Contemporary Perspectives on International Business and Culture

CONTEMPORARY PERSPECTIVES ON INTERNATIONAL BUSINESS AND CULTURE Michael Chibba Managing Director, Distinguished Fellow & Adjunct Professor, ICDEPR, Canada PRE-PUBLICATION VERSION Abstract: The interplay between international business (IB) and culture currently poses numerous challenges for businesses, nations and institutions. The purpose of this research, conceptual and practice-oriented paper is to conduct a selected review of five key areas of the subject: concepts, practice and cases; the contemporary IB and culture environment; cultural convergence; ethics in business; and culture’s intertwined role with other cornerstones of IB. The approach includes practice-based knowledge, selected literature references/review, and concise analysis of cases. The main conclusions reached are the following: (i) cultural convergence can only occur in IB where societies and markets are similar; (ii) ethics are important in business, but compliance with ethical standards is problematic as enforcement occurs only in extreme cases; (iii) the overarching conclusion is that culture is indeed a core factor in IB, with culture’s role ranging from making small adjustments to the firm’s business model to its pivotal role in a business venture in a host country; and finally (iv) the ‘Call to Action’ – part of concluding remarks - is three-fold and focuses on ensuring that culture has its proper place, in planning and operations, as one of six IB cornerstones. The utility and value of this paper rests with its usage as a tool for education, research, policy and strategy formulation, and practice. Key words: international business, culture, business environment, cultural convergence, ethics, cases. PROFILE OF MICHAEL CHIBBA Michael Chibba is Managing Director, Distinguished Fellow and Adjunct Professor and he is based at the International Centre for Development Effectiveness and Poverty Reduction, Canada. He has three decades of experience in international business, international development and related fields. His career includes service to a broad scope of organizations including private sector firms (consulting, manufacturing and service industries), multilateral and bilateral institutions (World Bank, Inter-American Development Bank, Asian Development Bank, Canadian International Development Agency, and the Commonwealth Secretariat), governments (federal, provincial, and developing countries), universities/think-tanks and non-governmental organizations. His work has taken him to over 35 countries (developed, emerging and developing) as expert, teacher/professor, team leader and/or project/program director. For example, in 2006, he worked in Botswana as Commonwealth Policy Adviser with his duty station at the Botswana Confederation of Commerce, Industry and Manpower. He has travelled extensively throughout Botswana on business. During his professional career, he has also served as head of three international firms. His scholarly output includes papers (several on international business) published in about 15 international, peerreviewed journals. Michael received his undergraduate degree at York University (Canada) and his postgraduate degrees at the University of Ottawa (Canada) and Johns Hopkins University (USA). He also studied at Harvard University, where he was the recipient of a Harvard Executive Program Fellowship. He has taught at various universities and professional venues throughout the world. In July 2014, he will be teaching a course on international business at the Uni ersity of Cape To n’s Graduate School of Business in Cape Town, South Africa. 1 1. Introduction Culture touches on all aspects of business and it is one of the six cornerstones of international business (IB). Yet, as recently as ten to fifteen years ago, culture was viewed as ancillary to, and part of, strategy and marketing. However, game-changing developments, esp. the continued march of globalization, the 2008-2009 global economic/financial crisis, and the rise of emerging market economies (EMEs), have ushered in a new era for IB and culture. Culture has now found its place as a core factor in IB. Given this context, in this paper, to better understand some of the issues at stake, and to serve as a research and educational tool, I use a three-pronged approach comprised of: my practicebased knowledge of the subject based on over three decades of directly related experience; selected references to relevant published research; and brief cases and examples for the purposes of illustration and analysis. The focus of this paper is on sharing contemporary perspectives on five key areas of IB and culture: main concepts, practice and cases; the business environment; cultural convergence; ethics in business; and culture’s intertwined role with other cornerstones of international business. Concluding remarks (including a Call to Action) are also offered. The target audience of this paper is general, and includes students, policy-makers, management, practice professionals and academics. 