Cross Cultural Management

Cross Cultural Communication & Negotiations Session 6

Cultural Differences in Selected Countries and Regions

Doing business in China
1. 2.

3. 4.

The Chinese place values and principles above money and expediency. Business meetings typically start with pleasantries such as tea and general conversation about the guests trip to the country, local accommodations, and family. The Chinese host will give the appropriate indication for when a meeting is to begin and when the meeting is over. Once the Chinese decide who and what is best, they tend to stick with these decisions. Although slow in formulating a plan of action, once they get started, they make fairly good progress.

Cultural Differences in Selected Countries and Regions

Doing business in China
5. 6. 7. 8.

In negotiations, reciprocity is important. If the Chinese give concessions, they expect some in return. Because negotiating can involve a loss of face, it is common to find Chinese carrying out the whole process through intermediaries. During negotiations, it is important not to show excessive emotion of any kind. Anger or frustration is viewed as antisocial and unseemly. Negotiations should be viewed with a long-term perspective. Those who will do best are the ones who realize they are investing in a long-term relationship.

Cultural Differences in Selected Countries and Regions

Doing business in Russia
1.

2.

3.

4.

Build personal relationships with partners. When there are contract disputes, there is little protection for the aggrieved party because of the time and effort needed to legally enforce the agreement. Use local consultants. Because the rules of business have changed so much in recent years, it pays to have a local Russian consultant working with the company. Ethical behavior in the United States is not always the same as in Russia. For example, it is traditional in Russia to give gifts to those with whom one wants to transact business. Be patient. In order to get something done in Russia, it often takes months of waiting.

Cultural Differences in Selected Countries and Regions

Doing business in Russia
5.

6.

Russians like exclusive arrangements and often negotiate with just one firm at a time. Russians like to do business face-to-face. So when they receive letters or faxes, they often put them on their desk but do not respond to them. Keep financial information personal. Russians wait until they know their partner well enough to feel comfortable before sharing financial data. Research the company. In dealing effectively with Russian partners, it is helpful to get information about this company, its management hierarchy, and how it typically does business.

7.

8.

Cultural Differences in Selected Countries and Regions

Doing business in Russia
Stress mutual gain. The Western idea of winwin in negotiations also works well in Russia. 10. Clarify terminology. The language of business is just getting transplanted in Russia so double-check and make sure that the other party clearly understands the proposal, knows what is expected and when, and is agreeable to the deal.
9. 11.

Be careful about compromising or settling things too quickly because this is often seen as a sign of weakness. Russians view contracts as binding only if they continue to be mutually beneficial, so continually show them the benefits associated with sticking to the deal.

12.

Cultural Differences in Selected Countries and Regions

Doing business in India
1. 2.

3.

4.

It is important to be on time for meetings. Personal questions should not be asked unless the other individual is a friend or close associate. Titles are important, so people who are doctors or professors should be addressed accordingly. Public displays of affection are considered to be inappropriate, so one should refrain from backslapping or touching others.

Cultural Differences in Selected Countries and Regions

Doing business in India
5.

6.

7.

8.

Beckoning is done with the palm turned down; pointing often is done with the chin. When eating or accepting things, use the right hand because the left is considered to be unclean. The namaste gesture can be used to greet people; it also is used to convey other messages, including a signal that one has had enough food. Bargaining for goods and services is common; this contrasts with Western traditions, where bargaining might be considered rude or abrasive.

Cultural Differences in Selected Countries and Regions

Doing business in France 1. When shaking hands with a French person, use a quick shake with some pressure in the grip. 2. It is extremely important to be on time for meetings and social occasions. Being fashionably late is frowned on. 3. During a meal, it is acceptable to engage in pleasant conversation, but personal questions and the subject of money are never brought up. 4. Visiting businesspeople should try very hard to be cultured and sophisticated.

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Cultural Differences in Selected Countries and Regions

Doing business in France
5.

The French tend to be suspicious of early friendliness in the discussion and dislike first names, taking off jackets, or disclosure of personal or family details.

6.

In negotiations the French try to find out what all of the other sides aims and demands are at the beginning, but they reveal their own hand only late in the negotiations.
The French do not like being rushed into making a decision, and they rarely make important decisions inside the meeting. The French tend to be very precise and logical in their approach to things, and will often not make concessions in negotiations unless their logic has been defeated.

