Ethnocentrism Within National Boundaries

Typically involving in-group favoritism (Hammond and Axelrod, 2006), ethnocentrism is an exemplary socio-psychological phenomena of a cultural distortion and a recurring theme in international business, arising in the discussion of strategy formulation (the strategy works successfully in my home market, and it should work in foreign markets), in marketing (if the marketing mix worked at home, it should work abroad) and in human resource management (why should the workforce practices and training be any different to those at home?). One way to think of ethnocentrism is as referring to feelings of group centrality and superiority (Sumner, 1906)

Awareness of “ethnocentrism”-the tendency to refer spontaneously to one’s own values and ways of thinking by drawing from one’s own ethnic or cultural group—can lead to disinterest, feelings of cultural superiority and cultural biases when making business decisions (Usunier and Lee, 2009) in a cross-cultural setting. The main premise of an ethnocentric way to see the world is that societies place their own group at the centre of that world, perceiving and interpreting other societies within their own frames of reference, and invariably judging them as inferior (Booth, 2014); that is, “(t)he ‘we’ group is characterized by feelings of superiority and pride, while the ‘others’ group is perceived as inferior” (Siamagka and Balabanis, 2015, p. 68).

In a domestic environment, studies of ethnocentrism mostly focus on the feelings of immigrants towards the products of their host country. In the case of Asian immigrants in the USA, the finding was that perceived ethnicity and acculturation play an important role in influencing ethnocentric feelings towards the host country, reflected in attitudes and behavioural intentions toward products made in the USA (Watchravesringkan, 2011).

One argument is that when home and host countries represent significantly different degrees of economic advancement, both ethnocentric and non-ethnocentric immigrants generally favor the products of the more advanced country (Zolfagharian, Saldivar and Sun, 2014). This would presumably favour a preference for the host country products since immigrants are generally presumed to look for a better life in a better place.

However, the findings are inconclusive because the role of acculturation and product type remain somewhat nebulous for their effect on ethnic consumers’ relative preferences for ethnic products and for mainstream products. For example, Marques, Yzerbyt and Leyens (1988) considered in-group heterogeneity and identified the Black Sheep Effect, addressing judgments about likeable and unlikeable in-group members versus out-group members, finding more extreme judgments by in-group members. Another example is a recent study of second-generation Turkish immigrants in the Netherlands—the children of immigrants who were born and bred in the Netherlands. This study found that acculturation and ethnic identification were important predictors of both consumer ethnocentrism and consumer disidentification, the latter referring to consumer repulsion towards Turkey negatively affecting the purchase of products made in that country or by businesses in that country (Josiassen, 2011). While somewhat startling in its finding of consumer repulsion to their ancestor’s place of birth, it certainly is not clear how generalizable this finding is. More research is needed.

The above studies are only meant as examples of the research interest generated in this area, which nevertheless remains immature. Without questioning these or other contributions, much more needs to be discovered about consumer ethnocentrism (and disidentification), given that it is a complex multi-dimensional construct encompassing five dimensions (explained in Table 13.1)—namely ethnocentric prosociality, ethnocentric cognition, ethnocentric insecurity, ethnocentric reflexiveness and ethnocentric habituation (Siamagka and Balabanis, 2015). All have implications for ethnic minority consumers and for ethnic minority businesses affiliating actively to a minority ethnic group, as eloquently indicated by the continued resilience and increasing importance afforded to minority ethnic groups within culturally diverse societies (Jamal, Peñaloza and Laroche, 2015; Pires and Stanton, 2015 b).

While an ethnocentric approach may be successful, a prior requirement for this choice is cultural awareness (Bonvillian and Nowlin, 1994), which involves being aware of how another person’s acculturation affects one’s behaviour, and self-awareness of how one’s own culture affects one’s behaviour. The increasing visibility of minority ethnic groups, particularly in the USA but also in Australia, the UK and throughout Europe, has heightened business awareness of the opportunities offered by “new” markets based on multiple ethnicities within national borders. Yet, the perceived effectiveness of the increased multicultural marketing efforts to take advantage of those opportunities were estimated at only four of each ten cases.

