GLOBAL vs. LOCAL

Global Green Automobile Strategy? A North American vs. Northwestern Continental European perspective

International Business Kelly Gilissen 531557 Bachelor Thesis Marketing 2010 Supervisor: drs. A.M. van Gool 8,930 words

How is the corporate global green sustainability strategy of major automotive companies adapted to the differences in culture of North American consumers and that of the Northwestern Continental European consumers?

Gilissen 2

Preface

I would like to take this opportunity to show my appreciation to those involved or influenced in the process of writing my thesis. First of all, to Mrs. Van Gool, who assessed the development of this thesis and provided noteworthy feedback. Second, a thank you to all the group members who had to balance writing their own theses with reading and commenting on mine. I am also grateful for my family and friends, who have always stood by me. Even when I could not make time for them and my laptop became my best friend.

The most difficult part in completing this thesis was finding the time to sit down and

write for several consecutive days. It was a struggle to combine 2 hours of daily soccer training (or game) in Utrecht, a 2 hour commute from Tilburg to Utrecht and back, and 8 exams, with writing a Bachelor thesis. In the final weeks of the soccer season, I was allowed to prioritize my thesis writing over soccer. Therefore I would especially like to thank the coaches of the FC Utrecht Women’s Eredivisie team and my teammates.

Gilissen 3

Management Summary

The central research question addressed in this literature review is:

How is the corporate global green sustainability strategy of major automotive companies adapted to the differences in culture of North American consumers and that of the NW European consumers?

According to Jones and Teegen (2001), one of the determinants that multinational

enterprises face when going global is culture (Hahn & Bunyaratavej, 2010). Therefore, culture is defined by evaluating the central three cross-cultural frameworks of Hofstede, Schwartz, and Inglehart. Consequently, the differences in opposing national culture of North America and Northwestern Continental Europe are described using Hofstede’s Cultural Framework.

The definition of green sustainability strategy is established and further analyzed using

two American based companies, Ford Motor Company and General Motors. Subsequently, these are used to measure the influence of the respective cultures on the global green sustainability strategies of previously mentioned automotive companies.

Hofstede’s dimension of masculinity has proven to be important in determining cultural

differences between North America and Northwestern Continental Europe. In turn, these cultural differences have influenced the regional (as opposed to global) strategic sustainability strategies of Ford Motor Company and General Motors.

The combination of the financial crisis, economic recession, and a shift in consumer

market preferences towards more fuel efficient, greener and smaller cars have forced global automotive companies to (re)think their corporate strategy. They have to re-position their brands, change product/market combinations, increase profitability, and tactically change their plans regarding their green sustainability strategy.

Though green marketing has fallen short of its initial expectations, according to Ginsberg and Bloom (2004), if companies realize that a one-size-fits-all strategy does not endure, they can obtain a more effective approach. Therefore, a global green sustainability strategy should be and is altered by major automotive companies to a regional (local) green sustainability strategy. The main reason for changing the strategy is the difference in culture between North American and Northwestern Continental European consumers.

Gilissen 4

Table of Contents

Chapter 1: Problem Statement ................................................................................ 5 1.1 The Problem Background ...................................................................................... 5 1.2 The Problem Statement ........................................................................................ 6 1.3 Research Questions ............................................................................................... 6 1.4 Relevance .............................................................................................................. 6

1.4.1 Academic Relevance ...................................................................................... 6 1.4.2 Practical Relevance ........................................................................................ 7

1.5 Structure of the Thesis .......................................................................................... 7 Chapter 2: Culture ................................................................................................... 8

2.1 Definition of Culture .............................................................................................. 8 2.2 Cultural Frameworks ............................................................................................. 8

2.2.1 Hofstede’s Cultural Dimensions .................................................................... 9 2.2.2 Schwartz’s Cultural Values ............................................................................ 9 2.2.3 Inglehart’s World Values Survey ................................................................... 9

2.3 Review of the Cultural Models .............................................................................. 9 2.4 Conclusion ........................................................................................................... 10

Chapter 3: Cultural Differences .............................................................................. 11 3.1 North American Culture Based on Hofstede’s Cultural Dimensions ................... 11 3.2 NW European Culture Based on Hofstede’s Cultural Dimensions ...................... 12 3.3 Comparison of Hofstede’s Cultural Dimensions for North America and NW

Europe .................................................................................................................. 13 3.4 Conclusion ........................................................................................................... 14

Chapter 4: Green Sustainability Strategy ................................................................ 15 4.1 Green Sustainability Strategy .............................................................................. 15

4.1.1 Defining Green Sustainability Strategy ........................................................ 15 4.1.2 Why Corporations Use Green Sustainability Strategies .............................. 15

4.2 Green Sustainability Strategy of Major Automobile Companies ........................ 16 4.2.1 Major Automobile Companies .................................................................... 16 4.2.2 Global Green Sustainability Strategy for Ford ............................................ 17 4.2.3 Global Green Sustainability Strategy for GM ......................................... 17

4.3 Conclusion ........................................................................................................... 18 Chapter 5: Global Green Sustainability Strategy? ................................................... 19

5.1 North American and NW European Cultures vs. Hofstede’s Dimension of Masculinity........................................................................................................... 19

5.2 Description of the North America Automotive Consumer Market. .................... 20 5.3 Description of the NW European Automotive Consumer Market. ..................... 20 5.4 Marketing Strategies of Ford and GM ................................................................. 20

5.4.1 Ford’s Marketing Strategy ........................................................................... 22 5.4.2 GM’s Marketing Strategy............................................................................. 22

5.5. The Influence of North American and NW European Culture on the Marketing Strategies of Ford and GM ............................................................................... 23

5.6 Conclusion ........................................................................................................... 23 Chapter 6 The Overarching Conclusions ................................................................ 24

6.1 Conclusions .......................................................................................................... 24 6.2 Limitations ........................................................................................................... 24 6.3 Recommendations ............................................................................................... 25

References ............................................................................................................ 26 Appendix ............................................................................................................ 29

Gilissen 5

Chapter 1: Problem Statement

1.1 The Problem Background

Recent decades have witnessed an increasing concern for environmental problems by society; moreover, better approaches to development have been acknowledged as a necessity since the mid-1980s (Barrow, 1995). Since the start of the twenty-first century, society has realized the social and environmental costs attached to the pursuit of economic growth (Peattie & Charter, 2003). The Economist (1990) recognizes that the environment may advance as the most remarkable opportunity for prudent companies’ business and innovation in the industrial world (Lampe & Gazdat, 1995). An increasing interest in the greening of corporations has arisen, including companies in the automobile sector. These companies have shifted focus to green marketing in an attempt to create brand sustainability and gain competitiveness. Over the coming decennium, hybrid technology will become essential (Austin, Rosinski, Sauer, & le Duc, 2003). Adler (1966), Austin (1965), Bell (1971), and Davenport (1971), to name a few, have all noticed that as demands for public and environmental responsibility are augmented further, the cost to the firm disregarding this setting in which it operates may well be survival, rather than simply profit (Anderson & Cunningham, 1972). Hybrid electric vehicles (HEVs) are no exception, and are perceived as the future means of clean, personal transportation. HEVs are anticipated fundamentally for competitiveness across chief automobile markets, through 2015, due to a combination of perceived growth, potential industry standards and amplified brand equity (Austin et al, 2003).

A driving force behind more interpersonal cross-cultural contact is the progressive

internationalization of economic, political and social fields (Black & Mendenhall, 1990). This cross-cultural contact has been experienced in the internationalized automobile industry, where world suppliers of automobiles are thus confronted with customers of different cultures and backgrounds. According to Jones and Teegen (2001), one of the determinants that multinational enterprises face when going global is culture (Hahn & Bunyaratavej, 2010). As explained by Blumenfeld and Gilbert (1990) people from different countries vary in their cultural backgrounds and perceptions, therefore, the North American consumer reacts in a different manner to issues than the European consumer (Lampe et al, 1995). These diverse cultures complicate the creation of a single greening globalization strategy for the global automobile industry. In general, however, public opinion in both the US and Europe, (affected by environmental damage, media exposure, and other causes) has greatly favored environmental protection (Lampe et al, 1995).

In order to effectively compare the influence of culture on corporate global greening

strategies, two opposing cultures should be studied. These varying cultures will essentially establish whether or not differing cultures affect the implementation of global greening strategies, and hence to what degree they do, or, do not. According to Webber (1969), when cultural systems are encouraged to converge, augmented communication and interaction allow for the bridging of cultural distance (Shenkar, 2001). The country borders are ignored which enables the formation of cultural clusters in which the cultures of several nations can be assessed as similar and compared to other, clustered countries. This thesis will evaluate the culture of North America, and at the other extreme, that of Northwestern Continental Europe (NW Europe). North America includes the US and Canada, which are seen as masculine societies. NW Europe entails the Netherlands and Scandinavia; Sweden, Norway, Finland, and Denmark. The Netherlands and Scandinavia have been clustered together on the basis of their similar feministic cultures (Hofstede, 2001).

Gilissen 6

Since previous research has covered the domains of culture and green sustainability separately, the key to this paper is to integrate the knowledge about culture and green sustainability and apply it to the automobile industry.

1.2 The Problem Statement

As Weick (1985) observes, the concepts of culture and strategy overlap (Hofstede, Neuijen, Ohayv, & Sanders, 1990). Therefore, it is of great importance to provide managers of automotive companies with a clear framework aiding the alignment of environmentally friendly products and processes whilst still catering to the needs of automobile consumers. This research will thus provide an evaluation of how cultural differences, among North America versus NW Europe, influence the corporate global greening strategy of major automotive companies.

