UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC
INTERNATIONAL NEGOTIATION –
UCL – JANUARY, 2014
lecturer Milan Oresky
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
8. Asian Versus America Iceberg. Interfaces in multiple
culture model within negotiation
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
9. Interfaces in multiple culture model within
negotiation
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
Cross-Culture Comparisons
Hight-Context (V.S) Low-Context Cultures
Deal-Orientated (V.S) Relationship – Orientated Cultures
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
High- and Low-Context Cultures (Hall)

Low-context cultures rely on explicit explanations, with
emphasis on spoken words. Such cultures emphasize clear,
efficient, logical delivery of verbal messages. Communication is
direct. Agreements are concluded with specific, legal contracts

High-context cultures emphasize nonverbal or indirect
language. Communication aims to promote smooth, harmonious
relationships. Such cultures prefer a polite, “face-saving” style
that emphasizes a mutual sense of care and respect for others.
Care is taken not to embarrass or offend others.
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
High- & Low-Context Cultures
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
Deal vs. Relationship Orientation

In deal-oriented cultures, managers focus on the task at hand,
are impersonal, typically use contracts, and want to just “get
down to business.” Examples are Australia, Northern Europe, and
North America

In relationship-oriented cultures, managers value affiliations
with people, rapport, and getting to know the other party in
business interactions. Relationships are more important than
individual deals, and trust is valued highly in business
agreements. Examples are China, Japan, and Latin American
countries. It took nine years for Volkswagen to negotiate a car
factory in China
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
Hofstede’s Typology of National Culture
Power distance describes how a society deals with inequalities in
power that exist among people

High power distance societies exhibit big gaps between the weak
& powerful. In firms, top management tends to be autocratic,
giving little autonomy to lower-level employees. Examples:
Guatemala, Malaysia, Philippines, and several Middle Eastern
countries

Low-power distance societies have small gaps between the weak
and the powerful. Firms tend toward flat organizational
structures, with relatively equal relations between managers &
workers. For example, Scandinavian countries have instituted
various systems to ensure socioeconomic equality
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
Typology of National Culture
Individualism vs. collectivism refers to whether a culture focuses
primarily on individuals or whether it values group membership

In individualistic societies, there is great emphasis on selfinterest; competition for resources is the norm; and individuals
who compete best are rewarded. Examples: Australia, Britain,
Canada, and the U.S

In collectivist societies, ties among individuals are important;
business is conducted in a group context; it’s important to keep
conflict at a minimum; conformity and compromise help maintain
harmony. Examples: China, Panama, Japan, and South Korea
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
Typology of National Culture
Uncertainty avoidance refers to the extent to which people can
tolerate risk and uncertainty in their lives


High uncertainty avoidance societies create institutions to
minimize risk and ensure security. Firms emphasize stable careers
and regulate worker actions. Decisions are made slowly. Examples
are Belgium, France, and Japan
In low uncertainty avoidance societies, managers are relatively
entrepreneurial and comfortable with risk. Firms make decisions
quickly. People are comfortable changing jobs. Examples are
Ireland, Jamaica, and the U.S
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
Typology of National Culture
Masculinity versus femininity refers to a society’s orientation
based on traditional male and female values.

Masculine cultures value competitiveness, ambition,
assertiveness, & the accumulation of wealth. Both men and
women are assertive, focused on career and earning money.
Examples are Australia and Japan

Feminine cultures emphasize nurturing roles, interdependence
among people, and caring for less fortunate people—for both men
and women. Examples are Scandinavian countries, where welfare
systems are highly developed and education is subsidized
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
Typology of National Culture
Long-term versus short-term orientation describes the degree to
which people and organizations defer gratification to achieve longterm success

Long-term orientation emphasizes a longer view of planning &
living (years/decades vs. months). Examples are traditional Asian
cultures (China, Japan, Singapore) where teachings of Confucius
about discipline, hard work, & education are key values

Short-term orientation is typical in the U.S. and most other
Western countries
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
Subjective Dimensions of Culture
Values represent a person’s judgments about what is good or bad,
acceptable or unacceptable, important or unimportant, and
normal or abnormal
Attitudes and preferences are developed based on values. They are
similar to opinions, except that attitudes are often unconsciously
held and may not have a rational basis
Examples
Values common to Japan, North America, and Northern Europe include hard
work, punctuality, and wealth acquisition.
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
Manners and Customs
Ways of behaving and conducting
oneself in public and business situations
Manners and customs are present in eating habits, mealtimes, work
hours & holidays, drinking & toasting, appropriate behavior at
social gatherings (kissing, handshaking, bowing), gift-giving
(complex), the role of women, & more.
It is a mistake to minimize the importance of knowing customs of
another culture, not simply b/c it could offend, but also because it
can signal that you are not prepared & thus could be taken
advantage of...
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
Perceptions of Time
Time dictates expectations about planning, scheduling, profit streams,
and what constitutes tardiness in arriving for work and meetings

Monochronic: A rigid orientation to time in which the individual is
focused on schedules, punctuality, and time as a resource. Time is
linear, and “time is money.” For example, people in the U.S. are
hurried and impatient

Polychronic: A flexible, non-linear orientation to time in which the
individual takes a long-term perspective. Time is elastic, and long
delays are tolerated before taking action. Punctuality is relatively
unimportant. Relationships are valued. Examples are Africa, Latin
America, and Asia
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
Religion

A system of common beliefs or attitudes regarding a being or
system of thought that people consider sacred, divine, or the
highest truth - & the associated moral values, traditions, & rituals

Influences
behavior.

