THE DILEMMA BETWEEN INTERNAL AND EXTERNAL CONTROL

The sixth dimension of culture in our model concerns the meaning people assign to their natural environment. Does a culture try to control or dominate nature, or submit to it?

Before the fifteenth century in Europe, nature was seen as an organism. People believed that nature - the environment - determined what human beings needed to do, that nature controlled them, rather than the reverse. With the Renaissance this organic view became mechanistic. Leonardo da Vinci depicted nature as a machine; if you can do that, then you begin to realize that pushing in one place causes a reaction in another. And so the idea that nature could be controlled developed. This is a mechanistic view, that the environment is something out there that we can control.

In cultures in which an organic view of nature dominates individuals appear to direct their actions outwards, toward others. Their focus is on the environment rather than themselves. This is known as external control. Those people who have a mechanistic view of nature have, in addition to the belief that man can dominate the environment, a tendency to take themselves as the point of departure for determining any course of action. This is known as internal control, and Figure 3.3 shows the relative orientation of a number of countries on this dimension.

Figure 3.3: Relative degree of internal-external control for a number of selected countries

The main issue with this dilemma is to connect the internally controlled culture of technology push (selling what we can make) with the externally controlled world of market pull (making what we can sell). Here's an example.

Renault planned to have one of its models "speak" to its customers. The company hired THT to find out how the car was supposed to speak to its driver. Should it say "You need to put gas in the car soon" in a feminine voice or in a masculine voice? Should a matter-of-fact tone or a cautionary one be used? The answer Renault got was unexpected: Drivers didn't want the car to speak to them at all. They didn't want to be "outsmarted" by a car; the driver was supposed to be the intelligent one, the one in control. Rather than having the car tell them when the gas was low, the drivers wanted direct, simple access to the information when they needed it. A digital gauge did not meet this need because drivers found the information hard to read and process quickly. They preferred having a simple, visual representation of how much gas they had left in the tank. This finding was confirmed in research conducted by Volvo. According to them: "The instruments on the interior of a Volvo are designed ergonomically. They appeal to the eye; they also have analog dials, not digital displays. Research has convinced us that drivers feel more comfortable with familiar analog dials than with digital readouts." Both Volvo and Renault have discovered the correct way to communicate fuel status to customers: through a visual gauge.

In earlier publications we have suggested that the most important tension facing marketers is the dilemma between this orientation to the internal or the external world. This antagonism becomes even clearer if your organization offers its products or services in an international context. It is quite obvious this orientation on control, or locus of control, is culturally determined. And obviously the solution lies in the connection of this antagonism.

In research at THT we have asked over 60,000 business people to chose from the following propositions :

1. What happens to me is my own doing.

2. I often feel I cannot take control of the things that happen in my life.

Let's look at the results across nationalities. Respectively 88% of Israelis, 86% of Norwegians, 82% of Americans and, yes, 76% of the French chose answer "a." On the other extreme - the externally controlled, who take the outside world as their point of departure - we find 67% of Venezuelans and 61% of the Chinese saying that answer "b" applied more to them than answer "a." (The relative orientations shown in Figure 3.3 are based on our internal-external dimension scale, which is computed from a whole series of questions similar to the above.)

Undervaluing these cultural orientations is liable to cause problems in selling products in cultures which marketers do not understand. Let's look at one example.

Americans seem to want everything to be under their control: their lives, their children, their partners , their bodies, their bank accounts, even international politics. The French company Danone, itself also "in control," has seen what results from underestimating this orientation. Their very expensive ads launching their French cheese in the US had absolutely no impact on buying behavior. In their campaign Danone emphasized the delicious smell and sensuousness of the cheese by showing female fingers caressing and pinching it. In France this is routine, determining the maturity of the cheese and used to see if there is some "life" in it. Cheese is allowed to mature outside of the refrigerator, often until it is runny. Conversely for most Americans cheese is associated mainly with the cheeseburger and is wrapped in plastic and kept in the refrigerator. Cheese is only edible if it is pasteurized and very "dead." Danone's ad appeared distasteful, and that was terrible for sales. Eventually Danone launched a campaign where the same cheese was recommended as being good straight from the refrigerator, was seen as well-packed, and was checked in detail.

