cross-cultural issues in business negotiations (revised)

7/29/2019 Cross-cultural Issues in Business Negotiations (Revised)

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Managing Cross-cultural WorkforceIn Global Business

Dr. Ajay Singh


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What is Culture?

What are the Layers of Culture?


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On the Surface.

What people say and do

How they speak

How they dress

The food habit and the way they greet

How they treat each other Certain dos and don'ts of the culture


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Below the Surface

The culture has many underground layers:

- These layers reflect deeply held attitude and beliefs

- Hidden, unconscious, common values


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Core elements of culture

Nations history,

Religion and religious ideals,

mythology,

heroes,

landscape,

climate and geography

All the above have impact on the shared values


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Cultural Dimensions

Three major studies to examine inter-

cultural dimensions are by:

Hall

Hofstede

Trompenaars


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Hall

Time

Space

Communication Context


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Time

Monochromic

Strict Punctuality

Obsessed with

deadlines

Strict scheduling

Discussion on one

issue at a time

Polychromic

Not strict punctuality

Loose scheduling

Overlapping issues in

business meetings

More time to for

interpersonal relations.


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Business Cultures

Monocromic Business Cultures:Nordicand Germanic Europe; North America; Japan.

Moderately Monochromic: Australia / NewZealand; Russia and most of East-Central

Europe; Southern Europe; Singapore, Hong

Kong; Taiwan; China; South Korea, S. Africa.

Polychromic Business Cultures: The ArabWorld; most of Africa; Latin America;

South and South East Asia.


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Space (Distance Behaviour)

Inter-personal Distance in global regions:

Close: 20 to 35 cms. (8 to 14 inches)

The Arab World; The Mediterranean Region;

Latin Europe; Latin America

Distant: 40 to 60 cms. (16 to 24 inches)

Northern, Central and Eastern Europeans;

North America; Large part of Asia.


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Communication Context

Explicit Communication:

Explicit message

Information in context

Direct

(USA and Canada; Australia and New Zealand, Eastern

Europe)

Implicit Communication: Most message in code

(East and South-east Asia, Nordic and Germanic Europe)


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Hofstedes Model

Examined International difference in

work-values under four dimensions:

The Power Distance Dimension

Uncertainty Avoidance Dimension

Individual Vs. Collectivism

Masculinity Vs. Feminity


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Individual vs. Collectivism

This dimension describes the relationship that

individuals have with others.

In individual society, person is expected to take

care of him/herself and immediate family.

Identity is based on individual and individual

initiative and achievement is appreciated.

In collective society identity is based on social

system & belongingness to organization is moral.


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Individualism Index Rank County Rank County Rank Country

1 USA 19 Israel 37 Hong Kong

2 Australia 20 Spain 38 Chile

3 Great Britain 21 India 39/41 West Africa

4/5 Canada 22/23 Japan 39/41 Singapore

4/5 Netherlands 22/23 Argentina 39/41 Thailand

6 New Zealand 24 Iran 42 Salvador

7 Italy 25 Jamaica 43 South Korea

8 Belgium 26/27 Brazil 44 Taiwan

9 Denmark 26/27 Arab countries 45 Peru

10/11 Sweden 28 Turkey 46 Costa Rica

10/11 France 29 Uruguay 47/48 Pakistan

12 Ireland (Republic of) 30 Greece 47/48 Indonesia 13 Norway 31 Philippines 49 Colombia

14 Switzerland 32 Mexico 50 Venezuela

15 Germany F.R. 33/35 East Africa 51 Panama

16 South Africa 33/35 Yugoslavia 52 Equador

17 Finland 33/35 Portugal 53 Guatemala

18 Austria 36 Malaysia


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Masculinity vs. Femininity

It shows the degree of preference for achievement,heroism, assertiveness and material success. These

values are rated high in masculine and low in

feminine cultures.

In feminine cultures relationship with people and

quality of life are given higher value, and the

social value is welfare.

This also reflects roles and values of men and

women in society. In masculine cultures sex roles

are more sharply differentiated than in faminine

cultures.


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Masculinity Index

Rank Country Rank Country Rank Country

1 Japan 18/19 Hong Kong 37/38 Spain

2 Austria 20/21 Argentina 37/38 Peru

3 Venezuela 20/21 India 39 East Africa

4/5 Italy 22 Belgium 40 Salvador

4/5 Switzerland 23 Arab countries 41 South Korea

6 Mexico 24 Canada 42 Uruguay

7/8 Ireland 25/26 Malaysia 43 Guatemala

7/8 Jamaica 25/26 Pakistan 44 Thailand

9/10 Great Britain 27 Brazil 45 Portugal

9/10 Germany FR 28 Singapore 46 Chile

11/12 Philippines 29 Israel 47 Finland

11/12 Colombia 30/31 Indonesia 48/49 Yugoslavia

13/14 South Africa 30/31 West Africa 48/49 Costa Rica 13/14 Equador 32/33 Turkey 50 Denmark

15 USA 32/33 Taiwan 51 Netherlands

16 Australia 34 Panama 52 Norway

17 New Zealand 35/36 Iran 53 Sweden

18/19 Greece 35/36 France


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The Power Distance Dimension

Shows the extent to which members of a society

accepts that power distance in institutions and

organisations.

Shows desirability and not of social inequality.

Is reflected in degree of equality of roles;

accessibility of superiors, and structure

(centralized or decentralized) of the organization.