Targeting ethnic markets is clearly challenging for all businesses, not the least because of the cultural differences that may need to be understood and effectively bridged if the aim is to establish relationships with consumers in these markets, as endorsed in this text. But the argument here is that if an ethnic minority business can target a co-ethnic audience and talk to it in its own language and in its own ways, then it can create a special bond with that audience that is not available to non-co-ethnic businesses (Hotchkiss, 1996). Overcoming the cultural challenge requires staff with a variety of skills and competencies (see Table 13.2 for an explanation), namely: interpersonal skills, linguistic ability, cultural curiosity, tolerance for uncertainty and ambiguity, flexibility, patience and respect, cultural empathy, strong sense of self and sense of humor (Schneider and Barsoux, 2003, pp. 190–195), while operating effectively in the local language and culture may also be important (LNTO, 2000).

The ability to deploy suitable, ethnic-sensitive tactical activities can result in competitive advantage (Emslie, Bent and Seaman, 2007; Cui and Choudhury, 2002; Cui, 1997), but the needed skills and competencies ensure that the cultural challenge is also a challenge for human resource management.

Human Resource Management (HRM) is the term used to describe formal systems devised for the management of people within an organization, involving the staffing (recruitment and hiring), deployment and management of the organization’s employees (defining/designing work, employee compensation and benefits). Its purpose is to maximize the productivity of an organization by optimizing the effectiveness of its employees, covering the broad tasks of managing employee assignments and opportunities, competencies, ethical behaviours and motivation (Schuler and Jackson, 2007). It is important in the present context because business demand for the skills and competencies that facilitate effective communication and interaction with ethnic communities can be expected to influence the criteria that are used in employee selection, as well as the need for, extent and nature of employee training.

Dealing With Cultural Distance

Within any country and any industry, businesses need to train their employees in a variety of areas but, compared with internally oriented areas of specialization, this need may be more pressing in areas involving interactional exchanges with the market. Organizational culture and subaltern aspects such as service-delivery performance, handling complaints, service recovery and ethical behaviour are just examples that assume particular importance when the strategic focus is on the development and implementation of relational ethnic-sensitive tactical activities.

Staff of ethnic minority businesses need to be prepared to handle enquiries, interact and arrive at an understanding with their co-ethnic consumers within a competitive environment, which implies that consumers have a choice. Hence, understanding consumers’ needs and to know how to interact effectively with them while addressing those needs is an important aspect of human resource management and employee training,

However, while formal training programs that foster cultural sensitivity and acceptance of different ways of doing things at country level are widely practiced by businesses that use an expatriate workforce (Harvey and Moeller, 2009; Littrell et al., 2006), such programs are usually focused on alleviating cultural shock effects (Usunier and Lee, 2009; Oberg, 1960), centred on expatriate employees’ adaptation to a new mainstream culture, and much less likely to focus on the characteristics of any one specific minority ethnic group. They are, therefore, much less likely to be attractive to ethnic minority businesses, and to be seen as crucial by entrepreneurs for assuring their businesses’ effective performance. This is corroborated in Australia by the findings of a report on energy consumption by ethnic minority consumers and businesses, which recommended the recruitment and training of bilingual educators in the languages of the ethnic communities to deliver information sessions on energy markets, demand side participation and hardship assistance (EEC, 2012)

Learning to accept and understand that cultural differences exist can help individuals reduce own discomfort and to better adapt to a new cultural environment (Pires, Stanton and Ostenfeld, 2006). Although essential, this is just the first step in understanding all that needs to be known about a minority ethnic group, with its cultural traits, values, gatekeepers, networks and other specifics required to power effective business performance that eventually meets with group preference.

The lack of group specific training programs can be explained by the minority status of the group in focus, justified both by a lack of critical mass to attract training providers, and by uncertain demand for the training, given the financial and time costs involved. Notwithstanding, while the consequences of a lack of training programs specific to a minority ethnic group are likely to be greater for non-co-ethnic businesses, such as mainstream businesses, due to the greater cultural distance (Chen et al., 2010; Harrison and Peacock, 2009; Hofstede, 1983), ethnic minority businesses may also suffer from the lack of formal business training programs for ethnic entrepreneurs.

