Introduction

Many business historians often start from the perspective of a world without organizations and even question why they should exist. They consider the exchanges between the individual buyer and seller and how these can be achieved at the lowest cost. Coase argued, as far back as 1937, that creating an organization only made sense if the transaction costs resulting from purchases in the market were greater than the costs of setting up and running the organization (Griffiths and Wall, 2004),

However, technology and globalization have shifted the balance towards the market and away from hierarchical organizations. Individuals could obtain all they needed (needed, not wanted, as discussed later) through the marketplace by initiating the transaction themselves . Markets are the means whereby buyers and sellers can be brought together and thus work best to the benefit of all except when they become inefficient. On the other extreme, the communist centralized planning model placed all transactions within the organization.

In western thinking, a free market has the following features (Colebatch and Lamour, 1993):

• There are a large number of buyers and sellers-so the buyer has a choice of suppliers.

• The buyers know what they want.

• They are able to pay for it.

• They act independently of each other.

• The sellers are each free to enter or leave the market.

• Information about products, services, and processes is free and accessible.

• There are no overhead costs in the actual transaction-simply the price.

The market model is based on the assumption that social activity derives from the private dealings between individuals or groups.

Hierarchies work best when the transactions between the parties:

• are certain,

• occur frequently,

• require specific investments in time, money, equipment, and technology, and

• are not easily transferred to the open market.

These fundamental models that lie at the extreme ends of a bipolar spectrum have been debated and explored at length by western economists. However, as we shall demonstrate throughout this book, when we begin to include other cultures as either buyers and sellers, or both, not only do these basic models fail the marketer because of cultural differences, but an entirely different logic is also required, one that transcends this bipolar western thinking.

In western thinking, marketing has become an all-embracing business discipline. The Chartered Institute of Marketing in the UK defines marketing as: "The management process that identifies, anticipates, and supplies customer requirements efficiently and profitably." This implies both an external orientation-looking outward and studying the nature of existing and potential markets-and an internal orientation, to ensure an organization manages its resources effectively in order to meet those needs. Strategic marketing is the process of ensuring a good fit between these extremes.

Marketing as a discipline had (and still has) less significance when goods are scarce and demand exceeds supply. In such an environment, an organization can sell all it can make, so why bother to spend time and effort in trying to understand customer needs? In addition there may be little motive for being efficient if an organization has a monopoly. The East German Trabant car pleased very few of its purchasers , yet some manufacturing plants had waiting lists of up to 20 years . This was in sharp contrast to the West German market, where increasing competition resulted in excess supply. Western manufacturers then had to modify their products to reflect consumers' changing desires. A lower sales price, higher product quality, and other benefits could only be achieved by efficient production. With the reunification of Germany, the Trabant came to an abrupt end, as western manufacturers seized the opportunity presented by an extended and, in effect, new marketplace.

Production orientation sometimes returns to an otherwise competitive market-such as during periods of bad weather, strikes, acts of terrorism-or simply changes in consumer tastes or demand, like ice cream on a hot day at a beach cafe. However, the situation which organizations faced more frequently was one of increasing competition and thus many had to "shout louder" in order to entice customers to buy what they had produced (Palmer and Worthington, 1992). Little or no thinking was applied to identifying the benefits to the customer of the products that were being offered on sale; there were no attempts to identify customer needs in order to define what should be produced. Sales techniques such as promotions and personal selling were developed to emphasize what was on offer. Heavy advertising and promotion of package holidays during the 1970s and 80s was based on this mentality . This shift towards sales orientation still did little to focus on satisfying customer needs.

Marketing orientation developed as competitive markets shifted in the buyers' favor. If a product had benefits that a customer wanted, then the customer would buy. As Peter Drucker stated in The Practice of Management , published in 1973:

The aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him [ sic ] and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed is to make the product or service available.

This marketing orientation first achieved prominence in industries manufacturing products that were largely undifferentiated; it was their route to survival. Much of the theory was developed from Anglo-Saxon and US-led research, and is heavily biased towards these cultures. Even services in the public sector became increasingly attracted to this approach. Hospitals, schools , and government departments all began talking in terms of business objectives. Hospital patients became " clients " and rail passengers became "customers." However this was often driven more by governments allocating resources to service providers that were popular, rather than cost efficiently creating a "have and have not" society.

Thus we have arrived at an era in which marketing has become a business ideology, with the customer as the locus. However, with the internationalization of business, marketing professionals and strategists have become increasingly aware of the need to include culture as a fundamental component in their thinking. To their anguish, established theories break down and are insufficient when organizations are faced with new global markets with different cultural orientations.

