UNIVERSITY OF ECONOMICS IN BRATISLAVA, SLOVAK REPUBLIC INTERNATIONAL NEGOTIATION – UCL – JANUARY, 2014 lecturer Milan Oresky

INTERNATIONAL NEGOTIATION – UCL, JANUARY International Business Negotiations

INTERNATIONAL NEGOTIATION – UCL, JANUARY Culture and cross-cultural risk 2.Interpretations of culture 3.Overcoming cross-cultural risk: Managerial guidelines 4.Ethics in international business 5.Corporate social responsibility 6.A framework for making ethical decisions

INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Key Concepts Culture: Enduring patterns of learned behavior that are generally shared in a society. Tough to observe, but demonstrated through values, ideas, attitudes, behaviors, & symbols Cross-cultural risk: A situation cultural mistake that puts some human value at risk. It arises in environments with unfamiliar languages & unique value systems, beliefs, & behaviors

INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Managerial Orientations  Ethnocentric orientation: Using one’s own culture as the standard for judging other cultures  Polycentric orientation: A mindset in which the manager develops a greater affinity for the country in which he or she works  Geocentric orientation: A global mind-set in which the manager is able to understand a business or market without regard to national boundaries Managers should strive for a geocentric orientation

INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Culture Is…  Not right or wrong: It is relative. There is no cultural absolute. People of different nationalities sometimes just see the world differently  Not about individual behavior: It is about groups. It is a collective phenomenon of shared values and meanings  Not inherited: It derives from the social environment. We are not born with a shared set of values and beliefs; we learn them as we grow up

INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Culture is Learned Socialization: The process of learning the rules and behavioral patterns appropriate to one's society Acculturation: The process of adjusting and adapting to a culture other than one's own; commonly experienced by expatriate workers Culture is like an iceberg - what is visible above the surface is only a small part of culture; below the surface is a massive base of assumptions, attitudes, & values that strongly influence decision making, relationships, and other actions at work

INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Interpretations of Culture Cultural Metaphors refer to distinctive traditions or institutions strongly associated with a society; a guide to deciphering attitudes, values, and behaviors American football represents systematic planning, strategy, leadership, and struggling against rivals The Swedish stuga (summer cottage) represents the love of nature and desire for individualism in Sweden The Spanish bullfight reflects the importance of ritual, style, courage, and pride in Spain

INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Examples of Where Culture can Impact the Conduct of Business  Developing products and services  In ads and promotional materials  Preparing for trade fairs overseas  Screening & selecting foreign distributors  In communicating with foreign partners  When negotiating various business ventures  In interactions with current & potential customers in different countries

INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 Specifics of International Negotiations In international negotiations your skills to identify and understand cultural differences are essential for choosing the right strategy There are more then 200 different national cultures in the world Some experts separated them into 3 main cultural types:  Multi active  Linear active  Reactive

INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014

In International Negotiations very important to understand the other side: Language Behaviour Values Mentality Decision making process

INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014 “The World’s Business Cultures. How to Unlock Them” by Barry Tomalin, Mike Nicks Analysis of main countries/economies of the world (China, USA, Germany, UK, Russia, India, Brazil, France, Italy and Japan) by their business cultures in 10 main features: 1.Communication style 2.Work style 3.Discussion style 4.Attitude to Business 5.Management style 6.Business relations 7.Decision making 8.Basis for Decision making 9.Attitude to time 10.Work – Life balance

INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014

It is said, that in modern business world, when it comes to big contracts of significant value what matters most is TRUST and RELATIONS between parties. Respect to the culture of the opponent is the key to success.

INTERNATIONAL NEGOTIATION – UCL, JANUARY 2014