The problem statement that follows is: How is the corporate global green sustainability strategy of major automotive companies adapted to the differences in culture of North American consumers and that of the North-Western Continental European consumers? In order to answer the problem statement, this thesis addresses several research

questions that need to be considered and consequently answered.

1.3 Research Questions

What does culture entail? How does North American culture differ from NW European culture? What is the green sustainability strategy of major automotive companies? How do the differences in culture influence the global green sustainability strategy of

major automobile companies?

1.4 Relevance

The problem statement and research questions to be investigated have to be worth investigating. The reasons why this thesis is both academically and managerially relevant will be discussed next. Seeing as this thesis is an academic literature review, the emphasis is placed on the academic relevance.

1.4.1 Academic Relevance

The topics of culture, globalization and green marketing strategies have all been covered separately in abundant studies and publications.

To this day, most of the international business research done has integrated national

culture as a prominent variable (Sivakumar & Nakata, 2001). Cleveland and Laroche (2007) indicate that whilst taking into account the development toward global markets and the global consumer culture, the role of culture is still an significant branch of research in the consumer decision-making process (Laroche, 2009).

All human activities are influenced by environmental concerns, still only a few academic

disciplines have incorporated green issues into their literature, especially in the field of marketing (Polonsky, 1994). Some literature, including those from Carlson, Grove and

Gilissen 7

Kangun (1993), and Davis (1992; 1993) does exist, however, they stem from differing perspectives (Polonsky, 1994).

In previous research covering the global green sustainability strategy, Ginsberg and

Bloom (2004) conclude that when a company incorporates greening successfully into its marketing strategy, those that stand to benefit are the consumers, shareholders and society at large.

Research regarding the relationship among culture, globalization, and green

sustainability strategies has been minimal, especially concerning the cultures of North America and NW Europe. This thesis aims to integrate these concepts and accordingly illustrate the influence of culture, specifically those of North America and NW Europe, on the corporate global greening strategies of major automobile companies.

1.4.2 Practical Relevance

According to Ginsberg et al (2004) the question that remains for companies is how to create business processes and products that are environmentally friendly whilst still meeting the needs of their consumers. As a manager or marketer one must understand one’s consumer buying behavior. Since cultural variances influence the economic decision-making process of consumers, including those of the automobile industry, each consumer culture will have a diverse decision-making process. This means that this research could be of importance in determining the most suitable green sustainability strategy when taking into consideration the differing cultures in Northern America, versus in NW Europe.

1.5 Structure of the Thesis

This literature study will provide a detailed analysis of the influence of culture, specifically that of North America versus NW Europe, on the green sustainability strategy of the major automobile companies in North America and NW Europe.

In the second chapter, culture will be defined and key cultural frameworks will be

introduced. In the subsequent third chapter, North American and NW European cultures are evaluated based on the chosen cultural framework and any differences clearly pointed out. The fourth chapter, assesses the green sustainability strategy of major automotive companies. In the fifth chapter, the question that will be answered is how the differences in culture influence the global green sustainability strategy of major automobile companies. In the sixth and final chapter overarching conclusions about the problem statement are drawn and recommendations suggested.

Gilissen 8

Chapter 2: Culture

What does culture entail?

“Without culture, and the relative freedom it implies, society, even when perfect, is but a jungle.”

~Albert Camus

Scholars extensive interest regarding the influence of culture on international business activities has not gone unnoticed by Gibson (1999), Chui et al (2002), and Ralston et al (2008) (Hahn et al., 2010). In chapter first tackles the meaning of culture is first established and subsequently investigates the concept in further detail. In order to narrow the findings, three central cultural frameworks will be examined, including those of Hofstede, Schwartz and Inglehart.

2.1 Definition of Culture

McCort and Malhotra (1993) suggest that culture embodies the most extensive influence on various elements of human behavior, which makes it complicated to define (Soares, Farhangmehr, & Shoham, 2007). Boyacigiller, Klein-berg, Phillips and Sackmann (1996) support that the concept of culture has been extremely difficult to depict and measure due to its complexity, and intangibility (Shenkar, 2001). Due to this intricacy, many definitions of culture have been established. Among which, a prominent anthropological conceptualization of culture by Kluckhon (1951, p.86, n.5) which states the following:

“Culture consists in patterned ways of thinking, feeling and reacting, acquired and transmitted mainly by symbols, constituting the distinctive achievements of human groups, including their embodiments in artifacts; the essential core of culture consists of traditional (i.e. historically derived and selected) ideas and especially their attached values” (Hofstede, 2001, p.9). Based on this in depth definition, Hofstede (2001, p.9) summarizes “culture as the

collective programming of the mind that distinguishes the members of one group or category of people from another”. This definition is accepted as central to this thesis.

2.2 Cultural Frameworks

Cross-cultural research aims to describe cultures by depicting sets of cultural values. The subsequent cultural frameworks that stem from these, outline several cultural dimensions in an attempt to explain a considerable fraction of country-to-country variance.

Many cultural frameworks have been developed and elaborated in the past decades.

These have been successful in describing the role of culture in a globalizing business world. In this line of research, Hofstede (1980; 1996; 2001) is one of the most vital research frameworks (Hahn et al., 2010) and will be examined first.

Gilissen 9

2.2.1 Hofstede’s Cultural Dimensions

Geert Hofstede, distinguished Dutch social psychologist, has fulfilled the goal of establishing dimensions that characterize the ways in which countries differ from each another (Smith, Bond, & Kâğitçibaşi, 2006). Hofstede’s Cultural Dimensions approach is the most renowned typology of cultural values in marketing and advertising research (Terlutter, Diehl, & Mueller, 2006).

Hofstede (2001) distinguishes five dimensions of culture including, power distance,

uncertainty avoidance, individualism versus collectivism, masculinity versus femininity, and long-term orientation versus short-term orientation. These are explained in detail in Appendix II(a).

Steenkamp (2001) perceives that the most suitable, well-rounded typology used for cross-national theorizing by marketing researchers, besides Hofstede (1980), is that of Schwartz (1994) (Baack & Singh, 2007). Therefore, Schwartz’s model is subsequently evaluated.

2.2.2 Schwartz’s Cultural Values

Shalom Schwartz, an Israeli psychologist, critically takes Hofstede’s analysis of nations one step further and evaluates culture at the individual-level by focusing on values. This resulted in seven nation-level value-types which Schwartz labeled: egalitarianism, harmony, embeddedness, hierarchy, mastery, affective autonomy, and intellectual autonomy (Schwartz, 1999). The definitions of these may be found in Appendix II(b).

2.2.3 Inglehart’s World Values Survey

Inglehart’s World Values Survey was designed to evaluate a wide range of important aspects of human interest, varying from religion to politics to economic and social life (Inglehart & Welzel, 2005). Stemming from the factor analysis done by Inglehart and Welzel (2005) are two dimensions, accounting for 70 percent of the cross-cultural variance, namely, Traditional versus Secular-rational values and Survival versus Self-expression values. Further analysis regarding Inglehart’s dimensions are found in Appendix II(c).

2.3 Review of the Cultural Models

Each cultural model discussed has varied in its evaluation of culture, leading to arguments in favor of and against its use, these will be discussed in this section.

In comparison to the cultural frameworks of Hofstede and Schwartz, Inglehart’s World

Values Survey analyzes culture based on the most representative sample data. This allows an accurate comparison of national cultures across time. However, this gain is overshadowed by a major limitation, namely, that national culture is characterized solely by two basic and broad dimensions. Therefore, Inglehart’s typology does not allow cultural distinctions to be made within these two dimensions.

Schwartz’s cultural values, as compared to Hofstede, has been less extensively applied to the fields of marketing and advertising. This is most likely the case because Schwartz’s findings for all the countries studied are scattered across numerous journals, instead of in a

Gilissen 10

single comprehensive publication. Though Schwartz’s typology seems to overcome many of the apparent limitations of Hofstede’s framework.

Without a doubt, the most influential cultural model developed was that of Hofstede (1980, 2001), which was cited over 1,100 times merely between 1987 and 1997 (Sivakumar & Nakata, 2001). Despite this, Brett and Okumura (1998), Schwartz (1994) and Steenkamp (2001), have increasingly criticized Hofstede’s pioneering work (Drogendijk & Slangen, 2006). One of the proposed limitations of Hofstede’s research is that it was not initially designed to identify national cultural dimensions. Therefore, it could be possible that his cultural dimensions do not fully embody culture. A second concern is that the results were based on the surveys of IBM employees which misrepresent the general population of the respective countries. However, Schwartz’s cultural values, which was based on a sample of teachers and students, was also not representative. A third limitation is that since its publication, important cultural changes have occurred worldwide, making the data that was obtained between 1967 and 1973, outdated (Drogendijk & Slangen, 2006). However, Hofstede (2001) identifies that national cultures are especially stable over the course of time. Therefore, this data is unlikely to change significantly in the near future, and can be used in the subsequent analysis of this thesis. Finally, concepts must be equivalent across cultures in order to compare inter-country scores on cultural dimensions. According to Schwartz (1994), Hofstede’s value items may be conceptually different across countries because it is not evaluated at the individual level. However, according to Markus and Kitayama (1991), it is likely that individuals adopt values and practices that are shared among members of their society as they are heavily influenced by values and behaviors practiced in their cultures (Terlutter, Diehl, & Mueller, 2006). Therefore, in order to analyze the soundness of cultural-level dimensions, the unit of analysis most suitable for the task is the society or cultural group, not the individual person (Hofstede, 1980, 1990; Schwartz, 1994b) (Schwartz, 1999).

