MT 5
Open the file (MT5) for instructions, you will need the book to answer it. Answer it in the same file
Mgt 360 Managing Cultural Differences and Diversity in a Global Economy
Micro-theme #5 (up to 20 points)
Dr. Pisani Fall 2020
Student Name: ___________________________ Date: September 17, 2020
Please answer the following question (and sub-questions, if pertinent) in the space provided below as it pertains to the reading Blunders in International Business.
Answer
ALL
of the following questions.
1. Generally, how do product and product/company names play a role in the blunders offered by Ricks? Specifically address a single example of a product blunder from Ricks.
2. How do: a) package; b) taste; and c) color play a role in the blunders offered by Ricks? Using specific examples, discuss the ramifications of these errors. Specifically address a single example of a package, taste, or color blunder from Ricks.
3. Translation is a critical component of international business. Discuss the challenges and pitfalls of translation miscues (e.g., carelessness, multiple meanings, idioms) according to Ricks and strategies to mitigate translation problems. Explain using one specific example from Ricks. Blunders in International Business
BIIA01 3/11/05, 9:52 AM1
This book is dedicated to those whose blunders
made the book possible
BIIA01 3/11/05, 9:52 AM2
Blunders in
International Business
Fourth Edition
David A. Ricks
University of Missouri, St Louis
BIIA01 3/11/05, 9:52 AM3
1974, 1993, 1999, 2006 by David A. Ricks
BLACKWELL PUBLISHING
350 Main Street, Malden, MA 02148-5020, USA
9600 Garsington Road, Oxford OX4 2DQ, UK
550 Swanston Street, Carlton, Victoria 3053, Australia
The right of David A. Ricks to be identified as the Author
of this Work has been asserted in accordance with the
UK Copyright, Designs, and Patents Act 1988.
All rights reserved. No part of this publication may be reproduced, stored
in a retrieval system, or transmitted, in any form or by any means,
electronic, mechanical, photocopying, recording or otherwise, except as
permitted by the UK Copyright, Designs, and Patents Act 1988, without
the prior permission of the publisher.
First edition published 1974 as International Business
Blunders by Grid, Inc.
Second edition published 1993 by Blackwell Publishing Ltd
Third edition published 1999
Fourth edition published 2006 by Blackwell Publishing Ltd
1 2006
Library of Congress Cataloging-in-Publication Data
is available for this book.
ISBN-13: 978-1-4051-3492-7 (paperback)
ISBN-10: 1-4051-3492-5 (paperback)
A catalogue record for this title is available from the
British Library.
Set in 11.5/13.5pt Garamond
by Graphicraft Limited, Hong Kong
Printed and bound in the United Kingdom
by TJ International Padstow, Cornwall
The publishers policy is to use permanent paper from mills
that operate a sustainable forestry policy, and which has been
manufactured from pulp processed using acid-free and elementary
chlorine-free practices. Furthermore, the publisher ensures that the text
paper and cover board used have met acceptable environmental
accreditation standards.
For further information on
Blackwell Publishing, visit our website:
www.blackwellpublishing.com
BIIA01 3/11/05, 9:52 AM4
Contents
Preface vii
1 Introduction 2
The Role of Culture 3
The Role of Communication 9
Structure 13
2 Production 17
Location/Layout 17
Product 19
Package 28
Color 32
Summary 33
3 Names 36
Product Names 36
Company Names 46
Summary 47
4 Marketing 49
Promotions 51
Pricing 74
Summary 78
5 Translation 80
Carelessness 80
Multiple Meanings 91
BIIA01 3/11/05, 9:52 AM5
Idioms 96
Summary 99
6 Management 101
Cultural Differences 104
Poor Personnel Choices 108
Labor Relations 111
Summary 113
7 Strategic Management 115
Entry Mode 115
Supply Problems 121
Complex Problems 125
Additional Mistakes 129
Summary 135
8 Other Areas of International Business 137
Legal 137
Finance 144
Market Research 146
Summary 155
9 Lessons Learned 157
Adaptation 157
Nationalism 158
Promotion 159
Translation 160
Market Research 166
Conclusion 167
Notes 170
Index of Companies 173
Index of Places 177
Index of Products 181
vi CONTENTS
BIIA01 3/11/05, 9:52 AM6
Preface
We often hear of business success stories. It seems that
everyone is willing to relate past successes. However,
unless these tales are absolutely incredible, we tend to
forget them and consequently learn little of value.