2. IB, culture and operations - key concepts, practice, and selected cases As I have noted elsewhere, IB is any business with a significant international dimension that views the world as its business territory (Chibba 2012, 2013). This is a general, practice-based and pragmatic definition that spares us the agony of belaboring over a variety of definitions to find the ‘perfect’ one. [Readers interested in academic definitions of IB are recommended to consult: Czinkota, Ronkainen and Moffett (2004), Daniels, Radebaugh and Sullivan (2013), Held et al (1999), Scase (2007), and Stiglitz (2006)]. In comparison, the concept of culture is far more challenging, with many and varied definitions, that are as broad as the subject itself. For example, Johnson and Turner (2003: 200-201) state that “culture is a complex concept, open to a variety of definitions and difficult to pin down precisely”. According to Daniels, Radebaugh and Sullivan (2013: 48), “culture refers to the learned norms based on attitudes, values, and beliefs of a group of people”. To Trompenaars and Hampden-Turner (2012: 27-32) culture encompasses everything from artifacts and products to norms, values and assumptions about life. I view (national) culture as the totality of language, religion, norms, values, rituals, tastes and preferences. In addition, at the company level, there is ‘corporate’ culture, which finds meaning through a firm’s mission, policies and strategies, and it is articulated by the corporate leadership. Importantly, culture and corporate culture influence thought, behaviour and action. In practice, IB is not normally concerned with esoteric, philosophical and academic perspectives of culture. To any business what is of critical importance is, inter alia: What will sell? What products and services do the clients want? What adjustments (if any), with respect to the host nation’s culture, should be made to products and services that would potentially facilitate enhanced appeal and improved sales (and greater market share and profits)? Here are three examples of culture’s role in different IB contexts. Case 1: Culture, product names and Ikea’s venture into the Thai market (based on Chibba 2012: p. 5). Translators were recruited by Ikea in Thailand to ensure that its product names did not offend Thais and the nation’s conservative mores. As a result, the retail name for bed, ‘radden’, had to be changed as it sounds like a sex act in Thai. Likewise, ‘jattebra’, the name for a plant pot, is a crude Thai term for sex, and it had to be changed to a culturally acceptable term. The role of culture is a powerful force in conducting an international business in Thailand but the adjustments to cater to the local market need not be extensive at all; simple name changes in products are often adequate, as this case illustrates. 2 Case 2: Culture and the Java Lounge in Saudi Arabia (based on Daniels, Redebaugh and Sullivan 2013: pp. 45-48). To navigate the cultural minefields in opening a ‘foreign-type restaurant/lounge’ in Saudi Arabia, four young Saudis who had lived and studied abroad, hired Lebanese consultants to research the market. The researchers concluded that there was sufficient demand for an upscale restaurant/lounge, which was opened for business in Jeddah – a city that has significant contact with foreigners and it is less conservative than the other large cities in Saudi Arabia, such as Riyadh. To adapt to local norms, however, all employees had to be male, separate entrances and separate floors were designated for clients based on the local norms and practices (e.g. every male not accompanied by a female must use a separate entrance and sit upstairs, out of sight of the groups of females and families on the ground floor). Religious prohibitions also mean that no pork products or alcohol could be served. This case highlights the pivotal role of religion and local norms and values in conducting business in Saudi Arabia. Case 3: Home Depot’s Failure in China (based on Gao 2014) Home Depot (H.D.) entered the Chinese market in 2006 by acquiring 12 stores from Home Way, a local retailer. The business was a failure, and in 2012, after six years of losses, H.D. exited the Chinese market by closing all of its stores. What went wrong? The key failure was that H.D. ignored cultural considerations (preferences; lifestyle; cultural incompatibility of the H.D.’s Do-It-Yourself approach to the locally favoured Do-It-For-Me approach; dislike of 1-Stop shopping in China, and so forth) and it thus operated ethnocentrically. In order words, H.D. used the American approach – “If it’s good enough for us, it will be good enough for them”. This ’tragic flaw’ in H.D.’s planning and operations led to its demise in China. As the above cases illustrate, culture’s role in IB varies from minor tweaking of product names (Ikea in Thailand) to the consideration of culture as central to the business model in the host country context (Java Lounge in Saudi Arabia and Home Depot in China). Indeed, culture is so important in foreign ventures that a fundamental lack of understanding of the host nation’s culture can lead to failed IB ventures. We can also infer that the degree of adjustment to culture is low when products or services do not substantially infringe on cultural issues in the host country (e.g. Thailand). However, in both ‘traditional’ societies (such as Saudi Arabia) and distinct societies with an authoritarian regime (such as China), culture is the driver of IB. What about theory? Unfortunately, purely academic arguments and esoteric theories on the role of culture in business are essentially of little or no value in the real IB world. For example, McSweeney’s (2002) excellent but purely theoretical evaluation and critique of Hofstede’s model of national culture carries little practical value in operating an IB. And the same applies to theoretical investigations that entertain the obvious – for example, whether there is cultural convergence in two totally dissimilar cultures, such as the U.S. and Japan (Bergiel, Bergiel and Upson, 2012). Having said this, evidence-based research that is linked to theory carries considerable weight and it is highly sought after for its value, in terms of applicability, research and teaching. 