2.4 Conclusion

Culture is an intricate concept that has received increasingly more attention over the past decades. Whilst plentiful scholars and researchers have attempted to define the different dimensions of culture, through their varying cultural frameworks, it is a concept that will continue to be developed and enhanced.

This thesis recognizes that no mutual decision has been made regarding the ‘best’

framework, but Hofstede’s framework has been most successful and widely applied, despite the above criticism. His framework has appreciably increased societies’ understanding of national cultures and aided in the evaluation of the differences between national cultures. Hence, this thesis will use Hofstede’s model as the cultural framework to capture the influence of national culture on the global green marketing strategies of major automobile companies. To facilitate this, the proceeding Chapter 3, covers the differences in national culture of North America and NW Europe with regard to Hofstede’s cultural typology.

Gilissen 11

Chapter 3: Cultural Differences

How does North American culture differ from NW European culture?

“We have become not a melting pot but a beautiful mosaic. Different people, different beliefs, different yearnings, different hopes, different dreams.”

~Jimmy Carter

The two focal cultural clusters studied by this thesis are North America and NW Europe.

This chapter addresses and compares how these cultures differ from one another according to the dimensions of Hofstede.

3.1 North American Culture Based on Hofstede’s Cultural Dimensions

This thesis classifies the United States and Canada collectively as North America. Figure 1 illustrates the scores of Hofstede’s cultural dimensions for North America and its respective countries.

Figure 1: Hofstede’s Cultural Dimensions for North America

Source: created by Kelly Gilissen (08/06/2010), based on Appendix III(a)

As can be seen in Figure 1 above, the independent scores on each of Hofstede’s

dimensions for the United States and Canada are close to identical. Thus the subsequent analysis will be regarding their arithmetic mean, North American culture.

There are only seven countries where individualism (IDV) ranks as the highest cultural

dimension, these include the United States (91), Australia (90), United Kingdom (89), the Netherlands and Canada (80), and Italy (76) (Hofstede, 2001). This high positioning of North America (86) signifies a culture with an individualistic outlook, as opposed to collective, and represents a population with moderately loose ties amongst each other. The people are more autonomous and typically look after themselves and their close ones.

Masculinity (MAS) is the second highest dimension for North America (57). Meaning its

society and power structure are dominated by males; this lays the foundation for more assertive and competitive females (but not as much as men) (Hofstede, 2001). The gender

0

10

20

30

40

50

60

70

80

90

100

PDI IDV MAS UAI LTO

US

Canada

North America

Gilissen 12

role differences among males and females prevail, yet women are becoming less modest and caring, and more aggressive and competitive. As further discussed in Chapter 5, one of the aspects of MAS is materialism. According to Rindfleisch, Burroughs and Wong (2009) materialism has been linked to various different forms of insecurity (lower-esteem, higher self-doubt and higher social anxiety). North American culture is highly materialistic and thus more insecure. In order to reduce this insecurity it enforces laws, policies and regulations covering all possible outcomes. This leads to a score of 47 on uncertainty avoidance (UAI).

The relatively low score of 40 on power distance (PDI) implies that North America has

greater power equality at all levels of society, which leads to a mutual interaction across power levels and thus a more stable cultural environment.

Merely 23 countries have been surveyed in order to calculate their long term orientation

(LTO) scores, including the United States (29) and Canada (23) (Hofstede, 2001). It is the lowest dimension for North America (26) and indicates that society values meeting obligations and appreciates cultural traditions.

3.2 NW European Culture Based on Hofstede’s Cultural Dimensions

NW European culture, as outlined in this thesis, entails the Netherlands and Scandinavia (Sweden, Norway, Finland, and Denmark). Figure 2, illustrates the scores of Hofstede’s cultural dimensions NW Europe and its respective countries. Scandinavia has been chosen as the entity to represent Sweden, Finland, Norway and Denmark because of their almost identical scores on Hofstede’s dimensions.

Figure 2: Hofstede’s Cultural Dimensions for NW Europe

Source: created by Kelly Gilissen (08/06/2010), based on Appendix III(a)

The Netherlands is positioned fourth highest worldwide (alongside Canada; 80) when it

comes to individuality (IDV) (Hofstede, 2001). Scandinavia’s individuality score of 69 is not far behind that of the Netherlands. The high ranking of NW Europe (75) is typical of an autonomous society, in which individuality is integral, and relationships are loosely united. Personal pride and respect are highly valued and demeaning a person is not tolerated.

0

10

20

30

40

50

60

70

80

90

100

PDI IDV MAS UAI LTO

NL

Scandinavia

Northwestern Continental Europe

Gilissen 13

Uncertainty avoidance (UAI) is the second highest dimension for both the Netherlands (53) and Scandinavia (40). The moderate score for NW Europe (47) depicts a culture that minimizes the level of uncertainty faced by society through enforcing laws, policies and regulations covering all possible situations.

The respective indexes for the Netherlands and Scandinavia regarding Hofstede’s

cultural dimension of power distance (PDI) are 38 and 28. For NW Europe this implies that power distance is valued at 33. This is a low score and signifies that NW Europe has high power equality at all levels of society, this leads to frequent interaction across power levels and thus a very stable cultural environment.

Long term orientation (LTO) is the next to lowest dimension of culture for both the

Netherlands (44) and Scandinavia (27). It should be noted that the long term orientation (LTO) for Denmark and Finland were not studied by Hofstede’s survey (Hofstede, 2001). Therefore, the long term orientation index for Scandinavia, as well as, NW Europe excludes these scores. NW Europe’s long term orientation is relatively low at an index of 35. This indicates that its society values meeting obligations and appreciates cultural traditions.

Masculinity (MAS) is the lowest dimension for NW Europe (14) which signifies that its

culture has low differentiation in gender roles, and females are treated fairly equally to males in all areas of society. This is also typical for an openly fostering society.

3.3 Comparison of Hofstede’s Cultural Dimensions for North America and NW Europe

Figure 3 depicts the histogram of Hofstede’s cultural dimensions, based on average values, for North America, NW Europe, and the world.

Figure 3: A Comparison of Hofstede’s Cultural Dimensions With Respect to North America, NW Europe, and the World Average

Source: created by Kelly Gilissen (08/06/2010), based on Appendix III(a)

As can be noticed, the world average exceeds well above both North America and NW

Europe on the dimensions of power distance (55), uncertainty avoidance (64) and long term orientation (45). The score for power distance captures the fundamental aspect of inequality

0

10

20

30

40

50

60

70

80

90

100

PDI IDV MAS UAI LTO

North America

Northwestern Continental Europe

World Average

Gilissen 14

in that all societies are unequal, however, some to a greater extent than others. In North America, power is relatively more unequally distributed than in NW Europe. With respect to uncertainty avoidance, it indicates that both NW Europeans and North Americans feel relatively more comfortable in unstructured situations than the world average. These cultures are thus more open-minded and impose less regulations. The concluding observation that can be made when viewing the scores of long term orientation is that North America is the least focused on future orientations and focuses mostly on current perspectives and goals. World values indicate that North America and NW Europe are lacking behind in future orientation. However, it should be noted that the world average is not high on long term orientation either. Values related with long term orientation are prudence and determination, whilst those linked to short term orientation are respect for cultural customs, satisfying social responsibilities and protecting one’s face (Hofstede 2001).

The world average scores for the other cultural dimensions of Hofstede are individualism

(43) and masculinity (50). Individuality for both the cultures of North America and NW Europe is particularly high. Unlike the world average, where most cultures are based on cohesive groups, the respective clusters are characterized by highly autonomous societies in which relationships among individuals are weak. North American culture ranks the highest on this dimension when compared to all countries surveyed and is thus the most individualistic society (Hofstede, 2001). The dimension of masculinity refers to the disparity between gender roles in a society and is high for both North America and the world average, but very low for NW Europe. A culture that is low on masculinity, is referred to as a feministic society. Hofstede (1980) identifies the key difference between masculine and feminine cultures in that the former stresses competition, assertion and task-oriented actions whilst the latter focus on relationships (Hahn et al., 2010).

3.4 Conclusion

This chapter successfully depicted the differences and similarities between North American and NW European cultures, in accordance with Hofstede’s cultural dimensions. It can be concluded that North American culture is marked by exceptionally high levels of individualism, self-sufficiency, and masculinity (in which there are relatively strong gender differences), high power equality (only slight hierarchical power distribution), moderate uncertainty avoidance, and short-term orientated rather than focused on future goals. NW European culture is outlined by high levels of autonomy and self-reliance, a very low level of masculinity, higher power equality, moderate uncertainty avoidance, and less short term orientation but slightly more future oriented perspectives.

North America ranks higher on all of Hofstede’s dimensions when compared to NW

Europe. This is especially the case for masculinity and thus confirms that North America is a masculine culture whilst the NW Europe is a feminine society.

These conclusions will provide an excellent base for comparison in Chapter 5, where

these findings will be applied to the green sustainability strategies of the automotive corporations. However, before this can be achieved, the following Chapter 4 has to clarify the concept of green sustainability and hence how this is used by automotive companies in their corporate strategies.

For the evaluations of the cultures of North America and NW Europe based on the

cultural framework of Schwartz and Inglehart refer to Appendix III.

Gilissen 15

Chapter 4: Green Sustainability Strategy

What is the green sustainability strategy of major automotive companies?

"Catering to environmental worries might be the hottest sales strategy since advertising agencies discovered sex in the 1950s"

~The Economist (1990b, p83).