The first serious book on the subject of the cultural aspects of marketing was written by Jean-Claude Usunier in 1997. It was published more than 20 years after warnings by two other Frenchmen, Andr Laurent and Michel Crozier, about the limitations of Anglo-Saxon approaches to management and organization theories.

Usunier's book, however, only scratches the surface. His main stance was to compare the differences between cultural systems in which marketing activities unfold. This is very similar to what we will later describe and explain as the multi-local approach: that is, to offer different products or services adapted to each destination culture. Usunier does not resolve the dilemmas that a truly transnational approach requires. Like many other writers, he also refers to culture as a factor affecting business, like other socio-political, financial, ecological, and legal factors.

Culture, based on our research at Trompenaars Hampden-Turner, is not like this; it is not simply a factor like most processes in the transactional environment.

To provide a reliable, generalizable framework that can help the modern marketer, culture must be considered as the context within which all transactions with stakeholders take place. For the transnational organization it changes the entire landscape because it is not just another factor to put into the equation. It is the dominant factor, one that pervades all relationships and behaviors and, importantly, "meaning." Culture challenges the fundamental strategy of marketing, customer relations, definition of product, price, and advertisement. In short, culture is all pervading.

It is not unexpected that marketing, as a discipline, has lagged behind other business disciplines in recognizing the need for it to be rewritten to account for culture. This is partly explained when we remember that it is one of the organizational disciplines that is heavily influenced by (abstract) economic theories. And economists seek general laws that apply universally across (national) boundaries. They prefer to focus their research on similarities rather than on differences.

For example, in On the Principles of Political Economy and Taxation (1817) Ricardo described how countries can take advantage of international trade by concentrating on the relative advantage they have with certain products. A frequently quoted example concerns sheets and wine, in England and Portugal respectively. Here the international trade opportunities were better than in their respective home markets. The English wanted Portuguese wine and the Portuguese wanted the output from English cotton mills.

This approach is too simplistic as it implies, firstly, that tastes, preferences, and habits are transferable between countries; secondly, it also implies that there is (real) free trade between nations. As far as these examples go, we obviously know better today. Even now, when wine has become a global product, it still takes the French at least ten times longer to chose the right vintage and grape combination than it does the Dutch, who tend to be more focused on price. Although free trade is talked about a lot by both the European Union and President Bush, the actions of politicians actually reveal the contrary. The clash of cultural identities is perhaps one of the most dominant issues that results in political leaders losing any kind of integrity or respect in the international context, while remaining surprisingly popular (among their supporters) at home.

Unfortunately, even in the more recent and culturally sensitive marketing frameworks published, such as that of Porter (1995), culture is still regarded simply as an add-on. Porter says that competitive advantage is not often generated when national competition is highest and assumes that the factors which determine national predispositions-like miniaturization for the Japanese, consistency for the Americans, style for the French, and taste for the Italians-are also successful internationally. Obviously the international success of Toyota, McDonald's, Chanel, and the pizza might support this, but there are many examples where successful national competition fails to guarantee international success. This is mainly because of the different tastes and preferences of customers in different destination cultures.

WHY DILEMMAS, AND DILEMMAS OF MARKETING? A NEW MODEL OF MARKETING COMPETENCE

Richard Boyatzis' seminal book The Competent Manager (1982) generated a paradigm shift in the quest to identify the characteristics distinguishing superior from average managerial performance, in attempts to identify and construct the "competent" manager. But there is still no agreed definition of the word "competence." Some, such as Boyatzis, define this as "an underlying characteristic of a person." Others, such as Woodruffe (1993) for example, define competency as "a set of behavior patterns that the incumbent needs to bring to a position in order to perform its tasks and functions with competence." And yet others use the terms skill and competence interchangeably.

For example we could consider hotel staff who need to be trained in how to deal with guests as customers. We might then say that a member of staff had the competence to deal with guests and provide customer satisfaction. Or we could consider that even after such training, competence to provide customer satisfaction is how staff actually perform, not simply what they know. They have to perform effectively on a continuous basis, as a result of which they can satisfy the customer even when facing new situations not encountered during their training. Competency, in this respect, is what people actually do, not simply what they know.

And this brings us directly to marketing. What are the competencies needed in order to be effective in marketing in today's ever-globalizing world?

Evidence from our research at THT enables us to build a new conceptual framework relevant to the future of marketing. It is based on these assumptions:

1. Knowledge and understanding is stored within corporate cultures, especially in the relationships between people and the relationship between the organization and its market.

2. Marketing strategy consists not of one infallible master plan, or "grand strategy," but in hundreds of trials and tentative initiatives.