Mistakes, on the other hand, are seldom admitted, are
easily remembered, and can be used to illustrate valuable
lessons. In fact, I began this collection of international
business blunders when I discovered how effectively
they could be used in the classroom. One day, after
discussing what many of my students thought was a
minor point related to international business, I cited
a few blunders made by firms that had overlooked the
concepts under discussion. The students thoroughly
enjoyed the blundersso much so that not only did
they remember the concepts but they also wanted to
learn more about international business.
As I encountered more reported blunders, I incor-
porated them into my classroom lectures with similar
results and began to realize that I had stumbled on
to a useful and enjoyable teaching tool. At this point,
I decided to search seriously for blunders committed
by multinational corporations. With the assistance of
Professor Jeffrey S. Arpan, University of South Carolina;
Marilyn Y.C. Fu Harpster, a former Ohio State gradu-
ate student; and Professor Donald Patton, Dalhousie
BIIA01 3/11/05, 9:52 AM7
University, I corresponded with those teaching interna-
tional business and scoured the journals and business
periodicals searching for blunders. We published a few
articles, and in 1974 wrote a book called International
Business Blunders, which was published by Grid, Inc.
The book was favorably reviewed in Business Week
and Forbes, and was also well received within the aca-
demic community. As I continued to gather reports of
new or different blunders, the collection grew and gained
the attention of the news media. As the public became
aware of my collection, individuals began sending me
evidence of even more blunders. All of this eventually
led to suggestions that I write about the cases in multina-
tional marketing I had uncovered.
I did so and the book, Big Business Blunders: Mis-
takes in Multinational Marketing, was published in 1983
by Richard D. Irwin, Inc. The book sold well to both the
trade and the academic communities. However, it did
not contain many of the nonmarketing blunders I had
uncovered.
In order to include a wider variety of international
business blunders, I wrote Blunders in International
Business. It was published by Blackwell in 1993.
Since then I have learned of even more blunders that
have occurred in all areas of international business. I now
welcome the opportunity to share my latest updated
collection with you because I truly believe that we can
learn from the mistakes of others. Of course, it is not
the only learning method, but it is an interesting and
enjoyable one and surely preferable to learning through
experience.
Many individuals have aided me in the collection and
presentation of these blunders. My former co-authors
Jeffrey S. Arpan, Marilyn Harpster, Donald Patton, and
Vijay Mahajanwere tremendous in their encouragement
and assistance in previous research efforts. I especially
viii PREFACE
BIIA01 3/11/05, 9:52 AM8
appreciate their understanding and tolerance of my
continuing interest in these blunders. Lesley Williams
was an invaluable editor of two earlier editions. Karen
Gruess-Steinman and Aysin Koparan, former students at
the University of MissouriSt Louis; Linda Norwicz and
Kari Morgenthaler, former students at Thunderbird, The
American Graduate School of International Management;
Peter Bemelman, Katherine Huelster, Martin Meznar, and
Pedro Sanabria, former graduate students in international
business at the University of South Carolina; and former
Ohio State University student Jeff Sugheir have aided
by serving as research assistants. Several other people
have been of assistance by sending me information about
business blunders. To all these people, I wish to express
my sincere appreciation.
David A. Ricks
PREFACE ix
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BIIA01 3/11/05, 9:52 AM10
INTRODUCTION 1
CHAPTER 1
Introduction
The Role of Culture
The Role of Communication
Structure
BIIC01 3/11/05, 9:59 AM1
2 INTRODUCTION
CHAPTER 1
Introduction
Learn from the mistakes of others. You cant live long enough to
make them all yourself.
