Going My Way Could Mean the Highway
Zachary I. Knutson
Business Practices in the Global Market - #2125
Prof. Creed
Final Paper
04/29/2015

As shared in the Introduction section of the textbook “Kiss, Bow, or Shake Hands” by Terri Morrison and Wayne Conaway, one of the most important lessons to learn in doing business internationally is that “communication always takes place between individuals, not cultures.” (Morrison pg. ix) We live in an age today where information and knowledge that is almost instantaneous is gradually blending the lines between countries doing business and the individual cultures that those businesses cater to. Today, more foreigners are entering U.S. schools for education and that will only continue to blur the lines between understanding specific business dealings – and understanding how those business dealings will work in a foreign country. If the playing field of business is becoming more and more aligned – where do the missteps happen in regards to doing international business? And if the communication goes successfully between the individuals creating the deal – shouldn’t that be the ‘green light’ for success? My argument is No. Because once the communication is successful in establishing the opportunity to do business internationally – it will then not be in the correct handshakes or presentation of business cards that success will be found – now it’s time to communicate with the culture. Here is where international business could go wrong, with an overall belief in ethnocentrism. The belief that doing it the way you have been, or want to, will work in every situation.

ETHNOCENTRISM In the online paper, “Intercultural Business Communication” by Melvin C. Washington, he defines ethnocentrism as “this view of things in which one’s own group is the center of everything, and all others are scaled and rated with reference to it.” This ethnocentrism, or feeling that the act of doing business will be successful everywhere once the agreement is signed, is a closed mindset regarding the fact that in the end – you’re not necessarily doing business with that company’s CEO or board of directors, but with that company’s customer base – and culture. Our text shares the stories in the Introduction section of both McDonald’s and Nike of “unintentional missteps [that] could destroy your costly international marketing efforts.” (pg. vii)

“McDonald’s Corporation settled a group of lawsuits for $10 million in 2002 […] because of their French fries and hash browns. After 1990, McDonald’s stated that only pure vegetable oil was used to cook their fries, implying that they were prepared in a ‘vegetarian’ manner. However, the oil contained the essence of beef flavor, which is an anathema to Hindus and vegetarians worldwide.”

“Nike was forced to recall thousands of pairs of Air [brand shoes], because of a decoration intended to resemble fire on the back of the sneakers. Unfortunately, when viewed from right to left (which is the way Arabic is read), the flames resembled the Arabic world for ‘Allah.’”

Because McDonald’s had always used that specific oil for making their successful fries, and because Nike had previously found success with their flame logo on their tennis shoes, they failed to transfer that successful business model to a different culture because they believed it was already great (and wanted by the consumer). There are countless stories of companies not translating their success internationally because they believed that they already had the formula perfected. Washington’s paper shares that “culture is the structure through which communication is formulated and when cultures interact, knowing all the cultural factors that affect the situation is essential.” Essential, as in necessary, because with any ethnocentric approach to doing business internationally there could inevitably be the perfect ‘kiss of death’ to any business deal. We need to look no further to a great example of this than with our own beloved Target Stores. In 2013, Target opened 124 stores in Canada (nine more were added the next year). By early 2015, our newsfeeds were filled with stories of layoffs and closings as Target pulled out with a $54 billion dollar loss. In the article “Why Target Failed in Canada” by Phil Wahba, he shares that while there were location issues, distribution issues and competition issues that contributed to Target’s downfall ‘Up North,’ there was also an “overriding element of ‘they don’t care about us’ on the part of the Canadian shopper.” In the book “International Marketing’ by Czinkota, we learn that the opportunity for profits because of an already established successful formula can be the “strongest incentive to become involved in international marketing.” And in the U.S., Target had that. Added to that, as shared in the article “Target Unveils Canadian Stores” by Hollie Shaw – Canada’s population of “over 36 million people with an over 70% awareness among Canadians [of Target] — 30,000 of whom already have a Target U.S. credit card” – it seemed like a safe bet and choice for this domestic company – and on paper it was. The ‘communication’ between the executives involved in both countries went fast and furiously as the commonality of doing this already established business model seemed destined for greatness in this new, and familiar arena. BUT what went wrong was ethnocentrism. In the Czinkota book we learn that “to serve a market efficiently, firms must learn what customers’ want, why they want it, and how they [can] go about filling their needs.” When Target’s marketers recognized early on that Canadian shoppers were familiar with Target – it seems like they failed to research what that ‘familiarity’ meant to the actual Canadian shopper. While 70% might have been aware of Target – that doesn’t mean 70% want to shop at Target. In the article “Missing the mark: Five reasons why Target failed in Canada” by Tamsin McMahon, he shares that one of the biggest reasons for the failure was that “Canadians were less accustomed to Target’s model of ‘one-stop shopping’ so popular with consumers in the U.S., preferring to visit several stores to fulfill their shopping lists.” This could be taken to mean that what Americans value as ease – Canadians might view as less variety. Going back to the Czinkota text, this could be looked at as “psychological distance. The lack of symmetry between growing international markets with respect to cultural variables, legal factors, and other societal norms.” While Canada and the U.S. might be neighbors, Target failed to realize that “attitudes and values […] may vary substantially between markets. [And that] too much of a focus on the similarities (brand recognition for example), may let the firm lose sight of the differences.” While locations, distribution and competition absolutely had a lot to do with Target’s failure, ethnocentrism and their failure to acknowledge the actual consumer and that consumer’s culture seems to be the biggest downfall of Target. Their belief in their own success and not recognizing that Canadians, while familiar with Target, still want to shop like Canadians – they failed to realize that “standardization [should] not mean 100% uniformity.”
FAUX PAS This is not to say that cultural faux pas don’t hurt business. But my argument with that is it’s not going to necessarily be the showing of your shoe’s soles in India that will cost you the deal – it’s the showing of your soles in India that will cost you the respect in regards to the Indian consumer. Kenneth V. Oster in his article “List of Ethical Issues in Business,” shares that “one of the most fundamental business ethical issues is trust between a company and its customers.” While the Western educated businessman might understand some of the smaller faux pas in regards to negotiating or gestures – it is the consumers perception of what that faux pas represents that can cause the bigger problems. Oster shares that “to become successful in the international market the best thing to do is appreciate the cultural differences. As much as possible you should exert effort to adapt the ways of a certain county in improving business [always keeping] in mind that what is insignificant in one country is a great deal to another.” In the article “Doing Business Abroad? Simple Faux Pas Can Sink You” by Gary Stoller, he shares the story of Richard Gere grabbing and kissing an Indian woman during a benefit for AIDS in 2007. In a culture “where public displays of affection are generally taboo” this act saw an Indian court issuing a warrant “for his arrest and irate protestors [burning] effigies of the actor.” The Indian actress was fine – she understood, but the backlash from the Indian culture for this ‘disrespect’ was not. Business run in to the same problems:

