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Chapter 12 Managing Cultural Differences John S. Hill.

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1 Chapter 12 Managing Cultural Differences John S. Hill

2 Introduction Managing Cultural Differences Conceptual Framework: High- Low Context Cultures Cultural Variations at the Nation State Level Cultural Underpinnings Intercultural Negotiations Organizing International Negotiations

3 Chapter Outline  A Framework for Understanding Business and Interpersonal Behaviors  Cultural Underpinnings of High-Medium- Low Context Behaviors – The “Whys”  Intercultural Negotiations  Organizing International Negotiations

4 Table 12.1: Business and Interpersonal Relationships in High, Medium and Low Context Societies (NOTE: generalizations) ContextLowMediumHigh Country/regional examples USA, Swiss Western Europe Asian, Arabic Values,attitudes behaviors Meeting peopleInformalFormal Getting acquaintedFastModerateSlow Relationship depthShallowModerateDeep Relationship trustLittleTrustMuch trust Behavior limitsLegalLegal/socialSocial Lawyer relianceHighModerateLow/zero

5 Table 12.1 (continued) - ContextLowMediumHigh Business relationshipsArm’s lengthSocial- business mixed Much socializing Mistakes toleranceHighMediumLow Mistakes accountability HighMediumLow Individual competitionEncouragedDiscouragedAnti-social Insider-outsiderLowModerateHigh PatriarchalLowModerateHigh IndividualismHighModerateLow Social class differencesLow/moderateModerateHigh Uncertainty toleranceHigh Low

6 Table 12.1 (continued): Flexible Stereotype—L-M-H Context Low Medium High LC-FS MC-FS HC-FS LC-FS Low Context flexible stereotype: Most people are low context (national stereotype), but significant pockets of medium context and smaller numbers of high context groups MC-FS Medium Context flexible stereotype: Most people in Western Europe are medium context but some are low context (Germans, Swiss); some are higher context (Greeks, Spanish HC-FS High Context flexible stereotype: National behaviors are rurally- oriented; smaller pockets of medium context behaviors (migrants in transition); minority low context behaviors of urbanites

7 A Framework for Understanding Business and Interpersonal Behaviors  Low context behaviors  Values and attitudes are associated with capitalist, efficiency-oriented societies. North American and some Western European countries  High context behaviors  Less competitive societies valuing cooperation, harmony and stability. Asia, the Middle East and Latin America  Medium context behaviors  Functioning democratic processes, competition in marketplace, and some movement between social classes. Western European countries

8 Cultural Underpinnings of High-Medium- Low Context Behaviors—the “whys”  Religion:  “A socially shared set of beliefs, ideas, and actions that cannot be verified empirically yet affects the course of natural and human events—a way of life woven around people’s ultimate concerns.”

9 Cultural Underpinnings of High-Low Context Behaviors—the “whys”  Polytheistic Religions  Primal religions  Been around for 3 million years  Africa, Australia (Aborigine), SE Asia, Pacific Islands, North and South America (Indian communities); cults and superstitions in west  Tend to be tribally based; passed on orally between generations; relationship with nature; personal, social and cosmic harmony important; ancestor worship

10 Cultural Underpinnings of High-Low Context Behaviors—the “whys”  Polytheistic Religions  Hinduism  1500BC beginnings; today 1 billion followers  Major influence on Indian culture: via caste system (priest-soldier-merchant-artisan + dalits (untouchables); affects food, social relationships, marriage, conduct (dharma)  Samsara: eternal birth-rebirth until Moksha (release); conduct determines rise up caste system Shinto: Japan’s national religion (600 AD)  Blended with Buddhism, Confucianism, Taoism  Emphasizes tradition, family, nature, cleanliness

11 Cultural Underpinnings of High-Low Context Behaviors—the “whys”  Monotheistic Religions  Judaism: forerunner of Christianity, Islam via Abraham  Over 13 million followers  Ten Commandments basis of western ethics  Israel-based  Numerous persecutions historically

12 Cultural Underpinnings of High-Low Context Behaviors—the “whys”  Monotheistic Religions  Christianity (Catholicism, Protestantism, Eastern Orthodox—2 billion followers in Americas & Europe  Spread by Romans in Europe and world via colonization  Protestantism-Capitalism link: productivity/income signs of God’s approval; frugality-industry emphasized; flexible faith  Crucial splits Eastern Orthodox (1054); and Reformation (16 th century Martin Luther)

13 Cultural Underpinnings of High-Low Context Behaviors—the “whys”  Islam (1.2 billion followers)  7 th century founded by Muhammad in today’s Saudi Arabia  Spread to rest of Middle East and North Africa by military conquest; to Asia via the Silk Road; still Muslims today  5 Pillars: profess the faith; prayers 5 times/day; Ramadan; charity; Mecca pilgrimage  Lifestyle religion: dominates politics, legal systems, social behaviors and education system  Problems with westernization effects on lifestyles