Example: The “ Protestant work ethic ” emphasizes hard work,
individual achievement, and a sense that people can control their
environment—the underpinnings for the development of
capitalism. Islam ’ s holy book, the Qur ’ an, prohibits drinking
alcohol, gambling, usury, and “ immodest ” exposure. The
prohibitions affect firms dealing in various goods & services
culture,
and
therefore
business
and
consumer
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
Language as a Key Dimension of Culture

Language is the “mirror” or expression of culture; it is essential
for communications and provides insights into culture

Linguistic proficiency is a great asset in international business

Language has both verbal and nonverbal components (i.e., facial
expressions and gestures)

There are nearly 7,000 active languages, including over 2,000 in
both Africa and Asia
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
Managerial Guidelines for Cross-Cultural Success

Acquire factual and interpretive knowledge about the other
culture; try to speak its language

Avoid cultural bias

Develop cross-cultural skills, such as perceptiveness,
interpersonal skills, and adaptability
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
Personality Traits for Cross-Cultural Proficiency

Tolerance for ambiguity: Ability to tolerate uncertainty and lack
of clarity in the thinking and actions of others

Perceptiveness: Ability to closely observe and comprehend
subtle information in the speech and behavior of others

Valuing personal relationships: Ability to appreciate personal
relationships, often more important than achieving one-time goals
or “winning” arguments

Flexibility and adaptability: Ability to be creative in
devising innovative solutions, be open-minded about outcomes,
and show “grace under pressure”
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
9. Ethics in international Business
 Moral principles and values that affect behavior of individuals,
companies, and governments
 Ethics tell us what’s right or wrong
 Sometimes easier to understand than it is to actually put it in
practice
 And, sometimes easier to know what’s wrong than what’s right to
do
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
Inappropriate Conduct
 Corruption is the abuse of power to achieve illegitimate personal
gain
 Bribery is common and can take the form of grease payments,
small inducements intended to expedite decisions and transactions
or gain favors
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
The Value of Ethical Behavior
 Ethical behavior is simply the right thing to do. It is often
prescribed within laws and regulations
 Often required by laws and regulations
 Ethical behavior is demanded by customers, governments, and the
news media. Unethical firms risk attracting unwanted attention
 Ethical behavior is good business, leading to enhanced corporate
image and selling prospects. Firms with strong reputations have an
advantage when hiring and motivating employees, partnering, and
dealing with foreign governments
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
Variation in Ethical Standards
 Ethical standards vary from country to country
 Relativism is the belief that ethical truths are not absolute but,
rather, differ from group to group. This perspective is summarized
by the phrase, “When in Rome, do as the Romans do.”
 Normativism is the belief that ethical behavioral standards are
universal and that firms and individuals should seek to uphold them
consistently around the world
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
An Ethical Dilemma
Imagine you are a manager visiting a factory owned by an affiliate in
Colombia. During this you discover the use of child labor in the
plant
You are told that without the income they receive from their children’s
work, their families might go hungry. If the children are dismissed
from the plant, they will likely turn to other income sources,
including prostitution and street crime
What should you do? Raise the issue of the immorality of child labor
or look the other way?
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
Corporate Social Responsibility
Corporate social responsibility: Manner of operating a business
that meets or exceeds the ethical, legal, commercial, and public
expectations of customers, shareholders, employees, and
communities
A strong CSR can:
 Help recruit and retain good employees
 Help differentiate the firm and enhance its brands
 Help cut costs, such as minimizing packaging, recycling,
economizing on energy usage, and reducing waste in
operations
 Help the firm avoid increased taxation, regulation, or other
legal actions by local government authorities
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
Corporate Governance
 Corporate Governance: The system of procedures and processes by
which corporations are managed, directed, and controlled
 It provides the means through which firms undertake ethical behaviors,
CSR, and sustainability
 Implementing appropriate conduct is challenging for MNEs, especially
when operating in many countries
 A complicating factor is the use of third-party suppliers and
contractors, some of which may behave badly
 Most firms incorporate ethics and CSR into their mission, planning,
strategy, and everyday operations
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
Ethical Standards for Corporate Governance
Ethical Standards for Corporate Governance
Utilitarian
Approach
This approach
argues the best
ethical action is
the one that
provides the
most good or the
least harm. It
produces the
greatest balance
of good over
harm to
customers,
employees,
shareholders,
the community,
and the natural
environment.
Rights
Approach
This approach
instructs the
decision maker
to choose the
action that best
protects and
respects the
moral rights of
everyone
involved. It is
based on the
belief that,
regardless of
how you deal
with an ethical
dilemma, human
dignity must be
preserved.
Fairness
Approach
This approach
advises that
everyone should
be treated
equally and
fairly. Workers
should be paid a
fair wage that
provides a
decent standard
of living, and
colleagues and
customers
should be
treated as we
would like to be
treated.
Common Good
Approach
This approach
suggests that
actions should
be based on the
welfare of the
entire
community or
nation. It asks
which action
contributes most
to the quality of
life of all affected
people. Respect
and compassion
for all, especially
the vulnerable,
should be the
basis for
decision making.
Virtue
Approach
This approach
advocates that
ethical actions
should be
consistent with
certain ideal
virtues that
provide for the
full development
of our humanity.
The most
important virtues
are truth,
courage,
compassion,
generosity,
tolerance, love,
integrity, and
prudence.
INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014
Questions?