Contents
1. Introduction ................................................................................................ 1
2. How culture influences Business Negotiation ............................................ 2
3. Cross-Cultural Training is a key factor for a successful business
negotiation ....................................................................................................... 2
4. Evaluation .................................................................................................. 5
List of reference ............................................................................................. 5
Cross-Cultural Training --- A key factor of International
Business Negotiation
1.
INTRODUCTION
As the process of globalization keeps advancing and the era of information has
already brought significant influences to our life, the world is becoming,
although not from a geographical perspective, smaller and international
communication happens more frequent. Such cross-cultural contact becomes
stronger both in depth and width and leads to the desire and demands for
communication of individuals from different regions, societies and cultures.
Owning to globalization, cross-cultural business negotiation is highlighted an
unprecedented level as one of the most important types of intercultural
communication. Communication between different cultures is undoubtedly
crucial, while there are still many problems and conflicts exist in business
negotiation because of cultural differences. In order to solve these cultural
problems and reach a successful business negotiation, the concept of
Cross-Cultural Training is raised as one of the key solutions. The
Cross-Cultural Training is defined as a series of efforts to equip individuals with
more effective cooperation and adjustment when they interact frequently with
individuals from other culture (Brislin and Yoshida, 1993). The essay will give a
brief definition of cross-culture communication and the cultural factors
influencing the business negotiation first. Secondly, example of cultural
conflicts will be shown to illustrate culture influences business negotiation.
Thirdly, Cross-Cultural Training will be discussed in four aspects which are
definition, effects, methodology and implication.
1
2.
HOW CULTURE INFLUENCES BUSINESS NEGOTIATION AND
CULTURAL CONFLICT EXISTING IN THE BUSINESS
A bottom-up sequence of the elements in business negotiation is made by
Vincent Guy and John Mattock (1995) in which cultural background stays at
the bottom of all the other elements which are the characteristics of the
company, personal character, skills, occasion and negotiation strategy. The
important position of the cultural factors in a business negotiation leads to a
number of influences that they will bring to the business negotiation.
Salacause (2004) states ten areas that cultural can make influence on
business negotiation. They are Negotiation Goal, Negotiation Attitude,
Personal Style, Communication, Sensitivity to Time, Emotionalism, Form of
Agreement, Building an Agreement, Team Organization and Risk Taking. Any
of the elements above may affect the negotiation and even cause a cultural
conflict. Taking the Enron as an example, it lost a contract during a business
negotiation in India because the local company felt that Enron pushed the
negotiation too fast. In fact, different sensitivity to time must be contributed to
the loss of the contract since for Enron’s negotiator, time equals to profit, while
for the businesspeople of India, slower negotiation leads to better trust in the
other side (Salacause, 2004). The great diversity of the cultures worldwide
makes it difficult for negotiators, even an experienced one, to adapt well to all
the cultures that may confront them.
3.
CROSS-CULTURAL TRAINING IS A KEY FACTORS FOR A
SUCCESSFUL BUSINESS NEGOTIATION
As shown in the example above, cultural conflicts may result in an
unsuccessful business negotiation and Black and Mendenhall (1989) claimed
that the business negotiation between different cultures often fail due to
problems related to cultural differences. Such conflicts are probably led by
2
cultural shock which is to describe the problems encountered by individuals
who go from one culture to another (Bhawuk & Brislin, 2000). Serious
obstacles to cross-cultural offered relevant practitioners with a legitimate
reason to provide cross-cultural training since it would result in the relief, if not
being totally removed, of culture shock (Bhawuk & Brislin, 2000) and therefore
improve the performance of expatriates in business activity and negotiation. As
Black and Mendenhall (1990) state, Cross-Cultural Training designed for
expatriation is helpful for expatriates to develop performance or learn
appropriate behaviors to achieve better adjustment in foreign countries
through observation and experience of different cultures ( Moon, Choi, Jung,
2012). If negotiators experience Cross-Cultural Training Program, they can
soon know well about knowledge of acceptable behaviors as well as taboos of
the host country (Black, 1991). Therefore, negotiators can improve their skills
on how to deal with cross-cultural business and negotiation in cognitive and
interpersonal perspective. (Littrell, Salas, Hess, Paley, and Riedel, 2006).
Taking Cross-cultural Training before cultural interaction helps to relief the
severity of the cultural shock and shortens the duration of not being acclimated
to the new culture. An appropriately designed Cross-Cultural Training program
can improve the adaption of the negotiator to the new cultural situation (Shen
and Lang, 2009). In 1983, Brislin presented several Cross-Cultural Training
methodologies which then became popular: (1) Fact-Oriented Training which
is the most basic type of Cross-Cultural Training in which trainees will be
exposed to various facts or information about the culture of the host country
(Black and Mendenhall,1989); (2) Attribution Training, communicating with
culture assimilator to enable trainees to internalize values and standard of
behavior of the host culture; (3) Cultural Awareness Training, which is to
provide the expatriate deep understanding about the concept of culture and
cultural differences through teaching awareness about the home culture
3
(Hånberg, Österdahl, 2009); (4) Cognitive-Behavior Modification, making
trainees know about what activity is rewarding or punishing and thus they can
focus on the rewarding one and deal with the challenge better (Hånberg,
Österdahl, 2009); (5) Experiential Learning, to personally be a participant and
learn about a specific host culture; and (6) Interaction Learning, it is designed
for trainees to feel more comfortable with host nation and to understand life in
the host country in detail (Eschbach, Parker and Stoeberl, 2001).
