International Management International Ninth Edition Management Luthans | Doh Fred Luthans Jonathan P. Doh Ninth Edition Chapter 7 Cross-Cultural Communication and Negotiation International Management Ninth Edition Luthans | Doh Cross-Cultural Communication and Negotiation • The specific objectives of this chapter are to 1. 2. 3. 4. 5. 6. DEFINE the term communication, examine some examples of verbal communication styles, and explain the importance of message interpretation. ANALYZE the common downward and upward communication flows used in international communication. EXAMINE the language, perception, culture of communication and nonverbal barriers to effective international communications. PRESENT the steps that can be taken to overcome international communication problems. DEVELOP approaches to international negotiations that respond to differences in culture. REVIEW different negotiating and bargaining behaviors that may improve negotiations and outcomes. International Management Ninth Edition Luthans | Doh The Overall Communication Process • Communication – The process of transferring meanings from sender to receiver. – On the surface this appears straightforward. – However, a great many problems can result in the failure to transfer meanings correctly. • Communication can be verbal or nonverbal. International Management Ninth Edition Luthans | Doh Verbal Communication Styles • Context – Information that surrounds a communication and helps convey the message. – Context plays a key role in explaining many communication differences. • Messages are often highly coded, implicit, and indirect in high-context societies. – Japan, many Arab countries • Messages are often explicit and speaker says precisely what s/he means in low context societies. – U.S. and Canada International Management Ninth Edition Luthans | Doh Explicit-Implicit Communication An International Comparison International Management Ninth Edition Luthans | Doh Major Characteristics of Verbal Styles International Management Ninth Edition Luthans | Doh Verbal Communication Styles • Indirect and Direct Styles – High-context cultures: Messages are implicit and indirect; voice intonation, timing, facial expressions can play important roles in conveying information. – Low-context cultures: People often meet only to accomplish objectives; they tend to be direct and focused in communications. International Management Ninth Edition Luthans | Doh Verbal Communication Styles • Elaborate to Succinct Styles – Three degrees of communication quantity—elaborating, exacting, succinct 1. Elaborating style most popular in high-context cultures with moderate degree of uncertainty avoidance – Widely used in Arabic countries 2. Exacting style focuses on precision and use of the right amount of words to convey message; more common in low-context, lowuncertainty-avoidance cultures – Used in England, Germany, and Sweden, etc. 3. Succinct style more common in high-context cultures with considerable uncertainty avoidance where people say few words and allow understatements, pauses, and silence to convey meaning – Most common in Asia International Management Ninth Edition Luthans | Doh Verbal Communication Styles • Contextual and Personal Styles – Contextual style focuses on the speaker and the relationship of parties • Often associated with high power distance, collective, high-context cultures • Speakers will choose words that indicate their status relative to the status of the others. – Personal style focuses on the speaker and the reduction of barriers between parties • More popular in low-power-distance, individualistic, low-context cultures • Speakers use first names in addressing others. International Management Ninth Edition Luthans | Doh Verbal Communication Styles • Affective and Instrumental Styles – Affective style is characterized by language requiring the listener to carefully note what is said and to observe how the message is presented. • The meaning is often nonverbal and requires receiver to use intuitive skills to decipher message. • Common in collective, high-context cultures • Middle East, Latin America, and Asia – Instrumental style is goal oriented and focuses on the sender who clearly lets the other party know what s/he wants the other to know. • More commonly found in individualistic, low-context cultures • Switzerland, Denmark, and the United States International Management Ninth Edition Verbal Styles Used in 10 Select Countries Luthans | Doh International Management Ninth Edition Luthans | Doh Communication Flows • Downward Communication – Transmission of information from manager to subordinate • Primary purpose of manager-initiated communication is to convey orders/information – Managers use this channel for instructions and performance feedback. – Channel facilitates the flow of information to those who need it for operational purposes. – Sending a mixed signal is never helpful. International Management Ninth Edition Luthans | Doh Communication Flows Suggestions for Communication • When communicating downward with nonnative speakers 1. 2. 3. 4. 5. 6. 7. Use most common words with their most common meanings. Select words with few alternative meanings. Strictly follow the basic rules of grammar. Speak with clear breaks between words. Avoid using esoteric or culturally biased words. Avoid the use of slang. Don’t use words or expressions requiring the listener to form mental images. 