The absence of formal training programs for ethnic minority businesses needs to be managed by suitably trained ethnic entrepreneurs, who then need to select the right employees and to train them to ensure they have the right skills and competencies, coaching them to perform effectively (Berg and Karlsen, 2012; Hameed and Waheed, 2011).

Summing up:

1. Different countries will offer ethnic entrepreneurs more—as in the case of the UK (Hussain and Matlay, 2007; Basu, 2004), or less, as in Australia (Collins, 2003)—business support and training programs;
2. Employee selection may involve a process with greater complexity for these businesses because prospective employees are often family members (possibly without the required skills), co-ethnic individuals, similar-others and, perhaps less often, individuals from the dominant group;
3. Given a possible lack of formal cultural training about the specific minority ethnic group, training is often on-the-job, with or without supervision; field training/coaching by the entrepreneur requires skills, which may be limited as per point 1 above;
4. While the main focus of an ethnic minority business is on the co-ethnic minority ethnic group, other ethnic groups and the mainstream cannot be excluded from day-to-day operations, with encounters taking place in the presence of each other.

There is, therefore, no apparent reason why the skills explained in Table 13.2 would not apply here. In fact, those skills may be more strongly required given a perceived power shift from the customer to the supplier, and the high probability that customers from different minority ethnic groups may be in each other’s presence when interacting with an ethnic minority business.

The implication is that, while ethnic minority business dependence is necessarily on the co-ethnic group of affiliation, cross-cultural interactions cannot be excluded, adding to the complexity in dealing simultaneously with different cultures, although this difficulty may be moderated if:

• It is accepted that all consumers try to fit, to some extent, with the mainstream way of doing things, thus providing a shared base for consumption behaviour and facilitating employees’ performance (Anthias and Cederberg, 2009); and
• In the case of highly intangible service activities’ instances of business failure, simultaneity and inseparability in service-encounters may help reduce the negative implications for business through the partial appropriation by customers of the responsibility for poor interactions.

Notwithstanding, a common way adopted by business in general in dealing with exchanges involving cultural distance issues is to reduce the distance by employing individuals that identify themselves with the target minority ethnic group (Hou, 2009; Aldrich and Waldinger, 1990). Together with the skills required to manage cross-cultural differences, language and cultural differences between businesses and consumers within a host country result in different vocabularies for the interpretation of things and different behaviours in consumption. Employing co-ethnic labour reduces cross-cultural communication issues.

Typical Tactical Activities Deployed by Ethnic Minority Businesses

Following the European Commission (2008), the typical ethnic minority business is likely to be a micro business owned and managed by a male ethnic entrepreneur with few employees, if any, operating in areas of business with low entry barriers and requiring low skill requirements. Low entry barriers mean that the business is vulnerable to price competition, by other co-ethnic entrepreneurs, by ethnic minority businesses affiliated to other ethnic groups, and by business in general. But a main reason is also a lack of differentiation expertise—by entrepreneur and employees—which explains labour intensive production, long working hours and low wages, as well as lower turnover and lower profit than typical businesses without the ethnic connotation. Asian shopkeepers, for example, are noted for their “commendable industriousness” working 80 hours a week and ignoring the toll this takes on them as human beings (Jones and Ram, 2012; Ram, Jones and Edwards, 2007).

Congruent with discussions in previous chapters of this text, there is somewhat limited research on tactical activities deployed by ethnic minority businesses given the variability in understanding what a minority business is, and the relative concentration of focused research in just a few countries, such as the UK. However, it is possible to propose that many ethnic minority businesses follow a typical path from their start-up to the outgrowth threshold that highlights the people side of the business, where ceasing to be dependent on a minority co-ethnic group dictates their loss of an ethnic connotation.

In the first instance, newly arrived migrants join a minority co-ethnic group, gaining access to its networks. In this process they may gain employment in existing co-ethnic minority businesses in a process that also provides them with opportunities to learn on the job and access to business contacts, to role models and to the consumer community with which some may develop professional and social relationships. This process can provide a way into an ethnic minority business of their own, drawing on co-ethnic peers as a means of reciprocating the benefits gained from the co-ethnic group (Yamagishi, 2003). The discussion that follows provides commentary relevant to Table 13.3.