7.

8.

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Cultural Differences in Selected Countries and Regions

Doing business in Arab countries
1.

It is important never to display feelings of superiority, because this makes the other party feel inferior. Let ones action speak for itself and not brag or put on a show of self-importance.

2.

One should not take credit for joint efforts. A great deal of what is accomplished is a result of group work, and to indicate that one accomplished something alone is a mistake.
Much of what gets done is a result of going through administrative channels in the country. It often is difficult to sidestep a lot of this red tape, and efforts to do so can be regarded as disrespect for legal and governmental institutions.

3.

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Cultural Differences in Selected Countries and Regions

Doing business in Arab countries
4. 5.

Connections are extremely important in conducting business. Patience is critical to the success of business transactions. This time consideration should be built into all negotiations. Important decisions usually are made in person, not by correspondence or telephone. This is why an MNCs personal presence often is a prerequisite for success in the Arab world. Additionally, while there may be many people who provide input on the final decision, the ultimate power rests with the person at the top, and this individual will rely heavily on personal impressions, trust, and rapport.

6.

Cross-Cultural Communication and Negotiation

The specific objectives of this chapter are:
1.

DEFINE the term communication, examine some examples of verbal communication styles, and explain the importance of message interpretation. ANALYZE the common downward and upward communication flows used in international communication.

2.

3.

EXAMINE the language, perception, and culture of communication, and nonverbal barriers to effective international communications.

Cross-Cultural Communication and Negotiation

The specific objectives of this chapter are:
4. 5. 6.

PRESENT the steps that can be taken to overcome international communication problems. 5. DEVELOP approaches to international negotiations that respond to differences in culture. REVIEW different negotiating and bargaining behaviors that may improve negotiations and outcomes.

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Communication Process and Verbal Communication Styles

Communication

The process of transferring meanings from sender to receiver

Verbal communication styles

Context is information that surrounds a communication and helps convey the message
Messages are often highly coded and implicit in high-context societies, such as Japan and many Arab countries The message is explicit and the speaker says precisely what he or she means in low-context societies such as the United States and Canada

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Explicit and Implicit Communication

High-context/implicit communication cultures Japanese Arabs Latin Americans Italians English

French
North Americans Scandinavians Germans Swiss Germans Low-context/explicit communication cultures

Adapted from Figure 71: Explicit/Implicit Communication: An International Comparison

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Phases of Multicultural Development

Table 71 Major Characteristics of Verbal Styles
Verbal Style Major Variation Interaction Focus and Content Cultures in Which Characteristic It Is Found

Indirect vs. direct

Succinct vs. elaborate

Indirect Direct
Elaborate Exacting Succinct

Implicit messages Explicit messages

High quantity of talk Moderate amount of talk Low amount of talk

Collective, high context Individualistic, low context

Moderate uncertainty avoidance, high context Low uncertainty avoidance, low context High uncertainty avoidance, high context

Adapted from Table 71: Major Characteristics of Verbal Styles

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Phases of Multicultural Development

Table 71 Major Characteristics of Verbal Styles
Verbal Style Major Variation Interaction Focus and Content Cultures in Which Characteristic It Is Found

Contextual vs. personal

Contextual
Personal

Focus is on the speaker and role relationships Focus is on the speaker and personal relationships
Language is process oriented and receiver focused Language is goal oriented and sender focused

High power distance, collective, high context

Low power distance, individualistic, low context Collective, high context

Affective vs. instrumental

Affective

Instrumental

Individualistic, low context

Adapted from Table 71: Major Characteristics of Verbal Styles

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Communication Process and Verbal Communication Styles

Verbal communication styles (continued)

Indirect and direct styles

In high-context cultures, messages are implicit and indirect question: Who will be at meeting? Voice intonation, timing, and facial expressions play important roles in conveying information In low-context cultures, people often meet only to accomplish objectives and tend to be direct and focused in their communications Question: What is the meeting going to be about?

