Understanding details Read the article again and answer these questions. 1. What is Geert Hofstede's nationality? 2. When did Hofstede carry out his research at IBM? 3. Why was IBM a good company to choose for his research? 4. Why was 'Nova' a bad name for a car in Spanish-speaking markets? 5. Why was the Lexus luxury car less successful in Europe than in the US? 6. What can companies do to be more successful when marketing products internationally? 7. Why do Western companies have problems operating in China? 8. What are some of the benefits of working across cultures? Barriers can give a competitive edge by Morgan Witzel A Sooner or later the growing company will reach market saturation in its domestic market and there will be little choice but to move into overseas markets. B Most companies, in fact, start dipping their toes in foreign waters long before they reach domestic saturation, to exploit other profitable markets and give themselves experience of working abroad. C Whether the company is trading abroad or establishing foreign subsidiaries, the issue of national culture assumes great importance. It had been known for years that working across cultures poses special problems, but the work of Geert Hofstede, the Dutch management theorist, in the 1970s and 1980s showed just how diverse and various cultural influences can be. D Working across a single global company – IBM, a business noted for the uniformity of its corporate culture, Hofstede showed that a huge variety of beliefs and values were present in the workplace, not just between the US, Europe and Asia, but within regions as well. E Globalization is said to be leading to cultural convergence but, as Hofstede and many later studies have shown, full convergence is still some way away. F Companies moving into international markets will usually first feel the effects of culture on their marketing and advertising. Every international marketer has their collection of mistakes, where the values of one culture fail to translate into another. Sales of the Vauxhall Nova in Hispanic-speaking countries, for example, suffered because in Spanish, no va means “won't go”. G Other failures are more complex and based on deeper cultural divides. Toyota's luxury car, the Lexus, was an immediate hit in the US, where the luxury-car market had been the pre-serve of a few domestic companies, and the Lexus offered something appreciably different. The Lexus has been much less successful in Europe, where there is a stronger tradition of luxury car-making and strong loyalty to local brands on the part of their buyers. H Cultural barriers in marketing can be overcome by repositioning brands, changing advertising and product features to suit local sensitivities and so on. Much more difficult to manage are the cultural differences that arise when companies establish multinational subsidiaries and then expect members of different national cultures to work together. This is especially the case with Western companies establishing subsidiaries in China. I Chinese workers often prefer strong directive leadership to the more democratic model now common in the West. They also rely much more on senior managers to sort out problems, including problems in the workers' private lives. Linguistic confusion is also compounded by quite different attitudes to issues such as ethics, reporting and control, and workers’ rights and responsibilities. J What appears to be a barrier, however, can actually be a source of competitive advantage for those companies and managers that learn to work with cultural differences and benefit from them. K In terms of managing local subsidiaries, some global companies have learnt to adopt best practices from foreign companies and transfer these into the home market. This kind of cross-fertilization has been taking place between Japanese and Western car-makers for decades, and has led to powerful innovations on both sides.