International Business

Negotiations: Bridging the

Cultural Gap

@
Dr. Kevin Mac Gabhann
Fall, 2022

Slide deck 1
 Outline
 1. Welcome, Introduction & outline

 2. Global Perspectives
Globalization & Internationalization process
A never ending CHANGE story
Strategy for change
Business Drivers

 3. The Human Factor problems

Impact of culture on the workplace
Changing profile of manager
Video cases. English Project Team manager

4. Solutions & skills Keys to success

5. Culture A-Z overview
6. Communications & IC tool box
7. Diversity
8 Personal strategies & Selling your skills?
 and Objectives &– Program Outline

Perspectives
Welcome, Introduction
Relevance
You & I
You & the next 40 years

Solutions
Challenges/Problems &
Skills

Latest Research
Bridging the Cultural Gap
&
Culture A to Z
Selling your skills
Learning Outcomes

• Understanding the value of

intercultural skills in the 21st C
workplace

• Understanding which international

management skills are most required
for managers to be effective working in
International cotexts (Teams,
negotiations etc)

• Understanding the importance of being

able to sell student study abroad
experience to employers.
 Who am I ?
Dr Kevin Mac Gabhann, Associate Professor/ Director of International
Relations Office, Consultant/trainer, Lecturer: IHRM Intercultural
management, International teams, Negotiations
Director General HERMES University network
Founding member CAN-IE (Climate Action Network for International
Educators)
Research: Bridging the Ethno-Cultural Gap…October 2015
USA:
Undergraduate BA International Business
Marmac Corporation (Export & Sales)
International Education & Training UWP Colorado/ 2 World Tours
Japan:
OPNET (Yamaha) Overseas assignments and expatriation training
Ireland:
Masters International Business ,University College Dublin
Irish Business Employers Confederation (Human Resource Executive)
France:
Strasbourg Chamber of Commerce/ENA/ISEG/ EM-Strasbourg,
Training & consulting. (Milipore, Steelcase, Pierre Lannier)
PhD Management of diversity
International Teaching :Ireland, UK, Austria, Mexico, Italy , USA, Australia.
 YOU ?
 Spain USA Hungary
 France Canada Colombia
 Poland China Sweden
 Australia Japan Austria
 Germany China Ireland
 Brazil Austria Mexico
 American Estonia Morocco
 Finland Russia UK
WELCOME TO
STRASBOURG
We are here…

…in the heart of Europe!

 Don’t forget the purpose of Educational
Exchanges in the context of your
management career
 Self aware

 Cultural competencies

 Personal development

 Networks & soft skills

 Bridging cultural gaps of

misunderstandings (Business)
 WHY? Cultural Gaps & Importance of
Local Knowledge

WHAT IS THIS?

U.S.A. China Northern Thailand

Pest Pet Snack

Source: HSBC advertisement

 Careful !!

 Aware of Differences ( self awareness)

 Understand Differences

 Accept Differences

 Value & leverage Differences

 Why We Are Here? Page 4

Ge
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Global
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Leveraging
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Global

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Gl u n i

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Diversity

r kp l
Wo loba

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lac
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Ma

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Intensifying CONNECTIVITY

© C2C Consulting and Training Pvt. Ltd. 2011

Why study Culture & language ?
1. Professional development of key skills to be
effective & efficient managing in a globalized world
2. Labour market
3. Expatriation, repatriation, teams, strategy etc
4. Global Leadership ( «don’t grow on trees »)
5. Global Citizen (Global Mindset)
6. Peace and International Relations
7. Organisations, competitiveness
8. National Prosperity
9. Personal and social capabilities relevant to all jobs
10.Transformative experiences
11.Innovation & creativity

• OTHER ??????
 Does a fish know what water is ?

A fish only discovers its need for water

when it is no longer in it
Does a fish know what water is ?
Culture is the water we live in. It surrounds us and defines us.
The real task in intercultural relations
“Culture hides more than it reveals and strangely
enough what it hides, it hides most effectively from
it’s own participants.

