YouTube clip on cultural mistakes 3.03 Exemplify the importance of understanding the values of other cultures, and what a negotiator must consider in international meetings http://www.youtube.com/watch?v=FOFZvcu0E4s YouTube clip on cultural mistakes

Importance of business culture- Involves trying to avoid losing face, or creating embarrassing or uncomfortable situations. Saving face allows someone to get out of situation without harming his/ her dignity. Being effective negotiator involves understanding business customs & traditions. Both sides typically have to make compromises.

Values - Shared beliefs held by members of culture, help define what is right, wrong, good & bad. Values can be related to Hofstede’s measures US executives typically believe innovation, strong competition & free markets are social good. US executives believe they personally benefit from negotiating positive business outcome for their company. Collectivist business cultures may believe they are negotiating only for good of their company/country. Individual success less important in collective business culture.

Values – (con’t) Customs - common practices among group of people passed from one generation to next Acceptable topics of conversation. Local table manners when dining Understanding appropriate interaction with those of opposite gender. Ex) In Arab countries, considered insult to show someone bottom of your feet. Ex) In Japan & many Scandinavian countries, customary to take shoes off when entering home.

Gift giving Is expected in some cultures reinforcing business relations Important to research so appropriate gifts given to each culture visited, but not viewed as bribes. Gifts for Chinese individuals should be small & personal Gifts between businesses should not be given until after negotiations finished. Gifts should not include products made in Taiwan.

Gift giving (con’t) In Japan give & receive gifts with both hands as gesture of respect & humility Never give 4 of anything because the number 4 is associated with word for death. Try not to get caught empty-handed; wise travelers to Japan typically carry assortment of gifts just in case

Bribe - Money or something of value given to persuade someone else to violate ethics or laws. Bribery common in underdeveloped countries, but China, Mexico, India & Russia considered high bribery states Belgium, Canada, Netherlands & Switzerland considered low bribery states http://www.youtube.com/watch?v=HVbSQYhgFlg According to Transparency International http://www.transparency.org/research/cpi/overview http://www.ringoffireradio.com/2013/08/sex-bribes-and-big-pharma-video/ Glaxo Smith Klien bribes

Foreign Corrupt Practices Act of 1977 Outlaws US companies from bribing foreign governments. Some countries have structured civil employment system around concept of paying for services rendered. Underpaid civil employees may be expected to supplement their incomes by accepting bribes. Siemans AG & DaimlerChrysler AG examples of companies levied fines by US Justice Department for violation of FCPA https://www.youtube.com/watch?v=J3IgAGBwlgY http://www.justice.gov/criminal/fraud/fcpa/ Bribe activity…now

International marketing meetings May vary according to business culture of country. Cultures vary on issue of time Chinese, Japanese, Americans & many northern Europeans begin on time. Latin American, Middle Eastern, warmer climate countries do not hold to same tight schedule for starting times. http://www.youtube.com/watch?v=-ZiApcvyLl0&feature=related silly clip on business hours in Germany

International marketing meetings (con’t) Even though English considered global business language, appropriate to arrange for translator to participate. Individuals who do not know foreign language should still be familiar with key phrases http://www.youtube.com/watch?v=xZ9nvYCDUUw YouTube clip – commercial for Berlitz http://www.berlitz.com/ http://www.rosettastone.com/

International marketing meetings (con’t) Greetings vary by culture In many Arab & Muslim countries, women should only be greeted verbally. Men should not kiss women on cheeks or shake hands unless their hands are offered. In France, kissing French woman on cheeks may be expected. http://www.youtube.com/watch?v=yDhXD25fmMo&feature=related Colombia Business School YouTube clip on American handshake

International marketing meetings (con’t) Business cards most always exchanged at meetings One side should be printed in English & other side in language of negotiation partner. In Asian cultures, business card should be handed over with 2 hands & turned over so receiver can read it. Cards should be studied for few moments as sign of respect to other person. In China, cards may be lined up on negotiation table so all names can be recognized. http://www.youtube.com/watch?v=DcuDT48_0qU YouTube clip on exchanging business cards in Japan

Culture & impact on business negotiations Often negotiations conducted over meal, - important to understand & observe meal customs. In Japan, noodles should be eaten with loud slurping sound. In China, important to try each item brought to table buffet In Asia, important to use chopsticks In Europe, meals can be based on regional food & drink, so good idea to study prior to be able to talk about meal. http://www.youtube.com/watch?v=0ZTRIblyUdw

Culture & impact on business negotiations (con’t) All sides of negotiation process will try to make most of their position, but must be able to trust each other. US, Canada & EU have strong contract laws, so legal action may be taken if contracts are broken. In other countries, typically less developed, people distrust contracts & believe signify lack of trust. Trust important in countries with weak contract laws or weak enforcement of contract laws. Negotiation process may start by developing trusted relationships

Culture & impact on business negotiations (con’t) Negotiation is an art. Each culture may employ tactics based on how they view other party. Japanese negotiators view Americans as being impatient & may remain silent to pressure Americans into making compromises. In high power distance cultures, real authority resides with top manager, which may be oldest person In Japan, likely to be oldest person on negotiating team.

Culture & impact on business negotiations (con’t) Important to identify where real negotiating power lies. Successful negotiators study culture & tactics used in cultures where negotiating.