CHAPTER 3 - History and Geography

THE FOUNDATIONS OF CULTURE

LO1 The importance of history and geography in understanding international markets.

Culturecanbedefinedasasocietysacceptedbasisforrespondingtoexternalandinternalevents.To
understandfullyasocietysactionsanditspointsofview,youmusthaveanappreciationforthe
influenceofhistoricaleventsandthegeographicaluniquenesstowhichaculturehashadtoadapt.To
interpretbehaviorandattitudesinaparticularcultureorcountry,amarketermusthavesomeideaofa
countryshistoryandgeography.
Historyhelpsdefineanationsmission,howitperceivesitsneighbors,howitseesitsplaceinthe
world,andhowitseesitself.Insightsintothehistoryofacountryareimportantforunderstanding
attitudesabouttheroleofgovernmentandbusiness,therelationsbetweenmanagersandthemanaged,
thesourcesofmanagementauthority,andattitudestowardforeigncorporations.Tounderstand,explain,
andappreciateapeoplesimageofitselfandtheattitudesandunconsciousfearsthatarereflectedin
itsviewofforeigncultures,itisnecessarytostudythecultureasitisnowaswellastounderstandthe
cultureasitwasthatis,acountryshistory.
LO2 The effects of history on a countrys culture LO3 How culture interprets events through its own
Eyes

Historyisimportantinunderstandingwhyacountrybehavesasitdoes,buthistoryfromwhose
viewpoint?Historicaleventsalwaysareviewedfromonesownbiasesandselfreferencecriteria
(SRC),andthus,whatisrecordedbyonehistorianmaynotbewhatanotherrecords,especiallyifthe
historiansarefromdifferentcultures.Historianstraditionallytrytobeobjective,butfewcanhelp
filteringeventsthroughtheirownculturalbiases.4
Ourperspectivenotonlyinfluencesourviewofhistorybutalsosubtlyinfluencesourviewofmany
othermatters.Forexample,mapsoftheworldsoldintheUnitedStatesgenerallyshowtheUnited
Statesatthecenter,whereasmapsinBritainshowBritainatthecenter,andsoonforothernations.
LO5 The effect of geographic diversity on economic profiles of a country

Geography,thestudyofEarthssurface,climate,continents,countries,peoples,industries,and
resources,isanelementoftheuncontrollableenvironmentthatconfrontseverymarketerbutthat
receivesscantattention.Thetendencyistostudytheaspectsofgeographyasisolatedentitiesrather
thanasimportantcausalagentsofthemarketingenvironment.Geographyismuchmorethan
memorizingcountries,capitals,andrivers.Italsoincludesanunderstandingofhowasocietysculture
andeconomyareaffectedasanationstrugglestosupplyitspeoplesneedswithinthelimitsimposed
byitsphysicalmakeup.Thus,thestudyofgeographyisimportantintheevaluationofmarketsand
theirenvironment.
ClimateandTopography
Altitude,humidity,andtemperatureextremesareclimaticfeaturesthataffecttheusesandfunctionsofproducts
andequipment.Productsthatperformwellintemperatezonesmaydeterioraterapidlyorrequirespecialcooling
orlubricationtofunctionadequatelyintropicalzones.Manufacturershavefoundthatconstructionequipment

usedintheUnitedStatesrequiresextensivemodificationstocopewiththeintenseheatanddustoftheSahara
Desert.
LO6 Why marketers need to be responsive to the geography of a country

Amarketerneedstoconsiderwhenassessingtheenvironmentalaspectsofmarketing.Examiningthe
worldasawholeprovidesthereaderwithabroadviewofworldmarketsandanawarenessofthe
effectsofgeographicdiversityontheeconomicprofilesofvariousnations.Climateandtopographyare
examinedasfacetsofthebroaderandmoreimportantelementsofgeography.AbrieflookatEarths
resourcesandpopulationthebuildingblocksofworldmarketscompletesthepresentationon
geographyandglobalmarkets.
Geography,Nature,andEconomicGrowth
Alwaysontheslimmarginbetweensubsistenceanddisaster,lessprivilegedcountriessufferdisproportionately
from natural and humanassisted catastrophes.16 The Haitian earthquake disaster of 2010 is perhaps the

prominentexample.Climateandtopographycoupledwithcivilwars,poorenvironmentalpolicies,andnatural
disasters pushthese countries furtherinto economicstagnation.Without irrigationandwater management,
droughts,floods,andsoilerosionafflictthem,oftenleadingtocreepingdeserts thatreducethelongterm
fertilityoftheland.17Populationincreases,deforestation,andovergrazingintensifytheimpactofdroughtand
lead to malnutrition and ill health, further undermining these countries abilities to solve their problems.
Cyclonescannotbeprevented,norcaninadequaterainfall,butmeanstocontroltheireffectsareavailable.
Unfortunately, each disaster seems to push developing countries further away from effective solutions.
Countriesthatsufferthemostfrommajorcalamitiesareamongthepoorestintheworld. 18Manyhaveneither
thecapitalnorthetechnicalabilitytominimizetheeffectsofnaturalphenomena;theyareatthemercyof
nature.
SocialResponsibilityandEnvironmentalManagement
Nations, companies, and people reached a consensus during the close of the last decade: Environmental
protectionisnotanoptionalextra;itisanessentialpartofthecomplexprocessofdoingbusiness.Manyview
theproblemasaglobalissueratherthananationalissueandasonethatposescommonthreatstohumankind
andthuscannotbeaddressedbynationsinisolation.Ofspecialconcerntogovernmentsandbusinessesare
waystostemthetideofpollutionandtocleanupdecadesofneglect.
Sustainabledevelopment
Is a joint approach among those (e.g., governments, businesses, environmentalists, and others) who seek
economicgrowthwithwiseresourcemanagement,equitabledistributionofbenefitsandreductionofnegative
effectsonpeopleandtheenvironmentfromtheprocessofeconomicgrowth.Sustainabledevelopmentisnot
abouttheenvironmentortheeconomyorsociety.Itisaboutstrikingalastingbalancebetweenallofthese
Resources
ThelocationsofEarthsresources,aswellastheavailablesourcesofenergy,aregeographicaccidents.The
worldsnationsarenotequallyendowed,andnonationsdemandforaparticularmineralorenergysource
necessarilycoincideswithdomesticsupply.
LO7 The economic effects of controlling population growth and aging populations