3. The new global environment of IB and culture The linkages between IB and culture since the 1980s have been shaped by three seismic changes on the global stage. The first such change is the decline of ‘rich’ nations such as the U.S., United Kingdom (U.K.), European nations and Japan, in terms of economic, business and political power vis-à-vis the ‘golden years’, from the 1960s to the 1990s, when these nations reigned supreme in the business world. The second change has been the rise over the last two to three decades of EMEs, especially the BRICS (Brazil, Russia, India, China and South Africa), but also MINT (Mexico, Indonesia, Nigeria and Turkey) and other EMEs, such as South Korea. The third major change resulted from the 2008-2009 global financial/economic crisis, which not only hastened the decline of the rich nations but also assisted in the rise of both EMEs and emerging market multinational corporations (EMNCs) – especially, Chinese, Indian, Brazilian, and Mexican, which are today ranked among the top multinational corporations (MNCs) in the world in certain sectors. 3 Recall that many EMEs withstood the turmoil that accompanied the recent global crisis and generally remained unscathed (though five years on, growth has slowed in the BRICS).Nonetheless, in the post-crisis period, two new developments are noteworthy. First, fundamental economic changes in the global economy have occurred. For example, in 2012, China became the second-largest economy in the world (ahead of Japan and Germany) and the BRICS and other large EMEs have been the engines of world growth while economic expansion in the rich countries has faltered. The other new development is profound changes on the IB front. On this and other related points, the Chinese MNCs deserve special attention because of China’s authoritarian regime and unique global corporations. In 2001, according to Shambaugh (2013: 184-185), there were only twelve Chinese corporations on the Fortune 500 list; by 2011 there were sixty-one. However, the vast majority of these firms find their strength exclusively in the Chinese market; and there are few Chinese firms that have truly gone global – exceptions include the following twelve: Air China, CNOOC, CNPC, Haier, Lenova, Geely, Huawei, Hisense, Li-Ning, Sinopec, Tsingtao, and possibly Yingli Solar. Nonetheless, given China’s rapid rise and overall robustness of its economy, it will not be long before many of the rest of the fifty or so Chinese corporations become global. The strategies favoured by large Chinese firms to going global include M&As (mergers and acquisitions; e.g. the 2010 sale of Volvo Cars of Ford Motor Company to Geely Automobile of China) and IPOs (initial public offerings; e.g. Alibaba’s current IPO to raise US$ 12.88 billion in the U.S.). But reliance on such strategies is dated and will have to be changed to more meaningful and sustainable approaches if large Chinese firms aspire to be truly global, not only in their interface with different cultures and governance structures worldwide but also in terms of their business culture, which is fundamentally ethnocentric. Indeed, no longer is the business world dominated almost exclusively by Western and Japanese multinational corporations (MNCs). And along with game-changing developments, so too has the nature, scope and character of MNCs changed. In the new environment, IB operations place culture as one of the six most important cornerstones of IB – the other cornerstones being mission, policies and strategies; leadership; human capital; technology, innovation and creativity; and the business environment (Chibba 2012, 2013). This shift in culture’s role is widespread, extending from private and public sectors to educational institutions. For example, some of the teachers/professors and research staff at various universities and colleges, such as the Harvard Business School, have recently focused on the multidimensional nature and pivotal role of culture on a range of IB issues – from leadership, to human resources, to partnering strategies, to operations – for instance, see Blanding (2012) and Hanna (2011, 2012). While many firms are struggling to adjust to the new reality of incorporating culture as a core factor in IB, others are slowly awakening to realize that culture can be a major stumbling block in the continued growth and expansion of an IB – i.e. if the not ready or not culturally savvy. As alluded to above, China serves as a powerful example of this. For despite China’s overall success economically, truly global Chinese firms are few and far between. As Shambaugh (2013: 186-189) has elaborated: “Very few Chinese firms can truly operate globally. . . . Instead of being global in perspective and able to easily adapt to foreign practices, Chinese companies and their management display an inability to escape their own national corporate culture and business practices. Chinese businesspeople are overly accustomed to the peculiarities of Chinese business culture … moreover, Chinese companies are politicized. That is, many have Communist Party cells, secretaries, and members embedded within the firm. … Chinese companies also demonstrate difficulties adapting to foreign legal, regulatory, tax, and political environments.” Furthermore, beyond direct meddling by