“Smart growth and sustainable transportation: can we get there from here?” ~Oliver A. Pollard, III (2002)

This chapter is classified into two sections. The first elaborating on the concept of green

sustainability strategy; what it is and why it is used by companies. The second part is dedicated to determining the green sustainability strategy of major automotive companies. To facilitate this evaluation, the major automotive companies are identified and each of their green sustainability strategies assessed. Subsequently, both sections are unified and a generalization for major automotive companies will be made regarding their green sustainability strategies.

4.1 Green Sustainability Strategy Not only culture has gained an international dimension. Winsemius and Guntram (2002)

admit that society has recognized the transcending of environmental problems and solutions across national boundaries. It has become evident to Elkington and Burke (1987), Winter (1988), Davis (1991), and Smith (1992), that business has to develop a greener corporate culture in both production and marketing aspects of the corporation (Barrow, 1995).

4.1.1 Defining Green Sustainability Strategy With the aim of defining the concept of green sustainability strategy, one must first be

acquainted with the terms green and sustainability. Green is explained by Barrows (1995) as environmental goodwill. Green marketing, as defined by Polonsky (1994, p.3), “consists of all activities designed to generate and facilitate any exchanges intended to satisfy human needs or wants, such that the satisfaction of these needs and wants occurs, with minimal detrimental impact on the natural environment.” This definition captures the essence of a green marketing strategy but is incomplete with regards to the sustainability aspect. Sustainability, according to the Brundtland Report (1987), is “meeting the needs of the present without compromising the ability of future generations to meet their own needs” (Winsemius et al., 2002, p.10). Subsequently, an appropriate definition of green sustainability strategy for this thesis is established by unifying the above definitions. Green sustainability strategy is conceptualized as ‘all activities enabling the human needs or wants of the present to be met, with minimal detrimental impact on the natural environment and without compromising the ability of future generations to meet their own needs or wants’ (Gilissen, 2010, based on Polonsky, 1994; Brundtland Report, 1987).

4.1.2 Why Corporations Use Green Sustainability Strategies Green sustainability strategies have increasingly been used by firms. Literature has

suggested numerous motives for corporations to do so, which Polonsky and Rosenberger (2001) summarize with five points. First, according to Keller (1987) and Shearer (1990), environmental marketing is an alleged opportunity for organizations used to achieve its objectives. Second, Davis (1992), Freeman and Liedtka (1991), Keller (1987), McIntosh (1990), and Shearer (1990) conclude that organizations feel morally obligated to be more socially responsible. Thirdly, the National Association of Attorneys General (NAAG, 1990)

Gilissen 16

declares that firms are pressured to become more responsible by governmental bodies. The fourth reason, which NAAG (1990) also state, is that firms’ environmental marketing activities are forced to change by competitors’ environmental activities. And lastly, as noted by Azzone and Manzini (1994), firms desire to adapt their behavior due to the costs involved in waste disposal or reductions in material usage.

Winsemius et al. (2002) distinguish between four corporate responses to environmental development, including reactive, functional, integrated and proactive approaches. These are explained in further detail in Appendix IV(b).

In the process of achieving sustainability, companies are alleged to be vital actors. In

response to stakeholders, corporations are beginning to enhance their green sustainability strategies. This is also the case for major automobile companies, which will be discussed next.

4.2 Green Sustainability Strategy of Major Automobile Companies As indicated by Ulrich and Fluri (1995), to corporations and their management a (green)

sustainability strategy is a guiding framework to convert their responsibility for actions regarding the environment, economy and society, into business practices, within the boundaries of society (Koplin, Seuring, & Mesterharm, 2007). It thus provides orientation for decision making and subsequent behavior in varying situations.

Warren, Rhodes and Carter (2001), considered the automobile industry in particular and noticed that along all stages of the car’s life cycle it is directly and indirectly related to economic wealth creation, and to its impacts on the natural and social environment as well (Koplin et al.,2001). The automobile companies are thus liable for the development of the environment and society, rather than simply providing individual transportation. They play a central role in the context of sustainability as the Commission of the European Communities (2002) points out, when applying their strategies, automobile companies have to act in response to stringent government regulations and expectations of both the environment and society (Koplin et al., 2001).

According to Winsemius et al. (2002), although automobile companies are tackling sustainability challenges (including emission controls, energy efficiency, recycling, alternative fuels, and road congestion) some still argue, that the car is in essence incompatible with sustainability. If one agrees with this statement, the question that remains is whether the industry is able to restructure itself to face this posed challenge (or opportunity), or whether other industries are superior positioned to do so (Winsemius et al., 2002). In order to restructure the industry, automobile companies should consider hydrogen fuel cells versus battery-powered engines.

4.2.1 Major Automobile Companies The fully matured automotive industry is recognized by Orsato and Wells (2007) as a

large, varied, and influential industry, which is unlike the majority of other industries. It is dominated by six automobile corporations including General Motors (GM), Toyota, Ford Motor Company (Ford), Renault/Nissan, Volkswagen, and DaimlerChrysler (as well as their affiliates), which together account for approximately 70 percent of global sales (Muthukumar, 2007).

Previous studies have emphasized organizational culture in their analysis, however,

recently, organizational culture has lost the battle to the concept of culture. As is noticed by

Gilissen 17

Schein (2003), factors attributed by organizational culture can be readily observed in the corporation, however, in an attempt to comprehend why these exist, solely the concept of culture comes into play (Schein, 2004). The six automobile companies mentioned previously stem from differing national cultures. These national cultures, in turn, influence the organizational culture of the companies. Therefore, in order to assure that organizational culture does not contaminate the central research question of this thesis, two American based automotive companies have been chosen; GM and Ford. These two companies will subsequently be evaluated in detail and afterward used in generalizing green sustainability strategies for the whole of the automotive industry.

4.2.2 Global Green Sustainability Strategy for Ford Ford, based in Michigan (USA) is a global automotive industry leader. It produces and

distributes automobiles across six continents. The company’s automotive brands include Ford, Lincoln, Volvo, and Mercury. Besides owning these four brands, Ford also owns a small stake in Mazda (Japanese firm) and Aston Martin (United Kingdom). Ford has made two important publications regarding its portfolio and transactions of 2010. These regard, the discontinuation of the Mercury brand, as well as, the sale of Volvo to Geely Automobile (Chinese company) before the end of this year (Ford Motor Company, 2010).

Ford has a very broad understanding of its responsibility to the consumer and society.

Due to its size, its social obligation exceeds merely supporting worthy causes but embraces everything that impacts people and their wellbeing. According to Bill Ford, Jr, Chairman and CEO of Ford, “our goal has to be nothing less than an emission-free vehicle that is built in clean plants, which contribute to the environment. And it can happen within my lifetime - hopefully within my working lifetime” (Winsemius et al., 2002, p31).

4.2.3 Global Green Sustainability Strategy for GM

GM is also amongst the world’s largest automobile companies, with its global headquarters in Detroit (USA). The four major car brands under its corporate umbrella are Chevrolet, Buick, GMC, and Cadillac. Other brands include Opel, Vauxhall, Wuling, GM Daewoo and Holden. Most of the cars produced in the latter two companies, Daewoo (South-Korea) and Holden (Australia), are sold as Chevrolet cars under local names in these areas. Wuling is a Chinese company with which GM has a joint venture to produce trucks.

Due to the recent economic crisis GM has been greatly restructuring its global business

as well as brand names. GM has attempted to sell production facilities and brands like Opel, Vauxhall, Saab and Hummer. However, the operations of Opel and Vauxhall were later considered strategically important in the Western European market. Saab was successfully sold to a Dutch manufacturer called Spyker Cars. The sale of the Hummer to China’s Tengzhong, on the other hand, failed and in order to minimize its losses, GM ceased its production. Other brands GM has eliminated the production of recently are Pontiac and Saturn. Nevertheless, GM will continue to be committed to meeting sales, warranty and service needs for the Hummer, Pontiac and Saturn divisions (GM, 2010).

Bill Ford’s counterpart John F Smith, Jr, at GM, makes clear that “infrastructure and land-use issues will take centre-stage, along with the need for transportation that is fast, effective, and environmentally compatible… certainly, no car company will be able to thrive in the future being solely dependent on the internal combustion engine” (Winsemius et al., 2002, p31).

Gilissen 18

4.3 Conclusion

Whether corporations view green sustainability as a challenge or an opportunity, they are forced to take it into consideration when developing their strategies. Not only has globalization meant a more interconnected world in which responsibility for the environment crosses national borders. Society has also increasingly recognized and demanded green sustainable products and services. Whether and to what extent corporations take these obligations seriously is up to themselves and their relevant governments.

The following chapter 5 deals with ways in which North American and NW European

cultures influence the global green sustainability strategies of major automobile companies; Ford and GM.

Gilissen 19

Chapter 5: Global Green Sustainability Strategy?

How do the differences in culture influence the global green sustainability strategy of major automobile companies?

“Except for the American woman, nothing interests the eye of the American man more

than an automobile, or seems so important to him as an object of aesthetic appreciation.” ~Alfred Hamilton Barr

“No other man-made device since the shields and lances of the ancient knights fulfills a

man's ego like an automobile.” ~William Rootes

This chapter aims to investigate the ways in which North American and NW European

cultures influence the global green sustainability strategies of Ford and GM. In order to achieve this, first, the specifics of the North American and NW European automotive target markets will be assessed with respect to Hofstede’s dimension of masculinity. This is followed by an analysis of the market strategy of Ford and GM to these respective markets. These preceding parts are integrated so as to delineate the way North American and NW European cultures influence the global green sustainability strategies of both Ford and GM.

