Review CH 5 Define the four basic predispositions MNCs have toward their international operations. In what way are parochialism and simplification barriers to effective cross-cultural management? In each case, give an example. Many MNCs would like to do business overseas in the same way that they do business domestically. Do research findings show that any approaches that work well in the U.S. also work well in other cultures?

Chapter 6 – Cont. CH 6- Continue

Organizational Cultures in MNCs Shaped by numerous factors including cultural preferences of leaders and employees Some MNCs have subsidiaries that (aside from logo and reporting procedures) wouldn’t be easily recognizable as belonging to same MNC

Organizational Culture in MNCs Four steps in integration of organizational cultures resulting from international expansion via mergers/acquisitions: Two groups establish purpose, goals, and focus of merger Develop mechanisms to identify most important structures and manager roles Determine who has authority over resources Identify expectations of all involved participates and facilitate communication between departments and individuals

Four Cultural Types

Four Cultural Types Family Culture: Strong emphasis on hierarchy and orientation to persons Power oriented, headed by leader regarded as caring parent Management takes care of employees, ensures they’re treated well, and have continued employment Catalyze and multiply energies of personnel or end up supporting leader who is ineffective and drains energy and loyalties

Four Cultural Types 2. Eiffel Tower: Strong emphasis on hierarchy and orientation to task Jobs well defined; coordination from top Culture narrow at top; broad at base Relationships specific and status remains with job Few off-the-job relationships between manager and employee Formal hierarchy is impersonal and efficient

Four Cultural Types 3. Guided Missile: Strong emphasis on equality in workplace and in task Culture oriented to work Work undertaken by teams or project groups All team members equal Treat each other with respect Egalitarian and task-driven organizational culture

Four Cultural Types Incubator Culture: Strong emphasis on equality and personal orientation Organization as incubator for self- expression and self-fulfillment Little formal structure Participants confirm, criticize, develop, find resources for, or help complete development of innovative product or service

National Patterns of Corporate Culture

Managing Multiculturalism and Diversity Both domestically and internationally, organizations lead workforces with a variety of cultures consisting of largely diverse populations: Women and Men Young and Old Black, White, Latin, Asian, Arab, Indian Many others.

Phases of Multicultural Development

Locations of Cross-Cultural Interaction

Types of Multiculturalism Domestic Multiculturalism Multicultural and diverse workforce operating in MNC home country Group Multiculturalism Homogenous groups Token groups Bicultural groups Multicultural groups

Potential Problems Associated with Diversity Perceptual problems When cultural diverse groups come together, often bring preconceived, erroneous stereotypes with them Inaccurate biases Inaccurate communication Attitudinal problems May cause lack of cohesion resulting in unit’s inability to take concerted action or be productive

Advantages of Diversity Enhance creativity Lead to better decisions More effective/productive results Prevent groupthink Can facilitate highly effective teams under right conditions

Managing Multicultural Teams Select team members for task-related abilities, not solely based on ethnicity Team members must recognize and prepare to deal with their differences Team leader must help identify/define overall goal Mutual respect among members is critical Managers must give team positive feedback on process and output

Review CH -6 In which of the four types of organizational cultures – family, Eiffel Tower, guided missile, incubator – would most people in U.S. feel comfortable? Most MNCs need not enter foreign markets to face challenges of dealing with multiculturalism. Do you agree or disagree? What are some problems to be overcome when using multiculturally diverse teams? What are some basic guidelines for helping make diverse teams more effective?

Cross-Cultural Communication and Negotiation chapter seven Cross-Cultural Communication and Negotiation McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.

Cross-Cultural Communication and Negotiation Six Chapter Objectives: DEFINE communication; examine examples of verbal communication style; explain importance of message interpretation ANALYZE common downward and upward communication flows of international communication EXAMINE language, perception, culture of communication; nonverbal barriers to effective international communication PRESENT steps to overcome international communication problems DEVELOP approaches to international negotiations that respond to differences in culture REVIEW negotiating and bargaining behaviors that can improve negotiations and outcomes

Overall Communication Process Communication: The process of transferring meanings from sender to receiver. On surface appears straightforward However, a great many problems can result in failure to transfer meanings correctly

Verbal Communication Styles Context is information that surrounds a communication and helps convey the message Context plays a key role in explaining many communication differences Messages often highly coded and implicit in high-context society (e.g., Japan, many Arab countries) Messages often explicit and speaker says precisely what s/he means in low context society (e.g., U.S. and Canada)

