Week 1, Lecture 1 Professor Bryan Hopkins, Room 419 Sejong University

 Culture and Business-  1. Is it intertwined?  2. What does culture and communications have to do with business?  What are examples of culture effecting business?  a Hong Kong Disneyland  b French Disneyland ( Euro Disney)  c GM  d IBM

 Business communication is international/intercultural communication. Why?  Values  Culture  Meaning of words  Meaning of actions or inactions  Growing diversity- how does it impact business?

 Look at US- how many cultures  Look at China- how many ethnic groups  Look at Europe- growing diversity  Look at Latin America  Look at Asia- are Asian countries the same?

 Growing competition  Increasing globalization  The world is “flat” A good business manager needs an understanding of international communications

 International Communications-  Vital in international negotiations  Vital in resolution of international business disputes  Vital in successful implementation of international business transactions  Vital in minimization of corporate crisis management-

 Onstage and Backstage Elements of Culture  (1) Onstage behavior: what people observe and react to  Ex: shaking hands, bowing, etc  (2) Backstage behavior: not visible to an outsider  i Cultural aspects on how people make decisions  ii Cultural aspects on how people look at society Interpersonal Communications Week 1, Lecture 1

Onstage behavior- Kissing, bowing, shaking hands Holidays- how people celebrate Food and dances, costumes and music Backstage behavior- unconscious behavior How people make decisions How people react How people accomplish tasks Interpersonal Communications Week 1, Lecture 1

 Never refuse an offer of coffee from a businessman in Kuwait  Plan to spend about 2 hours on lunch in France  Remove your jacket in Japan only when your Japanese colleagues do so first  Do not offer your host gifts for his wife while doing business in Thailand  Do not help yourself to foods when your are the guest of honor at a banquet in China

 What are other examples of backstage and onstage behavior?  1. ?  2. ?  3. ?  1. How do different cultures react and interact with each other?  2. What issues face international business teams when they communicate?  3. What behaviors are apparent only when members of different cultures interact? Interpersonal Communications Week 1, Lecture 1

 Ex- how do businessmen from Japan and the US react to each other when sitting across the table?  Ex- how do Taiwanese and Brazilian executives react when meeting each other?  What about Chinese and Canadians?

 Culture is a legitimate concern of business:  Why?  If you understand the culture of someone you negotiate with- you will have a better chance of “succeeding”. If you understand a culture- you will communicate effectively

 General Questions to ask yourself:  How do people in this society think?  What do they consider achievement?  How do they view the individual in relation to the rest of the culture?  How is the society organized?  What are the values of a society?

 When communicating with people of other cultures the main focus should not only be on  Backstage and Onstage Behavior- but WHY?  Why-  Learn the culture’s priorities  Know what kind of behavior is offensive  Know what kind of behavior is expected  Korea- what kind of behavior is offensive?  Japan?  US?

 Ex- McDonalds  Why is McDonalds the most successful franchise in the world? It has more outlets outside of the US than in the US.  It is in 118 countries  A new McDonalds opens up every 17 hours  Reason: It looks at the culture of the country it is in. It has a localized approach-  It gives people what they want wherever they are

 It is culture that impacts communication  It is communication that impacts business  When dealing with international negotiations, business transactions and crisis management we must be mindful of:  (i) cultural issues  (ii) communication issues  (iii) Intercultural communication issues  (iv) International business issues Its All about International Business Communications! International Business Communications Week 1, Lecture 1

 The Nature of Negotiation

 Negotiation is vital in business.  It is something that is done on a daily basis whether with other business entities or among the business team,etc.  A daily occurrence!

 Negotiations occur for several reasons:  1. To agree on how to share a limited resource  2. To create something new that neither party can attain by himself  3. To resolve a conflict or dispute between the parties

 Bargaining and negotiating are different  1. Bargaining- haggeling over the price- a win- lose situation  2. Negotiating- refers to win-win situations such as those that occur when parties try to find a mutually acceptable solution to a complex problem.