the state at the corporate level, Chinese firms face two other limitations that are exemplary of their political culture, authoritarian governance and national ideology – protection of firms and sectors considered to be of ‘strategic’ importance to China, and failure to ensure ‘reciprocity’ in joint ventures and M&As generally. A joint venture between a Chinese and a foreign firm is permissible provided the ownership of assets is one-way – i.e. entirely of the foreign firm and not vice versa. Examples include ArcelorMittal’s, attempted purchase of 25 percent of Ansteel, a large Chinese steel company, which failed to materialize as the Chinese government would allow no more than two percent (sic) ownership of Ansteel (Marsh 2012: 146-147). Another example is Canada’s desire to seek reciprocity (in principle at least) after CNOOC’s purchase of Nexen, a mid-sized Canadian firm in the oil and gas sector. No reciprocity was offered by China, nor by CNOOC. The lesson here is 4 that culture is inextricably linked to desires and/or designs to grow globally, as well as to the state’s ideology and governance apparatus in China – including China’s avowed goal of becoming a global leader in certain key sectors, industries and services. The new global environment of IB and culture also raises questions of cultural convergence, which I now turn to. 4. Cultural convergence Cultural convergence means a growing similarity between cultures that is evident in beliefs, values and preferences of consumers. This similarity is driven in part by brands, media and marketing. Whereas, in theory, cultural convergence is the result of frequent interactions between cultures (Bergiel, Bergiel and Upson, 2012; Axelrod 1997). Let me step back a moment before I proceed further. The beginnings of IB can be traced back to the 15 th century with the pursuit of English and Dutch models of IB (Chibba 2014). Despite five centuries of IB, and while there has been some diffusion of Western culture (esp. religion) to the New World, and to a much lesser extent to other nations (esp. colonies or former colonies), there are been few cases of cultural convergence at the global and regional levels. Today, there are a few global products and services – such as computers, the internet, electricity, and iconic products such as Coca Cola – but it would be a gross exaggeration to say that we have achieved cultural convergence globally. This does not mean that there are no global consumers or there is no homogeneity in products internationally. As Johnson and Turner (2003: 9) have aptly noted: “Social and cultural convergence across boundaries is only possible when there is no clash with more profoundly held cultural beliefs … (nonetheless) the emergence of a global consumer, or at least consumers with common preferences across a significant part of the globe, creates opportunities for the creation of global products … (though) truly global products are relatively few and far between but where their existence is possible, they increase the viability and desirability of developing international production systems and value chains, with all the potential gains in terms of scale economies and utilization of different comparative advantages.” The Target Canada case discussed below presupposes cultural convergence between the U.S. and Canada in Target’s expansion into Canada. The case of Target Canada – cultural convergence in action? (based on Kopun 2014: p. B1) Target is a large United States (U.S.) - based discount retailer. In 2013, it entered the Canadian market and opened 124 stores across Canada. Target assumed that the Canadian and U.S. markets are very similar – as many others have, including Walmart, Red Lobster, Victoria’s Secret and Nordstrum. Target was hoping to turn a profit by the end of 2013; instead it lost nearly $1 billion U.S. in its first year in Canada. What went wrong? Target is renowned for doing its homework – undertaking careful data analysis before making its decisions – and it assumed sales in Canada based on a model of U.S. stores and sales. After all, the two markets are similar. Indeed, despite the lack of absolute homogeneity in consumer markets in the U.S. and Canada (for instance, a sizeable Latino market in the U.S. and a substantial Francophone market in Canada), there is a healthy measure of cultural convergence. The failure occurred in implementation; and specifically with respect to a failure to show low prices for retail products. Canadians could just cross the border to the U.S. and buy the same products at lower prices in Target stores there. Another failure was Target Canada’s inability to stock its shelves as stores were not fully stocked – there were many empty shelves. Target’s excuse is that unlike the U.S., Canada does not have a large enough market for all goods. There were also design and layout problems in converting Zellers’ stores (which Target Canada had bought) to Target stores. Surely, Target would have known this to begin with and acted accordingly. Obviously, it made some assumptions on consumer choice, pricing, and stocking that were wrong. What are Target’s next steps? Target Canada’s current strategy is to ‘get the right products to the store at the right time’. It is also banking on better marketing, technology and talent. And it is still assuming a healthy measure of cultural convergence and expects to show a profit by 2018. It’s an open question if there is cultural convergence in the two markets or not, though my personal opinion is that there definitely is. 5 