3. Learning occurs when we eliminate the less successful trials and intensify and explore the more successful ones by continuously monitoring feedback from activities. Successful insurance is an unending inquiry into what helps customers and rewards the organization.

4. Management of change is based on adding value rather than throwing away the value of the old situation.

Our approach to understanding a corporation is to investigate its dilemmas. As we have previously noted, the word dilemma is from the Greek, meaning "two propositions ." In our findings all cultures and corporations have developed habitual ways of resolving dilemmas, of being-for example-both well centralized and highly decentralized at the same time. The success of a company will depend, among other things, on both the autonomy of its parts and on how well the information arising from this autonomy has been centralized and coordinated. If you fail to exploit fully centralized information, your scattered operations might as well be totally independent. If various business units are not free to act on local information, then your HQ is subtracting, not adding, value. Any network only justifies itself by fine-tuning the values of decentralized action and centralized intelligence, which is then fed back to the various units.

In this book we will focus on how, by recognizing and respecting cultural differences, marketing professionals have to face a variety of dilemmas in order to be effective.

There are two worlds , each as real as the other. There is the world of facts, of atoms , in which we give statistical expression to hard data. These consist of exclusive categoriziations, either/or, this or that, yielding thousands of annotated objects. Then there is another world, reflective of our languages, a world of information or difference, with no necessary connection to physical objects. These are differences of value, aim, feeling, opinion, perception; a world of contrasts that are binary. Marketing is of this latter world. As we increasingly drown in more and more of our own data, we urgently need an alternative logic in order to generate meaning and knowledge.

This kind of information typically has two ends, equally vital to development and survival. Errors need corrections if continuous improvement is to occur. Results need to be framed by questions if knowledge is to accumulate. Differences need to be integrated. Competing needs to have its results shared cooperatively if learning is to come about. Rules need exceptions for increasingly enlightened legislation. Local, decentralized activities need to be thought about globally and centrally if strategies are to improve.

We improve and prosper not by choosing one end over the other, but by reconciling the values at both ends and achieving one value through its opposite . Two desirable aims are in creative tension-and hence dilemmas, pairs of propositions, must be reconciled.

The opposites that marketers must deal with, like growth and decay, put tension into their world, sharpen their sensitivities, and increase their self-awareness . The problem cannot be " solved ," in the sense of eliminated, but it can be transcended. Small and family businesses need stability and change, tradition and innovation, public and private interest, planning and laissez-faire, order and freedom, growth and decay. Successful marketers get surges of energy from the fusing of these opposites.

Dilemma reconciliation could easily be described as good judgment, intuition, creative flair, vision, and leadership. Yet all these capacities have proved elusive when people try to explain them and they tend to vanish as unexpectedly as they first appeared.

Thinking in Dilemmas

A dilemma can be defined as "two propositions in apparent conflict." A dilemma describes a situation whereby one has to choose between two good or desirable options, for example: "On the one hand we need flexibility while on the other hand we also need consistency." So a dilemma describes the tension that is created due to conflicting demands. In dealing with such apparently conflicting propositions, there are several options.

Ignoring the Others

One type of response is to ignore the other orientation. Stick to your own standpoint. Your style of decision making is to impose your way of doing things either because it is your belief that your own way of doing things and your values are best, or because you have rejected other ways of thinking or doing things because you have either not recognized them or have no respect for them.

Abandon Your Standpoint

Another response is to abandon your orientation and "go native." Here you adopt a "when in Rome, do as the Romans do" approach. Acting or keeping up such pretences doesn't go unnoticed. Others may mistrust you and you won't contribute your own strengths to the situation you are in; it's like trying to impress on your first date.

Compromise

Sometimes do it your way. Sometimes give in to others. But this is a win-lose solution or even a lose-lose solution. Compromise cannot lead to a solution in which both parties are satisfied; something has to give.

Reconcile

What is needed is an approach where the two opposing views can come to fuse or blend, where the strength of one extreme is extended by considering and accommodating the other. This is reconciliation.

At their simplest, values are seen as opposites, and we tend to see only the differences.

However, one value cannot exist without the other. Errors need corrections for continuous improvement.

Competing proves beneficial only when the results can be cooperatively harvested. Rules need exceptions for increasingly enlightened legislation. Local, decentralized activities need to be thought about globally and centrally.

We can now break the initial line into two axes and create a value continuum. "Value added" is probably too narrow a term , because only seldom do values stack up like children's wooden building blocks placed on top of each other. Values come in all shapes and sizes and must be reconciled or integrated into larger meanings.

