENT

Business is as much a socio-cultural phenomenon as it is an economic activity. Per capita income in two countries may be the same, yet the consumption patterns in these countries may differ. Socio cultural forces have considerable impact on products people consume; designs, colour and symbols they like; dresses they wear and emphasis the place of religion, work, entertainment, family and other social relations. Socio-cultural environment influences all aspects of human behavior and is pervasive in all facets of business operations.

Culture can be defined as a "sum  total of man's  knowledge, beliefs, art, morals, laws, customs and  any other capabilities and habits acquired by man  as a member of society."  It is a distinctive way of life of group of people, their complete design of living. Culture thus refers to a man's entire social heritage - a distinctive life style of a society and its total value system which is intricately related to be consumption pattern of the people and management philosophies and practices.

Furthermore, within each culture there are many subcultures that can have business significance. For instance, in a country like United States distinct subcultures prevail in the South, North-Eastern or Midwestern parts. Subcultures are found in all national cultures and failure to recognize them may create impressions of sameness which in reality may not exist. A single national and political boundary does not necessarily mean a single cultural entity. Canada, for instance, is divided between its French and English heritages, although politically the country is one. Because of such distinctive cultural division, a successful marketing strategy among the French Canadians might not effectively work among the English Canadians or vice-versa. Similarly a single personnel policy may not work with workers employed in two different plants if they belong to different sub cultural groups and differ in their work habits and underlying motivations.

Elements of Culture

Some of the important elements to understand a country's culture are: language, aesthetics, education, religions and superstitions, attitudes and values, material culture, social groups and organizations, and business customs and practices.

Language: Language is an important element of culture and it is through language that most of the communications take place. An international marketer should have a thorough under- standing of the language of the market - particularly the semantic differentials and idiomatic nuances which are essential characteristics of all languages of the world. Dictionary translation could be quite different from the idiomatic interpretation of a language. When literal translations are made of brand names or advertising messages from one language to another by people who know the language but not the culture, serious mistakes may occur. When General Motors of the United States literally translated its marketing phrase ‘Body by Fisher’ into Flemish language, it meant ‘Corpse by Fisher'.  Similarly, the phrase "Come alive with Pepsi" faced problems when it was translated into German advertisements as "Come out of grave" or in Chinese as "Pepsi brings your ancestors back from the grave". When the American car called ‘Nova’ was introduced in Puerto Rico, sales were poor until the company realized that the word Nova was pronounced as ‘Nova’ - which literally meant in Spanish "does not go".  Sales were better when the name was changed to 'Carbie'.

Aesthetics:  Aesthetics pertain to a culture's sense of beauty and good taste, and is expressed in arts, drama, music, folklore, dance and the like. Aesthetics are of special interest to the international business executives for these govern the norms of beauty in a society and are helpful in correctly interpreting meanings of various methods of artistic expressions, colours, shapes, forms and symbols in a particular culture. Colours, for instance, mean different things to different people. The colour of mourning is black in the United States, but it is white in the Far East. Green is restful colour to Americans, but it is disliked by people in Malaysia where it connotes illness and death. Symbols also need to be interpreted correctly, Seven, for instance, signifies good luck in the United  States but just  opposite in Singapore, Ghana and  Kenya. Use of number four should be avoided in Japan because it is pronounced as ‘shi’ which in Japanese means death. Sensitivity to the aesthetics of a society and their symbolic expressions can greatly help in avoiding socially embarrassing situations and correctly designing the products and messages.

Education:  Education is generally understood as formal schooling. But it is better to adopt a broader perspective and define education as any process, formal or informal, through which one learns skills, ideas and attitudes. Education is important as it affects not only the education levels but also the development of mental faculties and various skills, In general, educated people have been found to be more sophisticated, discriminating and receptive to new products and ideas. Availability of educated manpower like skilled labour, technicians and professional is also dependent on the country’s education level. Media to be used by a company for promoting its products as services are also dependent on education level prevailing in the country. The conventional forms of printed communications, for instance, do not work in countries where literacy rates are low.

