MSC Strategy Presentation
mardino97
3GlobalizationSocietiesCulturesandNegotiation.pptxChapter 3 Globalization Societies, Cultures, and Negotiation
Different Sources of Cultures in Business
COMPANY CULTURE
INDUSTRY CULTURE
NATIONAL CULTURE
History of the company
Dress code
Leadership
Stability of CEOs
over time
Ownership
Family?
Institutional owners?
Functional orientation:
Marketing
Finance
Engineering
R&D
Industry norms:
Technology
Pace of change
Types of customers
Hofstede and Globe
Influenced by:
Country history
Religion
Education
‹#›
Consequences of National Culture
Communicating (low- vs. high-context cultures)
Evaluating (direct vs. indirect negative feedback across cultures)
Leading (egalitarian vs. hierarchical cultures)
Deciding (consensual vs. top-down)
Trusting (Task-based vs. relationship-based)
Disagreeing (Confrontational vs. avoids confrontation)
Source: based on text of Meyer, ‘The Culture Map: Breaking
Through the Invisible Boundaries of Global Business’,
Public Affairs, 2014
‹#›
Communicating across Cultures
Low-context
Good communication is clear
and precise.
Messages are expressed
and understood at face
value.
High-context
Good communication is
sophisticated and nuanced.
Messages are both spoken and read between the lines.
Messages are often implied but not plainly expressed.
USA
Japan
Indonesia
Korea
Netherlands
Australia
Canada
Germany
Finland
Denmark
Poland
UK
Mexico
Brazil
Spain
Argentina
Italy
France
Peru
Russia
Singapore
India
China
Iran
Kenya
Saudi Arabia
Source: based on text of Erin Meyer, ‘The Culture Map’
‹#›
Evaluating Performance and Providing Negative Feedback
Direct Negative Feedback
Negative feedback to a colleague is provided
frankly, bluntly, honestly.
Negative messages stand alone,
not softened by positive ones. Absolute descriptors are often used when criticizing ( e.g., “completely unprofessional”).
Criticism may be given to an individual in front of a group.
Indirect Negative Feedback
Negative feedback to a colleague is provided
softly, subtly, diplomatically.
Positive messages are used to wrap negative ones.
Qualifying descriptors are often used ( i.e., “ not quite appropriate”, “slightly unprofessional”.
Criticism is given only in private.
USA
Japan
Indonesia
Korea
Netherlands
Australia
Canada
Germany
Denmark
UK
Mexico
Brazil
Spain
Argentina
Italy
France
Russia
India
China
Kenya
Saudi Arabia
Source: based on text of Erin Meyer, ‘The Culture Map’
Israel
Norway
Thailand
Ghana
‹#›
Leading: Leadership, Hierarchy and Power
Egalitarian
The distance between a subordinate and a boss is low.
The best boss is a facilitator among equals.
Organizational structures are flat.
Communication often skips hierarchical lines.
Hierarchical
The distance between a subordinate and a boss is high.
The best boss is a strong director who leads from the front.
Status is important.
Organizational structures are multilayered.
Communication follows hierarchical lines.
USA
Japan
Indonesia
Korea
Netherlands
Australia
Canada
Germany
Denmark
UK
Mexico
Brazil
Spain
Italy
France
Russia
India
China
Saudi Arabia
Source: based on text of Erin Meyer, ‘The Culture Map’
Israel
Sweden
Finland
Poland
Peru
Nigeria
‹#›
Deciding: Who Decides and How?
Top-down
Decisions are made by individuals - generally the boss.
Consensual
Decisions are made in groups through unanimous agreement.
USA
Japan
Netherlands
Germany
UK
Brazil
Italy
France
Russia
India
China
Source: based on text of Erin Meyer, ‘The Culture Map’
Sweden
Nigeria
‹#›
Trust: How to Build?
Task-based
Trust is built through business-related
activities.
Work relationships are built and dropped
easily based on the practicality of the situation.
Relationship-based
Trust is built through social relationships (e.g., sharing meals,
evening drinks).
Work relationships are built slowly over time.
USA
Japan
Turkey
Netherlands
Australia
Germany
Denmark
UK
Mexico
Brazil
Spain
Italy
France
Russia
India
China
Saudi Arabia
Source: based on text of Erin Meyer, ‘The Culture Map’
Poland
Thailand
Nigeria
Finland
Austria
‹#›
Disagreeing
Confrontational
Disagreements and debates are positive for
the team or organization.