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Communication Process and Verbal Communication Styles

Verbal communication styles (continued)

Elaborate and succinct styles

Three degrees of communication quantity elaborate, exacting, and succinct. The elaborating style is more popular in high-context cultures that have a moderate degree of uncertainty avoidance ex arab countries The exacting style (england, germany, sweden) focuses on precision and the use of the right amount of words to convey the message and is more common in low-context, low-uncertainty-avoidance cultures

The succinct style (asia) is more common in high-context cultures with considerable uncertainty avoidance where people tend to say few words and allow understatements, pauses, and silence to convey meaning.

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Communication Process and Verbal Communication Styles

Verbal communication styles (continued)

Contextual and Personal styles

Contextual style (Japan, India, Ghana) is one that focuses on the speaker and relationship of the parties Contextual style is often associated with high-power distance, collective, high-context cultures (speakers choose words that relate status compared to others) Personal style focuses on the speaker and the reduction of barriers between the parties (USA, Aus, Canada: using first names and addressing informally and directly on equal basis) Personal style is more popular in low-power-distance, individualistic, low-context cultures

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Communication Process and Verbal Communication Styles

Verbal communication styles (continued)

Affective and Instrumental styles

Affective style (Middle East, Latin America and Asia) is common in collective, high-context cultures and is characterized by language that requires the listener to note what is said and to observe how the message is presented The meaning is often nonverbal and requires the receiver to use his or her intuitive skills to decipher the message Instrumental style (Swiss, Denmark & USA) is goal oriented and focuses on the sender who clearly lets the other party know what he or she wants the other party to know. The instrumental style is more commonly found in individualistic, low-context cultures

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Summary of Verbal Styles

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Communication Flows
Downward communication

Transmission of information from manager to subordinate Primary purpose of manager-initiated communication is to convey orders and information Managers use this channel for instructions and performance feedback The channel facilitates the flow of information to those who need it for operational purposes

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Communication Epigrams

Adapted from Figure 72: Communication Epigrams

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Communication Barriers
Language barriers (knowledge of home countrys language) Cultural barriers

Suggestions that can be of value to American managers who are engaged in international communications include:

Be careful not to use generalized statements about benefits, compensation, pay cycles, holidays, or policies in your worldwide communications. Since most of the world uses the metric system, be sure to include converted weights and measures in all internal and external communications. Keep in mind that even in English-speaking countries, words may have different meanings. Not everyone knows what is meant by counterclockwise, or quite good.

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Communication Barriers
Language barriers Cultural barriers

Suggestions that can be of value to American managers who are engaged in international communications include:

Remember that letterhead and paper sizes differ worldwide. The 812 by 11-inch page is a U.S. standard, but most countries use an A4 (814 1112-inch) size for their letterhead, with envelopes to match. Dollars are not unique to the United States. There are Australian, Bermudian, Canadian, Hong Kong, Taiwanese, and New Zealand dollars, among others. So when referring to American dollars, it is important to use US$.

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Nonverbal Communication
Nonverbal communication The transfer of meaning through means such as body language and use of physical space Kinesics The study of communication through body movement and facial expression

Eye contact Posture Gestures

Chromatics The use of color to communicate messages

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Nonverbal Communication
Proxemics

The study of the way that people use physical space to convey messages

Intimate distance is used for very confidential communications Personal distance is used for talking with family and close friends Social distance is used to handle most business transactions Public distance is used when calling across the room or giving a talk to a group

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Personal Space in the U.S.

Intimate distance Personal distance

18 18 to 4

Social distance
Public distance

4 to 8
8 to 10

Adapted from Figure 73: Personal Space Categories for Those in the United States

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Nonverbal Communication
Chronemics Monochronic time schedule

Things are done in a linear fashion (US,UK,Aus Canada). Manager addresses Issue A first and then moves on to Issue B Time schedules are very important and time is viewed as something that can be controlled and should be used wisely

Polychronic time schedules

People tend to do several things at the same time (Latin America, Middle East) People place higher value on personal involvement than on getting things done on time Schedules are subordinated to personal relationships

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Achieving Communication Effectiveness

Improve feedback systems

Two basic types of feedback systems between home office and affiliates

Personal (e.g., face-to-face meetings, telephone conversations and personalized e-mail) Impersonal (e.g., reports, budgets, and plans)

Language training Cultural training Increase Flexibility and Cooperation

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Flexibility Cooperation: Intercompany Interaction and Negotiation

