Week11 Session1

Culture & Negotiation:

Class Topics

• Session1: Theory and

mini-cases about

cultural dimensions

• POWER

• CONTEXT

• TIME

• Session2: “East meets

West” strategies

• Chinese War

Stratagem versus HB

Negotiation strategies

Let‟s start our topic by asking..

• Why is it important to understand cultural

difference before, during and after the

negotiation?

• What are the culture dimensions that can

impact the negotiating scenes?

• Cultural fluency help us choosing our

strategies in negotiation.

Culture counts in negotiation

• Culture is coherent

• Culture is learned

• Culture is the view of a group of people

• Culture ranks what is important

• Culture shapes attitudes

Deep culture is…

• The sum of individual

subconscious and unconscious

mental thought processes that are

also shared at a collective level”

• -Dr. Arai

This case shows how culture

affects the communication…

• Which value is more important?

• What is the deep culture behind the

communication?

• How culture shapes the behaviour?

• How culture can change?

•

Deep culture drives behavior?

• This case shows how „deep culture‟ impact

the Koreans‟ unconscious mental thought

that are shared at a collective level:

• “I’ve never understood my own culture

well. When I looked back and tried to

answer questions, I couldn’t. Why do we do

what we do? I just don’t know”

Cultural fluency and negotiation strategies

• Communication competence refers to the

manager‟s ability to initiate interaction

with people from another culture, enter

into meaningful conversation with others,

and deal effectively with communication

misunderstandings that occur” –Holopainen

and Bjorkman, 2005)

SESSION 1: Culture mini-cases

and their related theories

Power

Limits

Context

Mini-case 1 about

“Confucianism v Individualism”

Mini-case about „power‟:

“The junior was scared to be promoted”

(BCG, p30)

• The next morning, he decided to replace

Yoshinori with Takashi on MBA graduate

in his late twenties from a top American

univeristy – who was working in a junior

position on the project….He was to be

moved sideways with extremely good

grace. But when Takashi was told about his

promotion, he seemed both dejected and

terrified. …

Why was he terrified?

“The nail that sticks up will be hammered

down”

• Over dinner that evening, Johonson discussed Takashi‟s

reaction with a close Japanese friend. ..His friend nodded

and said: “The nail that sticks up will be hammered

down.”…”Moving someone of Takashi‟s age so

quickly and so publicly p the hierarchy was

rather unusual. ..And he would find it hard to

earn the respect of his team members…

• So next day, much to Takashi‟s relief, Johnson

reinstated Yoshinori as team leader.

Confucianism

in China, Korea and Japan • “Confucianism, a form of moral ethics and practical

doctrine of interpersonal relationships, encompasses

from the perspective of negotiation six more values:

moral cultivation; importance of

interpersonal relationship, family

orientation, respect for seniority and

hierarchy, pursuit of harmony and

avoidance of conflict and concept of face”

(James K. Sebenius)

This explains why junior Japanese was shocked

by his American boss suggestion to replace his

senior

Given Status :

CONFUCIANISM Acquired Status: AMERICAN

INDIVIDUALISM

Nepotism: is it normal to give jobs or

contracts to members of your family?

Acquired status

• People should be

judged on what

they do, not who

they are.

Given status

• Other factors – such

as family, class,

nationality, race,

education, age,

religion, sex – should

also be taken into

account

Chinese manager reacted (about sourcing

from his family) (BCG, p57)

• “I can‟t see what the problem is…My

family are much more loyal and reliable

than people I don‟t know. I can call them

any time of day or night. They can‟t escape

me. And, of course, they give me much

better discounts. Surely you don‟t want me

to use suppliers I don‟t trust?”

Discussion Question

• Let‟s share our (direct or indirect)

experiences where we faced a culture gap

between the individualist West and

collectivist East.

• What was the difference?

• And how we responded to the situation?

• And how did it work out?

Mini-case2 about „Limits”

Know the limits

Fixed truth

• There are clear

rights and

wrongs.

Relative truth

• What is right and

wrong depends

on the

circumstances.

