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7-1
Chapter 07: Cross-Cultural Communication and Negotiation
Chapter 7
Cross-Cultural Communication and Negotiation
1. Define the term communication, examine some examples of verbal communication styles,
and explain the importance of message interpretation.
Communication is the transfer of meaning from sender to receiver. The key to the
effectiveness of communication is how accurately the receiver interprets the intended
meaning.
2. Analyze the common downward and upward communication flows used in international
communication.
Communicating in the international business context involves both downward and upward
flows. Downward flows convey information from superior to subordinate; these flows vary
considerably from country to country. For example, the downward system of
organizational communication is much more prevalent in France than in Japan. Upward
communication conveys information from subordinate to superior. In the United States and
Japan, the upward system is more common than in South America or some European
countries.
3. Examine the language, perception, and culture of communication and nonverbal barriers to
effective international communications.
4. Present the steps that can be taken to overcome international communication problems.
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Education.
7-2
Chapter 07: Cross-Cultural Communication and Negotiation
Negotiation is the process of bargaining with one or more parties to arrive at a solution that
is acceptable to all. There are two basic types of negotiation: distributive negotiation
involves bargaining over opposing goals while integrative negotiation involves cooperation
aimed at integrating interests. The negotiation process involves five basic steps: planning,
interpersonal relationship building, exchanging task-related information, persuasion, and
agreement. The way in which the process is carried out often will vary because of cultural
differences, and it is important to understand them.
6. Review different negotiating and bargaining behaviors that may improve negotiations and
outcomes.
There are a wide variety of tactics used in international negotiating. These include location,
time limits, buyer-seller relations, verbal behaviors, and nonverbal behaviors. Negotiating
for mutual benefit is enhanced by separating the people from the problem, focusing on
interests rather than positions, generating a variety of options, insisting that the agreement
be based on objective criteria, and standing one’s ground.
1. Summary
This vignette discusses the ability of social media to influence world events. This opening
vignette highlights issues that many companies today face as they take advantage of
offshore opportunities. While moving certain operations offshore can offer companies
tremendous savings, it can also create problems as a result of cultural differences and
communications issues. Companies that proactively take steps to manage these differences
and ensure that communication is strong are more likely to find their offshore operations to
be successful.
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
7-3
Chapter 07: Cross-Cultural Communication and Negotiation
a. BusinessWeek: http://www.businessweek.com/
b. A.T. Kearney: http://www.atkearney.com
Teaching Tip: There are many companies that help businesses overcome cross-cultural
communications challenges and develop cross-cultural communications strategies. An example
is PROV. Communications, Inc.: http://www.prov.co.jp/en/. The website contains an excellent
description of the cross-cultural communications solutions that the company provides.
• One way of examining the ways in which individuals convey information is by looking
at their communication styles.
• Context is information that surrounds a communication and helps convey the message.
• Table 7-1 presents some of the major characteristics of communication styles.
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
7-4
Chapter 07: Cross-Cultural Communication and Negotiation
• A contextual style is one that focuses on the speaker and relationship of the parties.
• A personal style focuses on the speaker and the reduction of barriers between the
parties.
• The affective style is characterized by language that requires the listener to carefully
note what is being said and to observe how the sender is presenting the message.
• In contrast, the instrumental style is goal-oriented and focuses on the sender.
Teaching Tip: An interesting article dealing with the cultural dimensions of language is
available at http://faculty.css.edu/dswenson/web/CULTURE/SURVNOTE.HTM.
B. Interpretation of Communications
A. Downward Communication
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7-5
Chapter 07: Cross-Cultural Communication and Negotiation
B. Upward Communication
• The more important barriers involve language, perception, culture, and nonverbal
communication.
A. Language Barriers
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Education.
7-6
Chapter 07: Cross-Cultural Communication and Negotiation
• Knowledge of the home country’s language (the language used at the headquarters of
the MNC) is important for personnel placed in a foreign assignment.
• If managers do not understand the language that is used at headquarters, they likely will
make a wide assortment of errors.
o Language education is a good beginning, but it is also important to realize that the
ability to speak the language used at MNC headquarters is often not enough to
ensure that the personnel are capable of doing the work.
o Written communication has been getting increased attention, because poor writing
is proving to be a greater barrier than poor talking.
B. Perceptual Barriers
Advertising Messages
View of Others
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Education.
7-7
Chapter 07: Cross-Cultural Communication and Negotiation
• At the same time, many are not aware of the negative impressions they give to
others.
Cultural Values
• One expert on Middle Eastern countries notes that people there do not relate to and
communicate with each other in a loose, general way as do those in the United
States.
• Relationships are more intense and binding in the Middle East, and a wide variety of
work-related values influence what people in the Middle East will and will not do.