Religions and Superstitions:  Religions are a major determinant of moral and ethical values and influence people’s attitudes, habits and outlook on life which are reflected in their work habits and consumption patterns. Dr.  Ernest Dichter observed: "In puritanical cultures, it is customary to think cleanliness as being next to godliness. But in Catholic and Latin American countries, to fool too much with one's body to overindulge in bathing or toiletries, has the opposite meaning. It is that type of behavior which is considered immoral and improper". There are numerous religions and faiths in the world, with prominent ones being: Animism, Buddhism, Christianity, Hinduism, Islam and Shinto. Each one has its own morals and codes of conduct. A working knowledge of the religions prevalent in the target markets helps in understanding people's work habits, underlying motivations and consumption behaviors. Equally important are the superstitions of the people in a society.  People’s beliefs in astrology, hand reading, ghosts, lucky days and places are integral part of certain cultures. In some countries, single storey houses are preferred because it is considered bad to have another's foot on one’s head. Location of a building and its architecture in many Asian countries is governed by the principles of ‘vastushastra’ rather than purely geographical and economic considerations.

Attitudes and Values: Besides religions and superstitions, one must be cognizant of attitudes, values and beliefs prevalent in a society. These attitudes and values may relate to consumption level, material possessions, risk taking and change. ‘What is important and desirable' differs from society to society and is largely governed by the attitudes and value existing in a society. Americans in general are more receptive to change and risk taking, but people in many societies are averse to change and risk taking. They prefer doing what is traditional and safe. New products are not accepted unless these have the approval of local chiefs or religious leaders.

Material Culture:  According to Ball and McCulloch, material culture refers to all manmade objects and its study is concerned with how man makes things and who makes what and why. While the question 'how it relates to technology, other questions ‘that’, ‘what’ and ‘why’ are part of economics.

Technology includes the ways and means applied in making of material goods. It is technical know-how in possession of the people of a society. Choice of technology has its repercussions to the size of investment, scale of operations as well as type and amber of workers to be employed. Technology transfer has been a highly controversial issue in the past. Because of supply of obsolete or inappropriate technology, many developing countries have laid down stringent rules and regulations concerning technology imports and payments. Since transfer of new technology is often riddled with workers’ resistance to change and public criticisms, multinational corporations are advised to have suitable action plans to counter such opposition. Economic aspects of material culture, i.e., who, what and why, have already been discussed before.  It is suffice to say here that these elements influence the level of demand as well as types and quality of goods in demand, and consumption pattern in a society. Business implications of material culture of a society are obviously many. The goods and services that are acceptable in one market may not be acceptable in another market because of differences in material cultures of two societies. For example, sophisticated electronic appliances widely in demand in the technologically and economically advanced Western countries may not find a market in the less developed countries of Asia, Africa or Latin America.

Social Groups and Organizations: A study of social groups and organizations is important as it determines how people relate to one another and organize their activities. The size and cohesiveness of the family, role of men and women in society, and positions of different social classes differ from country to country. Social groups and organizations mould the pattern of living and interpersonal relationships of people in a society. They influence the behavioral norms, codes of social conduct, value systems, etc., that may be of relevance to the international business managers in their decision making.

Business Customs and Practices:  A familiarity with business customs and practices prevalent in different countries is a must to avoid business blunders. An international business manager must have necessary knowledge about how business is conducted and what importance business people in a foreign country attach to work, time, formality, change and achievement. American managers, for instance, are by nature highly work oriented and attach upmost importance to speed and punctuality in business dealings. They are, moreover, highly achievement oriented and fond of new things. But people in other parts of the world do not share these values and beliefs. Japanese, for instance, are also workaholics but they are very slow in decision making Latin Americans too do not believe in haste and spend considerable time in socializing and developing friendships before coming to business transactions.

A  person  dealing with people from different cultures should  be well aware of differences in the number and nature of stages  involved  in  business negotiations  anal  formalities to be observed  in  concluding business  contracts. While  in  countries like the United  States it is necessary to have final  agreement in  writing, this practice  is  not  much appreciated  in  many West Asian  countries where oral agreement  alone is considered more  than  sufficient.