 3 Basic Themes of the Chapter  1. The definition of negotiating  2. Interdependence –the relationships between people or businesses that leads them to negotiate  3. Understanding the dynamics of conflict and conflict management processes

 Characteristics of a negotiation  1. There are 2 or more parties  2. There is a conflict of needs and desires  3. Parties negotiate because they think they can get a better deal  4. Parties expect a “give and take” process

 Characteristics of a Negotiation:  1. Parties search for agreement rather than:  a. Fight Openly  b. Capitulate  c. Break off contact permanently  d. Decide to litigate or arbitrate  2. Successful negotiations involve:  a. Management of tangibles- price,terms,etc  b. Resolution of intangibles- underlying motivation such as saving face, winning,losing

 In negotiations- parties need each other to achieve their preferred outcomes or objectives  1. This mutual dependency is called “interdependence”  2. Interdependent goals are an important aspect of negotiation:  a Win-lose, I win -you lose  b Win-Win- opportunities for both to gain

 Interdependent parties- have interlocking goals  Doesn’t mean everyone will get everything  A mix of convergent and conflicting goals characterizes many interdependent relationships

 Types of Interdependence affects the outcome of negotiations Interdependence and the structure of the situation shapes the processes and outcomes: 1.Zero –sum or distributive ( Position Based)- One Winner 2.Non Zero Sum- integrative ( Interest Based)- mutual gains

 Alternatives Shape Interdependence  Evaluating interdependence depends on alternatives to negotiating  Is the desirability of working together better for the outcome?  What is the BATNA- Best Alternative to a Negotiated Agreement

 Mutual Adjustment is key  Continues throughout the negotiations as parties try and influence each other  One of the key causes of the changes that occur during negotiation- The effective negotiator needs to understand how people will adjust and readjust and how the negotiations might twist and turn, based on one’s own moves and the other’s responses

 Concessions  When one party agrees to make a change in his/her position, a concession has been made  Concessions restrict the range of options  When a concession has been made, the bargaining range is further constrained

 TWO DILEMMAS IN MUTUAL ADJSUTMENT  1. Dilemma of honesty- how much truth do you tell the other party  2. Dilemma of trust- how much should you believe from the other side

 Value Claiming and Value Creation  Opportunities to “win” or share resources  - Claiming value- result of zero sum or distributive situations where the object is to gain largest piece of resources  - Creating value- result of zero-sum or integrative situation where the object is to have both parties do well

 MOST NEGOTIATIONS WILL INVOLVE:  A combination of claiming value and creating value  - Negotiators must be able to recognize situations that require either approach  - Negotiators must be versatile in their use of strategic approaches-  ISSUE-  - Negotiators many times are biased against creating value

 Value differences exist between negotiators due to international or intercultural reasons:  - Differences in interest  - Differences in judgments about the future  - Differences in risk tolerance  - Differences in time preferences

 Conflict may be defined as a :  “Sharp disagreement or opposition” and includes “the perceived divergence of interest, or a belief that the parties’ current aspirations cannot be achieved simultaneoulsy”

 Intrapersonal conflict- conflict occurs within the individual ( ie we want the eat chocolate cake but we know it is fattening)  Interpersonal conflict- conflict between individuals (conflict between bosses and subordinates, team members, roommates, etc )

 Intragroup conflict- conflict within the group  - among team members, committee members, business divisions Intergroup conflict- - between nations, between organizations, etc- The hardest to negotiate

 1. Competitive win lose goals  2. Misperception and bias  3. Emotionality  4. Decreased communication  5. Blurred issues  6. Rigid commitments  7. Magnified differences  8. Escalation of conflict

 1. makes organizational members more aware and able to cope with problems  2. promises organizational change  3. strengthens relationships  4. promotes awareness of self  5. enhances personal development

 1. Contending- negotiators pursue own outcomes strongly, show little concern for other side  2. Yielding- Very interested in the other side attaining its goals  3. Inaction- Negotiators show little concern in obtaining goals and little concern for other side obtaining goals

 4. Problem Solving- Negotiators show high concern in obtaining own outcome, as well as high concern for other party obtaining high outcome  5. Compromising- Shows moderate concern in obtaining own goals as well as moderate concern for the other party obtaining their outcome.