Explicit and Implicit Communication

Major Characteristics of Verbal Styles

Major Characteristics of Verbal Styles

Verbal Communication Styles Indirect and Direct Styles High-context cultures: messages implicit and indirect; voice intonation, timing, facial expressions play important roles in conveying information Low-context cultures: people often meet only to accomplish objectives; tend to be direct and focused in communications

Verbal Communication Styles Elaborate and Succinct Styles Three degrees of communication quantity—elaborating, exacting, succinct Elaborating style most popular in high- context cultures with moderate degree of uncertainty avoidance Exacting style focuses on precision and use of right amount of words to convey message; more common in low-context, low-uncertainty-avoidance cultures Succinct style more common in high-context cultures with considerable uncertainty avoidance where people say few words and allow understatements, pauses, and silence to convey meaning.

Verbal Communication Styles Contextual and Personal Styles Contextual style focuses on speaker and relationship of parties; often associated with high power distance, collective, high-context cultures Personal style focuses on speaker and reduction of barriers between parties; more popular in low-power-distance, individualistic, low-context cultures

Verbal Communication Styles Affective and Instrumental Styles Affective style common in collective, high-context cultures; characterized by language requiring listener to note what is said/observe how message is presented; meaning often nonverbal; requires receiver to use intuitive skills to decipher message Instrumental style: goal oriented, focuses on sender who clearly lets other know what s/he wants other to know; more commonly found in individualistic, low-context cultures

Verbal Styles Used in 10 Select Countries

Communication Flows Downward Communication Transmission of information from manager to subordinate Primary purpose of manager-initiated communication is to convey orders/information Managers use this channel for instructions and performance feedback Channel facilitates flow of information to those who need it for operational purposes

Upward Communication From subordinate to superior Purposes: provide feedback, ask questions, obtain assistance In recent years a call for more upward communication in U.S. In Japan, Hong Kong, Singapore upward communication has long been fact of life Outside Asian countries, upward communication not as popular

Communication Epigrams

Suggestions for Communication Use most common words with most common meanings Select words with few alternative meanings Strictly follow rules of grammar Speak with clear breaks between words Avoid using esoteric or culturally biased words Avoid use of slang Don’t use words or expressions requiring listener to form mental images Mimic cultural flavor of non-native speaker’s language Paraphrase and repeat basic ideas continually At end, test how well other understand by asking him/her to paraphrase

Communication Barriers Language barriers Cultural barriers Be careful not to use generalized statements about benefits, compensation, pay cycles, holidays, policies in worldwide communication Most of world uses metric system so include converted weights and measures in all communications Even in English-speaking countries, words may have different meanings.

Dangers of using slang

Communication Barriers (continued) Cultural barriers (continued) Letterhead and paper sizes differ worldwide Dollars aren’t unique to U.S. Also Australian, Bermudian, Canadian, Hong Kong, Taiwanese, and New Zealand dollars. Clarify which dollar.

Perceptual Barriers Perception: a person’s view of reality Advertising Messages: countless advertising blunders when words are misinterpreted by others How others see us: May be different than we think

Common Forms of Nonverbal Communication

Nonverbal Communication Transfer of meaning through means such as body language and use of physical space Chromatics Use of color to communicate messages Kinesics Study of communication through body movement and facial expression Eye contact Posture Gestures

Nonverbal Communication Proxemics Study of way people use physical space to convey messages Intimate distance used for very confidential communications Personal distance used for talking with family/close friends Social distance used to handle most business transactions Public distance used when calling across room or giving talk to group

Personal Space in U.S.

Territory Primary territory: this refers to an area that is associated with someone who has exclusive use of it. For example, a house that others cannot enter without the owner’s permission. Secondary territory: unlike the previous type, there is no “right” to occupancy, but people may still feel some degree of ownership of a particular space. For example, someone may sit in the same seat on train every day and feel aggrieved if someone else sits there.

Territory Public territory: this refers to an area that is available to all, but only for a set period, such as a parking space or a seat in a library. Although people have only a limited claim over that space, they often exceed that claim. For example, it was found that people take longer to leave a parking space when someone is waiting to take that space. Interaction territory: this is space created by others when they are interacting. For example, when a group is talking to each other on a footpath, others will walk around the group rather than disturb it.

Haptics Haptics is the study of touching as nonverbal communication. Touches that can be defined as communication include: handshakes, holding hands, kissing (cheek, lips, hand), back slapping, high fives, a pat on the shoulder, and brushing an arm. Touching of oneself during communication may include licking, picking, holding, and scratching. These behaviors are referred to as "adaptor" and may send messages that reveal the intentions or feelings of a communicator. The meaning conveyed from touch is highly dependent upon the context of the situation, the relationship between communicators, and the manner of touch.