Fixed truth v Relative truth

Germany

USA

Britain

Korea

China

Latin America

Mini-case: German manager Klaus v

Chinese manager Li in China

German CFO in Berlin

German Klaus in China

Chinese manager Li

in China

Mini-case about „limits‟: German manager v

Chinese over „Zhou Houmen‟

• Mr. Claudis, a German manager in China, found

his local Chinese subordinate, Mr. Li, engaged in

„backdoor business‟ using the company

production line. Mr. Li was supervisor for all local

Chinese workers, and has „political connection‟

with the local government. But Mr. Claudis must

remind that he has a German boss in heardquarter

Hamburg in Germany How should he handle this

„Zhou

Klaus considers China‟s culture

codes

Kwanshi

Zhou Houmen

Mianzi

Zhou Houmen

Going through the back door)

• Personal connections are also used to obtain

goods and services that would not be

available on the open market. Zhou houmen

has become common practice. The

unofficial economy far exceeds most black

markets in its size and complexity.

Case (BCG, p50)

• German manager Mr. Klaus in

the Chinese factory know all

about connections, giving face

(mianzi) and going through the

back door (Zhou Houmen), but

his German boss in Berlin didn‟t.

Discussion Question

• Let‟s share our (direct or indirect)

experiences of dealing with Chinese

negotiating behaviour, which was

confusing, shocking or irritating or

different?

• How did you react?

• And how did it turn out?

Mini-case about a culture gap

about the context

Culture Mini-Case about the

context

• Imagine you have a

new American expat

boss, who set an

„unrealistic goal-

setting‟ for the new

project.

• How would you try

to persuade the

American boss?

• Imagine you are an

American manager

who has Korean boss,

who set an „unrealistic

goal-setting‟ for the

new project.

• How would you try

to persuade the

Korean boss?

CONTEXT

High-context

• Communication

needs to be

diplomatic,

implicit and

indirect

Low-context

• Communicati

on needs to be

frank, explicit

and direct

High-context culture (Hall, 1976)

• People tend to depend on a particular context in

which they decides to act and judge other people

• Communication is full of implicit meaning.

• Relatively little information is contained in the

explicit part of the message.

• The information needed for understanding is

already present in the context.

• So Japanese convey meaning through penetrating

stares, casual glances, occasional grunts, and

meaningful silence (Barnlund, 1989)

Low-context

• They donot assume there is shared

background knowledge and understanding

• Everything tends to be explained in words.

• Meaning depends on the clarity and

explanatory power of the communicator and

no inside knowledge on the part of the

litener is assumed.

Low-context

• They donot assume there is shared

background knowledge and understanding

• Everything tends to be explained in words.

• Meaning depends on the clarity and

explanatory power of the communicator and

no inside knowledge on the part of the

litener is assumed.

Mr. Kim consider American Low-Context

Style of Persuasion like..

LOGOS

ETHOS PATHOS

On the other hand, American

manager consider Korean high-

context style of persuasion Right Timing? (relationship,

history, his emotion)

Right Non-verbal cues? (Read signal from their body)

Right Place? (it sets the stage?)

Mini-task

• How would you persuade the „mistaken‟

boss from different culture

• 1# from high-context culture

• 2# from low-power distance

•

Consider the East v West culture

WEST

Expertise

Authority-delegated

EAST

Job position

Authority held by boss

Mini-case about culture gap

about time

Culture Mini-case about the

China‟s „만만디 time”

• Let‟s imagine your partner Chinese is

putting you in trouble, as they appears to be

„too relaxed‟ about the time-schedules of

progressing the on-going project?

Consider the East-West gap in

time

WEST

Mono-Chronic in a linear efficiency

EAST

Poly-chronic in a cycle: “At the right time, At the

right place”

Time

Mono-chronic

• I prefer to deal

with one task at

a time in a

structured

fashion.

Poly-chronic

• I prefer to have

several tasks

running at the

same time.

Questions about using deadlines

• Source: harvard management update, by

Don A. Moore

• “Many negotiators fear they’ll weaken their

bargaining position by letting it be known they

have a deadline. That’s rarely the case. In fact

deadlines often facilitate rather than constrain

progress-regardless of whether you’re involve in a

competitive nego or an integrative negotiation”

Mini-case about the China and

Japan

China, the war strategem

Japan, Nimewashi

Sun Tzu‟s The Art of War

Mini-case about

„the war strategem‟ • Suppose your company had a tough time to reach a

service license agreement with your Chinese

counterpart, and finally you‟ve got it. The Chinese

suggested to hold a „celebration party‟ with VIPs from

both side. Your team was happy and prepared for the

party. Three days before, however, the Chinese

suddenly came up with a offer to change some

conditions.

• What happened here? Why are the Chinese demand on

such a short notice?