5.1 North American and NW European Cultures vs. Hofstede’s Dimension of Masculinity

In Chapter 3 Hofstede’s dimension of masculinity proved to be a virtual difference between the cultures of North America and NW Europe. Therefore, masculinity is first evaluated in further detail.

Hofstede (2001) outlined the characteristics of a society low on the masculinity

dimension versus a society high on masculinity; this is depicted in Figure 4. NW Europe (low MAS of 14) is represented by the low masculinity column, whilst, North America (high MAS of 57) is portrayed by the high masculinity column.

Figure 4: Meaning of Hofstede’s dimension masculinity

Source: Hofstede (2001, p299)

Low MAS High MAS

Relationship orientation Ego orientation

Quality of life and people are important Money and things are important

Stress on who you are Stress on what you do

Work in order to live Live in order to work

Minimum emotional and social role differentiation between genders

Maximum emotional and social role differentiation between the genders

Men should be tender and take care of both performance and relationships; women should be the same

Men should be tough and take care of performance; women should be tender and take care of relationships

Men and women should be modest Men should be and women may be assertive and ambitious

Sympathy for the weak Sympathy for the strong

Small and slow are beautiful Big and fast are beautiful

Gilissen 20

Values of masculinity are important with respect to the automotive industry. NW Europe, low on masculinity, emphasizes relationship orientation, quality of life and people, and consider small and slow things as beautiful. The main values for the highly masculine, North American automobile consumers are ego orientation, importance of money and things, and big and fast things are beautiful. As can be noticed, both are in opposition to each other.

Upon evaluating Hofstede’s cultural dimensions, Schwartz captured the essence of the

consumer automobile culture of North America. Schwartz (2004) came to the conclusion that a culture focusing on success and ambition may also validate the dominance of status symbols (for example, a Hummer) and of norms that promote assertiveness (such as, don’t quit until you have reached the top!).

5.2 Description of the North America Automotive Consumer Market.

North America is characterized by a culture in which driving an automobile has become a fundamental necessity. This is due in part by the geographic environment present in both the United States and Canada, which is described by spacious, dispersed infrastructure and vast travel distances. Several other reasons are attributed to Hofstede’s dimension of masculinity. North Americans find beauty is best represented by big and fast, therefore the cars they purchase must also meet this criteria. In North American culture, materialism is central one uses cars to express one’s ego, personality, and money and thus status.

The North American fiscal environment is worker and consumer friendly. The income tax

is relative low with 30 percent for the United States and the value added tax varies from 5 to 10 percent. Cars in North America are priced around $38,000 for a fully loaded mid-sized car and gasoline prices are currently valued at $2.60 per gallon (which is equivalent to 3.8 liters).

5.3 Description of the NW European Automotive Consumer Market.

(Northwestern Continental) Europe has an extensive history in the production of very small automobiles due in part because of early infrastructure (circled city centers around the church) and as a means of providing personal transportation for those with lower income (Warren & Rhodes, 2006). Warren et al. (2006) also mention recent impacts that should be considered including the rising levels of congestion in urban areas, and, increasingly consumer awareness for the environment (the latter has been in the European Union as environmental legislations were imposed on the automotive industry). The culture of NW Europe places less importance on physical things, but strongly emphasize quality of life and relationships with other people, moreover, small and slow are seen as beautiful.

The fiscal environment is less worker and consumer friendly. The income tax in the

Netherlands, for example, can go up to 50 percent and the value added tax varies from 6 to 18 percent. Cars in NW Europe are much more expensive due to several taxes and the same fully loaded mid-sized car is priced around €56,000. Gasoline prices are €1.55 per liter (which is $5.90 per gallon).

5.4 Marketing Strategies of Ford and GM

In a global industry, where cultural differences do not influence the marketing strategy of the respective companies, one would expect automobile companies to sell any and all automobiles produced in any and all consumer market. The websites of Ford and GM are

Gilissen 21

used to gather data on the types of cars the companies are producing and which they are subsequently selling in North America and NW Europe. The results of these findings are found in Figure 5.

Figure 5: Car Models per Brand for GM and Ford in Relation to Their Respective Consumer Markets

Source: Kelly Gilissen (08/06/2010), based on the websites of Ford and GM

Brand names of General Motors Brand names of the Ford Motor Company

car model per consumer market car model per consumer marketCONSUMER MARKET REGION CONSUMER MARKET REGION

BOTH ONLY ONLY BOTH ONLY ONLY

US & EUR US & CAN NL & SCAN TOTAL US & EUR US & CAN NL & SCAN TOTAL

Buick 0 Ford Cars

Lacrosse 1 1 Ka 1 1

Lucerne 1 1 Fiesta 1 1

Enclave 1 1 Focus Sedan 1 1

Cadillac 0 Focus Coupe 1 1

CTS 1 1 Fusion 1 1

DTS 1 1 C-max 1 1

STS 1 1 Mondeo 1 1

Escalade 1 1 Kuga 1 1

Escalade hybrid 1 1 S-max 1 1

SRX crossover 1 1 Galaxy 1 1

Chrevolet / Chevy 0 RS 1 1

Avalanche 1 1 Mustang 1 1

Aveo 1 1 Taurus 1 1

Camaro 1 1 Hybrid

Captiva 1 1 Fusion Hybrid 1 1

Cobalt 1 1 Escape Hyrbid 1 1

Colorado 1 1 Crossovers

Corvette 1 1 Escape 1 1

Cruze 1 1 Edge 1 1

Epica 1 1 Flex 1 1

Equinox 1 1 SUV's

Express Cargo 1 1 Escape 1 1

HHR 1 1 Explorer Sporttrack 1 1

Impala 1 1 Explorer 1 1

Malibu 1 1 Expedition 1 1

Nubira 1 1 Trucks

Spark 1 1 Ranger 1 1

Silverado Hybrid 1 1 Transit connect 1 1

Suburban 1 1 F-150 1 1

Tahoe 1 1 E-series 1 1

Tahoe Hybrid 1 1 Explorer Sporttrack 1 1

Traverse 1 1 Super Duty 1 1

GMC 0 Lincoln

Acadia 1 1 MKS 1 1

Canyon 1 1 MKZ 1 1

Savana Cargo 1 1 MKX 1 1

Sierra 1 1 MKT 1 1

Sierra Hybrid 1 1 Navigator 1 1

Terrain 1 1 Town Car 1 1

Yukon 1 1 Mercury

Yukon Hybrid 1 1 Milan 1 1

Opel / Vauxhall Mariner 1 1

Cars Mountaineer 1 1

Agila 1 1 Grand Marquis 1 1

Astra 1 1 Volvo

Astra TwinTop 1 1 S40 1 1

Corsa 1 1 S60 1 1

GT 1 1 S80 1 1

Insignia 1 1 C30 1 1

Meriva 1 1 C70 1 1

Tigra TwinTop 1 1 V50 1 1

Zafira 1 1 V70 1 1

Crosover 0 XC 60 1 1

Antara 1 1 XC 70 1 1

Trucks 0 XC 90 1 1

Astra Van 1 1

Corsa Van 1 1 Total number of car types 16 25 7 48

Combo 1 1 % of total car models 33% 52% 15% 100%

Vivaro 1 1

Movano 1 1

Hummer 0

H2 1 1

H3 1 1

Pontiac 0

G8 1 1

G6 1 1

G5 1 1

G3 1 1

Solstice 1 1

Vibe 1 1

Torrent 1 1

Saturn 0

Astra 1 1

Aura 1 1

Outlook 1 1

Sky 1 1

Vue 1 1

Total number of car types 1 46 20 67

% of total car models 1% 69% 30% 100%

Gilissen 22

5.4.1 Ford’s Marketing Strategy

Figure 5 illustrates that Ford produces 48 different models of cars in total, of which, 25 are branded exclusively for the North American market, 7 solely for the NW European market, and 16 for both markets. Percentage wise these statistics lead to the conclusion that 52 percent of its car models are exclusively for the home market North America, 15 percent solely for the NW European market and 33 percent for both markets.

After the discontinuation of the Mercury brand and the sale of Volvo are finalized and

completed, Ford will have a total of 34 different car models, of these 62 percent are catered specifically to the North American market and 20 percent for the NW European market. The selling of Volvo will reduce the number of cars used for both markets from 16 to 6, accounting for 18 percent of their car models. Therefore, the more global oriented strategy is replaced by a more regional focused strategy.

The spectrum of cars use a great deal of gasoline and are therefore not the most fuel

efficient cars. The sustainability strategy of Ford has been distinguished for the two target markets of North America and NW Europe. Upon visiting the Ford website, the North American market is dominated by larger, inefficient cars, whilst its assortment for the NW European market includes a range of smaller, fuel efficient cars. The demand, given the economic crisis, for smaller and more fuel efficient cars might be the reason to introduce more NW European types of Ford models into their home market, North America. They should proceed a greening strategy.

Ford is marketing its own efforts to create a green sustainability strategy by improving

the fuel efficiency of its vehicles currently offered in North America. The company is investing in new vehicle segments as a strategy to improve fuel efficiency, whilst also continuing to expand the offerings of cars and “crossovers” in North America – vehicles that combine the features of cars and SUVs while generally achieving better fuel economy than traditional SUVs.

In NW Europe, Ford has reduced the average carbon dioxide (CO2) emissions per vehicle

by introducing a variety of innovations. These range from advanced common diesel engines to the lightweight materials in the all-aluminum body of the car. Despite all economic challenges, the company remains committed to further reduce fuel consumption and the average level of CO2 emissions of the new automobile generations.