The Choice of People to Employ

Ethnic minority businesses may be created in the first place to take on opportunities available in the co-ethnic market(s). This involves identifying what the unfulfilled needs and wants of that market are and sensing (more than recognizing based on experience) an ability to satisfy those needs and wants. Often the business objectives of earning a living and/or achieving family employment and/or or enhancing the entrepreneur’s social status are pursued through marketing strategies focused on responding effectively and efficiently to the unfulfilled needs and wants (Benavides-Velasco, Quintana-García and Guzmán-Parra, 2013). Amongst the tactical activities adopted to aptly satisfy consumers’ demand is the employment of people capable of more easily establishing relationships with the target market.

Given the need for the business to understand the cultural nuances of the group, when group needs and wants cannot be addressed solely by the entrepreneur, demand for co-ethnic labour will be created. That demand may be met by the entrepreneur’s family members, or by individuals recruited from

the target market, commonly co-ethnic individuals (Light and Gold, 2000). Depending on the target market, individuals affiliated with other minority ethnic groups and even mainstream individuals may be recruited.

Ethnic Sensitivity Skills Training

As detailed in Table 13.3, training employees develops skills, changes attitudes and directly influences growth (Basu and Goswami, 1999), contributing to increased sales, effective team building, improved quality standards and a stronger, new organizational culture (Daniels, 2003). However, ethnic minority businesses usually recruit their employees from family and from their co-ethnic group using informal practices.

Difficulty in accessing relevant, ethnic sensitive training geared to individual minority ethnic groups explains why co-ethnic businesses often expect their employees to learn on the job, a practice that also reduces substantial training costs (Wood and Mallinckrodt, 1990). This also may explain that these businesses are generally geared towards the recruitment of family labour and co-ethnic employees via informal sources, namely their social and business networks (Waldinger, 2005).

On the job management training and skills acquisition as well as reliance on family and co-ethnic labour may be the source of problems for ethnic minority businesses, particularly those in the start-up phase (European Commission, 2008). While the answer to these problems may be the adoption of a formal recruitment and training approach, the necessary resources and mechanisms may be lacking given the specificity of minority ethnic groups and what ethnic-sensitive practices entail.

People Tactics for Competitive Advantage

Competitive advantage may be relatively easy to achieve by ethnic minority businesses, when they achieve the special status of preferred supplier to their co-ethnic group. However, achieving a preferred supplier status depends on the value proposition offered by the business which encapsulates a variety of tactical activities, of which “people” is a major one. As an element of the marketing mix, the role played by people with soft ethnic-sensitive skills is crucial to an ethnic minority business’ ability to ensure positive and productive interactions with co-ethnic customers, without questioning the contribution derived from other elements in the marketing mix.

Given the shared ethnicity and small cultural distance between the ethnic minority business and the co-ethnic group on which it depends, it should be expected that managing any minor ethno-cultural differences related to group heterogeneity may be relatively easy when compared with operations across ethnic groups. Hence, provided ethnic minority businesses remain focused on their co-ethnic group and are able to defend against the poaching of their best employees by businesses focusing on culturally diverse markets, co-ethnic employees can increase the ability to compete and to achieve competitive advantage.

This premise, however, is challenged when ethnic minority businesses attempt to grow outside the boundaries of the co-ethnic group. Whether expansion is into other minority ethnic groups’ markets or into the mainstream, ability to compete will depend on employee cultural diversity (Smallbone, Bertotti and Ekanem, 2005), as reflected in their service delivery practices. For example, there is no clear reason to argue that Chinese employees who are highly proficient in serving the Chinese minority ethnic group will be equally proficient serving the Japanese minority ethnic group instead.

Finally, various aspects of ethical practices by ethnic minority businesses were alluded to. For example, it was noted that the employment of family members and, in some cases, co-ethnic staff may be disruptive to ethnic minority business growth, hence to competitive advantage. While it may be the lure of competitive advantage that explains attempts to exploit unskilled co-ethnic/family labour ready to work for less, the likelihood is that these practices, together with unethical practices of nepotism in recruitment and selection, may reduce productivity and expose the business to competitors (Dhaliwal, 2008).