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Power Distance Index

Rank Country Rank Country Rank Country 1 Malaysia 18/19 Turkey 37 Jamaica

2/3 Guatemala 20 Belgium 38 USA

2/3 Panama 21/23 East Africa 39 Canada

4 Philippines 21/23 Peru 40 Netherlands

5/6 Mexico 21/23 Thailand 41 Australia

5/6 Venezuela 24/25 Chile 42/44 Costa Rica

7 Arab countries 24/25 Portugal 42/44 Germany FR

8/9 Equador 26 Uruguay 42/44 Great Britain

8/9 Indonesia 27/28 Greece 45 Switzerland

10/11 India 27/28 South Korea 46 Finland

10/11 West Africa 29/30 Iran 47/48 Norway

12 Yugoslavia 29/30 Taiwan 47/48 Sweden

13 Singapore 31 Spain 49 Ireland

14 Brazil 32 Pakistan 50 New Zealand

15/16 France 33 Japan 51 Denmark

15/16 Hong Kong 34 Italy 52 Israel

17 Colombia 35/36 Argentina 53 Austria

18/19 Salvador 35/36 South Africa


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Uncertainty Avoidance Dimension

Shows the degree to which individuals feel

uncomfortable with uncertainty and ambiguity

about the future and in the work relationships.

Reflected in feeling of continuous threat, which is

reflected in inner need to work hard.

Have difficulty in adjustment to deviant behaviour

Emphasis on written rules and regulations.


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Uncertainty Avoidance Index Rank Country Rank Country Rank Country

1 Greece 19 Israel 37 Australia

2 Portugal 20 Colombia 38 Norway

3 Guatemala 21/22 Venezuela 39/40 South Africa

4 Uruguay 21/22 Brazil 39/40 New Zealand

5/6 Belgium 23 Italy 41/42 Indonesia

5/6 Salvador 24/25 Pakistan 41/42 Canada

7 Japan 24/25 Austria 43 USA

8 Yugoslavia 26 Taiwan 44 Philippines

9 Peru 27 Arab countries 45 India

10/15 France 28 Equador 46 Malaysia

10/15 Chile 29 Germany FR 47/48 Great Britain

10/15 Spain 30 Thailand 47/48 Ireland (Republic of)

10/15 Costs Rica 31/32 Iran 49/50 Hong Kong

10/15 Panama 31/32 Finland 49/50 Sweden

10/15 Argentina 33 Switzerland 51 Denmark

16/17 Turkey 34 West Africa 52 Jamaica

16/17 South Korea 35 Netherlands 53 Singapore

18 Mexico 36 East Africa


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Trompenaars

Universalism Vs. Particularism

Respect of universal laws vs. loyalty towards people

Specific vs. Diffuse relationshipsSuperficial engagement vs. total engagement

U i li V P i l i


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Universalism Vs. Particularism

You are sitting in your friends car, he is

driving 80 km/h in an area where he shouldbe respecting the 40km/h speed limitation.

Your friend hits a pedestrian.

There is no other witness. His lawyer asks

you to testify that your friend was driving at

the speed of 40 km/h. He assures that therewont be any serious consequence for you.


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What is expected from you?

My friend has a definite right as a friend to

expect me to testify to the lowest figure

My friend has some right as a friend to expect

me to testify to the lowest figure

My friend has no right as a friend to expect me

to testify to the lowest figure


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Universalism Index

Countries high in Universalism (Respect of Universal Law):

USA, Denmark, Austria, Switzerland, Netherlands, UK,

Czechoslovakia, Belgium

Countries moderate in Universalism:

Italy, Brazil, France, Singapore, Japan, Spain, Maxico,

Thailand.

Countries high in Particularism(Loyalty towards people):

Hong Kong, China, Indonesia, CIS, Venezuela.


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Specific Vs. Defused

Your boss asks you to help him in arrangement of

birthday party which he is organizing for his son this

weekend. The idea is not very appealing to you.

You decline the invitation: your boss has nothing to do

with your week-end activities. Your private and

professional lives are two different things.

You go and help your boss in the party because your

are totally committed to him/her, on a professional and

personal basis.


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Specific vs. Defused Relationships

Countries with Specific relationships (Engagement Superficial):

Austria, UK, USA, France, Netherlands, Belgium.

Countries that are moderate in this dimension:

Brazil,Czechoslovakia,Italy, Germany, Argentina, Japan,

Mexico, Indonesia, CIS, Thailand.

Countries high in Defused relationships(Engagement total):

Hong Kong, Singapore, Switzerland, Spain, China,

Venezuela.


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Managerial Implications

Motivation

Reward Appraisal

Negotiations (Verbal and non verbal)


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Convergence, Divergence and Crossvergence

Globalisation

Refers to global integration of markets and production processes

and industrialisation and economic development

Leads to cultural convergence or change in toward behaviours

that embrace free-market capitalism

Localisation

Refers to business and management practices that adapt

to the local culture or environment

Incorporate cultural values and new ideas from various

nationalities

Leads to cultural divergence and benchmarking business

approaches that work in different countries

Cultural Foundations of IHRM


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Convergence, Divergence and Crossvergence

Glocalisation

Refers to crossvergence or the mixing of cultural systems

between different countries

Belief that as global economy grows, countries willinfluence each other economically and globally

Cultural Foundations of IHRM


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Discussion

cross-cultural issues in business negotiations (revised)

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