5.4.2 GM’s Marketing Strategy

The current analysis, regarding GM, refers back to Figure 5. In total, it produces 67 different car models for the North American and European market, of which, 46 are branded exclusively for the North American market, 20 solely for the European market, and only 1 car, the Chevy Aveo, for both North American and NW European markets. Percentage wise, 69 percent of the cars are specifically produced for the North American home market, 30 percent solely for the NW European market and only 1 percent of their cars for both markets.

At the end of the fourth quarter of 2010, when GM ceases the production of the

Hummer, Pontiac and Saturn, the figures change. The total number of branded cars drops from 67 to 53, of which, 32 are catered to the specific needs of the North American consumer market (equivalent to 60 percent), 20 are tailored solely to the NW European consumer market (corresponding to 38 percent), and 1 car for both markets (2 percent).

Gilissen 23

With only 1 car on the market catering to both respective consumer markets, GM has highly distinguished regional strategies, as opposed to a global strategy.

5.5. The Influence of North American and NW European Culture on the Marketing Strategies of Ford and GM

It has become clear that cultural differences between North America and NW Europe have a great impact on the brands and car models of the two automotive companies Ford and GM. Both companies have a more regional based approach in their strategies as opposed to global strategies. Moreover, GM has entirely segmented its car brands and models, apart from the Aveo Chevy, based on cultural regions.

An effective global green sustainability strategy cannot be detected. Several cultural

differences that create the need of a (local) regional green sustainability strategy for automobile companies can be successfully discussed. First, distinctions can be made regarding the sustainability strategy of car types in the home market North America and NW Europe. For both Ford and GM in the masculine North American market, the marketing mix of automobile models consists of much bigger cars, more SUV’s, pickup trucks and large limousines. In contrast, the automobiles sold in the feminine NW European market are much smaller and more fuel efficient. Second, the number of car models sold in both North America and NW Europe markets ranges from 1 percent for Ford, to 33 percent for GM. These exceptionally low figures further emphasize that both automotive companies have a varying sustainability strategies per region. The number of car types targeting specific markets varies from a minimum of 15 percent (for Ford with respect to the Northwestern Continental market) to a maximum of 69 percent (for GM in the home market North America). Lastly, cultural differences bring about the price difference of a mid-sized car, specifically the Volvo S60, in both respective markets. The Volvo S60 is a model of Ford, which is priced at $38,000 (equivalent to €32,000) in the North American market, and €56,000 (converts to $67,000) in the NW European market. (See Appendix IV for more details). The government of NW Europe heavily taxes cars to create awareness for the (environmental) costs associated with driving larger cars.

5.6 Conclusion

Hofstede’s dimension of masculinity has proven to be important in determining cultural differences between North America and NW Europe. In turn, these cultural differences have influenced the regional (as opposed to global) strategic sustainability strategies of Ford and GM.

The last and final Chapter 6, will aim to construct overarching conclusions of all the

previous chapters and subsequently discuss the limitations of this thesis, and provide recommendations for future literature reviews.

Gilissen 24

Chapter 6 The Overarching Conclusions

“Global strategy… in a world of nations?” ~George S. Yip

This chapter is dedicated to answering the proposed research question, making

overarching conclusions, subsequently discussing the limitations of this thesis and providing recommendations for future literature reviews.

6.1 Conclusions

The combination of the financial crisis, economic recession, and a shift in consumer market preferences towards more fuel efficient, greener and smaller cars have forced global automotive companies to (re)think their corporate strategy. They have to re-position their brands, change product/market combinations, increase profitability, and tactically change their plans of their green sustainability strategies.

GM, a reactive corporation, has been reluctant to rethink its strategy in order to respond

to environmental concerns. In one year time their top brand Hummer went from being a top status symbol, in North America, to a socially unacceptable car. GM did not foresee this development and now has to close down Hummer’s production facilities. Ford, on the other hand, is a more integrated business and thus realizes cooperation is necessary and incorporates environmental concerns in its business strategy. In general, to be more successful North American companies should be more long term oriented. Therefore, both Ford and GM should proceed towards a more proactive stance in terms of their green sustainability strategy. Both companies should strategically build on their efforts to make their products more fuel efficient and to achieve strategic goals by using new hydrogen and fuel cell vehicle technologies.

The NW European culture is different from the North American culture. The most prominent difference between these cultures is Hofstede’s masculinity dimension, which greatly establishes variations in consumer markets. Both Ford and GM have understood that their car types should be different for North America versus NW Europe. However, their strategy is different. Ford tries to sell the brand Ford in both regions under a different model name (e.g. Ford Fiesta). Whilst GM does not sell as GM but has different brand names for each region (e.g. Chevrolet for US and Opel for Europe).

Therefore, a global green sustainability strategy should be and is altered by major

automotive companies to a regional (local) green sustainability strategy. The main reason for changing the strategy is the difference in culture of North American consumers and that of NW European consumers.

6.2 Limitations

This thesis was based on certain assumptions or theories which pose limitations. The first limitation is that the findings regarding the cultural framework of Hofstede were based on data retrieved in the 1960s-1970s. Improvement of Hofstede’s cultural dimensions can only be achieved within newer and more recent surveys (Smith, Bond, & Kâğitçibaşi, 2006). Secondly, cross-national analyses have been used, which do not account for the differences within the cultures of North America and NW Europe.

Gilissen 25

6.3 Recommendations

Though green marketing has fallen short of its initial expectations, according to Ginsberg and Bloom (2004), if companies realize that a one-size-fits-all strategy does not endure, they can obtain a more effective approach. Therefore, Ford and GM have to continue to adapt their green sustainability strategies to different cultures.

The automobile industry should be more proactive in decision making regarding green

sustainability strategies, as consumer markets are increasingly demanding greener and fuel efficient cars. Moreover, automotive companies should be careful when outlining a global green sustainability strategy, seeing that cultural variations among consumer markets can demand diverse marketing strategies.

Gilissen 26

References

Austin, D., Rosinski, N., Sauer, A., & le Duc, C. (2003, October). Changing Drivers, The Impact of Climate Change on Competitiveness and Value Creation in the Automotive Industry. Collaborated Report by WRI and SAM , 1-84.

Baack, D. W., & Singh, N. (2007). Culture and Web Communication. Journal of Business Research , 181-188.

Barrow, C. J. (1995). Developing the Environment: Problems and Management. London: Longman Group Limited.

Black, J. S., & Mendenhall, M. (1990). Cross Cultural Training Effectiveness: A Review and a Theoretical Framework for Future Use. Academy of Management Review (Vol. 15, 1), 113-136.

Chuia, A. C., & Kwok, C. C. (2009). Cultural Practices and Life Insurance Consumption: An International Analysis Using GLOBE Scores. Journal of Multinational Financial , 273–290.

Davis, J. J. (1993). Strategies for Environmental Advertising. Journal of Consumer Marketing (Vol.10, No.2), 19-36.

Drogendijk, R., & Slangen, A. (2006). Hofstede, Schwartz, or managerial perceptions? The effects of different cultural distance measures on establishment mode choices by multinational enterprises. International Business Review , 361–380.

Duncan, T., & Moriarty, S. E. (1998). A Communication-Based Marketing Model for Managing Relationships. The Journal of Marketing (Vol.62, No. 2), 1-13.

Ford Motor Company. (2008/9). Blueprint for Sustainability: Our Future Works. Michigan,USA: Ford Motor Company.

Ford Motor Company. (2010, May 28). The Ford Story. Retrieved on June 3, 2010, from Progress at Michigan Assembly Plant: http://www.thefordstory.com/our-plan-progress/progress-at-michigan-assembly-plant/

Ford. (2008/9). Sustaining Ford. Retrieved on June 3, 2010, from Ford.com: http://www.ford.com/microsites/sustainability-report-2008-09/issues-sustaining

Ford Motor Company. (2010). Retrieved on May-June 2010, from Ford Motor Company:

www.ford.com General Motors. (2010). General Motors Company. Retrieved on May-June 2010, from

Corporate Website GM: www.gm.com General Motors Europe. (2008). Fuel for Thought: On The Way To Cleaner Mobility.

Germany: Technologies & Design Communication. General Motors Europe. (2009). GM in Europe: Facts and Figures. Germany: General Motors.

Ginsberg, J. M., & Bloom, P. N. (2004). Choosing the Right Green Marketing Strategy. MIT

Sloan Management Review , 76-84.

Gilissen 27

Hahn, E. D., & Bunyaratavej, K. (2010). Services cultural alignment in offshoring: The impact of cultural dimensions on offshoring location choices. Journal of Operations Management , 186–193.

Hofstede, G. (2001). Cultural Consequences: Comparing Values, Behaviors, Institutions, and Organizations across nations. United States of America: Sage Publications.

Hofstede, G., Neuijen, B., Ohayv, D. D., & Sanders, G. (1990). Measuring Organizational Cultures: A Qualitative and Quantitative Study across Twenty Cases. Administrative Science Quarterly (Vol. 35), 286-316.

Inglehart, R., & Baker, W. E. (2000). Modernization, Cultural Change and the Persistence of Traditional Values. American Sociological Review , 19-51.

Inglehart, R., & Welzel, C. (2005). Modernization, Cultural Change and Democracy. New York: Cambridge University Press.

Koplin, J., Seuring, S., & Mesterharm, M. (2007). Incorporating Sustainability Into Supply Management in the Automotive Industry - The Case of the Volkswagen AG. Journal of Cleaner Production (15), 1053-1063.

Lampe, M., & Gazdat, G. M. (1995). Green Marketing in Europe and the United States: an Evolving Business and Society Interface. International Business Review (Vol. 4, 3), 295-312.