8. Mimic the cultural flavor of the nonnative speaker’s language. 9. Paraphrase and repeat basic ideas continually. 10. At the end, test how well the other person understands by asking him/her to paraphrase what has been said. International Management Ninth Edition Luthans | Doh Communication Flows • Upward Communication – Transfer of meaning from subordinate to superior • Primary purposes are to provide feedback, ask questions, and obtain assistance. – In recent years there has been a call for more upward communication in the U.S. – In Japan, Hong Kong, Singapore upward communication has long been a fact of life. – Outside Asian countries, upward communication is not as popular International Management Luthans | Doh Ninth Edition Communication Epigrams continues International Management Ninth Edition Communication Epigrams Luthans | Doh International Management Ninth Edition Luthans | Doh Communication Barriers • Language barriers – Knowledge of the language used at headquarters is not enough. – Fluency, technical knowledge, and writing skills are also important. – Misinterpretations often result from unskilled use of a language. • Cultural barriers in language – Geographic, cultural, and institutional distance challenge managers. – Written communications are heavily influenced by culture. International Management Ninth Edition Luthans | Doh Communication Barriers • Perception – A person’s view of reality • Advertising Messages – Countless advertising blunders when words are misinterpreted by others • How others see us – May be different than we think – Perceptions affect the way managers interact and communicate with their counterparts. International Management Ninth Edition U.S. Proverbs Representing Cultural Values Luthans | Doh International Management Ninth Edition Luthans | Doh The Impact of Culture Nonverbal Communication • Nonverbal communication – The transfer of meaning through means such as body language and use of physical space – Chromatics • Use of color to communicate messages; certain colors mean different things in different cultures. – Kinesics • Study of communication through body movement and facial expression. – Eye contact; oculesics―gaze, stare, etc. – Posture: appropriate relaxed appearance – Gestures: handshake, bow, kiss, etc. International Management Ninth Edition Luthans | Doh Nonverbal Communication • Proxemics – Study of the way people use physical space to convey messages • Intimate distance used for very confidential communications • Personal distance used for talking with family/close friends • Social distance used to handle most business transactions • Public distance used when calling across room or giving talk to group International Management Ninth Edition Luthans | Doh Nonverbal Communication • Chronemics – The way time is used in a culture. • Two types 1. Monochronic time schedule: things done in linear fashion; time schedules are important; time can be controlled, should be used wisely. 2. Polychronic time schedule: people do several things at same time and place higher value on personal involvement than on getting things done on time; personal relationships more important than time schedules International Management Ninth Edition Personal Space Categories for Those in the U.S. Luthans | Doh International Management Ninth Edition Luthans | Doh Achieving Communication Effectiveness • Improve feedback systems – Personal: face-to-face, phone, e-mail – Impersonal: reports, budgets, plans • Provide language training – English is the international language of business . • Provide cultural training – At least one party has to understand the other’s culture. • Flexibility and cooperation – The essential starting point: recognize/accept the inescapable subtleties and difficulties of intercompany relationships. International Management Ninth Edition Luthans | Doh Managing Cross-Cultural Negotiations • Negotiation – The process of bargaining with one more parties at arrive at solution acceptable to all. – Used in creating joint ventures, then for expansion, local managers, imports/exports of materials and finished goods, recapture of profits • Two types of negotiation 1. Distributive negotiation: two parties with opposing goals compete over a set value. 2. Integrative negotiation: two groups integrate interests, create value, invest in the agreement (winwin scenario). International Management Ninth Edition Luthans | Doh Negotiating Types and Characteristics International Management Ninth Edition Negotiation Styles from a Cross-Cultural Perspective Luthans | Doh International Management Ninth Edition Luthans | Doh The Negotiation Process 1. Planning – Identify objectives; adapt strategy, fine common ground. 2. Interpersonal relationship building – Get to know people on the other side. 3. Exchanging task-related information – Each side sets forth its position on critical issues. 