Page 54 - Introduction to Business

28 PART 1 The Nature of Contemporary Business

explains much of our behavior, and creates awareness for learning. Cultural differ-
ences exist not only between countries but also within them. While it is true that
cultural differences between nations are wide and varied, we should not ignore the
fact that even people within a country like the United States vary in their beliefs and
behavior and they must be treated equitably. As a nation of immigrants, the United
States has always accepted people from abroad who meet specific requirements
(immediate relatives, refugees, and employment-based immigrants) to settle in the
country and to spur economic growth and enrich the national landscape. Approxi-
mately 7.5 million immigrants entered the United States legally during the 1980s
and 1990s from all continents of the world. Approximately 42 percent of these
immigrants came from Mexico, Central America, and the Caribbean. Another 32
percent came from Asia, 14 percent from Europe, 6 percent from South America,
and 4 percent from Africa. The United States is truly a multicultural society, an
amalgamation of peoples of different ethnic background, religion, and social class
all living in one economic environment.
The challenges and opportunities for businesses get more complex when they
take into consideration cultural diversity in a global business environment. For
example, in a conservative country like Saudi Arabia, McDonald’s restaurants have
separate service lines for “ladies” and “gentlemen” and provide customized menus
(serving McArabia Sandwiches, for example) to reflect local tastes.
The primary role of business is to serve the customer. Unless a business is able
to identify the cultural background of the consumer, the firm may not be in a posi-
tion to identify consumer requirements and satisfy that particular need. Depend-
ing on their cultural background, customers will like to acquire different types of
food, shelter, clothing, and entertainment. With increased globalization, consumer
tastes and behavior will change across cultures more rapidly as foreign cultural
norms permeate open societies. However, while some cultures may be willing to
readily accept and adapt to foreign cultures, others may resist them to maintain
their national identity. This is particularly true in the way people dress, eat, and
entertain. McDonald’s, for example, has tried to adapt its menus to meet the needs
of different cultures while maintaining its relatively unique fast-food service qual-
ity. Since questions were raised about the nutritional value of its food (in terms of
portion size and fat and carbohydrate content), the company has taken major pos-
itive steps like revamping its menu to make it healthier. To suit American taste,
DaimlerChrysler manufactures in Alabama the Mercedes M-class SUVs, which it
does not produce or sell (or rarely sells) in Europe. Cross-cultural understanding
and competency is crucial not only for successful global management and market-
ing but also for human relationships. Lack of cultural sensitivity can lead to declin-
ing profits and stock prices, new-product disasters, and litigation.
Instituting cultural diversity in the workplace can lead to innovation, new-
product development, and increased corporate profits. At one time, hiring employ-
ees of different backgrounds was considered good corporate citizenship. However,
the globalization of business is now making it imperative for firms to have a diverse
workforce at all levels to achieve corporate success. Employees of different back-
grounds help bring new perspectives on products, services, and markets that oth-
erwise might have gone untapped. Along with diversity come sensitivity to cultural
differences and an understanding of what motivates consumers to choose one
product over another. Firms can no longer use a “one-size-fits-all” approach in
business if they are to be financially viable. Coca-Cola, for example, under the
direction of its former CEO Douglas Daft, had stressed the importance of promot-
ing some of the major local brands it had acquired overseas rather than abandon-
ing them and imposing Coca-Cola products. In India, with a population of a billion,

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