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Topic4.3-InternationalperspectivesonNegotiationandEthicalDilemmas.pptx

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MN7028: Topic 12 Cross-cultural Negotiations and Trust-building/ Ethics in the context of international business

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Breakthrough Leadership Skills MN7028 Topic 12 : Cross-cultural Negotiations and Trust-building/ Ethics in the context of international business 2

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Session Overview Defining cross-cultural negotiation Negotiation as a staged process Cross-cultural issues at different stages of negotiation Ethics and corporate social responsibility Ethical issues in international business Western theories of ethics Universalism or relativism? Cultural differences in ethics and values – implications for management and international business practice.

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Negotiating Give examples of different situations or contexts in which people engage in negotiations What do these situations have in common? What is the purpose of negotiation?

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Definitions of negotiation ‘An extended communication created in dialogue by two sides’ (Mead 2005) ‘A process of discussion between 2 or more parties with the aim of achieving a satisfactory agreement’ (Tayeb 2003) ‘Requires parties with opposing interests to get together to make a decision’ (Elahee and Brooks 2004)

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Cross-cultural negotiation ‘Discussions of common and conflicting interests between persons of different cultural backgrounds who work to reach an agreement of mutual benefit’ (Chaney and Martins (2004) cited in Zhu et al (2007)) Perceived as more difficult and complex because of differences in language and culture. ‘Promising partnerships fail to get off the ground due to conflicts and misunderstandings during the negotiation process’ (Steers et al, 2010: 321) Literature on cross-cultural negotiation tends to focus on contrasts between ‘Western’ (typically USA) and ‘Eastern’ (typically Chinese or Japanese) styles of negotiating

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Issues in cross-cultural negotiation What are aspects of cultural difference are highlighted in the following video? https://www.youtube.com/watch?v=rSDntIn6ekE

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Cross-cultural factors that impact on negotiations include: Individualism and collectivism High and low power distance High and low context Uncertainty avoidance Polychronic and monochronic Harmony or mastery Specific and diffuse..... Different assumptions about time and the importance of personal relationships are seen as key cultural factors in negotiating…

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Stages of negotiation (Tayeb 2003; Adler 2002) Preparation Non-task sounding Task-related exchange of information Persuasion Concessions and agreement There are different cultural understandings about the degree to which these stages are differentiated and their relative importance.

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Preparation Information gathering (national and cultural context; company information) Where to negotiate, physical arrangements (choice of 3 rd country in Middle East….) Expectations re time needed Who to include in negotiating team, what rank, how many Establishing own priorities, trying to predict others’ priorities

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Non-task sounding stage Focus on relationship and trust building Arab negotiators – greet foreign visitors at airport; invite them to private residence before formal negotiations begin ( Khakhar and Rammal 2013) Business in China is based on interpersonal trust; the importance of ‘old friend’ status and ‘banqueting’ (Miles 2003), in Mexico business relationships are more personalised than in USA ( Elahee and Brooks 2004) Monochronic and low context cultures want to ‘get down to business’… confusion between Chinese and Australian/American negotiators re when to end this stage (Zhu et al 2007)

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Task related exchange of information Parties make their presentation and state their position US negotiators: this stage is straightforward objective process, the aim is to exchange information. Chinese negotiators: ask questions rather than give information, get other party to take initiative and state position (Miles 2003)

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Persuasion Each party tries to persuade the other to give up part of their demands and make concessions: the use of negotiating ‘tactics’ Zhu et al (2007): US/Australian unable to pursue their persuasion strategies because Chinese had not provided them with essential information Arab managers - emphasise personal contacts (‘Wasta’) that can facilitate implementing agreement ( Khakar and Rammall , 2013) Importance of non-verbal cues at this stage (readiness to compromise/agree) Contrasting styles – study of UN Security Council in 1970s revealed USA negotiators made more use of factual/inductive arguments; Syrians used emotional appeal; Russians used ideological arguments...

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Different understandings/assumptions about conflict during negotiation (Lee 1998): Negotiation is a competitive game, involving open confrontation. Conflicts are short term and can be resolved OR: Conflict represents a fundamental threat that is long-term and cannot be resolved. Collectivists – prefer accommodation and avoidance strategies, believe in patience and harmony; individualists are more confrontational. High individualism and high uncertainty avoidance (Eastern and Southern Europe) associated with greater emphasis on rules and regulatory frameworks as a means to resolve conflict.