But is marketing not by its very nature simply the anticipation of the customer's needs and wishes? The customer is king,after all. Not at all! To focus exclusively on customers at the cost of your own values is very dysfunctional . Staff in organizations such as Ritz-Carlton Hotels have understood this. Instead of "Sorry, that is impossible ," they will say "I'll see what I can do for you." They have been trained never to say "no," but never to respond with an unconditional "yes" either.

Fons stayed at the Ritz-Carlton in Naples, Florida. His family arrived late at the beach and noticed that all the recliners were occupied. Fons talked to the hotel's beach guard, who said that this was quite normal at that time of the day. "But we've just arrived from the Netherlands where there is little sun," was Fons' immediate response, "and we'd really like to be able to sit outside." The staff member said that no other chairs were available, but asked them just to wait. Five minutes later he returned, together with two colleagues and the luxurious chairs from the hall of the hotel. These were taken to the beach and Fons' family were able to sit in an excellent place close to the sea.

But we cannot draw the conclusion that the employees had been brainwashed by the saying that "the customer always comes first." The obvious conclusion from that point of view is that the staff automatically come second. It concerns the reconciliation of two orientations that are both incorporated in a relationship of high quality. On the one hand, there are the demands of the customer; they pay for service. On the other hand, there is care for the staff; people give a large part of their life to the organization. As an organization you can demand nothing if you fail to look after your people well, and that applies to your customers too. Ritz-Carlton speaks of tough love: "where ladies and gentlemen serve ladies and gentlemen." Quality relationships are both demanding and caring. The more you give for your people and customers, the more demanding you become. If, on the one hand of the dilemma, too much care predominates without reciprocal demands, both customer and employee will go. And if you demand no care the result will be the same. The "customer as king" idea has produced a number of spoilt customers, resulting in a situation where employees do not want to satisfy their demands. In an ideal situation, a customer needs to be looked after well, but in such a way that you can demand some things in return. In this way internal and external orientations are united.

Customer Orientation in China and the US

In a cultural environment where a lot of attention is given to outside forces, companies are very interested in finding out what customers want. Manufacturers do their best to make or develop products that fulfill consumer needs. With the recent economic reforms , Chinese companies have been made responsible for their own profit or loss, and this has made them even more consumer oriented. For example, many Chinese manufacturers now conduct R&D activities in close cooperation with customers. Western manufacturers who wish to sell on the Chinese market will also need to be attentive to the needs of consumers and be willing to adapt their products and services to the Chinese market.

The strong Chinese belief in stories plays a significant role in marketing. In China, the company that is the first to introduce a certain product is usually the most successful. One of the main reasons behind this is that such a company can literally construct the market by creating stories or rumors beneficial to its products. These stories are as readily believed by Chinese consumers as facts, especially when the stories have an academic element to them, and they will be used as benchmarks to compare other products. Companies entering the Chinese market later, even with better products, will find it extremely difficult to counter these stories.

The usual practice in America is deviance -correcting feedback. You have an inner-directed purpose. You start to implement it. You get feedback that you are not quite on target. You take corrective action and persevere in your chosen direction.

The outer-directed Japanese proceed differently. They produce a variety of outputs in the expectation that some will be more acceptable than others; hence all deviate from each other. The customers tell you which deviation they prefer and the result is deviance- amplifying feedback, or what Maruyama called "the Second Cybernetic Revolution" (Maruyama, 1963). It is as if you were sailing for America, but chanced on Bermuda and decided to live there instead. Deviance amplification puts emphasis on luck, serendipity , and happenstance.

French Hard Sell versus Meetings of the Mind

Hard sell - the direct sales approach of convincing potential clients on the spot - is rare in France. You risk insulting the treasured rationality of French people by forcing them to draw "your" conclusion, not their own. It is best to provide information that clearly points to the conclusion you wish to draw without drawing it yourself. A lack of respect for others' intelligence can cost you dear. "Les Americains sont des grands enfants," or Americans are big children, has been a common saying for a few decades. Don't, for example and as a generalization, remind French people of their childhoods; discipline was strict and (by American standards) humiliation was common, so underestimating intelligence and reducing adults to the status of children is far more perilous than overestimating it.