Anonymous
The only constant in international business is change.
Accompanying change is the possibility of unexpected
events. Fortunately, some of these surprising occurrences
prove to be advantageous to the multinational com-
panies involved. For example, a U.S. firm selling feminine
sanitary napkins in South America suddenly experienced
a major surge in sales. The company was delighted,
although a bit startled, when it discovered that the sales
boost was prompted by local farmers buying the napkins
to use as dust masks! No less surprised was a U.S. com-
pany which sold toothbrushes in South Vietnam during
the late 1960s. It too experienced an unexpected increase
in sales. Years later the company learned whythe
Vietcong had purchased the toothbrushes to use for
weapon cleaning.
Other firms have also encountered unexpected prod-
uct marketability as a result of unplanned and often
unimagined uses for their products. These surprises, al-
though sometimes controversial, are normally welcomed
by the lucky companies. For example, an unimagined
use of a product occurred during the Persian Gulf War
when news spread that the U.S. troops were using
condoms to protect rifle barrels from sand. As a result
the condom companys stock skyrocketed. However,
BIIC01 3/11/05, 9:59 AM2
INTRODUCTION 3
not all firms experience such good fortune. In fact, many
surprises in international business are quite undesirable.
Sometimes companies are caught off guard by an
unavoidable turn of events. Other times, though, they
are unhappily surprised by outcomes that they could
have avoided. A company is said to have blundered if
it makes a decision resulting in a costly or embarrassing
situation that was foreseeable and avoidable.
The foreign environment has been especially difficult
for some to analyze. Many mistakes, for example, have
been made because managers have failed to remember
that consumers differ from country to country. Buyers,
influenced by local economic constraints and by local
values, attitudes, and tastes, differ in what they buy,
why they buy, how they buy, when they buy, and where
they buy. Managers who have failed to recognize these
differences have committed a number of blunders.
The Role of Culture
Cultural differences are the most significant and trouble-
some variables encountered by the multinational com-
pany. The failure of managers to comprehend fully these
disparities has led to most international business blun-
ders. A European businessman, for example, while on
an important negotiating trip to China, playfully flipped
a piece of ice from his drink towards his companion.
Unluckily for him, the ice accidentally landed on a nearby
official and the businessman was soon sent packing.
Another unlucky individual found himself home sooner
than expected after he flippantly patted a waitress. The
Chinese simply do not accept such foolishnessas many
a playful visitor can attest.
Without fully understanding the local culture, trying
to do as the Romans do can be a dangerous thing.
BIIC01 3/11/05, 9:59 AM3
4 INTRODUCTION
A former president of American Express, Japan, for
example, learned this the hard way. On New Years Day
1985, he was featured in a full-page ad in a photo
of himself wearing a Japanese kimono. Apparently, no
foreigner had done this before and it was suspected by
many Japanese that it was intended as a joke to make
fun of the local culture. Some even complained that it
was an intentional attempt to humiliate the Japanese.
In 1983 Columbia Pictures produced a four-hour
movie set in Egypt that resulted in the banning of all
Columbia films in Egypt. The Egyptian authorities were
offended by the numerous inaccuracies that included
accent (Pakistani), clothing (Moroccan), and behavior
(American). Nasser, for example, was portrayed publicly
kissing his wifean unacceptable act in Egypt and in
many other countries.
Cultural differences often show up during ceremonies,
such as in the case of a Toronto Blue Jays baseball
game. The U.S. Marine color guard made the mistake
of displaying the Canadian flag turned upside down,
with the top of the red maple leaf pointed downward.
As the scene was displayed on Canadian television,
the Canadian switchboards lit up and Toronto news-
papers were filled with viewer reactions to the obvi-
ous error.
During the groundbreaking ceremonies for Hitachi
Ltds subsidiary, Hitachi Automotive Products (USA),
Inc., the Governor of Kentucky presented the Japanese
executives with a flag of the Commonwealth of Kentucky.