• In North American society, the generally professed prevalent pattern is one of
nonclass-consciousness, as far as work is concerned.
• In the Middle East, the overruling obsession is how the money is made and via what
kind of job.
• These types of values indirectly, and in many cases directly, affect communication
between people from different cultures.
• When negotiating with managers from other cultures, knowing the way to handle the
deal requires an understanding of cultural values.
• Another cultural value is the way that people use time.
o In the United States, people believe that time is an asset and is not to be
wasted.
o This is an idea that has limited meaning in some other cultures.
Misinterpretation
• Cultural differences can cause misinterpretations both in how others see expatriate
managers and in how the latter see themselves.
o For example, U.S. managers doing business in Austria often misinterpret the
fact that local businesspeople always address them in formal terms.
o The informal, first-name approach used in the United States is not the style of
the Austrians.
• The following include other suggestions that can be of value to American managers
who are engaged in international communications:
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Education.
7-8
Chapter 07: Cross-Cultural Communication and Negotiation
D. Nonverbal Communication
Kinesics
Proxemics
• Proxemics is the study of the way that people use physical space to convey
messages.
• For example, in the United States, there are four “distances” people use in
communicating on a face-to-face basis (see Figure 7-3).
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Education.
7-9
Chapter 07: Cross-Cultural Communication and Negotiation
o Intimate distance is the distance between people that is used for very
confidential communications.
o Personal distance is the physical distance used for talking with family and
close friends.
o Social distance is the distance used to handle most business transactions.
o Public distance is the distance used when calling across the room or giving a
talk to a group.
Chronemics
Chromatics
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7-10
Chapter 07: Cross-Cultural Communication and Negotiation
• At present, there seem to be varying degrees of feedback between the home offices of
MNCs and their affiliates.
• Many international subsidiaries and affiliates are not operating as efficiently as they
should.
o The units may not have sufficient contact with the home office.
o They do not seem to be getting continuous assistance and feedback that are critical
to effective communication.
• It is very difficult to communicate effectively with someone from another culture unless
at least one party has some understanding of the other’s culture.
• Otherwise, communication likely will break down.
• It is erroneous to generalize about an “international” culture, because the various
nations and regions of the globe are so different.
• Training must be conducted on a regional or country-specific basis.
Teaching Tip: Many businesses provide cultural training for companies that do business
overseas. An example is a firm called Across Cultures. The firm’s website provides a nice
illustration of the services that cultural training firms provide. Three items are offered: the book
Cultural Intelligence, the Peterson Cultural Style Indicator (PCSI), and cultural
presentations/consulting services. Across Cultures’ website is available at
http://www.AcrossCultures.net/.
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
7-11
Chapter 07: Cross-Cultural Communication and Negotiation
Teaching Tip: The website Your Japanese Guest provides an excellent example of the
communications challenges that arise in international business. The website, which is available at
http://fly.hiwaay.net/%7Eeueda/japguest.htm, focuses specifically on the challenges of effective
American–Japanese communications.
• Negotiation is the process of bargaining with one or more parties for the purpose of
arriving at a solution acceptable to all.
• Negotiation often follows assessing political environments and is a natural approach to
conflict management.
A. Types of Negotiation
• People enter into negotiations for a multitude of reasons, but the nature of the goal
determines what kind of negotiation will take place.
• The following are two types of negotiations:
o Distributive negotiations refer to bargaining that occurs when two parties with
opposing goals compete over a set value.
o Integrative negotiations refer to bargaining that involves cooperation between
two groups to integrate interests, create value, and invest in the agreement.
Planning
• Planning starts with the negotiators identifying the objectives they would like to
attain.
• Then they explore the possible options for reaching these objectives.
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Education.
7-12
Chapter 07: Cross-Cultural Communication and Negotiation
• The second phase of the negotiation process involves getting to know the people on
the other side.
• In this part of the negotiation process, each group sets forth its position on the critical
issues.
Persuasion
• The success of the persuasion step often depends on (1) how well the parties
understand each other’s position; (2) the ability of each to identify areas of similarity
and difference; (3) the ability to create new options; and (4) the willingness to work
toward a solution that allows all parties to walk away feeling they have achieved
their objectives.
Agreement
• The final phase of negotiations is the granting of concessions and hammering out a
final agreement.
• Sometimes, this phase is carried out piecemeal, and concessions and agreements are
made on issues one at a time.
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Education.
7-13
Chapter 07: Cross-Cultural Communication and Negotiation
D. Negotiation Tactics
Location
Time Limits
• Time limits are an important negotiation tactic when one party is under a time
constraint.
Buyer-Seller Relations
• Often, when managers spend so much time getting to know the issue, many become
personally involved.