Years of study have convinced me that the real job is

not to understand foreign culture but to understand
our own.“

Edward Hall
American anthropologist
 2. Global Perspectives
Why are we here today ?
Managing complexity!
 Globalization Today “ A borderless
world”
 Dependent to Independent to
Interdependent world
 Explosion of Int’l Business since
WWII
 The World Coming together EU,
NAFTA etc
 Just look at The European Union:
Approx 447 million people – 27 countries
Generating collaborations!!

Member states of the European Union

Candidate countries
 The EU symbols

The European anthem

The European flag

Europe Day, 9 May

The motto: United in diversity
24 official languages

?
 What the future holds?
 One thing certain is that the future is very uncertain
 Covid and other pandemics
 Economic uncertinity
 Forces of Gobalisation, ideas flows & financial flows
 Innovation, the Golden Age,
 Emmigration, demograhic changes, climate, economic, political etc
 Imbalances, equality, inequality, migration, high tech,
 Econ growth, China
 Revolutionary technologies/information/imagination
 Stem cells, pandemics, nano technologies, artificial experience
 Rural to Urban ? , & consequences e.g. healthcare
 Risks, unpredictability, tipping points, bio terrorism,
 Climate changes, Climate Justice, Climate action… Energy sources
 The underbelly of globalisation, fragility
 Who will make decisions ? Can we trust old institutions, G-8, WB, WTO Nato,
UN ?
 The challenges of 21st Century
 The future is in our hands
 Evolution of companies
 Domestic

 International

 Multinational (Subsidies)

 Global (international supply chains)

 Constant Change and Flux
Intensifying connections!!!
 Technology
 Communications
 Transportation
 “ A global village”
 DIE (Diversity, Equity, Inclusion)
 VUCA (Volatility,Uncertainty, complexity, Ambiguity)
 Eg Ireland & Dubai
 Your next 20-40 years
Changes
 Population growth 9+ billion (2050)
Scarce resources (water, energy,
food, energy, skills)
 Regional population shifts
 GDP shifts
 Rural to Urban
 New key growth markets
 Largest economies of 2050 (China, USA,
India, Japan, Brazil, Mexico)
PETER DRUCKER
(1909-2005)
 Drucker quote
 « Every few hundred years in Western history
there occurs a sharp transformation. Within a few
short decades, society-its world view, its basic
values, its social and political structures, its arts,
its key institutions,- rearranges itself. And the
people born then can not even imagine a world in
which their grandparents lived and into which
their own parents were born. We are currently
living through such a transformation »

 ( Peter Drucker, The Post-capitalist Society 1993)

 Strategy
The key elements that drive strategy
 Top Line growth expansion (M&As) Innovation, new
markets, BRICs,

 Global requires employees to work across borders,

geographies, to achieve successful downstream integration
& implementation

 Global Leaders/managers placed in critical posts to manage

multinational teams/projects (often virtually)

 Expectations of performance will remain rigorous, despite

need to do job while navigating cultural issues

 Only most CULTURALLY competent will be effective.

Companies need to develop Global managers
 Global Business Drivers!
Growth: Top line Expansion,
M&As, new mkts, innovation, new products
etc

Cost Optimization: (Below line )

Outsourcing, joint ventures, (IT to India)

Employee engagement:
Global talent, Human Resources (that
drives the business realities)
 3. The Human Factor = the
problem factor (sample problems)
 HK talent shortages
 Transnational teams not working
 Multi-cultural teams & virtual teams difficulties
 People leaking in M&As
 Outsourcing problems ( India)
 Brainstorm in meetings (China, USA etc)
 M&As 70% fail to reach intended goals (culture)
 Decision making, trust, building relationships everyone has
their take on it
 Not getting 100% capacity in a highly competitive world
 (Danes milk industry) China labour laws, France scents)

 And from your EXPERIENCES?