DynamicsofGlobalPopulationTrends
Current population, rural/urban population shifts, rates of growth, age levels, and population control help
determinetodaysdemandforvariouscategoriesofgoods.45althoughnottheonlydeterminant,theexistence
ofsheernumbersofpeopleissignificantinappraisingpotentialconsumermarkets.Changesinthecomposition
anddistributionofpopulationamongtheworldscountrieswillprofoundlyaffectfuturedemand.Moreover,it
now appears that demand for goods worldwide can affect migration patterns as well, in a reversal ofthe
traditionalcausalrelationship.Specifically,theglobalfinancialcrisisthatbeganin2008appearstohavecaused
a(perhapstemporary)reversalofmigrationsfromurbantoruralareaswithincountriesandfromdeveloped
backtodevelopingcountriesinternationallyasemploymentopportunitiesdryupinresponsetothedeclinein
demandforgoodsandservice
ControllingPopulationGrowth
Facedwiththeominousconsequencesofthepopulationexplosion,itwouldseemlogicalforcountriestotake
steps to reduce growth to manageable rates, but procreation is one of the most culturally sensitive
uncontrollablefactors.Economics,selfesteem,religion,politics,andeducationallplaycriticalrolesinattitudes
aboutfamilysize.
Familyplanningandallthatitentailsisbyfarthemostuniversalmeansgovernmentsusetocontrolbirthrates,
butsomeeconomistsbelievethatadeclineinthefertilityrateisafunctionofeconomicprosperityandwill
come only with economic development. Ample anecdotal evidence suggests that fertility rates decline as
economiesprosper.Forexample,beforeSpainseconomybeganitsrapidgrowthinthe1980s,familieshadsix
ormorechildren;now,SpainhasoneofthelowestbirthratesinEurope,anaverageof1.24childrenperwoman.
SimilarpatternshavefollowedinotherEuropeancountriesaseconomieshaveprospered.
Rural/UrbanMigration
Migrationfromruraltourbanareasislargelyaresultofadesireforgreateraccesstosourcesofeducation,
healthcare,andimprovedjobopportunities.
PopulationDeclineandAging
Whilethedevelopingworldfacesarapidlygrowingpopulation,theindustrializedworldspopulationisin
declineandrapidlyaging.57 BirthratesinwesternEuropeandJapanhavebeendecreasingsincetheearlyor
mid1960s;morewomenarechoosingcareersinsteadofchildren,andmanyworkingcouplesareelectingto
remainchildless.Asaresultoftheseandothercontemporaryfactors,populationgrowthinmanycountrieshas
droppedbelowtheratenecessarytomaintainpresentlevels.Justtokeepthepopulationfromfalling,anation
needsafertilityrateofabout2.1childrenperwoman.Notonemajorcountryhassufficientinternalpopulation
growthtomaintainitself,andthistrendisexpectedtocontinueforthenext50years.
WorkerShortageandImmigration
Formostcountries,massimmigrationisnotwellreceivedbytheresidentpopulation.However,arecentreport
fromtheUnitedNationsmakesthestrongestargumentforchangeinimmigrationlawsasaviablesolution.The

freeflowofimmigrationwillhelpamelioratethedualproblemsofexplosivepopulationexpansioninless
developedcountriesandworkershortageinindustrializedregions.

WorldTradeRoutes
Trade routes bind the world together, minimizing distance, natural barriers, lack of resources, and the
fundamentaldifferencesbetweenpeoplesandeconomies.Aslongasonegroupofpeopleintheworldwants
somethingthatanothergroupsomewhereelsehasandthereisameansoftravelbetweenthetwo,thereistrade.
Earlytraderouteswereoverland;latercamesearoutes,airroutes,and,finally,somemightsay,theInternetto
connectcountries.

LO8 Communication infrastructures are an integral part of international commerce

An underpinning of all commerce is effective communicationsknowledge of where goods and

servicesexistandwheretheyareneededandtheabilitytocommunicateinstantaneouslyacrossvast
distances.Continuousimprovementsinelectroniccommunicationshavefacilitatedtheexpansionof
trade.Firstcamethetelegraph,thenthetelephone,television,satellites,mobilephones, 66thecomputer,
theInternet,andcombinationsofthemall. 67Map5inthefollowingpagesillustratestheimportanceof
fiberopticcableandsatellitesinprovidingglobalcommunications.Eachrevolutionintechnologyhas
hadaprofoundeffectonhumanconditions,economicgrowth,andthemannerinwhichcommerce
functions.Eachnewcommunicationstechnologyhasspawnednewbusinessmodels;someexisting
businesseshavereinventedtheirpracticestoadapttothenewtechnology,whileotherbusinesseshave
failed to respond and thus ceased to exist. The Internet and mobile phone revolutions will be no
different;theytooaffecthumanconditions,economicgrowth,andthemannerinwhichcommerce
operates.