Group

Assignment

IBC201 | Class IB1702

Lecturer: Luu Thien Binh
 Member of Group 4
Name Roll number
Tran Thanh Tu CS171645
Nguyen Phuong Thy CS171290
Nguyen Minh Khoi CS170541
Bui Thi Bich Cham CS160871

Table of Contents
I. Introduction.................................................................................1
1. Overview of Cultural Differences in Business Practices..........1
2. Theories on Cultural Differences in International Negotiation.1
II. Analysis.....................................................................................2
1. Case studies of successful negotiations in different cultures....2
2. Case studies of failed negotiations due to cultural
misunderstandings.........................................................................2
3. Analysis of cultural differences and their impact on negotiation
outcomes........................................................................................2
4. Strategies and Plans to Address Cultural Differences in
International Negotiation...............................................................3
III. Conclusion.................................................................................5
References........................................................................................5
 I. Introduction
In today's globalized business environment, it is common for companies to operate across borders and interact
with people from diverse cultural backgrounds. This creates a significant challenge as cultural differences can
affect business practices, negotiations, and relationships. Failure to understand and navigate these differences
can lead to misunderstandings, communication breakdowns, and even loss of business opportunities.
Understanding cultural differences is crucial in international negotiation because it can make the difference
between a successful and unsuccessful outcome. Culture influences the way people communicate, their
expectations, and how they approach conflict. In an international negotiation, the parties may come from
different cultural backgrounds, which can create challenges and misunderstandings. It is, therefore, crucial to
understand and navigate these differences to reach a successful outcome.
The purpose of this assignment is to provide an overview of cultural differences in business practices, analyze a
case study related to cultural differences, evaluate theoretical frameworks for understanding cultural
differences, and propose a strategy and plan to address cultural differences in business practices. The scope of
this assignment is to examine cultural differences in global business, using a case study to illustrate how cultural
differences can impact business negotiations and provide recommendations for how to address these
differences.
1. Overview of Cultural Differences in Business Practices
Cultural differences refer to the distinct values, beliefs, behaviors, and communication styles that characterize
different societies. These differences can manifest in different ways, including language, communication styles,
social norms, values, beliefs, and attitudes towards time and punctuality, among others. In global business,
cultural differences can be classified into several types, including language, communication, values and
attitudes, social structure, and time orientation.
Cultural differences can impact business practices in several ways. For example, they can affect
communication, decision-making, and negotiation styles. Cultural differences can also impact how companies
structure their businesses, manage their workforce, and approach marketing and advertising. Failure to
recognize and address these differences can lead to misunderstandings, failed negotiations, and loss of business
opportunities.
Cultural differences in business practices can vary significantly depending on the region or country. For
example, in Asia, there is a strong emphasis on hierarchy and respect for authority, which can impact
communication and decision-making. In the Middle East, business relationships are often built on personal
connections and trust, and negotiations can take longer due to the importance of building trust. In Latin
America, business relationships are often built on personal relationships and trust, and communication can be
more indirect and relationship-focused.
2. Theories on Cultural Differences in International Negotiation
Theories are essential in guiding businesses and negotiators on how to approach cultural differences in
international negotiation. Hofstede's Cultural Dimensions Theory, Trompenaars' Cultural Dimensions Theory,
and Hall's Cultural Dimensions Theory are some of the theories that are relevant in this context. Hofstede's
Cultural Dimensions Theory identifies six dimensions that differentiate cultures: power distance, individualism-
collectivism, masculinity-femininity, uncertainty avoidance, long-term orientation, and indulgence-restraint.
Trompenaars' Cultural Dimensions Theory identifies seven dimensions: universalism versus particularism,
individualism versus communitarianism, neutral versus affective, specific versus diffuse, achievement versus
ascription, sequential versus synchronic, and internal versus external control. Hall's Cultural Dimensions
Theory focuses on communication styles and how cultures differ in the way they communicate. It identifies two
dimensions: context and time orientation.