Open confrontation is appropriate and will not negatively
impact the relationship.
Avoids Confrontation
Disagreements and debates are negative for
the team or organization.
Open confrontation is inappropriate and will break group harmony
or negatively impact the relationship.
USA
Japan
Indonesia
Netherlands
Australia
Singapore
Germany
Denmark
UK
Mexico
Brazil
Spain
Italy
France
Russia
India
China
Saudi Arabia
Source: based on text of Erin Meyer, ‘The Culture Map’
Israel
Sweden
Ghana
Thailand
Peru
‹#›
MAJOR OBSTACLES TO GROUP & MNC PERFORMANCE IN
MULTI-CULTURAL SITUATIONS
Assumption of similarity/homogeneity across cultures; denial of cultural diversity
This is often done unconsciously
Parochial & ethnocentric mindset (the best way of thinking/acting)
Western individualism
Coming across as too direct & confrontational to Easterners
Moving too fast & little to no opportunity to build trust
Confusion about decision-making authority (i.e., CEO-centric thinking)
See André Laurent/INSEAD
‹#›
Differences in Business Practices: Examples
‹#›
Negotiation Framework
SELLER
BUYER
Bargaining
Range
Seller’s Walk Away
price
Buyer’s
Walk Away Price
Seller opening offer
Buyer opening offer
Uncertainty range
Uncertainty range
Preparation
Negotiation Rounds
Closing
Negotiation Process
Preparation
Constitution of negotiation team
Role assignment
Set your constraints
Valuation of:
Stand alone
Synergies
Walk away price
Valuation of:
Stand alone
Synergies
Walk away price
Seller
Buyer
List buyer’s objectives/constraints
Hypothesis on buyer’s walk away price
List seller’s objectives/constraints
Hypothesis on seller’s walk away price
Determine bargaining range
Negotiation Team
Finance representatives
Legal representatives
Operational input, often from middle managers
Advisors
Translators
First Round
First offers
Explain the logic of the offer
Second Round
Counter offers
Explain the logic of the offers
Arguments
In-between: recalculation and revision: Unofficial discussions
In-between: recalculation and revision: Unofficial discussions
Third (or later) Round
Reaching Agreement
Negotiation Process
Closing
Technicalities of the deal
Legal procedure
Signing agreement
Based on concepts in Salacuse (2005) and Brett (2001)
COMMUNICATION
Negotiation Attributes
Risk Taking
INFLUENCING
TEAM
ORGANIZATION
FORM OF
AGREEMENT
EMOTIONS
TIME
STYLE
ATTITUDE
GOAL
INFLUENCING
RISK
Examples of cultures
of this style
Examples of cultures
of this style
Contract
Win-Lose
Formal
Direct
Strict
Specific
Hidden
Direct
Specific
One
Risk Taking
Informal
Indirect
Win-Win
Relationship
Indirect
Expressed
General
Consensus
Risk averse
Flexible
US, German
Japanese
US, German
Western Europe,
North American
US, UK, French
Asian
US, German
US, French
Chinese
US
Asian, Arabic
US
Japanese
Asian, Arabic
Japanese
Japanese
Latin
Arabic, Chinese, Latin
Asian, Arabic
Japanese
Negotiation Styles
‹#›
Negotiation Styles: American vs. Japanese
Negotiation Parameter
Typical American style
Typical Japanese style
Reused with permission from Sunshine, ‘Negotiating for International Development’ 1990
‹#›
Negotiation Parameters
Typical American
Typical Japanese
| Selection Criteria for Negotiator(s) | Verbally articulate individuals | Rank and position |
| Appropriate Number of Negotiators | Few | Many: in order to demonstrate seriousness and for functional coverage, including learning. |
| Appropriate Role(s) of Lawyers(s) | Key participant & leader and contract advisor | None: seen as adversarial troublemakers |
| Attitude toward Decision-making Process, and Appropriate Degree of Delegation of Authority to Negotiators | Top-down decision-making; high degree of delegation of authority | Consensual, middle-up decision-making (ringi seido); little or no authority delegated to negotiators |
| Appropriate Tone for Negotiation and Communication | Direct; informal; egalitarian | Highly indirect; highly formal; hierarchical |
| Negotiators’ Interest in Personal Feelings and Values of Counterparts | Little or none; irrelevant or improper; logic more important than emotions; issues more important than personalities | Acute; personal rapport essential to establish trust |
| Appropriateness of Socializing with Counterparts | Mostly inappropriate; risks conflict of interest and loss of personal control | Highly appropriate; and traditional release; also, ritualised gift-giving |
| Attitude toward Time during Negotiations | Acutely time-conscious; “time is money”; impatient | Patience is the key |
Negotiation Styles: American vs Japanese
‹#›
Chinese Business Negotiating Styles
Sources: Based on discussions in Fang (1997, 2006), Woo and Prud’homme (1999), Herbig and Martin (1999)
‹#›
ETIQUETTE
Addressing
How to refer to the other person In Malaysia nobility titles are the proper way to
address ( Encik, Tan, etc.)