5. Do ethics matter in IB? Ethics are one important dimension of culture but a contestable one at that. It could be argued, for example, that if the primary purpose of a business is to generate profits, do ethics matter in IB? A short answer is that ethics do matter, even if they do not have a long arm in most cases and situations. To elaborate, this section will respond to the following questions: Why? How? What is being done? And who is promoting and/or enforcing ethical standards? Why ethics matter. Since the 1960s, the question of ethics in the conduct of business has been gradually moving towards center stage in various circles - international, national, social, cultural, legal, corporate and operational. The greatest progress has been on the philosophical and theoretical fronts – see Baumhart (1968), Dam & Lund (1978), Goldman (1980), De George (1986), and Davies (1997) – encompassing a broad scope of questions such as: What is business ethics? What are the various types of cultural and ethical relativism? What are the approaches to ethical theory? What are the various versions of utilitarianism? Is the deontological approach relevant in IB? Are there moral obligations and responsibilities in conducting an IB? What role should morality play in IB? Are ethics relatively more important than business profit(s)? These are important but hard questions to answer in the real world of IB. There might not be any ‘right’ or ‘wrong’ answers depending on the cultural context. And some of these questions are purely philosophical; while one or two of these have a bearing on practice. On the practice front, ethics and IB have been in the spotlight through failures and disasters linked to IB, such as oil spills (e.g. Exxon Valdiz), factory tragedies (Union Carbide’s Bhopal pesticide plant disaster in 1984; and more recently, the garment factory collapse in Bangladesh) and fundamental failures in ethics at MNCs in the case of bankcruptcy, executive pay vis-à-vis earnings and benefits of the rank and file members of an organization (e.g. Enron and Nortel). Other ethical challenges (see, for example, Johnson and Turner 2003: 208-210) facing MNCs include human rights, exploitation, labour issues and bribery/corruption. Other specific cases include the sale of formula milk in poor countries and EMEs (countries where there are not always clean water supplies). Proponents against the use of formula milk for infants in these countries argue that the mother’s milk is best for the child in any case. This has subjected Nestle’s marketing practices and related maternal-child health (MCH) claims to scrutiny and reminded us all of some of the ethical challenges faced by IBs overseas. How do ethics matter in IB? First, unethical practices by IBs are illegal in most countries. Second, given mass communications and the internet, it doesn’t take long before any unethical practices are exposed to audiences locally, nationally, and worldwide. The damage from negative publicity can far outweigh any short-term gain from illegal practices. It’s better to be ethical to begin with. Third, there are codes of conduct that have to be adhered to in IB – both on the national side and, increasingly, on the corporate side. What is being done? The Sullivan Principles of 1977 (and the 1999 Global Sullivan Principles), the Caux Principles (that resulted from the Caux Roundtable of business leaders from Europe, Japan and the U.S. in the late 1980s), and the Global Compact Initiative (first proposed by Kofi Annan at the World Economic Forum in Davos in 1999, and adopted in 2000 after multi-stakeholder consultations) are three of several sets of ethical principles for the conduct of IB. Each of these is essentially little more than codes of ethical behaviour that find meaning only if they are adhered to in the conduct of an IB. Who is promoting and/or enforcing ethical standards? Many countries today have ethical standards that MNCs and others engaged in IB must adhere to - in principle at least. While enforcement is a challenge (and admittedly, in poor countries in particular, there is generally no enforcement at all , and, at any rate, often it is too late to take corrective action, esp. in the case of disasters.) Much progress has nevertheless been achieved, partly due to the role of international and regional organizations, but also due to the active role played by NGOs globally. As a Permanent Member of the Independent Investigation Mechanism of the Inter-American Development Bank for five years (2001-2006), I was closely involved in reviewing a major project in Mexico for its integrity, inter alia, in terms of due diligence. I also contributed in the formulation of the Bank’s Safeguards policy. Enforcing safeguards, however, was a challenge as politics played an intervening, and often decisive, role. Notwithstanding, the adoption of Safeguard policy – which encompass a broad range of safeguards (operational, legal, environmental, cultural, etc.) by development banks - such the World Bank Group and the various regional development banks - as well as bilateral institutions, has further bolstered and entrenched the role of ethical standards in IB. Yet, in the final analysis, ethics and ethical standards are enforceable mostly in extreme cases only. 6 6. Culture and other cornerstones of IB in a dynamic situation The cases discussed thus far have placed the role of culture in IB in different contexts - from simple tweaking of product/service names (the case of Ikea in Thailand) to adherence to local norms (Java