Jennifer Lombardo received both her undergraduate degree and MBA in marketing from Rowan University. She spent ten years in consumer marketing for companies such as Nielsen Marketing Research, The Dial Corporation and Mattel Toys. She is currently an adjunct professor of marketing at Rowan University and a social media marketing consultant.
Prejudice and Ethnocentrism
You are attending an international engineering conference where you meet a fellow engineer from Germany. He seems to be friendly and engaging, but soon he starts to attack everything about America. The German explains that only his country can design and produce high quality cars and that American products are all cheap. He then goes on to say that Americans are lazy, self-righteous, materialistic workers who take everything for granted. This is an example of the prejudice that ethnocentrism can create in individuals. Prejudice is also known as prejudgment and consists of thoughts and feelings regarding a specific group. The German engineer has already created a prejudgment about the American engineers without any real knowledge.
The word ethnocentrism comes from the Greek word 'ethnos,' or nation or people, and the English word 'center.' The definition of ethnocentrism is when a company or individual believes that their group is superior to another group. Let's take a look at the impact prejudice and ethnocentrism can have with an organization. SlowGo Automobile Company is based in Germany. They have recently expanded factories and subsidiaries into numerous international locations.
A company that is ethnocentric will have certain issues with organizational performance. The first issue a company can have is overall problems with decision-making. A company that has a mentality of 'if it works, don't fix it' will not have any flexibility with decision-making, rules, and policies with subsidiaries. For example, SlowGo Automobile ignored suggestions from their French subsidiary to improve engineering software. SlowGo used antiquated software and the German engineering VP feels that it's a waste to retrain the staff.
Another issue with ethnocentric companies is that they tend to be inflexible adapting to local standards or customer preferences. This kind of inflexibility can cost companies clients and customers. SlowGo has spent years designing, producing and manufacturing automobiles for German customer tastes. Each of the new subsidiaries have been supplying headquarters with local customer preferences to improve SlowGo's cars.
The engineers have ignored all suggestions. For example, the American subsidiary believes that it's important for their market to have additional cup holders. American customers are notorious for needing at least eight cup holders in their minivans. The German engineers feel that it would hurt the van's overall design and have refused to make the changes. This lack of responsiveness has hurt American sales of the German minivan.
A third costly issue of ethnocentric behavior in organizations is regarding the hiring of employees. Most ethnocentric companies do not hire locally. This results in higher costs to companies because they have to move and train headquarter staff. They believe that only their headquarter-trained employees can do a good job. This can also hurt product design and feedback, as the headquarter employees are not familiar with local customs and preferences.
Most of the English office is made up of German employees. This has led to a lack of understanding of the English auto market, since there are no local employees to help identify trends and tastes of English customers.
Stereotyping is when an individual assigns generalizations to a group of people based on an incorrect belief. This type of problem can occur within an ethnocentric-based company. For example, some of the German engineers wanted to increase the size of the car seats for the American consumer, as they believed that all Americans suffered from weight issues. This stereotype was due to a few engineers believing that all Americans ate fast food and were overweight.
There are ways that companies can make adjustments to help ethnocentric corporations succeed. SlowGo can easily improve upon their mistakes and move away from ethnocentric behavior. One of the first suggestions is to have each employee learn about additional cultures and diversity. It is important to understand local customer trends, culture and preferences. Cultural training classes can help employees eliminate ethnocentric behavior.
Companies need to stop making assumptions based on limited experience. Employees should receive extensive training and international job rotation to experience different cultures. In addition, companies should embrace diversity within their employees. Headquarters should hire local talent and within each division there should be a fair representation of all types of diversity to ensure different views, opinions and cultures.
There are a few advantages to an ethnocentric-based company. Since the organization is against any outside views or changes, it can be simple to manage due to having the same standards, rules and policies across all subsidiaries. In addition, this can lead to simplified management and overall control.
Ethnocentric behavior in organizations can cause numerous problems. Ethnocentric issues are problems with decision-making, inflexibility adapting to local standards or customer preferences, and higher employee costs due to not hiring locally and stereotyping. Prejudice is also known as a prejudgment and consists of thoughts and feelings regarding a specific group. The definition of ethnocentrism is when a company or individual believes that their group is superior to another group. Ethnocentrism can be eliminated by cultural training, employing a diverse workforce and job rotation.
After viewing this video lesson, you should be able to recognize that ethnocentric organizations are at a disadvantage due to prejudiced beliefs applied to their business practices.
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