Indeed, opportunistic practices such as work exploitation by requiring family and co-ethnic labour to work longer for less (Anderson, 2010) may be incidentally justified by eventually precarious business contexts. Occasionally, such practices may even be assessed positively as altruistic by the community, as in the case of the employment of co-ethnic individuals unable to secure other employment (whether with legal or illegal status in the host country). However, there is no evidence that nepotism, discriminatory work advancement and underpayment practices (Noon, 2007) can be expected to meet with positive assessments by the co-ethnic community for the longer term implied in the deployment of relational business approaches.

Given other ethics-related practices discussed in Chapter 11, such as unfair premium pricing at community events, supply of ethnic products of poor quality and general over-promising may not always be distinct from fair pursuance of opportunities in serving co-ethnic minority groups, so their possibly negative repercussion cannot be overlooked. For example, it is widely accepted that black, Asian and minority ethnic female entrepreneurs are subject to more discrimination, also reflected in a lack of business and social support (Carter et al., 2015; Davidson, Fielden and Omar, 2010; Collins and Low, 2010; Pearce, 2005)

Reflecting the sparse attention given to issues of social responsibility and ethics in a small business context (Worthington, Ram and Jones, 2006), this chapter concludes with a brief appraisal of those issues in the context of ethnic marketing relevant to ethnic minority businesses, largely drawing from Pires and Stanton (2002, 2015 b).

Ethnic Minority Business: Ethics and Social Responsibility

Drawing on Vitell, Rallapalli and Singhapakdi (1993), ethnic marketing ethics is understood as referring to the nature and grounds of moral judgments, standards and rules of conduct relating to ethnic marketing decisions and ethnic marketing situations. This allows for decisions and situations inherent to business-to-consumer (B2C), administration/government to consumer (A/G2C) and, indeed, business-to-business (B2B) environments.

The importance of issues of ethnic marketing ethics and social responsibility has been highlighted by relatively recent research in the marketing literature (Jamal, Peñaloza and Laroche, 2015; Pires and Stanton, 2015 b, 2002; Cui and Choudhury, 2002; Cui, 1997). Including discussions of social responsibility usually limited to A/G2C perspectives, examination is overwhelmingly focused on issues of ethics related to the targeting/non-targeting of vulnerable consumers affiliated with minority ethnic groups (Andreasen and Manning, 1990), or some aggregate of these groups (such as Hispanics, African-Americans and Asian-Americans). The context of that research is, invariably, on business and Government behaviour in the B2C domain and typically limited to the examination of cross-cultural aspects.

An extensive multi-disciplinary search for literature largely met with silence on matters of social responsibility and ethical behaviour involving ethnic minority businesses either as a perpetrator or as a recipient. Urged by the identification of important and enduring issues of ethical concern in the discussion of the importance of people in ethnic minority businesses’ marketing mix, ethics is the mainstay of the discussion concluding this chapter.

Disadvantage, Vulnerability and Poor Business Practices

Examining social responsibility and ethics issues related to ethnic marketing at any level can benefit from clearly distinguishing general considerations of business ethics, “what is good” related to business practice (Seelye and Wasilewski, 1996), from poor business practice (as contrasted with unethical behaviour) and social responsibility (what is “good” for society in general, present and future).

The distinction between ethics and social responsibility may be easier to operationalize in the case of ethnic minority businesses given their shared ethnicity with their target market, although market heterogeneity may be a complicating factor. This is because a business needs to define a level of “what is good” that balances own goals, customers’ needs and those of society in general (Pires and Stanton, 2002), thus respecting their primary function as providers of a service to their customers (Buchholz and Rosenthal, 2000). Notwithstanding, dependence on the co-ethnic marketing group does not impede exploration of opportunities focused on other minority groups, the mainstream or even external markets. Clearly, operationalization is more complex in these cases because distinct cultures lead to eventual lack of alignment of the notion of “what is good” across cultures (Kotler et al., 1998, p. 833; Sarwono and Armstrong, 1998).