Laroche, M. (2009). Impact of Culture on Marketing Strategy: Introduction to the Special Issue. Journal of Business Research , 921-923.

Muthukumar, R. (2007). Case Studies on Global Automobile Industry. India: ICFAI.

Orsato, R. J., & Wells, P. (2007). The Car Industry & Sustainability. Journal of Cleaner Production , 989-993.

Peattie, K., & Charter, M. (2003). Green Marketing. In M. J. Baker, The Marketing Book (5 ed., Vol. Chapter 28, pp. 726-755). Oxford: Elsevier.

Polonsky, M. J. (1994). An Introduction To Green Marketing. Electronic Green Journal , 1-11.

Polonsky, M. J., & Rosenberger, P. I. (2001). Re-evaluating Green Marketing: A Strategic Approach. Business Horizons (Vol.44,No.5), 21-30.

Rindfleisch, A., Burroughs, J. E., & Wong, N. (2009, June). The Safety of Ojects: Materialism, Existential Insecurity, and Brand Connection. Journal of Consumer Research , 1-16.

Schein, E. H. (2004). Organizational Culture & Leadership. San Fransisco, CA, USA: Jossey-

Bass.

Schwartz, S. H. (1999). A Theory of Cultural Values and Some Implications for Work. Applied Psychology: An International Review (48(1)), 12-47.

Gilissen 28

Schwartz, S. (2004): Mapping and interpreting cultural differences around the world, in: Vinken, H., Soeters, J., Ester, P. (Eds.): Comparing Cultures: Dimensions of Culture in a Comparative Perspective, Brill, Leiden and Boston, MA.

Shenkar, O. (2001). Cultural Distance Revisited: Towards a More Rigorous Conceptualization

and Measurement of Cultural Differences. Journal of International Business Studies (Vol. 32, No. 3), 519-535.

Sivakumar, K., & Nakata, C. (2001). The Stampede Toward Hofstede's Framework: Avoiding the Sample Design Pit in Cross-cultural Business Studies. Journal of International Business Studies (Vol.32, No.3), 555-574.

Smith, P. B., Bond, M. H., & Kâğitçibaşi, Ç. (2006). Understanding Social Psychology Across Cultures: Living and Working in a Changing World. London: SAGE.

Soares, A. M., Farhangmehr, M., & Shoham, A. (2007). Hofstede's Dimensions of Culture in

International Marketing Studies. Journal of Business Research , 277-284.

Terlutter, R., Diehl, S., & Mueller, B. (2006). The GLOBE Study - Applicability of a New Typology of Cultural Dimensions for Cross-Cultural Marketing and Advertising Reseach. In R. Terlutter, & S. Diehl, International Advertising and Communication (pp. 419-438). Germany: DUV.

Warren, J. P., & Rhodes, E. (2006). 'Smart' Design: Greening the Total Product System. In J. Sarkis, Greening the Supply Chain (pp. 271-291). UK: Springer Verlag.

Winsemius, P., & Guntram, U. (2002). A Thousand Shades of Green: Sustainable Strategies For Competitive Advantage. London: Earthscan Publications Ltd.

Yip, G. S. (1989). Global Strategy...In a World of Nations. Sloan Management Review (Vol.31, No.1), 29-41.

Gilissen 29

Appendix

Appendix I

Figure 1: Contextual Framework

How is the corporate global

greening strategy of major

automotive companies adopted

to the differences in culture of

North American consumers and

that of the Dutch and

Scandinavian consumers?

What is the green

sustainability

strategy of major

automotive

companies?

How does North

American culture

differ from NW

Europe?

consumers

How do the

differences in

culture influence the

global green

sustainability

strategy of major

automobile

companies?

- Define North American

culture.

- Define Northwestern

Continental culture.

- Clearly show the difference

between the two

consumer cultures.

- Comparison using

Hofstede’s cultural

dimensions model.

- Define green sustainability

strategy.

- Highlight green sustainability

strategies of world automobile

suppliers (using Ford and GM)

What is culture? - Define culture. - 4 cultural frameworks compared,

Hofstede chosen.

- What factors should be considered when developing a global green sustainability strategy in order to account for these cultural differences?

Gilissen 30

Appendix II

II(a) Hofstede’s Cultural Dimensions

IBM data revealed four applicable independent dimensions of national culture, including, power distance, uncertainty avoidance, individualism versus collectivism, masculinity versus femininity (Hofstede, 2001). Together these dimensions capture the core of cultural values most readily observable across differing cultures (Hostede 2001) and will be explained. The first of the dimensions is called power distance (PDI). Power distance depicts the magnitude to which cultures acknowledge social hierarchy and inequalities. The second dimension of national culture is known as uncertainty avoidance (UAI). One of the fundamental facts of human life, with which people try to cope through technology, law and religion, is uncertainty about the future. The dimension uncertainty avoidance scales cultures’ acceptance of uncertainty in everyday life and should not be confused with risk avoidance. The third dimension of national culture is named individualism (IDV), versus collectivism. It assesses the relationship each individual has with society and the degree of societal-individual dependence. The fourth and last dimension in which national cultures vary systematically is masculinity (MAS), as opposed to femininity. This dimension evaluates the allocation of gender roles in society.

Later research resulted in the addition of a fifth dimension, long-term orientation (LTO)

versus short-term orientation, which Hofstede (2001) defines as the extent to which a society encourages merits oriented toward future rewards.

II(b) Schwartz’s Cultural Values

Shalom Schwartz, an Israeli psychologist, critically takes Hofstede’s analysis of nations one step further and evaluates culture at the individual-level by focusing on values. When the concept of “values” is studied, individuals are compared; when the concept of “culture” is evaluated, societies are compared (Hofstede, 2001).

In his approach, Schwartz (1999) stresses that in order to compare nation-level

comparisons accurately; basic research into the values at the individual-level should be done. This because cross-national surveys always entail translations of concepts into various differing languages, leading to a large variation in the range of identical meanings of these concepts. Therefore, by checking how values compare among individuals in diverse parts of the world, it can be checked whether or not a values survey relies on the same psychological meanings in diverse parts of the world (Smith et al., 2006).

At the individual-level structure of analysis, Schwartz’s included all value categories

regarding inter-country cultural disparity (a total of 56 values) (Drogendijk & Slangen, 2006). The following ten dimensions were the result of this analysis: power, achievement, hedonism, stimulation, self-direction, universalism, benevolence, conformity, tradition, and security (Schwartz, 1999). These are depicted by figure 2.

Gilissen 31

Figure 2: Schwartz’s Individual-level Structure of Analysis of Values

The meanings of these individual-level dimensions are subsequently provided by Schwartz (1999). Power (PO) considers social status and prestige, as well as, control over people and resources. Achievement (AC) regards individual achievement through illustrating capability according to social standards. Hedonism (HE) is one’s pleasure and satisfaction with life. Stimulation (ST) is determined by excitement and challenges in life. Self-direction (SO) is the ability to think and choose independently. Universalism (UN) is showing appreciation and tolerance for the welfare of people and nature. Benevolence (BE) regards the preservation and enrichment of the wellbeing of people with whom one is close with. Tradition (TR) is the degree to which traditional culture or religion provide the self with respect and commitment of the customs and ideas. Conformity (CO) regards the control of actions and impulses likely to displease others and disobey social expectations and norms. Security (SE) is the safety and stability of society, relationships and oneself.

Upon examining which of these 56 values had an equivalent meaning across cultures,

the number of useful values was reduced to 45 items per country (Drogendijk & Slangen, 2006). This resulted in seven nation-level value-types which Schwartz labeled: egalitarianism, harmony, embeddedness, hierarchy, mastery, affective autonomy, and intellectual autonomy (Schwartz, 1999).

Schwartz (2004) explains what each of these seven categories mean. Egalitarianism

represents the degree to which people are voluntarily able to promote the well-being of others, by putting aside one’s own self-serving interest. Harmony refers to the value that is attached to harmoniously fitting into one’s environment. Embeddedness concerns a culture’s focus on restricting actions or desires that will disrupt the solidarity of the group or the traditional order, as well as, upholding the existing state and correctness. Hierarchy refers to how justifiable it is to unevenly distribute power, responsibilities and resources. Mastery denotes the significance of self-assertion in directing or changing the natural and social environment to achieve group or individual goals. Affective autonomy promotes the pursuer to experience positive affective experiences for themselves. Intellectual autonomy

Gilissen 32

expresses the importance for individuals to follow their own intellectual directions and ideas independently.

II(c) Inglehart’s World Values Survey

The first of the two dimensions, Traditional versus Secular-rational values, highlights the difference between cultures in which religion is of importance and those where it is not. Inglehart and Baker (2000) identify a broad range of other aspects that are associated with this dimension. Cultures near to the traditional pole highly value parent-child ties and submission to authority, moreover, they do not approve of divorce, abortion, euthanasia, and suicide. These societies are marked by high levels of national pride and national outlook on life. At the other pole, societies based on secular-rational values have opposite preferences regarding the above aspects. Increasingly, industrial societies have shifted away from Traditional toward Secular-rational values, though this relationship is not linear (Inglehart & Baker, 2000). According to Inglehart the core of “post-modernization”, was the shift from survival to well-being (Hofstede, 2001). Survival versus Self-expression values regards the extent to which society places emphasis on economic and physical security versus stressing one’s subjective well-being, self-expression and quality of life.

Figure 3 is a two-dimensional graph illustrating the position of North America and NW

Europe according to Inglehart. North America is located in the cluster of English Speaking countries, whilst, NW Europe is positioned in Protestant Europe. NW Europe has more secular-rational values in comparison to North America which emphasizes traditional values more. Both clusters are high on self expression values as opposed to survival values.