French audiences like indirectness, especially subtle plays on words. Volvo won a French advertising contest with the picture of a small girl strapped safely in a rear seat, and the caption "Always take care of the future. Especially when the future is behind you." The importance of such humor is that it requires the meeting of minds. It shows a more abstract mindset compared to a pragmatic, down-to-earth, Anglo-American approach.

French culture is full of exclusive clubs, secret joys, private pleasures, and recherch_, carefully selected goods. You are never really "in," and if you are accepted in one selected circle, you will be excluded from others. The clash of values between one circle and another is a treasured vein of French humor, as in La Cage aux Folles, an internationally successful movie about gay transvestites who accidentally meet moral crusaders.

The Germanic Focus on Quality

If you want to sell your products in Germany, don't only rely on competing on price. Germans focus on quality even if it means paying more. Many Germans are willing to spend more in exchange for reliability, and there is a general tendency to mistrust the cheaper product.

German companies expect to sell on the basis of quality, as well as on delivery performance and after-sales service. All these aspects imply confidence in the product and the supplier. Moreover, you can control quality and delivery performance of your product, but you can never control your competitors ' prices.

Marketing Irishness

An effective food marketing strategy has been to include already popular products as ingredients in creating a new product. For example, a few years ago a whole range of unusual Irish mustards, including ingredients such as Irish whiskey, Guinness, and Irish honey, successfully entered the market. This marketing approach of linking a new product to the reputation of an already successful one reflects the combination of internal and external locus of control that is characteristic of the Irish. It also reflects the Irish synchronous orientation to time, where the life cycle of products does not just include birth, growth, maturity, and death but is a reproductive cycle. Products A and B can "give birth" to product C.

It has often been noted that what the Irish are best at exporting is themselves. This not only refers to emigration, but to "Irishness" in any form. They have been quick to recognise the potential market for Irish goods among foreigners. There are only approximately 3.9 million people living in the Irish Republic itself (a further 1.7 million live in Northern Ireland), but the number of tourists visiting the Republic each year is far greater. If one includes all Irish emigrants and people who identify themselves as being of Irish origin worldwide, then the Irish number about 90 million. This means that there is an extremely large market for specialist products that are associated with being Irish.

One of the things that most people immediately think of when they think of Ireland is the typical Irish pub. For many years Irish pubs have enjoyed success abroad, and the recently formed Irish Pub Company has introduced "traditional" Irish pubs into many major cities around the world. It seems an ironic twist at a time when many of Dublin's traditional pubs are being replaced by more modern (and now smoke-free) European-style bars.

Kaizen: The Art of Refinement

Japan's major inroads into western markets have come less from products that the culture has originated and more from products that the culture has refined. For example, Ampex, a US Corporation, manufactured the first video recorders , used largely by the TV industry to record programs. It was the Victor Company of Japan and Sony who developed and refined the video recorder for con sumer use, much as Canon produced the "home copier " with the changeable drum after Xerox pioneered the office machines.

Refinement and development should not be underestimated. Billions of dollars of investment were needed to get the price of video recorders down to a few hundred dollars and the tape width from an inch to half an inch. It helps to be outer-directed, because this cultural tendency focuses on what customers want. It makes Japanese products user -friendly and perfectly customized. It is in the continuous improvement of products that Japanese companies excel.

Trendy and Unconventional

Singapore's external orientation leads to the national pastime of "shopping, shopping, shopping." Orchard Road is still a shopper's paradise . Singaporeans always want to be up on the newest trend and it does not matter what that latest trend is. It may be the hottest Japanese designer of the moment, rollerblading, surfing the Web and downloading music, but Singaporeans are up on it.

Singaporean youth culture especially values things that are unconventional. Many companies make use of that fact in their marketing campaigns ; they know that if they can present their product as unconventional, it will sell.