After opening the flag for all to see, the Japanese care-
lessly dragged it along the ground. In Japan (and in
many other countries), flags are not treated with the
same respect as they are in America. The Japanese really
meant no disrespect; they simply were unaware of U.S.
customs about flags. However, many in the audience,
especially the older Americans, were offended.
BIIC01 3/11/05, 9:59 AM4
INTRODUCTION 5
We all know that some things are done differently
by the people of other countries, but sometimes these
differences are hard to embrace. Consider, for instance,
what happened when a man from Tonga answered
a neighbors ad in the Salt Lake City newspaper.
The neighbor wanted to sell his sons pony. When the
neighbor asked the Tongan why he wanted to purchase
the pony, the Tongan replied that he wanted it for his
own sons birthday. The seller was satisfied with the
reply so the deal was closed. Then before the sellers
eyes, the Tongan casually turned, picked up a board,
and clubbed the pony to death. The dead pony was
tossed into the Tongans truck and hauled home. When
the police arrived, they found a huge birthday party in
progress with many Tongans happily cooking the pony
for a typical Tongan birthday dinner.
All nationalities possess unique characteristics that
must be understood. For example, Arabs typically dislike
deadlines. An Arab faced with a deadline tends to feel
threatened and backed into a corner. Many Americans,
on the other hand, try to expedite matters by setting
deadlines. Hundreds of U.S.-owned radio sets are sitting
untouched in Middle Eastern repair shops because some
Americans made the cultural mistake of requesting that
the work be completed by a certain time.
U.S. business managers have encountered similar prob-
lems trying to understand time values in other cultures.
One U.S. company lost a major contract opportunity
in Greece because its managers tried to impose U.S.
customs on the Greek negotiators. Besides being too
forthright and outspoken in the eyes of the Greeks, the
Americans tried to set time limits for the meetings. The
Greeks, however, considered time limits insulting and
thus felt that the Americans showed a lack of finesse.
The Americans also wanted the Greeks to first agree
to principles and then allow their subordinates to work
BIIC01 3/11/05, 9:59 AM5
6 INTRODUCTION
out all necessary details. The Greeks viewed this as a
deceptive strategy; they preferred to directly handle all
arrangements regardless of the time involved.1
Protocol with regard to location is often the source of
international blunders between cultures. A Chicago com-
pany was bidding on a public works project in Thailand
and was waiting for the Thai contingent to arrive at their
Chicago offices for the meeting. After hours of waiting,
the Chicago company found out that the Thai group
was still waiting to be picked up at the airport. They
rescheduled a meeting for the next day, only to find out
that the same communication problem existed. The Thai
group waited for the Chicago company to pick them up
at the hotel, while the Chicago company expected the
Thai group to meet them at the Chicago office.
In France, McDonalds overlooked a cultural difference
that led to years of litigation. In selecting a French partner,
McDonalds examined a number of characteristics that
would ensure sales. McDonalds is very good at this and,
as usual, was successful. However, it did not examine
carefully enough its partners attitudes about cleanliness.
Because French firms sometimes place less emphasis
on cleanliness than U.S. firms do, local references of
the French partner did not expose this as a troublesome
issue. As business in France grew, however, McDonalds
soon observed hygiene habits it considered unaccept-
able in its U.S. outlets. These habits, though, were not
viewed as negatively by the French partner or by most
of the French customers, for that matter. The real prob-
lem? Many of the outlets customers were U.S. tourists
expecting U.S. standards. The French outlets, there-
fore, negatively impacted McDonalds global image and
threatened its clean reputation at home.
A local supermarket hoping to impress Japanese
visitors served sushi and tea to its guests. Unfortunately,
it not only served the fish cooked when the fish should
BIIC01 3/11/05, 9:59 AM6
INTRODUCTION 7
have been served raw, but the supermarket also served
Chinese tea.
The failure to understand cultural differences can bear
serious consequences. Consider an unfortunate U.S.
manager who worked in the South Pacific. He hired
local people without considering the islands traditional
status system. By hiring too many of one group, he
threatened to alter the balance of power of the people.