Bridging these opposites in a creative way could be called an upward spiral. You could also describe it as innovative learning, or creating value. Marketers succeed and prosper not by choosing one end over the other, but by reconciling both and achieving one value through its opposite. Two desirable aims are in creative tension; hence dilemmas must be reconciled into new integrities.

Clustering Dilemmas of Marketing

To show how this reconciliation can be achieved, we first need a way of clustering dilemmas so that we can offer a robust, generalizable framework in order to reconcile each type of dilemma. First, therefore, we have to describe our model of cross culture, which itself differentiates between norms and values of different cultures.

Culture, like an onion, comes in layers . The outer layer covers everything you can see and hear. Take any airport far away from home. When travelling from the airport into town you'll probably see the same things everywhere: factories, office buildings , traffic, food outlets, housing, and people. You only need to look a bit closer to see the differences. All the things that are visible and audible belong to the "outer layer of culture." This layer is thin. It can be peeled off easily, revealing a deeper layer. You simply notice that people in other cultures behave differently. The reasons why they do so are in the second layer: the domain of "norms and values," "good or bad," "right or wrong." You will never be able to see a norm, nor shake hands with a value. You can only observe their power on the surface level in the behavior of people. You may feel uncertain interpreting certain behaviors; what's good or normal in your culture may be wrong or strange in another. Is it bad when people shout? How should you interpret the feelings of customers who show no emotion? What impact would it have if you were to be late for an appointment with a client?

To understand marketing across cultures, we need to look for an explanation for all these differences in the core , the innermost layer. Every culture has its own history, often a long one. There have been disasters and plagues, shortages of food and labor. There have been influences from other cultures, war, migration. And then there's nature, sometimes wild and dangerous, sometimes willing and generous. And don't forget "other people": old people, young people, friends , and enemies. Throughout the centuries mankind has faced similar basic problems concerning other people, time, and nature. Each society has solved these problems in its own unique way and each solution is called a "basic assumption." Culture is the result of all the basic assumptions a society has developed over the centuries in order for it to survive. Only if you are familiar with these basic assumptions can you really understand a specific culture.

Basic assumptions are all in the heart, passed down from generation to generation. They're in your head as well and they got there unnoticed. Basic assumptions are very important for understanding cultural differences. They can be measured by dimensions, and at THT we distinguish seven basic cultural dimensions. Each one is like a continuum, covering all possible combinations between two contrasting basic values. Someone from a different culture will have a cultural profile that is different to yours. But remember that differences are just differences; in music an F-sharp is no better or worse than a B-flat-they are just different. Exactly the same can be said about cultures.

When we set down a product or marketing plan from one culture in another, the underlying assumptions of the culture in which it is placed will give it new meaning. This meaning is often puzzling and disturbing to the culture that invented it. The meaning of explicit " artefacts of culture" is completely dependent upon the underlying assumptions of implicit culture.

The seven dimensions model is described in Chapters 2 and 3 and is intended to provide a framework for exploring commonly shared problem areas in a structured way. Tensions arising from these cultural differences generate the dilemmas that marketers have to face.

They arise from the meaning of relationships between people, time orientation, and nature.

When marketers know the personal cultural profile of both their target customers and themselves, and can respect the differences, they are well on the way to developing cross-cultural competence and being much more effective.

So future marketers who are plying their function across cultures need to develop and then demonstrate an "adequateness" ( adaequatio ) for dilemmas-"that is, the understanding of the knower must be adequate to the thing being known" ( adaequatio rei et intellectus: Plotinus, AD 270). To clarify, some people are incapable of appreciating a piece of music, not because they are deaf, but because of lack of adaequatio ; the sense of hearing perceives nothing more than a succession of notes, whereas the music is grasped by intellectual powers. Some people possess these powers to such a degree that they can grasp an entire symphony simply on the strength of reading the score, while to others it is just a noise. The former is adequate to the music but the latter is inadequate.

For all of us, only those patterns and dynamics in organizations exist for which we have sufficient "adequateness." Effective marketing managers need to possess adequateness for reconciling dilemmas. For example, they won't try to win an argument with a customer; real leadership isn't about winning arguments.

What marketing has to achieve is the creation of wealth through the relationships between people and what they value. A product or service is a distillation of reconciled values offered to customers through relationships. (On a larger level in our dangerous world of polarizing differences, where hatreds have grown murderous, we must bridge new chasms if these are not to engulf us.) Effective behaviors that result in the reconciliation of contrasting values, we call transcultural competence, although this can include differences that are not necessarily rooted in the cultures of nation states. Through the integration of values into ever larger systems of satisfaction we can develop our new theory of marketing.