4. Persuasion – Willingness to give some concessions 5. Agreement – The granting of concessions and hammering out of a final agreement International Management Ninth Edition Luthans | Doh Cultural Differences Affecting Negotiations • When negotiating – Don’t identify the counterpart’s home culture too quickly; common cues (name, appearance, language, accent, location) may be unreliable. – Beware of Western bias toward “doing.” Ways of being, feeling, thinking, and talking can shape relationships more powerfully than doing. – Counteract the tendency to formulate simple, consistent, stable images. – Don’t assume all aspects of the culture are equally significant. – Recognize that norms for interactions involving outsiders may differ from those for interactions between compatriots. – Don’t overestimate familiarity with counterpart’s culture. International Management Ninth Edition Luthans | Doh Negotiation Tactics • Location – Most businesses will choose a neutral site. • Time limits – An important negotiation tactic when one party is under a time constraint. • Buyer-seller relationship – Some trade favors, others expect buyer to get all. International Management Ninth Edition Luthans | Doh Negotiation Tactics • Five general principles 1. Separate the people from the problem: see other’s side, avoid blame, stay positive; recognize emotions. 2. Focus on interests over positions: gives insight into the motivation behind why a particular position was chosen. 3. Generate a variety of options before settling on an agreement: better for everyone to have many options. 4. Insist that the agreement be based on objective criteria: emphasize the communal nature of the process. 5. Stand your ground: neither side should agree to terms that will leave it worse off than its best alternative to a negotiated agreement, or BATNA. International Management Ninth Edition Luthans | Doh Bargaining Behaviors • Bargaining behaviors are both verbal and nonverbal. – Use of extreme behaviors: Some begin with an extreme offer or request. – Promises, threats, and other behaviors: often greatly influenced by the culture – Nonverbal behaviors: silent language (silent period, facial gazing, touching, conversational overlaps) International Management Ninth Edition Luthans | Doh Review and Discuss 1. 2. How does explicit communication differ from implicit communication? Which is one culture that makes wide use of explicit communication? Implicit communication? Describe how one would go about conveying the following message in each of the two cultures you identified: “You are trying very hard, but you are still making too many mistakes.” One of the major reasons that foreign expatriates have difficulty doing business in the United States is that they do not understand American slang. A business executive recently gave the authors the following three examples of statements that had no direct meaning for her because she was unfamiliar with slang: “He was laughing like hell.” “Don’t worry. It’s a piece of cake.” “Let’s throw these ideas up against the wall and see if any of them stick.” Why did the foreign expat have trouble understanding these statements, and what could be said instead? International Management Ninth Edition Luthans | Doh Review and Discuss 3. 4. Yamamoto Iron & Steel is considering setting up a minimill outside Atlanta, Georgia. At present, the company is planning to send a group of executives to the area to talk with local and state officials regarding this plant. In what way might misperception be a barrier to effective communication between the representatives for both sides? Identify and discuss two examples. Diaz Brothers is a winery in Barcelona. The company would like to expand operations to the United States and begin distributing its products in the Chicago area. If things work out well, the company then will expand to both coasts. In its business dealings in the Midwest, how might culture prove to be a communication barrier for the company’s representatives from Barcelona? Identify and discuss two examples. International Management Ninth Edition Luthans | Doh Review and Discuss 5. 6. 7. 8. Why is nonverbal communication a barrier to effective communication? Would this barrier be greater for Yamamoto Iron & Steel (question 3) or Diaz Brothers (question 4)? Defend your answer. For U.S. companies going abroad for the first time, which form of nonverbal communication barrier would be the greatest, kinesics or proxemics? Why? Defend your answer. If a company new to the international arena was negotiating an agreement with a potential partner in an overseas country, what basic steps should it be prepared to implement? Identify and describe them. Which elements of the negotiation process should be done with only your group? Which events should take place with all sides present? Why? International Management Ninth Edition Luthans | Doh Review and Discuss 9. An American manager is trying to close a deal with a Brazilian manager, but has not heard back from him for quite some time. The American is getting very nervous that if he waits too long, he is going to miss out on any backup options lost while waiting for the Brazilian. What should the American do? How can the American tell it is time to drop the deal? Give some signs that suggest negotiations will go no further. 10. Wilsten Inc. has been approached by a Japanese firm that wants exclusive production and selling rights for one of Wilsten’s new high-tech products. What does Wilsten need to know about Japanese bargaining behaviors to strike the best possible deal with this company? Identify and describe five.