The Modest Approach

A modest approach can be more effective than boasting about the achievements of a product. Volkswagen had a full-page advertisement in Singaporean newspapers in which they mentioned a test done by an auto magazine. In very small print, the ad said that tests had been done comparing the Volkswagen Passat with the BMW 3-series and the Mercedes C-class: "Result - clear victory for the Passat." In much bigger letters above the advertisement it said "Far be it for us to blow our trumpet ."

Korea: Buying the Latest Thing

Koreans like to have the latest thing and tend to buy the newest design or model available on the market. When it comes to trends, they are willing to accept western influence. "Made in the US" or "Made in Italy" can give a product a competitive advantage. American fast food companies such as McDonald's, Kentucky Fried Chicken, and Pizza Hut do very well in Korea. The most successful foreign companies are the ones that manage to combine the image of a foreign brand with some degree of adaptation to local circumstances and preferences.

From Copying to Innovation and Improvement

When the Taiwanese department store Chung Yo started a joint venture with the Japanese Matsuya in 1990, one of Chung Yo's primary goals was to adopt the customer service concept from Japan so as to be a level above the Taiwanese competition. The Japanese did not believe they would be able to do that. However, within a few years Chung Yo was able to show that they had copied and improved the concept of "leaving a deep impression in the heart of the customer."

The Taiwanese shoe industry is a good example of the sequence from copying to learning to innovating that Taiwan has gone through over the past few decades. Taiwan started as a manufacturer of cheap shoes. There are some 5,000, mainly small, companies producing shoes in Taiwan. Nowadays most of the cheap "Made in Taiwan" shoes are actually made in mainland China, where wages are typically only 10 percent of the wages in Taiwan. The fashionable and more expensive (sport) shoes are still made in Taiwan. As in other industries, this manufacturing is mainly OEM (original equipment manufacturing) for international brands like Nike, Reebok, and Clarks. OEM is characterized by low margins and low risk; the marketing and stock-holding risks are taken by the customer.

The Taiwanese industry entered a third stage at the end of the 1990s; they moved to ODM (original design manufacturing) and OBM (original brand manufacturing). The Taiwanese Footwear Manufacturers' Association coordinates the collection of knowledge from Italian and British shoe manufacturers and designers. Taiwan has an R&D institute for shoe design and manufacturing and sends students abroad to learn the newest technology.

The Taiwanese government actively stimulates innovation through the Taiwan Innovalue Program, which advertises in international publications to show the added value Taiwanese manufacturers give to their products through innovations. The program tries to convey the message that Taiwanese entrepreneurs are strong in "creative imitation ." In fact they sometimes understand what an innovation represents better than those who created it, and they are able to use innovations in a creative way for a commercial purpose.

To invent something, to be its author and originator, is associated with high status in an internally-referenced culture like the US; to refine and develop something that was invented elsewhere is less prestigious. Hence, many products that were invented by Americans have been refined and sold by the Japanese, who are more external in their orientation. For the Japanese, the process of refinement has very high cultural prestige and is considered an art in itself. By reconciling the internal and the external approaches, you can get the best of both worlds - a new technology that has been perfected and modified to offer maximum customer satisfaction.

UK Loyalty Cards

A relatively recent development in the UK is the issuing of loyalty cards to customers in order to encourage them to shop regularly in a particular store. These were initiated by an oil company offering "points" which could be collected when buying gas and then spent in Argos, an unrelated store; previously points and coupons from gas stations could only be exchanged for a limited range of goods like glasses , soup bowls, and model cars. Giving points for Argos was, for many people, just like giving them money. The element of choice appealed to their internal locus of control. Also, for those people driving company cars and doing high mileage, whose gas was paid for by their employer, this was effectively an added bonus. The garages and gas stations in these schemes were able to demonstrate a significant increase in customer loyalty. Loyalty card schemes are now offered by many retailers.

Recently, however, there has been some over-saturation of these cards which has resulted in "choice fatigue." As with any oligopolistic marketplace , an initiative like this works in the short term to provide differentiation, but only until competitors copy the idea - to the point where it then becomes an irritant for the consumer. There are also signs of a more "political" reaction to them, particularly among younger consumers who often see them as a form of privacy invasion.