 Bridging the Cultural Gap

“The greatest barrier to business

success
is the one erected by culture.”

Edward T. Hall
 The Impact of Culture in the
Workplace
1. Customers vendor relations
2. Work patterns
3. Ideals of Leadership
4. Spans of control
5. Career path concepts/development
6. Extent of specialization
7. Socialization including (after work
socialization)
8. Gender appropriate behavior
9. Negotiator selection criteria
The Impact of Culture in the Work -
place continued
10. Standards of ethical behavior
11. Planning methods/time horizons
12.Employee benefits/compensation & rewards
13.Employee evaluations/performance appraisal
14. Training
15. Selection criteria (including expatriation)
16. Responses to change
17. Ways of handling problems/conflicts
18. How we negotiate, run meetings, make
presentations,
19. Build relationships & trust
20. Manage project teams
 HRM key to success
 The right people in the right position in
the right location is crucial in meeting
the challenges of international business.

 The profile of the right people is

changing.

 Well is it ? What do you think?

 Thoughts & Comments
 Being competitive is more than product or
pricing, or strategic fits etc, it requires a thorough
understanding of one’s
customers/employees/associates/ including
appreciation of their languages, culture and
customs

 Unfamiliarity with foreign etiquette, social norms,

cultural values, can directly effect the success of
an enterprise “the bottom line”, it can jeopardize
deals, cause failed overseas assignments, internal
and external problems that effect the bottom line
 Thoughts & Comments
 A company needs the right Top Line
and Bottom Line strategies but more
importantly it needs the right Human
Talent factor to drive it.
 Keys to Global Corporate Success
1. Identify market needs & develop products &
services that will sell

2. Sound long term marketing & business strategy

3. 3rd and key to point 1 & 2 is to have executives

with in-depth first hand knowledge &
understanding of culture, society & language (to
be globally competent)
 ZOOM on Negotiations & Culture

 The Negotiation process is where interaction,

behaviors, insights are most intense in
international business communication

 Therefore it follows that the international

manager must have a comprehensive knowledge
of the significant impact that culture has on
negotiation
 Importance of Negotiations

 It is estimated that over 50% of an international

manager’s time is spent negotiating (Hendon,
Hendon, Herbig 1996)

 Negotiations are an extremely important skill in

international management today and require
highly developed skills
 What is Negotiation ?

 “Two elements must normally be present for

negotiations to take place; there must be both
common interest and issues of conflict. Without
common interest, there is nothing to negotiate
for, without issues of conflicts nothing to
negotiate about” (Ikle 1964)
 Definition of Cross-cultural Negotiations

 “ The conscious and deliberate interactions

between two parties, originating from two
different national cultures, who are attempting to
define their interdependence in a business
matter” ( Weiss 1993)
 It’s Simple !
 Negotiations are not just a matter of arriving at a
contract/deal
 It is a complicated PROCESS that involves many
factors of which MANY are CULTRURALLY
determined
 Underestimating this may lead to
misunderstandings, frustrations, distrust which
in-turn could lead to FAILURE
 Overview of Culture’s Impact on Negotiations (some
beginning examples)

 Time
 Protocol
 Deal orientation versus relationship establishing
orientations
 Contract
 Decision making
 Conflict
 Direct Versus Indirect communication
 Win-Win versus Win-Lose
 Classic Examples (Value differences)

 Time example: (Germany V Latin America)

 Protocol: (USA V Japan)

 Deal oriented V Relationship oriented

(Saudi Arabia V USA)
 SO!!