• Therefore, responses to a particular position can be interpreted as a personal affront.
• The position one side takes can be expressed through a simple outline, but still does
not provide the most useful information.
• Digging deeper into the situation by both recognizing your own interests and
becoming more familiar with others’ interests will put all active partners in a better
position to defend their proposal.
Generating Options
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7-14
Chapter 07: Cross-Cultural Communication and Negotiation
• Managers may feel pressured to come to an agreement quickly for many reasons,
especially if they hail from a country that puts a value on time.
• In cases where there are no common interests, avoid tension by looking for objective
options.
• Legitimate, practical criteria could be formed by using reliable third-party data, such
as legal precedent.
Standing Ground
• Every discussion will have some imbalance of power, but there is something
negotiators can do to defend themselves.
o No matter how long negotiations drag on, neither side should agree to terms
that will leave it worse off than its best alternative to a negotiated agreement, or
BATNA.
o If no common ground is reached, a neutral third party can come in to assess the
desires of each side and compose an initial proposal.
Each group has the right to suggest alternative approaches, but the third-
party person has the last word in what the true “final draft” is.
If the parties decide it is still unacceptable, then it is time to walk away
from negotiations.
F. Bargaining Behaviors
• The profits of the negotiators increase when they make high initial offers, ask a lot of
questions, and do not make many verbal commitments until the end of the negotiating
process.
• In short, verbal behaviors are critical to the success of negotiations.
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Education.
7-15
Chapter 07: Cross-Cultural Communication and Negotiation
bargainer’s preferences; (5) shows the opponent that the bargainer is willing to play
the game according to the usual norms; and (6) lets the bargainer gain more than
would probably be possible if a less extreme initial position had been taken.
Nonverbal Behaviors
1. How is communication in India similar to that of Europe and North America? How is it
different?
Answer: On the surface, communication in India is similar to that of Europe and North
America in that India also uses communications tools like the telephone and e-mail.
However, Indians tend to be vague with their messages as compared with Americans or
Europeans and do not question management. Instead, Indians are deferential and may
appear to agree with management outwardly, even if in reality they do not. Consequently,
they may not make suggestions or share information without specifically being asked to do
so. This situation can create a gap between what U.S. or European managers think is going
on and what is actually occurring.
2. What kind of managerial relationships could you assume exist between the American
financial services firm (mentioned in The World of International Management) and its
employees in India?
Answer: Many students will suggest that the relationship between the American firm and
its Indian employees is a distant and hierarchical one in which U.S. managers are clearly
above the employees in India. It appears that the U.S. firm is not really taking the
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Education.
7-16
Chapter 07: Cross-Cultural Communication and Negotiation
necessary steps to ensure that Indian employees fully understand communications from the
U.S. firm and the context in which they are being made. In addition, there seems to be a
lack of interaction and engagement between the two groups.
3. What kind of negotiations could help engage Indian employees and overcome some of the
cultural problems encountered? How might culture play a role in the approach the Indian
employees take in their negotiation with the financial firm?
Answer: Negotiation is the process of bargaining with one or more parties to arrive at a
solution that is acceptable to all. In this particular case, it might be wise to provide cross-
cultural training to both sides to help ensure that each of them better understands the other
culture. In addition, it is important to stress mutual respect and communicate to the Indian
employees that their opinions are important. One way to do this is to avoid an us-versus-
them environment by making sure that the subsidiary has some more complex
responsibilities as well as less complex ones. Teamwork and collaboration should be
encouraged, and there should be an emphasis on sharing knowledge.
Key Terms
Context: Information that surrounds a communication and helps convey the message
Distributive negotiations: Bargaining that occurs when two parties with opposing goals
compete over a set value
Integrative negotiation: Bargaining that involves cooperation between two groups to integrate
interests, create value, and invest in the agreement
Intimate distance: Distance between people that is used for very confidential communications
Kinesics: The study of communication through body movement and facial expression
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
7-17
Chapter 07: Cross-Cultural Communication and Negotiation
Monochronic time schedule: A time schedule in which things are done in a linear fashion
Negotiation: Bargaining with one or more parties for the purpose of arriving at a solution
acceptable to all
Nonverbal communication: The transfer of meaning through means such as body language and
the use of physical space
Oculesics: The area of communication that deals with conveying messages through the use of
eye contact and gaze
Personal distance: In communicating, the physical distance used for talking with family and
close friends
Polychronic time schedule: A time schedule in which people tend to do several things at the
same time and place higher value on personal involvement than on getting things done on time
Proxemics: The study of the way people use physical space to convey messages
Public distance: In communicating, the distance used when calling across the room or giving a
talk to a group
Social distance: In communicating, the distance used to handle most business transactions
1. How does explicit communication differ from implicit communication? Which is one
culture that makes wide use of explicit communication? Which is one culture that makes
wide use of 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.”