Adapted to the present context from a critical review of the relevant literature, Table 13.5 reports ethics and social responsibility issues associated with ethnic marketing targeted to co-ethnic minority consumers by ethnic minority businesses.

Often noted in the literature for their vulnerability and disadvantaged status vis-a-vis the mainstream population, consumers within heterogeneous minority ethnic groups may suffer from inequalities in the marketplace (Wolburg, 2005; Brenkert, 1998). Ethnic minority consumers, particularly early in their settlement within a host country, may have limited market knowledge about what is available, where and for how much, as well as about market “do’s and don’ts”, reflected in poor socialization. This may lead to newcomers being perceived as disadvantaged with their vulnerability exploited through deceptive practices by both ethnic minority businesses and businesses in general (Kotler et al., 1998; Moore-Shay, 1996), clearly a matter of concern for ethnic marketing ethics.

New arrivals in the host market often rely on referral or recommendation by similar-others they trust (Frable, Platt and Hoey, 1998)—eventually their minority ethnic group of affiliation, particularly when market inexperience and communication difficulties limit the number and range of accessible secondary sources—as a means to reduce vulnerability to deceptive practices (Pires and Stanton, 2000) and lessen the effects of cultural shock (Oberg, 1960). Notwithstanding, there is a continued perception of vulnerability and disadvantage, perhaps explained by incongruent stereotyped conceptualizations reflective of cultural sensitivity limitations and based on early information impervious to subsequent evidence, or epistemic freezing (Kruglanski and Freund, 1983).

Considerations about ethnic group substantiality, sometimes perpetuated by a lack of objective information and by the perception of poor returns to the business, may lead to eventual failure to focus on the needs and wants of some sub-segments, including the provision of market information that could enable neglected segments to look for solutions in an informed way. In situations of racial discrimination, as discussed below for the Indian community in the United States, consumer disadvantage may ensue (Grier, Williams and Crockett, 1996). While exposure to a multicultural experience may have ameliorative effects through epistemic unfreezing (Tadmor et al., 2012), deception and discrimination remain important ethics issues involving ethnic minority consumers.

From a social responsibility perspective, failure by ethnic minority businesses to focus on the needs and wants of some ethnic minority consumer segments may lead to dual misallocation of resources, with failure to satisfy “real” needs and over-marketing due to overestimation of the size of the minority ethnic group as a whole resulting in increased costs for the group (Fisher et al., 1999), for the business and for society as a whole. Some of the potential consequences listed in Table 13.5 may result mostly from poor business practices, in which case the resulting ethics/social responsibility issue is present but is not deliberate. Nevertheless, the targeting of minority ethnic groups by ethnic minority businesses may involve deliberately unethical actions as well as actions intrinsically unethical.

Adapted from Cui (1997) Table 13.6 identifies five areas of potential ethical failure by ethnic minority business, namely: inadvertent stereotypes, biology and genetics, nature of the product, redlining and ethnocentric bias.

From an outset where all ethical and social responsibility implications related to socio-economic activity apply equally to all minority ethnic group affiliates, issues of inadvertent stereotypes, and biology and genetics may not apply in the context of a homogeneous minority ethnic group. However, even those issues may apply in situations of inner-minority ethnic group heterogeneity. A major example is the Indian community in the USA, comprising 2.4 million Indian immigrant residents in 2015. The community grew more than eleven-fold, up from just 12,000 in 1960, and it is second only to the Mexican community (Zong and Batalova, 2017). Comprising Hindus, Christians, Muslims, Sikhs, Jains, Buddhists, Parsis and Indian Jews, the Indian community is far from homogeneous, as clear in the excerpt below:

Applied to the Indian community, the practice of ethnic minority business based on the unrealistic homogeneity of the community may be questioned, based on all five areas of possible ethical failure. Redlining, for example, refers to the selection/exclusion of segments within a heterogeneous ethnic minority group (such as the Indian community) by ethnic minority business based on racial lines. It can be perceived as implicit discrimination if the business is not aware of its practice (Bertrand, Chugh and Mullainathan, 2005). It is also similar to consumer racism, a measure of consumer judgments of, and willingness to buy, ethnic products that are perceived as being made by selected or excluded segments, with significant negative effects for minority-owned business performance (Ouellet, 2007).