 You need to be aware of the possible differences

in values underlying approaches to negotiations
which can/do lead to misunderstandings,
frustrations conflicts, soured relationships and
failure
 French negotiation
style

The French tend to:

• create a friendly, personable atmosphere, make

small talk
• like intellectual, philosophical discourse,

unlimited time
• no standard offer, discuss the problem

• create and maximize alternatives

 Source Richard lewis « When Cultures Colide »

 German Negotiation
style

Germans tend to:

• create a serious, factual and analytical atmosphere

• have a direct, matter-of-fact approach, present standard offer

• look at “Gesamtkonzept” and reach a fair, “best” solution for

all
• carry out final decisions into rigorous, comprehensive action

steps

Source Richard Lewis « When Cultures Collide »


 Even Skills/Qualities of a good Negotiator are
Culturally relevant
Different cultures stress different needs reflecting
diverse ways in viewing negotiating
 Rational thinking skills
 Interpersonal skills
 Communication skills
 Listening, questioning and summarizing
 Excellent product knowledge
 Win respect
 Ability to exploit power
 Mistakes to avoid as an Intercultural Negotiator
(Surinder Deol 1985)
1. Don’t try and look at everything from your own definition of what is
rational and scientific
2. Don’t press a point if the other side is not readily prepared to accept it.
Wait for a more favorable time
3. Don’t look at things from your own narrow self-interest
4. Don’t ask for concessions or compromises which are politically or culturally
sensitive. You will not succeed
5. Don’t stick to your agenda if the other side has a different set of priorities
6. Don’t use jargon which can confuse the other party and create a feeling of
distrust
7. Don’t skip authority in a way which hurts sensibilities of middle level
officials; the top man has the power to commit the organization, but for
implementation you require the support of people at intermediate levels
8. Don’t ask for a decision when you know that the other party is not
competent to say yes or no
 Profile of a Successful Intercultural Negotiator

 “Successful intercultural negotiators are aware that people

indeed think , feel, and behave differently and are at the
same time, equally logical and rational. They know that
individuals, groups, communities, organizations and nations
have different values, beliefs, and assumptions that make
sense from their own viewpoints. They are sensitive to the
fact that everybody perceives, discovers, and constructs
reality- the internal and external world-in various
meaningful ways. They are convinced that to be different is
good as long as the differences are under control or
managed”

(Pierre Caisse & Surinder Deol)

 Pierre Caisse’s Top Three Skills for International
Negotiators

 Should be able to see the world as

others see it
 Deal with ambiguous situations
 Express themselves in a way that
everyone can understand
 ( Training for the Cross-Cultural Mind)
 Ex 1:Japanese Negotiations 62 Craig Storti

 Martha: How did the negotiations go ?

 Janet: Not so well. We were taken.
 M: What happened ?
 J: Well I proposed our starting price and Maruoka didn’t say
anything.
 M: Nothing?
 J: He just sat there looking very serious. So then I brought the
price down.
 M: And ?
 Janet: Still nothing. But he looked a little surprised. So I brought
it down to our last offer and just waited. I couldn’t go any lower.
 M: What did he say?
 J: Well he was quite for about a minute and then he agreed.
 M: Well at least we have a deal. You should be pleased.
 J: I guess so. But later I learned that he thought our first price
was very generous.
Ex 2: International Negotiation scenarios. Discuss
the following situations:
1. A Japanese businessman gives you his card.How do you receive it
?

2. You are negotiating one-to-one with a Saudi. The telephone

rings. He answers it and talks for 5 minutes. How are you to
interpret this? Does this show disinterest in the present negotiations
?

3. You are negotiating with a Chinese team. One of the team’s

members, a young person, speaks very good English and thus you
address most of your comments to him. What mistake are you
probably making?