Nonverbal Communication Chronemics: the way time is used in a culture. two types: Monochronic time schedule: things done in linear fashion Polychronic time schedule: people do several things at same time and place higher value on personal involvement than on getting things done on time

Monochronic Time A monochronic time system means that things are done one at a time and time is segmented into precise, small units. Under this system time is scheduled, arranged and managed.

Monochronic Time The United States is considered a monochronic society. This perception of time is learned and rooted in the Industrial Revolution, where "factory life required the labor force to be on hand and in place at an appointed hour" (Guerrero, DeVito & Hecht, 1999, p. 238).

Monochronic Time For Americans, time is a precious resource not to be wasted or taken lightly. "We buy time, save time, spend time and make time. Our time can be broken down into years, months, days, hours, minutes, seconds and even milliseconds. We use time to structure both our daily lives and events that we are planning for the future. We have schedules that we must follow: appointments that we must go to at a certain time, classes that start and end at certain times, work schedules that start and end at certain times, and even our favorite TV shows, that start and end at a certain time.”

Monochronic Cultures Germany Canada Switzerland United States Scandinavia

Polychronic Time A polychronic time system is a system where several things can be done at once, and a more fluid approach is taken to scheduling time. Unlike Americans and most northern and western European cultures, Latin American and Arabic cultures use the polychronic system of time.

Polychronic Time These cultures are much less focused on the preciseness of accounting for each and every moment. Raymond Cohen notes polychronic cultures are deeply steeped in tradition rather than in tasks -- a clear difference from their monochronic counterparts. Cohen notes that "Traditional societies have all the time in the world.

Polychronic Time The arbitrary divisions of the clock face have little saliency in cultures grounded in the cycle of the seasons, the invariant pattern of rural life, and the calendar of religious festivities" (Cohen, 1997, p. 34). The culture is more focused on relationships, rather than watching the clock. They have no problem being “late” for an event if they are with family or friends, because the relationship is what really matters. Polychronic cultures have a much less formal perception of time. They are not ruled by precise calendars and schedules. Cultures that use the polychronic time system often schedule multiple appointments simultaneously so keeping on schedule is an impossibility.”

Polychronic Cultures Saudi Arabia Egypt Mexico Philippines

Time can also be used as an indicator of status. Chronemics Time can also be used as an indicator of status. For example, the boss in most companies can interrupt progress to hold an impromptu meeting during the middle of the work day, yet the average worker would have to make an appointment to see the boss.

Chronemics The way different cultures perceive time can influence communication as well. For example, most Americans will schedule a meeting for a specific time such as 2:15 p.m., and expect all involved parties to be punctual at the specified time. In many cultures in Central America and South America, however, they may set a time to meet "sometime in the afternoon" and on many occasions the schedule is broken, changed or deadline unmet.

Communication Effectiveness Improve feedback systems Language training Cultural training Flexibility and cooperation

Negotiating Styles

Managing Cross Cultural Negotiations Negotiation: Process of bargaining with one more parties at arrive at solution acceptable to all Two types of negotiation: Distributive when two parties with opposing goals compete over set value Integrative when two groups integrate interests, create value, invest in the agreement (win-win scenario)

Negotiation Types and Characteristics

Steps of the Negotiation Process: Planning Interpersonal relationship building Exchange of task related information Persuasion Agreement

Cultural Differences Affecting Negotiations Don’t identify counterpart’s home culture too quickly; common cues such as accent may be unreliable. Beware of Western bias toward “doing”. Ways of being, feeling, thinking, talking can shape relationships more powerfully than doing. Counteract tendency to formulate simple, consistent, stable images. Don’t assume all aspects of culture are equally significant. Recognize norms for interactions involving outsiders may differ from those for interactions between compatriots. Don’t overestimate familiarity with counterpart’s culture.

Negotiation Tactics Location Time limits Buyer-seller relationship Bargaining behaviors Use of extreme behaviors Promises, threats and other behaviors Nonverbal behaviors

Review and Discuss How does explicit communication differ from implicit communication? “He was laughing like hell.” “Don’t worry: It’s a piece of cake.” What are these expressions and what communication complications might they present? How is nonverbal communication a barrier to effective communication? Kinesics or proxemics? Which nonverbal communication barrier would be greatest for a U.S. company going abroad for the first time? What might a U.S. based negotiator need to know about Japanese bargaining behaviors to strike a best possible deal?