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 II. Analysis
1. Case studies of successful negotiations in different cultures
Toyota is a Japanese automobile manufacturer that is known for its approach to negotiation. When Toyota
decided to set up a manufacturing plant in the US, the company had to negotiate with the local government and
unions to secure favorable terms. Toyota approached the negotiations with a long-term perspective, building
relationships with the stakeholders and emphasizing mutual benefits. The company also made efforts to
understand the culture and business practices of the US, which helped Toyota establish a successful operation in
the country. By taking a collaborative approach and building relationships, Toyota was able to achieve a win-
win outcome for all parties involved.
Another successful case is in 2013, Disney negotiated a deal with the Chinese government to open a theme park
in Shanghai. Disney understood the importance of guanxi, the Chinese concept of building personal
relationships, and worked to establish trust with Chinese officials. Disney also adapted the park to fit Chinese
culture, incorporating local themes and traditions, which helped the company achieve a successful launch. By
recognizing and respecting Chinese culture, Disney was able to create a positive image in China and establish a
successful business venture.
2. Case studies of failed negotiations due to cultural misunderstandings
In 2014, a Swiss construction company attempted to negotiate a contract with a Saudi Arabian client. The Swiss
company did not consider the importance of building personal relationships before discussing business matters.
Additionally, the Swiss company did not understand the cultural norms of the Middle East, including the
expectation of lavish hospitality. As a result, the negotiations failed, and the Swiss company lost the contract to
a local competitor. This case highlights the importance of understanding cultural norms and building
relationships before entering into business negotiations in different cultures.
In the 1990s, a US company tried to negotiate a deal with a Brazilian company. The US company approached
the negotiations with a direct and assertive style, which was perceived as confrontational by the Brazilian
company. The Brazilian negotiators valued a more indirect and relationship-based approach. The negotiations
failed, and the US company lost the opportunity to do business in Brazil. This case highlights the importance of
understanding communication styles and cultural norms when negotiating with partners from different cultures.
3. Analysis of cultural differences and their impact on negotiation outcomes
Cultural differences can have a significant impact on negotiation outcomes. In international negotiations,
cultural differences can affect communication, decision-making, and relationship-building, all of which can
impact the success or failure of the negotiation.
Communication Styles
Different cultures have varying communication styles that can impact negotiations. For example, some cultures
may value direct communication while others prefer a more indirect approach. This can lead to
misunderstandings and conflicts during negotiations. To overcome this challenge, negotiators should strive to
understand the communication style of their counterparts and adapt their approach accordingly.
Relationship Building
In some cultures, building personal relationships and establishing trust is essential before discussing business
matters. For instance, in many Asian cultures, people value building strong relationships and establishing a
rapport with their business partners before discussing any deals. In contrast, in some Western cultures,
negotiations may begin with a discussion of business matters before any relationship building takes place.
Understanding these differences is critical for successful negotiations. Building trust and rapport can help
negotiators establish common ground and achieve mutually beneficial outcomes. Neglecting to build
relationships can create a perception of rudeness or a lack of interest in the other party's culture, which can
damage the negotiation process.