* Nike, again, had to apologize to China when an “advertisement showing NBA star LeBron James defeating a computer-generated kung Fu fighter, two dragons and a Chinese woman. Chinese consumers and government officials said the ad offended national dignity and culture.” * Toyota had to apologize to Chinese also when “an ad campaign that showed a stone lion saluting a Toyota Prado. Prado translates to "domineering" in Chinese. Stone-carved lions are on the Marco Polo Bridge, southwest of Beijing. Japan launched an invasion of China there in 1937, and the bridge has become a symbol of humiliation.”

Stoller shares that “globalization has made cross-border business deals more common than ever. But, every day, deals are jeopardized or lost when foreign associates are offended by [another culture being] unaware of other countries' customs, culture or manners.” While executives might find the lack of cultural etiquette disrespectful or obnoxious, mistakes will happen. But it is the effect of these mistakes on any company’s ability to actually do business in another culture that could be the deal-breaker on being successful.

CAN WE EVEN HELP IT? Ken Barger’s paper “Ethnocentrism” online shares that “everyone is ethnocentric – it cannot be avoided, nor can it be willed away by a positive or well-meaning attitude.” We simply cannot look at things any other way than how we look at them – even when trying not to, we wear the precursor of ‘I’m not looking at this the normal way.’ “This is all we know... what we have already experienced is the basis for our ‘reality,’ what we expect.” What Target knew was that they were wildly successful with their business model in this country. They knew that the majority of Canadians knew who they were. They knew there was money to be made there. Based on those facts (and seemingly strong business decisions in Canada), why wouldn’t they have been hugely popular and successful? The answer is complicated, but one additional answer is ethnocentrism…something Barger claims we really can’t even avoid. Target failed to look beyond their obvious and saw Canada’s way of doing business “in terms of [Target’s] life and business experience, not [Canada’s] context.” Likewise, Nike’s shoe isn’t any less wonderful because it upset the Chinese consumers; nor McDonald’s French fries less tasty because they used beef fat in India…they just failed to look beyond what they know. And see what they needed. In the end, in a world that is constantly connecting on a faster and faster basis – there will inevitably be more mistakes. The wrong flowers might be delivered to your dinner hosts, or the businessman might make lunch reservations when they would rather discuss business over dinner. That is way international etiquette websites and handbooks will continue to sell strongly. What can’t be forgotten by most is the semblance of disrespect. Disrespect for the people. Disrespect for their culture. Oster’s article shares that “learning the customs and culture of a foreign country "signals respect for the other side, and respect is important in developing a business relationship. The fact that you haven't learned the history and the customs raises questions about the sincerity of how committed you are to doing business in the country." And that ethnocentric viewpoint that you haven’t taken the time to learn is the all-time biggest deal breaker of all.

REFERENCES

Czinkota, Michael R., and Ilkka A. Ronkainen. International Marketing. Fort Worth: Dryden, 1998. Print. Book.

McMahon, Tamsin. "Missing the Mark: Five Reasons Why Target Failed in Canada." The Globe and Mail. N.p., 15 Jan. 2015. Web. 18 Apr. 2015.

Morrison, Terri, and Wayne A. Conaway. Kiss, Bow, or Shake Hands. 2nd ed. Avon: Adams Media, 2006. Print. Book.

Oster, Kenneth V. "List of Ethical Issues in Business." Demand Media. The Houston Chronicle, n.d. Web. 21 Apr. 2015.

Shaw, Hollie. "Target Unveils Canadian Stores." Financial Post. PostMedia Network, 26 May 2011. Web. 18 Apr. 2015.

Stoller, Gary. "Doing Business Abroad? Simple Faux Pas Can Sink You - USATODAY.com. Gannett Broadcasting. 24 Aug. 2007. Web. 21 Apr. 2015.

Wahba, Phil. "Why Target Failed In Canada.” Fortune Magazine, Time, Inc. 15 Jan. 2015. Web. 18 Apr. 2015.