In the case of ethnocentric bias, the ethical concerns derive from the development of marketing programs towards the co-ethnic group as a whole, hence ignoring the specific needs and wants of segments within the group.

Other issues that may arise from unethical targeting of ethnic minority consumers by ethnic minority businesses are reported in Table 13.7, involving stereotyping, incorrect ascriptions to the community, exclusion, racial discrimination, privacy concerns, dumping of products, alienation of trusted sources, price discrimination, bribes and behaviours that are opportunistic and/or discriminatory (Davidson, Fielden and Omar, 2010; Aldrich and Waldinger, 1990). An example in the literature refers to the targeting of tobacco and alcohol-related products to minority ethnic groups, sometimes understood as racist behaviour (Moore, Williams and Qualls, 1996).

A notable feature of Table 13.7 is its inclusion of issues related to actions enacted by businesses directed to consumers, strictly a B2C environment, albeit intertwined at times with A/G2C aspects relevant to social responsibility. Given the active participation of ethnic minority consumers and businesses in the host country’s marketplace not only as consumers and users of social products but also as producers and retailers, functions usually in the B2B domain, focus on only the B2C environment is, on ethical grounds, hazardous. This is more so in the present context given the role played by ethnic business networks in the day-do-day life and resilience of minority ethnic groups.

For example, dependence on existing preferred suppliers to the community during the start-up phase of a business may be rewarded with reciprocal behaviour to the otherwise unjustified exclusion of competitors, hence possibly adulterating market mechanisms. This defies compliance of the “Respect” value discussed above—the need to “make every effort to understand and respectfully treat buyers suppliers, intermediaries and distributors from all cultures” (AMA, 2018), implicitly recognizing responsibility for ethical responsible behaviour along the whole of the supply chain.

Table 13.8 provides a preliminary review of ethical considerations on ethnic marketing ethics in a B2B context, involving at least one ethnic business.

Acknowledging that business environments are often subject to written norms and regulations, ethical behaviour by embedded ethnic minority businesses is guided by what is legal and what is illegal, as well as by unwritten rules of conduct that, inherently unethical as they may be, are sometimes perceived as characteristic of the normal way of doing business. For example, the potential for bribery practices within the B2B ethnic marketing context is justified by such practices being deemed as common in international/cross-cultural marketing (Dunfee et al., 1999),

justifying the upkeep of a “Bribe Payers Index” (The Economist, 2011). An argument can be made that, since a home culture has predictable effects on managerial decision-making (Tse et al., 1988), similar effects apply within a B2B ethnic marketing domain (Armstrong, 1996).

As social outsiders within a host country, ethnic minority businesses may experience deficits in wealth, in valid educational credentials, in lobbying power and influential contacts. To compensate for these deficits and to overcome political and economic obstacles they face, businesses use personal networks, family and co-ethnic labour, building special relationships and delivering special services, supporting ethnic associations, paying penalties and seeking protection from governments officials and owners outside their ethnic communities through bribery (Waldinger et al., 1990). As stated by Aldrich and Waldinger (1990),

Justified by what is “known” to actually happen in markets, the Business Marketing Association (New York City) has a Code of Ethics discouraging bribery and practices such as disparaging a competitor’s products unfairly, and encouraging treating suppliers equitably (BMA, 2013).

Objection to the noted, almost exclusive examination of ethical issues in the B2C domain, also extends to ethical implications of C2C communications, including the fair or unfair preference for particular ethnic minority businesses and potential influence on exchanges within other environments. These are created by exposure to structural change in information and communication technologies (ICT) and convergence capabilities which support C2C communications.

Exposure to ICT-Based Structural Change

Changes in marketing activity related to consumer-based communication and accessibility issues for ethnic minority businesses from a perspective of ethics and social responsibility are barely covered in the relevant literature. Notwithstanding, the verified importance of this exposure within ethnic markets strengthens the call by Pires and Stanton (2015 b) for further research, since minority ethnic groups and their affiliated consumers and businesses are empowered to independently satisfy their unique demands, at least for some types of goods and services. This may result in a widening of the gap between consumers’ wants and suppliers’ offers, inviting examination of associated ethics and social responsibility issues (Pires, Stanton and Rita, 2010).