14 Cultural Underpinnings of High-Low Context Behaviors—the “whys”  Non-Theistic Religions  Buddhism (400 million followers; 1-2 billion influenced)  6 th century founded by Siddhartha Gautama (‘Buddha’)  Guided by 4 Noble Truths and Noble Eightfold Path to individual behaviors (right knowledge, purpose, speech, living etc.)  Emphasizes calmness, wisdom, compassion, spiritualism  Confucianism & Taoism (6 th century, East Asia)  Confucius “greatest single intellectual force” in Asia  Relationships between people and societal harmony: humaneness, love, ‘ideal host’, titles, seniority, respect, ‘arts of peace’  Taoism: act with nature; emotions ‘wasted energy’; no self-assertiveness; complementary forces of yin-yang

15 Impact of Religion on Societal Behaviors  High context behaviors  Emphasize trustworthiness, interpersonal sociability and societal stability, with the religion emphasizing a sense of community, family unity and nonmaterial orientations  Religion has major effects on lifestyle in most high context societies and tends to emphasize spirituality over all else; very difficult to change

16 Impact of Religion on Societal Behaviors  Low context behaviors  Christianity does not seem to clash with highly competitive political and economic systems  Social class systems based on income and wealth are incentives to build up economic resources and move up the social hierarchy  Protestantism rewards hard work and thrift; religiosity declines during industrialization

17 Economic and Political System Effects  As countries industrialize, competitive low- context behaviors diffuse from developed urban centers into rural parts  Traditional village economies much less competitive; less turbulent; more community-oriented  Where governments limit or control outside influences, traditional high-context behaviors remain the norm

18 Social Forces  Social Class  Systems based on income and wealth; they are fluid and mobile  Hereditary/seniority systems limit social and economic competitiveness  Education  Industrialized countries: education tend to be more technical, scientific  Developing countries: education is often elitest and may be less technological—more arts-oriented

19 Intercultural Negotiations  How to do face-to-face negotiations with  US businesspeople  Japanese  Latin Americans  Western Europeans  Asians  Middle Easterners  Russian

20 Intercultural Negotiations  Negotiating with US Businesspeople  Objective, efficient and competitive negotiators  Prefer informality, rationality and detailed contracts  Negotiating with the Japanese  Emphasis on harmony, cooperation, conformism, and long-term business perspective  Key aspects: after-hours sociability, little use of lawyers, patience required, long-term business orientations, renegotiating points, conflict avoiders, use of silence

21 Intercultural Negotiations  Negotiating with Latin Americans  More outgoing and emotional  Little or no mixing of business with pleasure  The relative unimportance of work  Recognition of social and ethnic distinctions, respect accorded the “Patron”

22 Intercultural Negotiations  Negotiating with Western Europeans  Low context Europeans emphasize objectivity in business dealings, focusing on contracts. “plain talking”, and efficiency  Medium context nations put more emphasis on relationships, trust, less on lawyers  Key aspects: like procedures, titles; negotiate many points simultaneously; legal contracts part of relationship; looser negotiating postures

23 Intercultural Negotiations  Negotiating with Asians: like the Japanese  Traditionally based and emphasize personal relationships over written contracts  Respect for the past, importance of the family and people generally (viewed as assets, not costs)  Patience and humility are important; non-emotional  Negotiating with Middle Easterners  Religion (Islam) is paramount; social relationships are all- important; time is not  Avoid conflict situations  Many social formalities and courtesies; hereditary aristocracy are ‘men of respect’

24 Intercultural Negotiations  Negotiating with Eastern Europeans: The Russian Case  Cautious, tough, and disciplined negotiators  Focus on general agreements  Relationships built on after-hours socializing  Still cautious about western profit motives (though changing)

25 Organizing International Negotiations  Planning and preparation  Conducting the negotiation  Reaching an agreement  What is a good negotiator?

26 Organizing International Negotiations  Planning and preparation  Where to negotiate: home country cultural advantage as visitors acclimatize  Assembling the right team: internationally experienced; locals important; maintaining team is important  Preparation: country, company background, clear objectives

27 Organizing International Negotiations  Conducting the negotiation  Relationship building required in most parts of the world; socializing important  Recognize the power brokers; usually senior people  Show respect, patience at all times  Body language is important  Negotiating style should be known

28 Organizing International Negotiations  Reaching an agreement  High context cultures take time (often years); often letters of agreement to start  Contracts signify the start of a relationship, but do not define it totally

29 Organizing International Negotiations  What is a good negotiator?  Negotiation objectives important part of what is planned  Spend more time developing different scenarios and alternatives  Focus on common ground and agreements, not disagreement areas  Long-term issues emphasis  Flexible, not rigid in setting goals  Have no predetermined sequences of points to cover  Take time to build relationships, knows all aspects of proposed agreement, persuades not argues, is conciliatory

30 Key Points  High-medium-low context cultures are important frameworks but are generalizations  Religion is very important in high context societies  Face-to-face negotiations are culturally-loaded  Cultural understanding paramount in relationship building

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