Answer: Explicit communication involves directly saying exactly what you mean, whereas
implicit communication requires making inferences about meanings. The U.S. culture
makes wide use of explicit communication. For example, most American managers are
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Education.
7-18
Chapter 07: Cross-Cultural Communication and Negotiation
taught to set objectives in quantitative terms with timetables for accomplishment. On the
other hand, the Japanese culture makes wide use of implicit communication. The Japanese
are intentionally more ambiguous, and no one individual carries responsibility for a
particular idea. Instead, groups or teams of employees assume joint responsibility. To
convey the message in the U.S. culture, a manager using explicit communication would
probably simply say, “You are trying hard, but you are still making too many mistakes.” In
the Japanese culture, a manager might say, “Your effort is commendable,” and then begin
to coach the employee on the area in which the mistakes were being made.
2. 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?
Answer: The foreign expatriate had trouble understanding these statements because she
had misinterpreted their meaning. The statements that would be less likely to be
misinterpreted would be the following: “He was laughing very loudly.” “Don’t worry; it’s
a very simple task.” Let’s consider the merits of all these ideas and see if we find any that
appear to be workable.
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.
Answer: The way in which Yamamoto and the state officials see reality may vary, and this
will influence their judgment and decision making. Thus, perceptions of the two parties can
become a barrier to effective communication.
After greeting the executives from Yamamoto, the state officials may choose to get down
to the business at hand. The Japanese executives might perceive the behavior of the
officials as being hasty and rude. In Japan, it is customary to spend a much longer time
“getting to know one another” before getting serious about business. One of the state
officials might try to create a more relaxed atmosphere by trying to introduce a bit of
humor into the initial conversation. Because of the language barrier, the Japanese
executives may not be certain as to whether the comments were made in jest or as serious
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
7-19
Chapter 07: Cross-Cultural Communication and Negotiation
statements. To be on the safe side, the Japanese executives will not laugh or even smile at
the comments. Because of the cold reaction to his humor, the state official may perceive
the Japanese as being cold and perhaps disinterested in the project.
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.
Answer: The biggest cultural barriers to communication will probably stem from lifestyle
differences between the Midwest and Barcelona. A prime example is lunchtime behavior.
In Chicago, it is not uncommon to see managers eating lunch at their desks purchased from
the local fast food restaurant or perhaps skipping lunch altogether. In France, lunch is
usually quite a lengthy affair involving wine and casual conversation. Also, the French
managers may be unwilling to work into the night to complete a project, whereas the
Chicagoan may not think twice about a late nighter. In any case, the outsider often has
difficulty interpreting why these culturally specific events are happening, and this becomes
a barrier to effective communication.
Answer: The use of body language (kinesics) and the use of physical space (proxemics)
can account for many perceptual problems, which act as barriers to communication. The
barrier could be substantial in both cases (Yamamoto Iron & Steel and Diaz Brothers), but
the Japanese company would probably experience more communication problems than the
French company simply because Asian culture differs from Western culture in so many
important ways. Of course, the individual cultural experiences of the representatives of the
two companies will be an important factor as well.
6. 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.
Answer: Both kinesics and proxemics will be barriers to communication, but in most cases
proxemics will be the greater of the two. A great deal of communication is done through
body language, and an American attempting to do business abroad for the first time will
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
7-20
Chapter 07: Cross-Cultural Communication and Negotiation
find that even if he or she has complete mastery of the language, he or she will still have
difficulty communicating until the nonverbal gestures are mastered.
7. 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.
8. Which elements of the negotiation process should be done with only your group? Which
events should take place with all sides present? Why?
Answer: The first phase, planning, should be done only with your group. This is when
negotiators identify the objectives they would like to attain. Then, they explore options for
reaching these objectives. The events that should take place with all sides present are
remaining steps of the process: interpersonal relationship building, exchanging task-related
information, persuasion, and agreement.
These are done with all sides present because it is important to get to know the other side
and their goals to attain the goals one’s side has set.
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.
Answer: In American culture, time is considered an asset and should not be wasted. The
American manager should not let one deal ruin the chances of settling the deal elsewhere.
Americans believe it is important to be factual and objective. They often make early
concessions to show the other party that they are flexible and reasonable. The American
manager should have hammered out specific details in the initial negotiation meetings and
also reviewed the negotiating styles of the Brazilian manager. Researchers have found that
Brazilians do better when they are more deceptive and self-interested and their opponents
are more open and honest than they are. They are also much more prone to say no;
therefore, the American manager should move on to the backup options of the deal.
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THE DRAMATIC ACADEMY
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That you were a Behaviourist....
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