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Concessions and agreement Collectivist cultures may take longer, need to achieve consensus Concessions may be made throughout process – according to Adler (2008) Russians and Arabs make more extreme initial offers; Russians see concessions as a weakness. Miles (2004) when negotiating with Chinese – expect negotiator to confer with superiors; do not count on signing a contract on particular trip (ideas about time)

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Finalising the negotiation Different understandings of what constitutes a contract – cultures favouring Western-style contracts emphasise the importance of ‘getting it in writing’ as the basis for mutual trust, in contrast cultures favouring oral agreements (typically Chinese and Japanese) see trust as mostly personal ( Usunier , 2013) USA - negotiators assume that agreeing the deal is the end of the negotiating process, whereas in Thailand the process of negotiation goes well beyond this stage (Mead, 2005)

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References Elahee , M and Brooks, C (2004) ‘Trust and negotiation tactics: perceptions about business-to-business negotiations in Mexico’ Journal of Business and International Marketing 19/6 397-404 Khakhar , P and Rammall , H (2013) ‘Culture and business networks: International business negotiations with Arab managers’ International Business Review 22, 578-590 Lee, M (1998) ‘Understandings of conflict: a cross-cultural investigation’ Personnel Review 27/3, 227-242 Miles, M (2003) ‘Negotiating with the Chinese: lessons from the field’ Journal of Applied Behavioural Science 39/4, 453-472 Usunier , J-C (2013) ‘International negotiations’ in Chanlat et al (eds) Cross-cultural Management, Routledge Zhu, Y., McKenna, B. and Sun, Z (2007) ‘Negotiating with Chinese: success of initial meetings is the key’ Cross Cultural Management 14/2, 354-364

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Ethics and values in international business

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Overview Ethics and corporate social responsibility Ethical issues in international business Western theories of ethics Universalism or relativism? Cultural differences in ethics and values – implications for management and international business practice.

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Ethics and business in western society The Protestant ethic Free market economics: ‘There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud’ (Friedman 1970: 6) Increasing recognition of the social impact of business Stakeholders and interest groups Moral capital, mission statements and ethical codes

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Examples.... https://corporate.primark.com/en-gb/a/primark-cares/our-approach https://www.ikea.com/gb/en/this-is-ikea/sustainable-everyday/

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Ethics and international business Class discussion: Examples of issues?

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Are there universal rules which can/should be applied to ethical dealings? Deontological perspectives: things are good or bad. Murder? Kant’s categorical imperatives. Consequential perspectives: focussing instead on the effects and results of actions. Whose murder? Bentham and Mill utilitarianism

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Bribery and corruption ‘Corruption is rife and getting worse in high-growth export markets promoted by the Foreign Office and Downing Street’ (The Guardian 28.8.12) Countries with highest perceived levels of public sector corruption: Somalia, S Sudan, N Korea, Syria, Yemen, Sudan... Countries with lowest perceived levels…: Finland, Sweden, Switzerland, Norway, Singapore... https://www.transparency.org/news/feature/corruption_perceptions_index_2016 (accessed 09/12/20)

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The basis of moral behaviour..... Influence of religious laws and beliefs Behaviours: specific and diffuse (Trompenaars) Whistle-blowing: Purity or loyalty ( Chanlat et al, 2013, p.169)

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Contextualism in Japanese business (Taka 1998) The belief in the importance of social context (stemming from Confucianism): 'external' rather than 'internal’ Positive influences include: Consensus and avoidance of conflict Respect for seniors Respect for employees - lifetime employment Shareholders should not intervene Companies refrain from excessive competition and … Some act against exposure of corruption – in 1980s, employees of Green Cross Corporation did not raise concerns relating to unsafe blood products

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Universalism vs Relativism Universalism: belief in a set of universally applicable ethical principles Relativism: ethical principles cannot be applied universally Parochialism and ethnocentrism – tendency to see one’s own culture as morally superior People within the same society do not all share the same values and moral beliefs

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Ethics values and cultural difference Implications of... Individualism or communitarianism High and low context – giving and receiving gifts Inner - outer direction (contextualism)

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Exposure of corporate fraud at Olympus April 2011: appointment of Michael Woodford as first foreign president of Olympus Later that year he was fired for ‘failing to adapt to Japanese corporate culture’ But Michael Woodford claimed he was fired for initiating investigation into corporate fraud going back to late1980s Cultural factors that Woodford argued undermine Japan’s strengths include ‘tribalism’, misplaced loyalty and self-reinforcing networks amongst managers.... Pilling, D (2012) ‘A gaijin blows the whistle’ FT 28 November