The islanders discussed this unacceptable situation and
independently developed an alternative plan. It had taken
them until 3 a.m. to do so, however. But since time
was not important in their culture, they saw no reason
to wait until morning to present their suggestions to the
American. They casually went to his place of residence,
but their arrival at such a late hour caused him to panic.
Since he could not understand their language and could
not imagine that they would want to discuss business
at 3 a.m., he assumed that they were coming to riot
and called in the Marines! It was some time before the
company was able to get back to business as usual.
Knowing what to do is as important as knowing
what not to do. In India, for instance, it is considered
a violation of sacred hospitality mores to discuss busi-
ness in the home or on social occasions. And if a
business executive from India offers come any time, it
is an honest invitation, not just a polite expression as
often used in the United States. The Indian is requesting
a visit but is politely allowing the guest to arrange the
time of the meeting. If no time is set, the Indian will
assume that the invitation has been refused. The failure
to understand this local custom has led to some serious
misunderstandings.
Even the rejection of a cup of coffee can cause major
problems. While a very profitable opportunity was being
negotiated, one U.S. executive innocently made the
mistake of refusing a Saudi Arabians friendly offer to
BIIC01 3/11/05, 9:59 AM7
8 INTRODUCTION
join him for a cup of coffee. Such a rejection is considered
an affront in Saudi Arabia. Naturally, the Saudi became
much less sociable, and the negotiation process was
much less successful than it might have been.
Gift giving can also create troubles. Sometimes gifts
are expected and the failure to supply them is seen as
insulting. Other times, however, the mere offer of such
a token is considered offensive. In the Middle East,
for example, hosts are insulted if guests bring food or
drink to their homes, because they believe that such
gifts imply that they are not good hosts. (Liquor, of
course, is an especially dangerous gift, as it is prohibited
by the Islamic religion.) In many parts of Latin America,
cutlery or handkerchiefs should not be given, because
these gifts imply a cutting off of a relationship or the
likelihood of a tearful event. And giving a clock to some-
one in China is not a good idea, either. The Chinese
word for clock sounds similar to their word for funeral.
In fact, even the way in which a gift is presented is
important. In most parts of Asia gifts should be given
privately to avoid embarrassing the Asians, but in the
Middle East they need to be offered publicly in order
to reduce the possible impression that bribery is being
attempted.2
To avoid making blunders, a person must be able to
discern the difference between what must be done, what
must not be done, and what may or may not be done.
For example, shoes must be removed before entering
many of the religious buildings of the world, but the
individuals doing so must not act as if they are of
the religion if, in fact, they are not.
Complete knowledge and understanding of a foreign
culture, however, is almost impossible to acquire. In fact,
no general agreement even exists as to what culture is,
but most experts do concur that it is a complex set of
variables involving a groups beliefs and ways of living.
BIIC01 3/11/05, 9:59 AM8
INTRODUCTION 9
They also agree that an understanding of any foreign
culture requires knowledge in a great many areas. Un-
fortunately, even a well-intended person can commit a
blunder by overlooking just one seemingly unimportant
aspect of a foreign culture.
The Role of Communication
As stated, culture plays an important role in international
business. Of all of the aspects of culture, communication
may be the most critical and certainly has been involved
in numerous blunders. Good communication linkages
must be established between a company and its cus-
tomers, its suppliers, its employees, and its host govern-
ments. Poor communication networks can and have
caused difficulties.
Technology offers new ways to commit blunders.
Some of these blunders are simply due to not fully un-
derstanding the technology but sometimes the blunder
happens because the normal ways to detect mistakes
dont always work. Therefore new technology requires
us to develop new ways to detect errors.
Take, for example, the use of the Internet to obtain
data. More uses for the Internet are being developed
daily, but not without some problems and challenges.
Many textbooks now make more additional material that
interfaces with their books available on the Internet. This
material can be updated and provide valuable support
for the learning experience. However, care must be taken
to insure that the results are as anticipated.