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Time Orientation
Cultures may have different attitudes towards time, with some valuing punctuality and efficiency, while others
prioritize flexibility and adaptability. This can impact negotiations, as one culture may perceive delays or
changes in plans as a lack of respect or commitment. Understanding these differences and adjusting
expectations accordingly can help negotiators avoid conflicts and misunderstandings. For example, in many
cultures, being late for a meeting is considered rude and disrespectful, while in some other cultures, it is
acceptable to be a few minutes late. In some cultures, business meetings may not start on time, and there may be
a more relaxed attitude towards scheduling. Understanding these differences and adjusting expectations
accordingly can help negotiators avoid misunderstandings and demonstrate respect for the other party's culture.
Cultural Norms
Each culture has its own set of values, beliefs, and customs that influence how people behave and interact with
others. Understanding these cultural norms can help negotiators avoid misunderstandings and develop a more
effective negotiation strategy. For instance, in some cultures, it may be essential to demonstrate respect for
authority and hierarchy, while in others, egalitarianism and consensus-building may be valued. In some
cultures, negotiations may be conducted in a more formal manner, while in others, a more informal approach
may be preferred. By understanding these cultural norms, negotiators can adjust their approach to fit the cultural
context and improve the chances of a successful negotiation outcome.
Decision-Making Styles
Different cultures may have different decision-making styles, with some preferring a top-down approach and
others valuing a more participatory process. Understanding the decision-making style of the other party is
crucial for successful negotiations. For instance, in some cultures, decisions may be made by a small group of
people in positions of authority, while in others, decisions may be made by a more democratic process
involving a larger group. By understanding the decision-making style of the other party, negotiators can identify
decision-makers and understand how decisions are made, which can inform the negotiation strategy.
4. Strategies and Plans to Address Cultural Differences in International Negotiation
International negotiations are complex processes that involve diverse cultures and perspectives. Cultural
differences can impact the negotiation process and outcome, leading to misunderstandings, conflicts, and failed
agreements. Addressing cultural differences requires a strategic approach that involves understanding and
respecting cultural norms, building relationships, adapting communication styles, and developing a negotiation
strategy that takes into account cultural differences.
Cultural Awareness and Sensitivity Training
Cultural awareness and sensitivity training is an effective way to address cultural differences in international
negotiation. This type of training helps negotiators understand the cultural norms, values, and behaviors of their
counterparts, which is essential for successful negotiation outcomes. Through cultural awareness training,
negotiators can become more aware of their own cultural biases and assumptions, allowing them to approach
negotiations with a more open and adaptable mindset. Cultural awareness training can also help negotiators
develop a more nuanced understanding of cultural differences, which can inform their negotiation strategy and
improve their chances of success. For example, negotiators may learn about the importance of relationship-
building in certain cultures, or the value of indirect communication styles in others. Cultural awareness training
can also help negotiators avoid misunderstandings and misinterpretations that can lead to failed negotiations. By
being aware of cultural differences and adapting their approach accordingly, negotiators can build trust,
establish rapport, and achieve mutually beneficial outcomes
Build Relationships
In international negotiations, building relationships is crucial to establish trust and rapport with the other party.
Different cultures may have varying expectations regarding the importance of relationship-building, with some
valuing personal connections and trust more than others. In some cultures, business discussions may not take
place until a certain level of trust and familiarity has been established. This requires negotiators to invest time

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and effort in building personal connections with the other party, which may involve socializing outside of the
negotiation room, demonstrating respect for cultural norms and traditions, and showing a willingness to listen
and understand the other party's perspective. Building relationships can help negotiators establish common
ground and identify shared goals and interests, which can lead to more successful negotiation outcomes.
Relationship-building can also help negotiators establish a positive reputation and credibility, which can be
beneficial in future negotiations. However, it is important to note that building relationships takes time and
effort, and negotiators must be patient and persistent in their efforts to establish trust and rapport with the other
party.
Adapt Communication Styles
Communication style is a crucial aspect of international negotiation that can significantly impact the outcome.
Different cultures may have different communication styles, with some valuing directness and clarity, while
others may prefer indirectness and politeness. To address cultural differences, negotiators must be adaptable and
flexible in their communication style. This requires a deep understanding of the cultural context and an ability
to adjust one's communication style accordingly. For example, in some cultures, direct and assertive
communication may be valued, while in others, such communication may be perceived as aggressive and
disrespectful. In these situations, negotiators should adapt their communication style to fit the cultural context.
This may involve using different language, adjusting the tone and pace of speech, and adapting nonverbal cues
such as gestures and facial expressions. Moreover, negotiators should be mindful of their own cultural biases
and assumptions and be open to learning about and understanding the other party's communication style. By
adapting communication styles to fit the cultural context, negotiators can build rapport, establish trust, and
improve the chances of a successful negotiation outcome. However, it is also essential to strike a balance
between adapting communication styles and maintaining authenticity and transparency in the negotiation
process.
Understand Decision-Making Styles
Decision-making styles can vary significantly across cultures, with some cultures valuing a top-down approach,
while others prioritize consensus-building and participation. To address cultural differences in decision-making
styles, negotiators must be proactive in learning about the other party's decision-making process. This may
involve identifying decision-makers, understanding their roles and responsibilities, and their decision-making
criteria. In some cultures, decisions may be made by a single person, while in others, decisions may require the
input and agreement of a group or team. Understanding these nuances is essential to develop an effective
negotiation strategy. Additionally, negotiators should be prepared to adjust their approach to fit the decision-
making style of the other party. For example, in a top-down decision-making culture, negotiators may need to
focus on building rapport and trust with the decision-maker, while in a consensus-building culture, negotiators
may need to focus on building relationships with all stakeholders and ensuring their input and agreement. By
understanding the decision-making style of the other party and adapting the negotiation approach accordingly,
negotiators can increase the chances of a successful negotiation outcome.
Develop a Negotiation Strategy
The negotiation strategy should be developed with a deep understanding of the cultural context and the other
party's cultural values, norms, and behaviors. The negotiation strategy should incorporate cultural awareness,
relationship-building, communication adaptation, and an understanding of decision-making styles. Cultural
awareness involves understanding the cultural background of the other party, including their language, history,
customs, and traditions. This understanding can help to build rapport, establish trust, and demonstrate respect
for the other party's culture. Relationship-building is an essential part of international negotiation, and
negotiators should focus on developing personal connections with the other party. This may involve sharing
personal experiences and stories, showing interest in the other party's culture, and building common ground.
Communication adaptation is also crucial, with negotiators being adaptable and flexible in their communication
style. This may involve using different language, adjusting tone and pace of speech, and adapting nonverbal
cues to fit the cultural context. Finally, an understanding of decision-making styles is essential for developing
an effective negotiation strategy. This involves identifying decision-makers, understanding their roles and
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responsibilities, and their decision-making criteria. The negotiation strategy should also be flexible and
adaptable, allowing for adjustments based on the evolving cultural context. By developing a negotiation strategy
that takes into account cultural differences, negotiators can build rapport, establish trust, and improve the
chances of a successful negotiation outcome.