By taking Cross-Cultural Training, businesspeople can improve their
adjustment to a new cultural environment and thus they are not able to meet
cultural problems when they are involved in a cross-cultural business
negotiation. People who receive Pre-Cross-Cultural Training will do better in
identifying the cultural elements of the host country such as the concept of time,
values, characteristics of language and the taboo, which can lead to a
successful business negotiation without any misunderstanding and confusion.
Nevertheless, there are many companies remain blind to the effect of
Cross-Cultural Training because it needs money to be invested and such
investment will not be profitable in a short-term period of time. It is also
concerned by many firms that Cross-Cultural Training can be useful during the
training program but it may not work after the training program is completed
since it may not practical enough. Blake and Heslin(1983), Blake et al.(1996),
and Kealey and Protheroe(1996) argued that the previous reviews hold a more
favorable attitude toward the effectiveness of Cross-Cultural Program (Dan,
Janet , Milton, 2003). Dan, Janet and Milton (2003) states that there is no
proofs lead to the ineffectiveness of this kind of training but it is shown that the
it is not effective in achieving all the objectives associated with Cross-Cultural
Training in practice because the effect of the Cross-Cultural Training varies
relying on the differences (knowledge, behavior, etc) of the individuals.
4
4.
Evaluation
Intercultural business deals not only cross nations, but also cross cultures.
Culture may result in profound influences on an individual’s thoughts,
communication, and behavior. It also affects their methods and strategies of
negotiation (Salacuse, 2004). Many enterprises refuse the program because of
its extra requirement of money and inconspicuous effects. It is estimated by
Birdseye and Hill (1995) that the direct cost of sending a businessperson
overseas may reach $220,000 and the cost of such issues to America, for
instance, may be as high as $2 billion annually (Mark and Chet, 2001).
According to the research conducted by Eschbach, Parker and Stoeberl
(2001), the cost of failed international business negotiations has been
estimated as up to $500,000 and Black and Mendenhall (1990) and Walton
(1990) estimated that the failure rates ranges from 20 per cent to 85 per cent.
The results of the studies demonstrated that comprehensive Cross-Cultural
Training is effective in reduce the time necessary to achieve sound adjustment
and to attain cultural proficiency and shortens the time necessary to become
effective and productive in business negotiation (Eschbach, Parker and
Stoeberl, 2001). It is the high cost and risk of reaching a successful
intercultural negotiation that makes Cross-Cultural Training the key solution
and since it is proved to be an effective way for negotiator to perform better in
international business negotiations, more and more companies should focus
on investigation and investment of the Cross-Cultural Training Program.
List of Reference
BLACK, J. S. & MENDENHALL, M. 1989. A Practical but Theory-based Framework for Selecting
Cross-Cultural Training Methods. Human Resource Management, 28, 511-539.
BLACK, J. S. & MENDENHALL, M. 1990. Cross-Cultural Training Effectiveness: A Review and a
Theoretical Framework for Future Research. Academy of Management Review, 15,
113-136.
BRANDL, J. & NEYER, A.-K. 2009. Applying cognitive adjustment theory to cross-cultural
training for global virtual teams. Human Resource Management, 48, 341-353.
ESCHBACH, D. M., PARKER, G. E. & STOEBERL, P. A. 2001. American repatriate employees'
5
retrospective assessments of the effects of cross-cultural training on their adaptation
to international assignments. International Journal of Human Resource Management,
12, 270-287.
JIE, S. & LANG, B. 2009. Cross-cultural training and its impact on expatriate performance in
Australian MNEs. Human Resource Development International, 12, 371-386.
KOO MOON, H., KWON CHOI, B. & SHIK JUNG, J. 2012. Previous international experience,
cross-cultural training, and expatriates' cross-cultural adjustment: Effects of cultural
intelligence and goal orientation. Human Resource Development Quarterly, 23,
285-330.
MORRIS, M. A. & ROBIE, C. 2001. A meta-analysis of the effects of cross-cultural training on
expatriate performance and adjustment. International Journal of Training &
Development, 5, 112.
OKPARA, J. O. & KABONGO, J. D. 2011. Cross-cultural training and expatriate adjustment: A
study of western expatriates in Nigeria. Journal of World Business, 46, 22-30.
SALACUSE, J. W. 2005. Negotiating: The top ten ways that culture can affect your negotiation.
Ivey Business Journal, 69, 1-6.
Guy, Vincent & Mattock, John. 1995. The international business book. NTC Business Books.
Lincolnwood. Ill. USA
6