Figure 3: Two dimensional cross-cultural variation by Inglehart.

Figure 3 source: Ronald Inglehart and Christian Welzel, Modernization, Cultural Change and

Democracy. New York, Cambridge University Press, 2005: p. 64 based on the World Values Surveys, see www.worldvaluessurvey.org.

Gilissen 33

Appendix III

III(a) Hofstede

Table 1: Hofstede’s Country Scores per Cultural Dimension

PDI IDV MAS UAI LTO

World Average 55 43 50 64 45

North America 40 86 57 47 26

US 40 91 62 46 29

Canada 39 80 52 48 23

NW Europe 33 75 14 47 35

NL 38 80 14 53 44

Scandinavia 28 69 14 40 27

Sweden 31 71 5 29 33

Finland 33 63 26 59 -

Norway 31 69 8 50 20

Denmark 18 74 16 23 -

Created by Kelly Gilissen (08/06/2010), based on Geert Hofstede (http://www.geert-hofstede.com/)

It should be noted that all scores for North America and NW Europe were calculated

based on an arithmetic mean and rounded to the nearest whole number. According to Hofstede (2001), it should also be taken into consideration that the French

province of Quebec has a propensity to be more private and reserved, when compared to other Canadian provinces, which causes some tension.

Gilissen 34

This thesis evaluated the national cultures of North America and NW Europe based on Hofstede’s values. This section augments this analysis by examining these respective cultures with regards to Schwartz’s Cultural Values and Inglehart’s World Survey.

III(b) Schwartz’s Cultural Values for North America and NW Europe

The location of 67 nations in relation to Schwartz seven nation-level value-types is depicted in the Figure 4.

Figure 4: Schwartz’s Map of 67 Nations on Seven Cultural orientations.

The USA is located in between an affective autonomy and mastery, but closest to the latter. Mastery includes important values like independence, success, social recognition, ambition, daring and competence. Canada (English speaking part) is closest to an affective autonomy, where pleasure, exciting and varied life play a crucial role. Values at pole ends of the map entail that those values are in opposition of one another. For example, as Schwartz (1999) notices, American culture focuses on mastery and affective autonomy, whilst giving little importance to the domain of harmony (opposing pole of Mastery). Central to harmonious cultures are values such as world at peace, unity with nature, and protecting the environment.

According to Schwartz (1999), egalitarianism and intellectual autonomy are usually

found together, as is the case for NW Europe. Denmark and the Netherlands share the characteristics of an intellectual autonomy, and are also closely linked to egalitarianism. The essentials of intellectual autonomies include broadmindedness, creativity, curiosity and freedom. Sweden, Norway and Finland strongly emphasize egalitarianism, harmony and intellectual autonomy. Main values in egalitarianism cultures are equality, social justice, responsibility, help, and honesty. The cultural emphasis for NW Europe on embeddedness is low, and it is very low for mastery and hierarchy.

Figure 5 illustrates Schwartz’s nation-level structure of values depicting the

characteristics of the cultures. It is thus easier to see which values are relevant to particular

Gilissen 35

national structures. For example, harmonious cultures value protecting the environment, a peaceful and beautiful world, and are one with nature.

Figure 5: Schwartz’s Nation-level Structure of Values

Gilissen 36

III(c) Inglehart’s World Value Survey for North America and NW Europe

Figure 6 illustrates the cluster-level value scores on traditional/secular-rational values for all available waves of surveys. It can be noticed that North American culture is still relatively traditionally orientated. NW Europe, in contrast, is rather high on secular-rational values.

The average score of secular-rational values for NW Europe across all waves of research

is slightly increasing. In North America from 1981 (wave 1) to 1990 (wave 2), culture was on its way to focusing less on traditional values. However, from 2000 (wave 4) to 2006 (wave 5) it can be noticed that traditional values have become more important once again.

Figure 6: Cluster-Level Value Scores on Traditional/Secular-Rational Values For All Available Surveys (Where Wave 1 = 1981, 2 = 1990, 3 = 1995, 4 = 2000, 5 = 2006)

-1

-0.5

0

0.5

1

1.5

0 1 2 3 4 5

Trad

itio

nal

/Se

cula

r-ra

tio

nal

val

ue

s

Waves

Average Northwestern Continental EuropeAverage North America

Gilissen 37

Figure 7 depicts the cluster-level value scores on survival/self-expression values across all waves of research. It is evident that both North American and NW European cultures rank especially similar on self-expression values. Over the years of research done, both averages have increased almost homogeneously.

Figure 7: Cluster-Level Value Scores on Survival/Self-Expression Values For All Available Surveys (Where, Wave 1=1981, 2=1990,3=1995,4=2000, 5=2006)

Societies that rank high on self-expression emphasize the need for environmental

protection, acceptance of diversity, and increasing priority for participating in economic and political decision making (Inglehart & Wetzel, 2005). According to Inglehart et al. (2005), the level of interpersonal trust is positively correlated with values of self-expression. Since North America and NW Europe are cultures with high self-expression values, their interpersonal trust is also high. A culture of trust and tolerance is thus formed, where people value individual freedom and self-expression highly (Inglehart & Wetzel, 2005).

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

0 1 2 3 4 5

Surv

ival

/Se

lf-e

xpre

ssio

nva

lue

s

Waves

Average Northwestern Continental Europe

Average North America

Gilissen 38

Figures 8 and 9 have been created to illustrate the per country level value scores on traditional/secular-rational values, as well as, survival/self-expression values (across all available waves). They are an in-depth analysis of Figures 6 and 7.

Figure 8: National-level Value scores on Traditional/Secular-rational values for all available surveys (where wave 1 = 1981, 2 = 1990, 3 = 1995, 4 = 2000, 5 = 2006)

Figure 9: National-level Value scores on Survival/Self-expression values for all available surveys (where, wave 1=1981, 2=1990,3=1995,4=2000, 5=2006)

-1

-0.5

0

0.5

1

1.5

2

0 1 2 3 4 5

Trad

itio

nal

/ Se

cula

r-ra

tio

nal

val

ue

s

Waves

US Canada The Netherlands Sweden Finland Norway Denmark

0

0.5

1

1.5

2

2.5

0 1 2 3 4 5

Surv

ival

/Se

lf-e

xpre

ssio

n v

alu

es

Waves

US Canada The Netherlands Sweden Finland Norway Denmark

Gilissen 39

Appendix IV

IV(a) Impact of Hofstede’s Dimensions in International Marketing and Consumer Behavior

In Table 2, Soares et al. (2007) has summarized the findings of previous academic research regarding the impact of Hofstede’s dimensions in international marketing and consumer behavior.

Table 2: Impact of Hofstede's dimensions in international marketing and consumer behavior

Individualism Uncertainty avoidance

Power distance

Masculinity Long-term orientation

Innovativeness x x x x X

Service performance

x x x

Advertising appeals

x x x

Information exchange behavior

x x

Sex role portrays

x

source: Soares et al. (2007, p281).

As can be noted, the dimension of individualism (collectivism) influences innovativeness, service performance and advertising appeals. Uncertainty avoidance impacts innovativeness, advertising appeals and information exchange behavior. Power distance has the widest range of influence with regards to international marketing and consumer behavior. It manipulates innovativeness, service performance, advertising appeals and information exchange behavior. Masculinity is the sole the dimension that impacts sex role plays. It also influences innovativeness and service performance. Long-term orientation only has an impact on innovativeness.

IV(b) Corporate Responses to Environmental Development

Reactive corporations are reluctant to respond to environmental scandals and resulting regulations. Environmental planning is seen as a procedure to keep regulators and consumers content, whilst doing so these corporations try to minimize costs and inconvenience. Functional responsive corporations have developed a more positive stance towards environmental responsibilities and attempt to achieve cost efficiency (due to the greater financial stakes involved). Integrated businesses realize cooperation is necessary (with private enterprises as well as (non)government agencies) and incorporate environmental concerns in their business strategies. Proactive environmental management is typically still a forecast (though there are companies already using this approach); however, it is expected to take center stage as stakeholders increasingly stress the necessity for sustainable solutions.

Gilissen 40

Appendix V

Price of Volvo S60 in North America vs. NW Europe

The price of the Volvo S60 in the Netherlands has been chosen to represent the price of the Volvo S60 in NW Europe. Figure 10 illustrates the company website of the Volvo S60 in NW Europe. The price of the Volvo S60 in NW Europe is € 55,995.

Figure 10: Price of Volvo S60 in NW Europe

Retrieved 08/06/2010 www.volvocars.com/nl The price of the Volvo S60 in the United States has been chosen to represent the price of

the Volvo S60 in North America. Figure 11 illustrates the company website (and price) of the Volvo S60 in North America. The price of the Volvo S60 in North America is $ 38,550.

Figure 11: Price of Volvo S60 in North America

Retrieved 08/06/2010 www.volvocars.com/us/

Gilissen 41

Subsequently, the website http://www.xe.com/ was used to determine the live conversion rates for US dollars into Euros (and vice versa). Based on the data obtained on June 8, 2010 (9.30 UTC where 1 EUR = 1.19127 USD, and 1 USD = 0.839442 EUR) the prices of the Volvo were calculated and rounded. Table 3 illustrates the findings.

Table 3: Actual vs. Rounded Prices of Volvo S6 for Respective Regions

Actual Price of Volvo S6 Rounded Price of Volvo S6

North America $ 38,550.00 = € 32,360.49

$ 38,000 = € 32,000

NW Europe € 55,995.00 = $ 66,705.02 € 56,000 = $ 67,000