III. Conclusion
In conclusion, cultural differences have a significant impact on international negotiation processes and
outcomes. As the world becomes more interconnected, negotiating across cultures is becoming increasingly
common. To succeed in international negotiations, negotiators must understand and respect cultural norms,
values, and behaviors. They must also be adaptable and flexible in their approach to communication,
relationship-building, and decision-making. Cultural awareness and sensitivity training, building relationships,
adapting communication styles, understanding decision-making styles, and developing a negotiation strategy
that takes into account cultural differences are all crucial strategies for addressing cultural differences in
international negotiation. By following these strategies and plans, negotiators can improve their chances of
success and achieve mutually beneficial outcomes in international negotiations. The case studies of successful
and failed negotiations due to cultural misunderstandings highlight the importance of cultural awareness and
adaptation in international negotiations. It is clear that cultural differences must be taken seriously and carefully
managed in international negotiations to achieve successful outcomes.

References
Hofstede, G. (1980). Culture's consequences: International differences in work-related values. Beverly Hills,
CA: Sage Publications.
Trompenaars, F., & Hampden-Turner, C. (2012). Riding the waves of culture: Understanding diversity in global
business (3rd ed.). London: Nicholas Brealey Publishing.
Adler, N. J. (1997). International dimensions of organizational behavior (3rd ed.). Cincinnati, OH: South-
Western College Publishing.
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University Press.
Hall, E. T., & Hall, M. R. (1990). Understanding cultural differences. Intercultural Press.
Hofstede, G. (1980). Culture’s consequences: International differences in work-related values. Sage.
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in business. Nicholas Brealey Publishing.
Gudykunst, W. B., & Kim, Y. Y. (Eds.). (2013). Theories in intercultural communication. Sage.
Adler, N. J. (1991). International dimensions of organizational behavior. PWS-Kent Publishing Company.
Meyer, E. (2014). The culture map: Breaking through the invisible boundaries of global business. PublicAffairs.
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Takahashi, Y. (2019, August 19). Toyota’s culture of contradictions. Financial Times.
Reynolds, I. (2016, June 18). How Disney worked its magic in Shanghai. The Japan Times.
Ibrahim, S. K., & Georgiou, A. M. (2017, November). Negotiating in the Middle East: Overcoming Cultural
and Emotional Challenges. Academy of Management Perspectives, 31(4), 292-307.

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Pimentão, C., & Stuart, J. (2007, October). Negotiation Styles: A Cross-Cultural Study of Selected Cases in
Brazil and the United States. Journal of Business and Technical Communication, 21(4), 471-500.
Lewicki, R. J., Saunders, D. M., & Minton, J. W. (1994, June). Culture and Negotiation. International Journal of
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Sessa, V. I. (1991, October). Cultural Dimensions and Decision Making: Negotiating in an International
Context. Journal of Business Communication, 28(4), 387-404.

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