Lounge case in Saudi Arabia), to cultural convergence in certain markets (Target in Canada). But other situations can also arise that are not so ‘cut-and-dry’. Put differently, while culture is a key conceptual, environmental and operational consideration in IB – not a discrete one - it manifests itself as one of several dynamic factors in the environment and also in the management and operation of an IB. The case study outlined below (drawn from Daniels, Radebaugh and Sullivan 2013), highlights how culture, as part of a dynamic real life situation involving several IB cornerstones, can present a different set of challenges to an IB. On the whole, firstly, culture’s consequences in IB can be profound and consideration of culture is indeed intertwined with other forces in the environment and operations of an IB. Secondly, in view of the diversity of cultures encountered around the world, it is reasonable to assume that each case or each major decision must stand on its own merits. There is no cookie-cutter approach to uphold. Thirdly, while some decisions (as in Ikea’s case in Thailand) are straightforward, others require various degrees of assessment and engagement, from adhering to religious norms (as in the Saudi Arabian case to operating in a culturally unique environment in an authoritarian regime such as China) to the entangled role of culture in IB as was just highlighted that also brought to the fore the interplay of other key IB cornerstones, including vision, policy and strategy, human capital, and leadership. The Case of Hydro Generation in Uganda Hydro Generation (HG), a U.S.-based MNC, won the contract to build a large dam in Uganda. Charles Martin was hired to work on the preconstruction phase of the project. The question before James Green, vice president of HG, was whether to continue employing Charles Martin in Uganda as the firm pondered the staff profiles and potential staff composition for the construction phase. While Martin had performed well in Uganda in terms of performance, there were concerns about ‘culture’. Martin was perhaps too comfortable in the Ugandan culture – e.g. how decisions were made to achieve desired results (see specific examples below) – albeit to the detriment of HG corporate culture and without regard to its modus operandi (esp. HG’s methods of operating internationally). Green was also apprehensive that Martin’s practices could have longer-term negative repercussions for HG, even within Uganda. Martin wanted to remain in Uganda and there were few candidates who had the combination of U.S. business training, experience with HG, and a good understanding of Uganda. Martin, although young at 29, was also knowledgeable about development issues and he had been effective in disarming critics of the power plant. Nonetheless, and specifically, there were several concerns about Martin’s approach to fulfilling his duties and responsibilities. He showed a strong disregard for the company’s culture; his actions did not always support HG’s vision as set out by its founder; his practice of ‘paying tips’ could be perceived as engaging in corruption; human resource practices (e.g. recruitment) bordered on the promotion of nepotism; and his participation in or support of tribal rituals were seen as questionable actions. However, based solely on performance, Martin completed every task on time and within the total budget. Thus, his performance was quite satisfactory otherwise. What did James Green decide regarding Martin’s future with HG in Uganda? This is left to the reader to contemplate, discuss if possible, and conclude accordingly. 7 7. Concluding Remarks Culture’s role in IB can range from making small adjustments to the business model when embarking on foreign investments (retail, resource-based, or other) to culture serving as the driver of IB. The degree of adjustment is low when products or services do not substantially infringe on cultural issues in the host country. However, in ‘traditional’ societies (such as Saudi Arabia) and distinct societies (such as China), culture is the driver of IB. In countries where there are multiple issues at play in an IB venture (as in the H.G. case in Uganda), the policy and operational response is determined by carefully assessing the intertwined roles of two or more of the six cornerstones of IB. Globally, ethics and ethical standards are a contestable area as enforcement, in the case of violation of ethical standards, is generally upheld only in extreme cases. The existence of traditional societies, states based on religion or authoritarian politics/commerce, and countries in turmoil, war or transition, leave very little scope for upholding ethics. Nonetheless, ethics are an important aspect of democratic governance, and there is a ‘critical mass’ of countries that view ethics as central to IB. Cultural convergence can only enter into play in IB where the societies and markets are similar, as in the U.S. – Canada case of Target. Specific adjustments to the business model are still necessary, though not to the extent as demanded in the cases of China and Saudi Arabia. From planning and operational perspectives, a ‘Call to Action’ is imperative, and for this paper it is three-fold: (i) All key staff at IBs should be cognizant of the overarching role that culture plays as one of six cornerstones of IB. (ii) In planning, setting-up, operating, and leading an IB, culture must be viewed as a core consideration in all IB matters – it is that important. 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