1. International Management
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2. Cross-Cultural Communication and Negotiation
Chapter 7
Cross-Cultural Communication and Negotiation

3. Learning Objectives
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

4. Learning Objectives (continued 1)
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

5. Learning Objectives (continued 2)
Develop approaches to international negotiations that respond to differences in culture
Review different negotiating and bargaining behaviors that may improve negotiations and outcomes

6. World of International Management - Netflix's Negotiations
Faces setbacks due to negotiation and communication difficulties in:
China - Setbacks due to a long negotiation process
Russia - Setbacks because of Netflix’s lack of communication and negotiation prior to entry

7. Communication Process of transferring meanings from sender to receiver
Advent of the telephone, Internet, and personal communication devices has influenced the way people communicate
Types - Verbal or nonverbal

8. Verbal Communication Styles - Context
Information that surrounds a communication and helps convey the message
Plays a key role in explaining many communication differences
High-context societies
Messages are often highly coded and implicit
Low-context societies
Messages are often explicit and speaker says precisely what s/he means

9. Table 7.1 - Major Characteristics of Verbal Styles

10. Indirect and Direct Styles
High-context cultures - Messages are implicit and indirect
Voice intonation, timing, facial expressions play important roles in conveying information
Low-context cultures - People often meet only to accomplish objectives
Direct and focused in their communications

11. Degrees of Communication Quantity
Elaborate style - Most popular in high-context cultures that have a moderate degree of uncertainty avoidance
Widely used in Arabic countries
Involves talking, detailed descriptions, and repetition
Exacting style - Focuses on precision and use of the right amount of words to convey the message

12. Degrees of Communication Quantity (continued)
More common in low-context, low-uncertainty-avoidance cultures
Used in England, Germany, and Sweden
Succinct style
More common in high-context cultures with considerable uncertainty avoidance
People say few words and allow understatements, pauses, and silence to convey meaning
Most common in Asia

13. Contextual Styles Focus on the speaker and the relationship of parties
Associated with high-power-distance, collective, and high-context cultures
Speakers choose words that indicate their status relative to the status of the others

14. Personal Styles
Focus on the speaker and the reduction of barriers between the parties
More popular in low-power-distance, individualistic, and low-context cultures
Speaker uses first names while addressing others

15. Affective Styles
Characterized by language that requires the listener to carefully note what is said and to observe how the message is presented
Meaning is conveyed nonverbally and requires the receiver to use intuitive skills to decipher the message
Common in collective, high-context cultures
Middle East, Latin America, and Asia

16. Instrumental Styles Goal-oriented
Focuses on the sender who clearly lets the other party know what s/he wants the other party to know
Found in individualistic, low-context cultures
Switzerland, Denmark, and the United States

17. Table 7.2 - Verbal Styles Used in 10 Select Countries

18. Interpretation of Communications
Effectiveness of communication is determined by how closely the sender and receiver have the same meaning for the same message
If the meaning is different, effective communication will not take place

19. Downward Communication
Transmission of information from manager to subordinate
Purpose - Convey orders or 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 mixed signals is never helpful in communication

20. Downward Communication (continued)
Challenges posed by downward communication in an international context
Communication is direct and extends beyond business matters in European countries
Communication is less direct in Asian countries

21. Upward Communication
Transfer of information from subordinate to superior
Purpose - Provide feedback, ask questions, or obtain assistance from higher-level management
Upward communication is not popular outside Asian countries

22. Communication Barriers - Language
Knowledge of the language used at the headquarters of an MNC is essential for personnel placed in a foreign assignment
Fluency, technical knowledge, and writing skills
Misinterpretations often result from unskilled use of a language
Inadequate language training

23. Cultural Barriers in Language
Geographic, cultural, and institutional distance challenge international managers
Native speakers might deviate from the standard business communication practices of other cultures

24. Perceptual Barriers Perception Advertising messages View of others
Person’s view of reality
Advertising messages
Misunderstandings caused when words are misinterpreted by others
View of others
May be different from what one thinks
Perceptions influence how individuals see others

25. Nonverbal Communication
Transfer of meaning through means such as body language and use of physical space
Types
Kinesics
Proxemics
Chronemics
Chromatics

26. Table 7.7 - Common Forms of Nonverbal Communication

27. Kinesics
Study of communication through body movement and facial expression
Areas of concern - Eye contact, posture, and gestures
Oculesics: Area of communicating through the use of eye contact and gaze
Haptics: Communicating through the use of bodily contact