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Different perspectives on gift giving: ethics at Citicorp (from Schneider and Barsoux , 2002) After successfully completing a complex deal for a Japanese client, he presents you with an expensive vase to express his appreciation. Although accepting a gift of such value is clearly against Citicorp policy returning it would insult your client. Would you: return the vase [..] explaining tactfully that it’s against Citicorp policy to accept gifts accept the gift because you can’t risk insulting an important client accept the gift on behalf of Citicorp… display it in a public area accept the gift and use it as a reward for an employee who displays service excellence? style.visibility ppt_x ppt_y style.visibility ppt_x ppt_y style.visibility ppt_x ppt_y style.visibility ppt_x ppt_y style.visibility ppt_x ppt_y style.visibility ppt_x ppt_y

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Universal ethical standards? Guirdham proposes charting a route to an ‘ethical minimum’, agreed by partners from the different cultures involved in a process of concensus -building (see French, 2015, p.246) Schneider and Barsoux (2003) identify three components which might serve to underpin universal standards: Honesty Integrity Protection of stakeholders

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Dealing with dilemmas? Kohls et al (1999) gathered data from (mainly) US students asking them how they would deal with a situation where the other party had breached their own standards: Avoiding Forcing Educating Negotiating Accommodating Collaborating Adoption of one of the above may be influenced by these factors: Moral significance (actual significance to the host culture and how common it is) Power (evenly distributed or is there dependency?) Urgency (is there time to discuss/negotiate?)

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Ethics, values and cultural differences? Ethics are defined as ‘ a set of moral principles : a theory or system of moral values’. They are ‘ the principles of conduct governing an individual or a group’ (Merriam-Webster Online) Or as the ‘social organising of morality’ (Clegg et al, 2007) Try to consider how your moral principles might be influenced and moulded by, for example: Individualism/Collectivism High/Low Context Inner/Outer Direction

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Further reading on effects of social culture in business ethics: Akbar, Y.H and Vujić, V. (2014) "Explaining corruption: the role of national culture and its implications for international management", Cross Cultural Management 21/2,191-218 Chanlat, J.F., Davel, E. and Dupuis, J-P. (2015) Cross Cultural Management: Culture and Management across the World. Routledge: London Crawley, E., Swailes, S. and Walsh, D. (2013) Introduction to International Human Resource Management. OUP: Oxford

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Synthesising leadership – Ethical Leadership? Ethical egoism: transactional, focus on maximising profits Utilitarianism: best outcome for the greatest number of people Altruism: authentic transformational leadership in which ‘leadership has a moral dimension’ (Northouse, 2019, on Burns)

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Synthesising leadership – Global Leadership? Global leaders must develop five cross-cultural competencies (Adler and Bartholemew , 1992, in Northouse, 2019) Grasp of business, politics and cultural environments Grasp of perspectives, tastes, trends and technologies across many cultures Ability to communicate with people from different cultures (Hall, 1976) Ability to relate to people from different cultures from a position of equality rather than ethnocentric superiority (French, 2017) Ability to work with people from different cultures In addition they need to be able to Create transcultural visions (Ting-Toomey, 1999 in Northouse, 2019)

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PowerPoint Presentation Susanne Ehrlich Natalie Langley 70 2015-09-23T08:23:27Z 2023-09-27T17:34:44Z

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0 2403 Microsoft Office PowerPoint Widescreen 270 36 22 0 0 false Fonts Used 5 Theme 2 Slide Titles 36 Arial Calibri Calibri Light Times New Roman Wingdings 1_Office Theme Default Design PowerPoint Presentation Breakthrough Leadership Skills MN7028 Session Overview Negotiating Definitions of negotiation Cross-cultural negotiation Issues in cross-cultural negotiation Cross-cultural factors that impact on negotiations include: Stages of negotiation (Tayeb 2003; Adler 2002) Preparation Non-task sounding stage Task related exchange of information Persuasion Different understandings/assumptions about conflict during negotiation (Lee 1998): Concessions and agreement Finalising the negotiation Ethics and values in international business Overview Ethics and business in western society Examples.... Ethics and international business Are there universal rules which can/should be applied to ethical dealings? Bribery and corruption The basis of moral behaviour..... Contextualism in Japanese business (Taka 1998) Universalism vs Relativism Ethics values and cultural difference Exposure of corporate fraud at Olympus Different perspectives on gift giving: ethics at Citicorp (from Schneider and Barsoux, 2002) Universal ethical standards? Dealing with dilemmas? Ethics, values and cultural differences? Further reading on effects of social culture in business ethics: Synthesising leadership – Ethical Leadership? Synthesising leadership – Global Leadership? London Metropolitan University false false false 16.0000