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Economics/Universalism vs cultural relatism


Hi, my name is Rain a Mass Communication student from the Philippines. I just want to ask, what is your opinion about Universalism VS. Cultural Relativism and as an economist, which would be the best for a nation, Is it the implementation of the Univeralism doctrine or the retention of cultural relativism in a country?

Hope you find time answering my questions. Thank you.

From an economic perspective, this is a great question!

Thank to technological advances in communication, transportation, and the dissemination of information, our world has the potential to become highly integrated, a process called globalization.  As contact between nation becomes easier and cheaper than ever, the people of these nations will trade together in order to maximize sales and minimize costs.  The manner in which this is done can also cause people to be exposed to ideas and cultures from other nations as well, but it depends a lot on how these products are marketed.

In order to help explain this, let's look at something called the integration-responsiveness framework.  An image of the grid can be found here:

Each company, when they are interacting with people from another nation, must find the best balance of global integration, and domestic responsiveness.  That refers not only to the products themselves, but also the way the way a company portrays itself; the image that a company has in each nation.  For example, Pizza Hut is seen as a cheap and easy food delivery option in the US, but in China it markets itself as a high-end, dine-in restaurant for people seeking classy foreign food.  The food itself changed a little bit (there are a few original pizza toppings available), but the image they created for themselves changed a lot.  So, when Pizza Hut changed their products and images, they also changed how much of American culture the Chinese were being exposed to.

Culture is really just a collection of ideas; things we've been brought up to believe, including the manner in which we should behave and interact with others.  When we are exposed to new ideas and new cultures, often people will begin to accept and even adopt parts of another culture that they see as useful, interesting, novel, or otherwise beneficial.  Once kids in the US were exposed to Japanese animation, that part of Japanese culture became very popular in the US because it was better than animation in the US.  Some of the people in the US that enjoyed Japanese animation went on to try other aspects of Japanese culture; some became popular (sushi), while others did not (Japanese music).  No cultural traits will become popular unless the people of another nation are exposed to it, though, and the amount of another culture that people are exposed to depends entirely on economics.  Why economics?  Well, economics defines and drives our exposure to other nations.  We go to other nations seeking employment, we can buy some goods more cheaply from other nations, our companies can sell more products by selling to a larger number of customers than 1 nation can provide, we can gain unique products and innovations that aren't otherwise available, and when resources are limited people fight to maintain control over what little exists (like oil).  In short, our drive to travel the world comes, in large part, from our need to trade.

So how does a company decide whether to be internationally integrative or responsive?  It's all about maximizing sales and minimizing costs.
International Strategy (low integration, low responsiveness): This means that a company is taking no efforts to customize products to the needs of locals, and intends to keep their business strategy focused on the local level.  An example would be Maserati; they sell the same product everywhere in the world and don't combine the efforts of offices around the world much at all.  This can help other nations become exposed to a culture because a company with this strategy will still encompass only their own national culture, rather than being incorporating any other cultures to make sales, but with low-integration, they may not get much exposure.  In other words, they may show very pure cultural traits, but it may not spread far since they are not globally integrated.
Global Strategy (high integration, low responsiveness): This means the organization takes efforts to bring-together its branches from around the world in a coordinated effort, exposing workers from around the world to each other, in order to sell a single, unchanging product-line.  So, this type of company will expose the world to the products of their home nation.  Honda was a good example of this in the early 20th century, but then they actually changed the car-culture around the world as many nations adopted not only the Japanese designs, but also their business operations to remain competitive.  A very-high degree of cultural universalism being exerted, here.
Multinational Strategy (low integration, high responsiveness): These companies will attempt to customize their products to meet the needs of each nation, but control it from a single location.  These companies contribute the least to cultural universalism because not only do people have the least amount of exposure to other cultures through organizational integration, but the products themselves do not necessarily represent the culture of the company's home nation.  This is also often where cultural mistakes are made, because the people of one culture assume they can understand the needs of other cultures.  Proctor & Gamble is an example of this.
Transnational Strategy (high integration, high responsiveness): Hershey.  Hershey is a chocolate company that has headquarters all over the planet, has cross-national directors, and changes their recipe for each nation.  As a result, everyone knows about Hershey because of their high integration, but their high responsiveness means that they aren't representing any single culture; they are representing all cultures in their respective nations, so each nation isn't really exposed to anything new.

Since economics drives globalization and exposure to other nations, and the amount to which we are exposed to their cultures is a function of driving profits and exposure (also an economic issue), then the amount of cultural universalism vs. cultural relativism is also driven by an aggregate of economic factors as ideas and individual cultural traits compete for dominance in being the most useful in each nation.

We might think that increasing globalization means that we are becoming a homogeneous world; that we are losing the uniqueness of each culture through the spread of westernization or other forms of global cultural integration.  Not every cultural trait or idea works in every nation, though, so the ideas that people accept will be different in each nation, which then changes the evolution of our ideas in these disparate nations causing increasing cultural differentials.

In short, when it comes to an economic analysis of culture, there are some traits that become more universal, while there are other traits that become more relative.  There are new cultural traits born all the time, not all of which will be popular in all nations.  Our world is big enough and diverse enough to maintain a degree of relativism, but we are constantly working toward finding a universal set of traits that optimize our decisions.  As a result, between universalism and relativism, one is not better than the other, but we must utilize both as a means of cultural evolution to make ourselves better than we were in the past.


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Michael Taillard


Accepts most economic questions


Consulting with major corporations, government agencies, political organizations, small businesses, non-profits, start-ups, and even individual people. Teaching at universities around the world, and developing original coursework. Performing original research and analysis. Writing books and scientific studies.

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PhD (Financial Economics; honors) -- MBA (International Business Finance; honors) -- Grad School Certificate (International Business Management; honors) -- BS (International Business Economics; honors) -- AA (Business Administration; honors) -- Certificate (Chinese Language and Culture) -- Trade School (Transportation Logistics; honors)

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