Professors Michael Moffett and Arthur Stonehill, for
example, had problems with the 1998 edition of their
very good international financial management textbook
when their readers were given an Internet address for
checking their learning progress (answers to exercises,
BIIC01 3/11/05, 9:59 AM9
10 INTRODUCTION
etc.). The problem was that the address given was just
slightly incorrect. The address turned out to provide
X-rated (not FX) material. (It might be noted, however,
that authors of some of the other competing books
wondered if this was really an accident.)
Because so many potential communication barriers
exist, it is especially difficult for companies to effectively
communicate with potential buyers. Messages can be
translated incorrectly, inappropriate media used, regula-
tions overlooked, and economic or taste differences
ignored. Sometimes the potential customer never receives
the companys message, and at other times the message
arrives but because of its ineffectiveness is of little value.
Every once in a while the buyer receives the message
but, to the companys dismay, the message sent was
incorrect.
For example, it certainly would not be wise to say
yeah to the Japanese. Not wise, that is, unless one
wants to say no, because yeah sounds like the
Japanese word for no. However, saying so should
cause no problemsit means the same in both lan-
guages. (In China, by the way, boo-shih means, not
true. Americans have a remarkably similar-sounding
phrase they sometimes use when wanting to imply they
dont believe something!)
Multinational companies are not the only entities vul-
nerable to communication problems, of course. Former
President Carters speech in Poland will long be remem-
bered for his incorrectly translated appreciation of the
Polish women (whom his translator said he lusted for).
Other well-known people have mangled public intro-
ductions by using incorrect titles and names. It seems
that if there is a way to say something incorrectly, some
poor soul has managed to do so.
As was noted earlier, even Professors of International
Business have been known to make mistakes. Indiana
BIIC01 3/11/05, 9:59 AM10
INTRODUCTION 11
University, for example, hosted an important inter-
national business conference in 2002 and invited five
distinguished speakers to talk about the history of
international business education. Dr. John Daniels, past
president of the Academy of International Business and
a highly visible researcher in the field of international
business, was one of the special speakers. As he was
about to make his presentation, however, he saw he
had a problem. Sitting in the audience was a person
whom Dr. Daniels had identified in his already circulated
paper as dead.
Communication problems take many forms. Nonverbal
communication difficulties, in particular, have led to
serious blunders. Americans, for example, all too often
forget the old proverb that patience is a virtue. On
many occasions, this lapse of memory has led them
to react inappropriately by trying to correct a situation
when in actuality all that was needed was patience. The
improper amount of touching or eye contact has left
many people feeling so uncomfortable that effective com-
munication efforts have been hampered. The incorrect
distance between individuals engaged in conversation
has led to the false conclusion that the other person is
too aggressive and hostile or too cold and distrustful.
The peoples of each culture uniquely utilize body
movements as methods of communication. The mean-
ings of motions and signs common in one culture may
relay something quite different in another. Consider,
for example, the OK sign commonly used in the United
States. In France it signifies zero, and in Japan it sym-
bolizes money. In parts of South America, however, it is
a vulgar gesture. One unfortunate company learned this
when it had an entire catalog printed with an OK stamp
on each page. Although the error was quickly discovered,
it created a costly six-month delay while all of the catalogs
were reprinted.
BIIC01 3/11/05, 9:59 AM11
12 INTRODUCTION
Headshakes are particularly difficult to interpret.
People in the United States shake their heads up and
down to signify yes. Many British, however, make the
same motions just to indicate that they hearnot neces-
sarily that they agree. To say no, people shake their
heads from side to side in the United States, jerk their
heads back in a haughty manner in the Middle East,
wave a hand in front of the face in the Orient, and
shake a finger from side to side in Ethiopia.
Asian Indians sometimes shift their heads from side
to side in a slightly jerky manner to indicate interest.
However, in New Zealand people suck in a bit of air to
show the same interest. The U.S. gesture to slit ones
throat means I love you in Swaziland. A backward
victory symbol is an insulting gesture in Europe. Using a
palm-up hand with moving index finger connotes come
here in many countries but is considered vulgar in
others. In Ethiopia, one beckons another by holding out
the hand, palm down, and repeatedly closing the hand.