Table 77 Negotiation Styles from a Cross-Cultural Perspective

Adapted from Table 77: Negotiation Styles from a Cross-Cultural Perspective

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Flexibility Cooperation: Intercompany Interaction and Negotiation

Table 77 Negotiation Styles from a Cross-Cultural Perspective

Adapted from Table 77: Negotiation Styles from a Cross-Cultural Perspective

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Managing Cross-Cultural Negotiations

Negotiation: The process of bargaining with one or more parties to arrive at a solution that is acceptable to all
Planning

1. identify the objectives negotiators would like to attain and explore the possible options for reaching these objectives 2. Set limits on single-point objectives 3. Divide issues into short- and long-term considerations and decide how to handle each 4. Determine the sequence in which to discuss the various issues

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Managing Cross-Cultural Negotiations

Negotiation: The process of bargaining with one or more parties to arrive at a solution that is acceptable to all
Planning

Get to know the people on the other side

Feeling out period is characterized by the desire to identify those who are reasonable and those who are not

Impersonal Relationship Building

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Managing Cross-Cultural Negotiations

Negotiation: The process of bargaining with one or more parties to arrive at a solution that is acceptable to all
Planning

Each group sets forth its position on the critical issues These positions often change later in the negotiations Participants try to find out what the other party wants to attain and what it is willing to give up

Impersonal Relationship Building

Exchanging TaskRelated Information

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Managing Cross-Cultural Negotiations

Negotiation: The process of bargaining with one or more parties to arrive at a solution that is acceptable to all
Planning

Success of the persuasion step depends on

How well the parties understand each others position

The ability of each to identify areas of similarity and differences The ability to create new options The willingness to work toward a mutually acceptable solution

Impersonal Relationship Building

Exchanging TaskRelated Information

Persuasion

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Managing Cross-Cultural Negotiations

Negotiation: The process of bargaining with one or more parties to arrive at a solution that is acceptable to all
Planning

Grant concessions and hammer out a final agreement This phase may be carried out piecemeal, and concessions and agreements may be made on issues one at a time.

Impersonal Relationship Building

Exchanging TaskRelated Information

Persuasion

Agreement

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Cultural Differences Affecting Negotiations

1. Do not identify the counterparts home culture too quickly. Common

2.

3.

4.
5. 6.

cues (e.g., name, physical appearance, language, accent, location) may be unreliable. Beware of the Western bias toward doing. Ways of being (e.g., comportment, smell), feeling, thinking, and talking can shape relationships more powerfully than doing. Counteract the tendency to formulate simple, consistent, stable images. Do not assume that all aspects of the culture are equally significant. Recognize that norms for interactions involving outsiders may differ from those for interactions between compatriots. Do not overestimate your familiarity with your counterparts culture.

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Negotiation Tactics
Location (neutral site have advantages viz: away from home so less

interference, cost of staying high builds pressure to finalize fast, dont want to return empty handed) Time limits (duration of stay, closing deal before departure) Buyer-seller relations (USA negotiators tend to walk away after deal, Japanese believe in reciprocal favors and Brazilian work best when they are deceptive and self interest then their opponents) Bargaining behaviors Use of extreme behaviors (Chinese, Arabs) Promises, threats and other behaviors (Japanese rely on commitment, recommendations Brazilian on rewards, commands , self disclosure and US middle of the two. Nonverbal behaviors (Japanese used silence, Brazilian facial gazing, touch & conversational overlaps

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Effective Negotiation Characteristics

Adapted from Table 7-10: Culture-Specific Characteristics Needed by International Managers for Effective Negotiations

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Effective Negotiation Characteristics

Adapted from Table 7-10: Culture-Specific Characteristics Needed by International Managers for Effective Negotiations

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Negotiations across Cultures Americans - linear, fact driven and numbers oriented - impatient and the contract is their central focus Asians - avoid conflict - express opinions indirectly and maintain a face of surface harmony when too direct can be seen as rude French - enjoy emphasising distinctions and differences - blunt and logical approach to conflicting points of views that can seem antagonistic to people from other cultures Middle Easterners and Latinos - passionate expression of differences - save face and preserve dignity Russians a great deal of posturing and theatrics

2006 Prentice Hall

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