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Cross-cultural Issues in Business Negotiations (Revised)

Cross-cultural Issues in Business Negotiations (Revised)

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Published by Aashka Aggarwal
Cross-cultural Issues in Business Negotiations
Cross-cultural Issues in Business Negotiations

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Published by: Aashka Aggarwal on Sep 19, 2013
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Managing Cross-cultural Workforce

In Global Business

Dr. Ajay Singh

What is Culture?

What are the Layers of Culture?

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

These layers reflect deeply held attitude and beliefs .Hidden. common values . unconscious.Below the Surface … • The culture has many underground layers: .

heroes.Core elements of culture • • • • • • Nation’s history. Religion and religious ideals. mythology. landscape. climate and geography All the above have impact on the shared values .

Cultural Dimensions Three major studies to examine intercultural dimensions are by: • Hall • Hofstede • Trompenaars .

Hall • Time • Space • Communication Context .

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. .

South and South East Asia. Hong Kong. Taiwan. Russia and most of East-Central Europe. • Polychromic Business Cultures: The Arab World. Japan.Business Cultures • Monocromic Business Cultures: Nordic and Germanic Europe. . Latin America. North America. • Moderately Monochromic: Australia / New Zealand. Southern Europe. S. Singapore. South Korea. Africa. most of Africa. China.

North America. (8 to 14 inches) The Arab World.Space (Distance Behaviour) Inter-personal Distance in global regions: Close: 20 to 35 cms. Large part of Asia. Central and Eastern Europeans. . Latin America Distant: 40 to 60 cms. (16 to 24 inches) Northern. Latin Europe. The Mediterranean Region.

Australia and New Zealand. Nordic and Germanic Europe) . Eastern Europe) Implicit Communication: • Most message in code (East and South-east Asia.Communication Context Explicit Communication: • Explicit message • Information in context • Direct (USA and Canada.

Feminity . Collectivism Masculinity Vs.Hofstede’s Model Examined International difference in work-values under four dimensions: • • • • The Power Distance Dimension Uncertainty Avoidance Dimension Individual Vs.

. Collectivism • This dimension describes the relationship that individuals have with others. • In collective society identity is based on social system & belongingness to organization is moral. • 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.Individual vs.

South Africa Finland Austria Rank 19 20 21 22/23 22/23 24 25 26/27 26/27 28 29 30 31 32 33/35 33/35 33/35 36 County Israel Spain India Japan Argentina Iran Jamaica Brazil Arab countries Turkey Uruguay Greece Philippines Mexico East Africa Yugoslavia Portugal Malaysia Rank 37 38 39/41 39/41 39/41 42 43 44 45 46 47/48 47/48 49 50 51 52 53 Country Hong Kong Chile West Africa Singapore Thailand Salvador South Korea Taiwan Peru Costa Rica Pakistan Indonesia Colombia Venezuela Panama Equador Guatemala .R.Individualism Index • • • • • • • • • • • • • • • • • • • Rank 1 2 3 4/5 4/5 6 7 8 9 10/11 10/11 12 13 14 15 16 17 18 County USA Australia Great Britain Canada Netherlands New Zealand Italy Belgium Denmark Sweden France Ireland (Republic of) Norway Switzerland Germany F.

and the social value is welfare. • This also reflects roles and values of men and women in society. heroism. . Femininity • It shows the degree of preference for achievement. • In feminine cultures relationship with people and quality of life are given higher value. These values are rated high in masculine and low in feminine cultures.Masculinity vs. In masculine cultures sex roles are more sharply differentiated than in faminine cultures. assertiveness and material success.

Masculinity Index • • • • • • • • • • • • • • • • • • • Rank 1 2 3 4/5 4/5 6 7/8 7/8 9/10 9/10 11/12 11/12 13/14 13/14 15 16 17 18/19 Country Japan Austria Venezuela Italy Switzerland Mexico Ireland Jamaica Great Britain Germany FR Philippines Colombia South Africa Equador USA Australia New Zealand Greece Rank 18/19 20/21 20/21 22 23 24 25/26 25/26 27 28 29 30/31 30/31 32/33 32/33 34 35/36 35/36 Country Hong Kong Argentina India Belgium Arab countries Canada Malaysia Pakistan Brazil Singapore Israel Indonesia West Africa Turkey Taiwan Panama Iran France Rank 37/38 37/38 39 40 41 42 43 44 45 46 47 48/49 48/49 50 51 52 53 Country Spain Peru East Africa Salvador South Korea Uruguay Guatemala Thailand Portugal Chile Finland Yugoslavia Costa Rica Denmark Netherlands Norway Sweden .

and structure (centralized or decentralized) of the organization. • Is reflected in degree of equality of roles. .The Power Distance Dimension • Shows the extent to which members of a society accepts that power distance in institutions and organisations. accessibility of superiors. • Shows desirability and not of social inequality.