In France people are addressed by their title
(Monsieur le Directeur)
In the USA first name usage is normal
In Japan, the exchange of business cards is
critical
Gesturing
How to position oneself and how
to use body language
Left hand shaking is not proper in Muslim
countries
Finger pointing is often considered as highly
impolite in Asia
Dressing
Dress code Malaysian businessmen wear jacket and ties
while in Singapore long sleeved shirts are normal
business attire
Eating
Importance of meals in business
dealing
Behavior at the table
French business transactions usually take place
at a lunch or dinner table
Chinese banquets and sometime drinking
punctuate deals
Timing
How to control time Signs of impatience are considered as improper
in many cultures
Lengthy preliminaries are usual in the Middle East
Talking
Importance of verbal
communication
Silent pauses are the norm in Chinese or
Japanese; often seen as awkward in the West
ETIQUETTE |
|
|
|
Addressing
|
How to refer to the other person |
· In Malaysia nobility titles are the proper way to address ( Encik, Tan, etc.) · In France people are addressed by their title (Monsieur le Directeur) · In the USA first name usage is normal · In Japan, the exchange of business cards is critical |
|
Gesturing |
How to position oneself and how to use body language |
· Left hand shaking is not proper in Muslim countries · Finger pointing is often considered as highly impolite in Asia |
|
Dressing |
Dress code |
· Malaysian businessmen wear jacket and ties while in Singapore long sleeved shirts are normal business attire |
|
Eating |
Importance of meals in business dealing Behavior at the table |
· French business transactions usually take place at a lunch or dinner table · Chinese banquets and sometime drinking punctuate deals |
|
Timing |
How to control time |
· Signs of impatience are considered as improper in many cultures · Lengthy preliminaries are usual in the Middle East |
|
Talking |
Importance of verbal communication |
· Silent pauses are the norm in Chinese or Japanese; often seen as awkward in the West |
Attitude toward Silence
during Negotiations
Uncomfortable; “fill the void” Acceptable
Reaction to Cross-cultural
Signals
Mostly unaware Aware indifference
Attitude toward Sequential
Bargaining and Negotiating
Progress
Strongly attracted to both Unimportant
Attitude toward Sharing
Information
Open; willing Collect it avidly, but don’t give it out
Form of the Contract
Long; detailed; covering all
foreseeable contingencies
Prefer very short; and limited to general
principles and affirmations
Commitment to the
Contract
Total, binding Weak; the relationship is what counts, not
the document; and inevitable changing
conditions will necessitate later
amendments
Central Purpose of the
Negotiation
Reaching agreement on a
contract
Launching a long-term relationship
|
Attitude toward Silence during Negotiations |
Uncomfortable; “fill the void” |
Acceptable |
|
Reaction to Cross-cultural Signals |
Mostly unaware |
Aware indifference |
|
Attitude toward Sequential Bargaining and Negotiating Progress |
Strongly attracted to both |
Unimportant |
|
Attitude toward Sharing Information |
Open; willing |
Collect it avidly, but don’t give it out |
|
Form of the Contract |
Long; detailed; covering all foreseeable contingencies |
Prefer very short; and limited to general principles and affirmations |
|
Commitment to the Contract |
Total, binding |
Weak; the relationship is what counts, not the document; and inevitable changing conditions will necessitate later amendments |
|
Central Purpose of the Negotiation |
Reaching agreement on a contract |
Launching a long-term relationship |