The question is whether ethnic minority businesses strengthen their position in the market due to the wider access to alternative suppliers, or whether their ability to benefit is impaired, at least to a greater extent than competitors’ ability, by their deficits in wealth, in valid educational credentials, in lobbying power, in influential contacts and in access to banking and financing. To presume that all ethnic minority businesses benefit from the same accessibility as competitors, or that they are likely to become equally proficient in communicating in the language of the web does not appear a sensible presumption from the outset, given all the known vulnerabilities related to the cultural, language and digital divides (Pires and Aisbett, 2003).

Inequitable ICT-driven gains may contribute to market imbalances, with implications for social responsibility. This may require more Government support for ethnic minority businesses, including proficiency in ICT and, unavoidably, proficiency in English, still the common language of the Internet.

Flexibility and Evolutionary Dynamism

Ethnic minority businesses may benefit from ICT-based flexibility to interact with consumers and suppliers in tactical ways that duly takes into account aspects of ethics and social responsibility. Pires and Stanton (2015 b) recommend examining the potential for the operationalization and implementation of glocalized marketing programs, both within multi-ethnic domestic markets and for minority ethnic communities with multi-locations globally. However, it is unrealistic to consider that only ethnic minority businesses adapt to the evolution of the internet, or that this adaptation will be positive, given the multi-level embedding of ethnic minority businesses. Some questions that need answers and are examined for their implications for ethical behaviour and social responsibility include:

• Can ethnic minority businesses benefit from the potential of robotics?
• Can the use of substitutes for humans able to replicate human actions meet the need for bilingual employees recruited from the co-ethnic group or family?
• Can greater accessibility allow ethnic minority businesses to go beyond their outgrowth threshold?
• Can ICT and robotics dictate the demise of ethnic minority businesses because any business will be able to woo co-ethnic minority consumers with effective and efficient ethnic-sensitive strategies?

Summary

Attention in this chapter was first given to people as an element of the marketing mix, highly relevant to the tactical activities deployed by ethnic minority businesses. The importance of people was strongly highlighted, but a number of issues of ethics and social responsibility were discovered. Drawing on Pires and Stanton (2015 b), attention thus focused on providing an updated perspective of the ethical and social responsibility issues impacting ethnic minority business, necessarily spreading to ethnic marketing as a whole, culminating in a brief discussion of issues emanating from the internet revolution.

It is apparent that the dynamic nature of the capabilities currently becoming available to ethnic minority businesses is grounded on continuous ICT-based innovation that demands capabilities that are both flexible and dynamic, justifying continuous examination. However, ICT-based innovation does not question the tenet that ethnic communities are socially determined. The internet revolution has been ongoing, yet the digital divide remains a reality across and within countries, remaining a real matter of social justice and social responsibility and justifying continued intervention by government.

Clearly, the impact of government policies on immigrants can affect the opportunities available to start a business or the types of businesses that may be started. Some nations require a person to be a resident in order to start a business and it may be extremely difficult, or take many years for an immigrant to obtain their citizenship. Many communities have zoning and ordinances which prohibit certain types of businesses from operating or which dramatically increase the start-up costs for a business in order to comply with the local regulations (Waldinger et al., 1990; Min and Bozorgmehr, 2003).

On a global scale, there are marked differences in the public policies and strategies that countries have adopted to deal with immigrants and refugees, either political or economic. Over the past 60 years, the United States of America has consistently shown a positive stance, while European nations have dithered on the fence at times aggressively “recruiting” immigrants and, more recently, enacting legislation to curb major influxes and/or hinder economic incorporation (Hollifield, 1994).

While research points to the myriad of difficulties encountered by both illegal and legal immigrants in terms of “language barriers, cultural differences, rising competition, racial segregation, taxes and money problems” (Nam and Herbert, 1999, p. 341), immigrant tenacity has delivered positive returns in both struggling and booming economies as well as contributing to the emerging global economy.

Issues of environmental conditions favourable to the growth of ethnic marketing are discussed in the next chapter.