The act of folding ones arms denotes respect in Fiji but
indicates arrogance in Finland. To an Ethiopian, one
finger to the lips requests silence from a child whereas
four fingers to the lips are necessary to ask the same
from an adult.
The pointing of a finger is a dangerous action. In
North America it is a very normal gesture, but it is con-
sidered very rude in many other parts of the world
especially in areas of Asia and Africa. It is usually much
safer to merely close the hand and point with the thumb.
However, even though pointing the thumb up is an
easily recognized positive gesture in North America,
that same thumbs-up signal is a vulgar insult in the
Middle East.
Many cultures also have their own form of greeting.
Often it is some variation of a handshake, but people
also greet each other with hugs, nose rubs, kisses, and
BIIC01 3/11/05, 9:59 AM12
INTRODUCTION 13
other gestures in other cultures. Failure to be aware of
these customs has led to awkward and embarrassing
encounters and to serious misunderstandings.
Other forms of communication have also caused
problems. The tone of the voice, for example, can be
important. Some cultures permit people to raise their
voices when they are distant from one another, but loud-
ness in other cultures is often associated with anger or a
loss of self-control.
Even laughter is interpreted differently around the
world. While most countries consider it an expression
of joy, some cultures discourage it. In many West African
countries, laughter indicates embarrassment, discomfort,
or surprise.
Ignorance of such differences in verbal and non-
verbal forms of communication has resulted in many a
social and business blunder. Local people tend to be
willing to overlook most of the mistakes tourists make;
after all, they are just temporary visitors. Locals are much
less tolerant of the errors of business peopleespecially
those who represent firms trying to project an impres-
sion of permanent interest in the local economy. The
consequences of erring, therefore, are much greater for
businesses.
Structure
Some of the blunders that companies have committed
while trying to engage in business in foreign countries
are described and discussed in this book. Most of these
blunders have been reported in the media, but only in
small numbers at any one time and in no clear patterns.
The gathering of hundreds of these reports provided
an opportunity to group these blunders and to arrive at
some universally applicable conclusions.
BIIC01 3/11/05, 9:59 AM13
14 INTRODUCTION
The blunders have been grouped into seven categories:
production, names, marketing, translation, management,
strategy, and other. Production blundersespecially
those related to building plants on inappropriate sites
have generally proven to be the most costly. Plant loca-
tion and plant layout errors as well as mistakes involving
products and packages are reported in the next chapter.
As pointed out in Chapter 3, inappropriate product
and company names have caused company headaches.
On occasion, a company has introduced an old, estab-
lished name in a country that misunderstands it. In other
instances, a firm has created a new name, only to later
regret its decision. Sometimes harmless and amusing,
these blunders have at other times proven insulting,
embarrassing, and costly.
Marketing mistakes are described in Chapter 4. Com-
munication problems, poor promotional strategies, and
cultural differences have all played a part in the develop-
ment of major marketing blunders. These types of errors
are identified and discussed.
The largest number of blunders has been due to faulty
translations. In fact, the number of translation errors is
so vast that they are reported in a separate chapter,
Chapter 5. Carelessness, unexpected additional mean-
ings, and improper use of idioms have all contributed
to translation blunders.
Managerial blunders were generally caused because
people did not understand or were not aware of cultural
differences. Some people simply are not culturally
sensitive enough to successfully handle international
assignments. Others may be sensitive but uninformed.
A number of the management problems reported in
Chapter 6 were caused by managements lack of know-
ledge concerning local labor practices. These misunder-
standings have often led to the most confrontational of
all the reported incidents.
BIIC01 3/11/05, 9:59 AM14
INTRODUCTION 15
Strategic blunders are usually the most complex. They
are also among the most difficult to overcome. Problems
arising from companies entry modes, their establish-
ment of various alliances, and their planning of supply
arrangements are discussed in Chapter