4.You are negotiating with a Japanese team. You let it be known

that you have a return flight on a certain date and state that you
hope the negotiations can be completed by that date. What
mistakes have you made, how might they both damage the
business relationship and be used against you ?
 ZOOM on culture & teams
Benefits of Multicultural Teams
 Different perspectives
 Encourages creativity
 Higher global skills
 Easily operating in other cultures
 Better services for customers
 Enhances work environment and
motivation
 Increases productivity
 Makes recruitment easier
56
Multicultural Team Risks

57
The Need of Managing Multicultural
Teams Appropriately

58
The value of skills
as seen by the
employers

http://www.britishcouncil.
org/culture-at-work-
research_march_2013.pdf .
Ex 4: Morel International Team

Gavin Hales Jack Xu

(UK) (China) Mohammed Alberto Franceschini (Italy)
Hussein (Egypt)

Eva Schmidt Jessie King Sanji Rupta

(Germany) (USA) (India) 60
 4. Solutions: What is
Intercultural Competence Page 5 -6

Intercultural competence:
key skills for employees working in today’s global world

Intercultural
knowledge

Intercultural
competence
Intercultural
skills

Intercultural
sensitivity
“The ability to communicate and behave
effectively and appropriately in a variety
of cultural settings.”
 Intercultural competence models
- recognizing prevalent norms, customs,
and value systems
Dirks (1995) - understanding local role structures and
societal relations
- realizing differences and nuances in
verbal and non-verbal communication

Communicative and
Cognitive Cognitive
Behavioural

Emotional
- Social
Psychological
Affective

- exhibiting empathy - developing and inclination to

- willingness to accept risk actively listen
- curiosity to learn - willingness to improve one's
- awareness of own self own behavior
- engaging in local networking
Gertsen (1992)

MEANING MENTAL AND BODILY

Barmeyer (2000) 1. Affektiv ABILITIES BALANCE

Soziale Kompetenze wie: FUNCTIONALITY SENSITIVITY

CONTENT INCENTIVE
Sympathie Empathie
Aufgeschlossenheit Ethnorelativismus

3. Konativ Lernbereitschaft
Selbstreflexion
Umgang mit Stereotypen
Ambiguitätstoleranz
knowledge
understanding
motivation
emotion
Flexibilität Stressresistenz
Toleranz Humor
skills volition
Umsetzung von Einstellungen (1.) und Kenntnissen (2.)

sowie

Kommunikationsbereitschaft Interkulturelle Reflective

Kommunikationsfähigkeit
Fremdsprachenkenntnisse Kompetenz Observation
"Watching"
action
communication
cooperation

2. Kognitiv
INTER-
ACTION
Landeskundlisches Wissen

Illeris’ (2007)
Kenntniss kultureller Dimensionen
Kenntniss kultureller Systeme

INTEGRATION
SOCIALITY
Latest Observations on ICC

•Life Long Process

•Process not a result
•Intentionality
•ICC in different contexts
•Centrality of learner not program
•Language is not enough
•Multiple perspectives and lens
•ICC not just for working abroad/study abroad
Integrate for Life
•Developmental (DMIS) reflection key. Student ta
agency
 New Skills ?
 Mobility
 Cultural savvy, cultural Intelligence
 The ability to “hit the ground running”
 Multicultural competencies (they are not
automatic)
 Tech skills, Functional competencies,
Business Practices, Corporate Culture,
Intercultural competencies (What are they
and where do you get them ?)
 (The British Council ) Hard V Soft
 Competencies/Skills
 Knowledge Understand Cultural difference
 Skills Adaptability
 Attitudes Accept Cultural Difference
 Management Adjust Communication
 Values Self awareness
 Responsability Ambiguity Tolerance
 Multilingual Working in Teams
 Cultural Agile Listening, understand V respond
 Global Interest Resistent
 Collaborative Perseverence
 Innovative Critical thinker
 Humble Open
 Empathy Emotional intelligence
What is it?

A set of 5 individual and social competencies (Daniel Goleman)

The ability to perceive, control and evaluate emotions.

 It is built on:
- understanding and respect for one’s own and others’ cultural;

- appreciating the strengths and limits of different cultures;

- developing special skills of intercultural communications.

( Milton J. Bennett)

Development of Intercultural Sensitivity Model

Denial Defense Minimization Acceptance Adaptation Integration

Ethnocentric Stages Ethnorelative Stages

Experience of difference
Most Critical of all!!!!