28. 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 and close friends
Social distance: Used to handle most business transactions
Public distance: Used when calling across room or giving a talk to a group

29. Figure 7.2 - Personal Space Categories for Those in the U.S.

30. Chronemics Way in which time is used in a culture Types
Monochronic time schedule: Things done in linear fashion
Used in societies which consider time schedules important and time to be a controllable factor that needs to be used wisely

31. Chronemics (continued)
Polychronic time schedule: Several things are done at the same time
Place higher value on personal involvement than on getting things done on time
Consider personal relationships more important than time schedules

32. Chromatics Use of color to communicate messages
Knowing the importance and the specifics of chromatics helps avoid embarrassing situations

33. Achieving Communication Effectiveness
Open feedback systems
Personal - Face-to-face, phone, or
Impersonal - Reports, budgets, or plans
Provide language training
Non-native speakers of English need to be provided training to aid them in making face-to-face conversations and telephonic conversations
Written communication is important in achieving effectiveness

34. Achieving Communication Effectiveness (continued)
Provide cultural training
At least one party has to understand the other’s culture
Increase flexibility and cooperation
Improves effectiveness in communication and understanding and cooperation

35. Negotiation
Process of bargaining with one or more parties to arrive at a solution that is acceptable to all
Follows assessing political environments
Used in creating joint ventures with local firms
Once a firm starts operating, additional areas of negotiation are included

36. Types of Negotiations
Distributive negotiation: Occurs when two parties with opposing goals compete over a set value
Integrative negotiation: Involves cooperation between two groups to integrate interests, create value, and invest in an agreement

37. Table 7.8 - Negotiating Types and Characteristics

38. Negotiation Process Planning Interpersonal relationship building
Involves identifying objectives, exploring options to attain objectives, and finding areas of common ground between parties
Interpersonal relationship building
Getting to know people on the other side
Exchanging task-related information
Parties setting forth its position on critical issues

39. Negotiation Process (continued)
Persuasion
Success of a negotiation depends on:
Understanding each parties’ position
Identifying areas of similarity and difference
Creating new options
Working toward a solution
Agreement
Granting of concessions and hammering out of a final agreement

40. Understanding Cultural Differences
Counterpart’s home culture should not be identified too quickly
Western bias toward doing should be approached with caution
Tendency to formulate simple, consistent, and stable images should be counteracted

41. Understanding Cultural Differences (continued)
Significance of all aspects of the culture should not be assumed to be equal
Differences might exist between the norms for interactions involving outsiders and between the compatriots
Familiarity with counterpart's culture should not be overestimated

42. Negotiation Tactics Location Time limits
Businesses choose a neutral site to avoid gaining advantage of a location and to finish negotiations soon due to the cost of staying at site
Time limits
Important negotiation tactic when one party is under a time constraint

43. Negotiation Tactics (continued)
Buyer-seller relationship
Different for certain countries
Americans believe in trading favors
Japanese believe they should get most out of a purchase
Brazilians are deceptive and self-interested

44. Principles of Negotiation Tactics
Separate the people from the problem
Focus on interests over positions
Generate a variety of options before settling on an agreement
Insist that the agreement be based on objective criteria
Stand ground

45. Bargaining Behaviors Verbal and nonverbal Use of extreme behaviors
Verbal behaviors are important as they improve the final outcome and are critical to the success of a negotiation
Use of extreme behaviors
Some begin with an extreme offer or request, while some begin with an initial position that is close to the one they are seeking

46. Bargaining Behaviors (continued)
Promises, threats, and other behaviors
Influenced by culture and are designed to influence the other party
Nonverbal behaviors
Silent language (silent periods, facial gazing, touching, and conversational overlaps)

47. Be the International Management Consultant - China
If you are working as a consultant for Coca Cola, how does the dismissal of the deal by the Chinese government affect your continued investment in the country? 
What more could private business, like Coca Cola, do to convince the government that new enterprise can bring positive economic development to the country?

48. Be the International Management Consultant - China (continued)
Is the prospect of China’s sheer volume of potential customers too good to pass up? 
Do the actions of the government and the country’s recent stock market woes indicate a signal that investment should be reconsidered?

49. Review and Discuss
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”

50. Review and Discuss (continued 1)
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

51. Review and Discuss (continued 2)
“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?

52. Review and Discuss (continued 3)
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

53. Review and Discuss (continued 4)
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

54. Review and Discuss (continued 5)
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

55. Review and Discuss (continued 6)
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?

56. Review and Discuss (continued 7)
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

57. Review and Discuss (continued 8)
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