Power Distance Index • • • • • • • • • • • • • • • • • • • Rank 1 2/3 2/3 4 5/6 5/6 7 8/9 8/9 10/11 10/11 12 13 14 15/16 15/16 17 18/19 Country Malaysia Guatemala Panama Philippines Mexico Venezuela Arab countries Equador Indonesia India West Africa Yugoslavia Singapore Brazil France Hong Kong Colombia Salvador Rank 18/19 20 21/23 21/23 21/23 24/25 24/25 26 27/28 27/28 29/30 29/30 31 32 33 34 35/36 35/36 Country Turkey Belgium East Africa Peru Thailand Chile Portugal Uruguay Greece South Korea Iran Taiwan Spain Pakistan Japan Italy Argentina South Africa Rank 37 38 39 40 41 42/44 42/44 42/44 45 46 47/48 47/48 49 50 51 52 53 Country Jamaica USA Canada Netherlands Australia Costa Rica Germany FR Great Britain Switzerland Finland Norway Sweden Ireland New Zealand Denmark Israel Austria .

. which is reflected in inner need to work hard.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. • Have difficulty in adjustment to deviant behaviour • Emphasis on written rules and regulations.

Uncertainty Avoidance Index • • • • • • • • • • • • • • • • • • • Rank Country 1 2 3 4 5/6 5/6 7 8 9 10/15 10/15 10/15 10/15 10/15 10/15 16/17 16/17 18 Greece Portugal Guatemala Uruguay Belgium Salvador Japan Yugoslavia Peru France Chile Spain Costs Rica Panama Argentina Turkey South Korea Mexico Rank 19 20 21/22 21/22 23 24/25 24/25 26 27 28 29 30 31/32 31/32 33 34 35 36 Country Israel Colombia Venezuela Brazil Italy Pakistan Austria Taiwan Arab countries Equador Germany FR Thailand Iran Finland Switzerland West Africa Netherlands East Africa Rank 37 38 39/40 39/40 41/42 41/42 43 44 45 46 47/48 47/48 49/50 49/50 51 52 53 Country Australia Norway South Africa New Zealand Indonesia Canada USA Philippines India Malaysia Great Britain Ireland (Republic of) Hong Kong Sweden Denmark Jamaica Singapore .

Trompenaars • Universalism Vs. total engagement . Particularism Respect of universal laws vs. loyalty towards people • Specific vs. Diffuse relationships Superficial engagement vs.

There is no other witness.Universalism Vs. Your friend hits a pedestrian. He assures that there won´t be any serious consequence for you. he is driving 80 km/h in an area where he should be respecting the 40km/h speed limitation. His lawyer asks you to testify that your friend was driving at the speed of 40 km/h. . Particularism You are sitting in your friend´s car.

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 .

Thailand. Switzerland. • Countries high in Particularism (Loyalty towards people): Hong Kong. UK. Singapore. Maxico. Netherlands. France. Austria. China. Japan. . Czechoslovakia. Venezuela. Spain. Indonesia. Belgium • Countries moderate in Universalism: Italy.Universalism Index • Countries high in Universalism (Respect of Universal Law): USA. Denmark. Brazil. CIS.

Your private and professional lives are two different things. on a professional and personal basis. Defused Your boss asks you to help him in arrangement of birthday party which he is organizing for his son this weekend. .Specific Vs. You go and help your boss in the party because your are totally committed to him/her. You decline the invitation: your boss has nothing to do with your week-end activities. The idea is not very appealing to you.

Belgium. Defused Relationships Countries with Specific relationships (Engagement Superficial): Austria. Singapore. Japan. Countries that are moderate in this dimension: Brazil. France. Argentina. Italy. China. Czechoslovakia. Spain. Mexico. Indonesia. Switzerland.Specific vs. CIS. Thailand. UK. Netherlands. Venezuela. . USA. Countries high in Defused relationships (Engagement total): Hong Kong. Germany.

Managerial Implications • • • • Motivation Reward Appraisal Negotiations (Verbal and non verbal) .

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 .

Divergence and Crossvergence Glocalisation  Refers to crossvergence or the mixing of cultural systems between different countries  Belief that as global economy grows.Convergence. countries will influence each other economically and globally Cultural Foundations of IHRM .

Discussion .

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