昌紅白瞼

China: “Wait until the bad guy leaves”

USA: “Let the bad guy control”

昌紅白瞼 v “Good Guy, Bad Gay”

창홍백검

• When you prepare for

negotiation, make a team

that consists of „red-

faces(radicals)‟ and „white-

faces (moderates). Low-

level people will take hard

position, while high-level

ones can take soft position

Good guy, bad guy

Nimewashi

Informal, off-stage, timing

Mini-case about the

“Nimewashi”

• Imagine your company is bidding a new order

for a project owned by Japanese company. This

is very competitive bid with several bidders

from China and India. So your CEO was

happy to have a chance to the Japanese CEO

to meet personally in Tokyo…So your CEO

flew to Tokyo and had a „friendly talk‟ with the

Japanese..So he thought the deal is almost

done…Then What happened later?

Culture affecting decision-

making process

Top-down

Nimewashi

Bottom-Up

Consider Japan‟s way of forming

a consensus: Nimewashi

All middle managers involved

• The “Nimewashi‟ may explain

why Korean CEO was denied

access to Japan‟s decision-

makers

Discussion Question

• Let‟s share our experiences of facing the

Japan‟s “Nimewashi” style of forming a

consensus

Mini-case about Power

How to use power?:

Autocratic or Communicative leadership?

Mini-case about power

• A Swedish manager appointed to a job in an

Indian textile company assumes that his Indian

employees, following the example of his

employees in Sweden, will welcome the

opportunity to be involved in planning decisions.

But his assumption proves to be wrong. The

Indian employees ignore his requets to submit

their ideas. They regard these requests as a sign of

his managerial incompetence.

Consider the „power‟ gap

between the East and the West

WEST LEADERSHIP

Communicative

Persuasive

Expertise

EAST LEADERSHIP

Autocratic

Paternalistic

Discusison Question: Do you agree?

• Their participative management

style is counterproductive in a

high-power distance culture like

Russia or India or Korea, where

autocratic styles are expected and

are the norm.

This may explain why the Swedish

manager was not welcomed by Indian

employees.

• In high power-distance cultures, expatriate

managers are expected to behave in an

autocratic, directive way and to take all

necessary decisions. They are looking for

firm direction and control. Expatriate

managers in foreign coutnires are expected

to show decisive, clear-cut leadership

(Paine, 2010)

Cultural scales on power

Low-power-

distance

High-power-

distance

Sweden

Australia

Jante‟s law

Poppy

Syndrome

USA

British

Germany

Japan

France

Belgium

Latin America

India

Power Distance Index

(PDI) by Hofested • Attitudes toward hierarchy, how much a culture values and

respects the authority.

• “To what extent were you afraid to express disagreement

with our managers?”

• “To what extent do you expect that power is distributed

unequally?”

• “Are power holders entitled to special privileges?

• (*source: Outliers, P239-240)

Mini-survey: Q1:

“To what extent were you afraid to express disagreement with

our managers?”

• 1> I am never afraid

• 2> I am seldom afraid.

• 3> I am sometimes afraid

• 4> I am often afraid.

• 5> I am always afraid.

Q2:“Are power holders entitled

to special privileges?”

• 1> Yes, they always are

• 2> Yes, they often are.

• 3> Yes, they sometimes are.

• 4> No, they seldom are.

• 5> No, they never are.

Low Power Distance:

Jante Law BCG, p26

• Danes, Norwegians and Swedes tend to feel

instinctively suspicious of people who push

themselves forward or boast about their

achievement. Modesty is the personal

quality that these cultures seem to value; if

you say, „you are ordinary‟, they would

regard it as a compliment

Jante‟s Law in Scandinavia

• In 1933, Danish author Aksel

Sandmose published a novel.

Unable to accept the petty

jealousies and he he moved to

Norway, Jante – the imaginary

small Danish port in the novel.

Jantes people live by their own

“Ten Commandments‟ or Jante

Law‟ :

• You shall not think

you can teach us

anything.

Australia:

“The tall poppy syndrome” • To Australians, striving

for individual excellence

implied pushing yourself

forward or trying to be

better than others. And

in a society where

everyone is equal, such

behaviour can be

perceived as very

divisive.

Power distance in cockpict:

Captain, Captain, Oh my God! 1997 KAL class

• “Captain, the weather radar could have

been helpful”

• “Captain, turn the airplane to another

direction NOW! Look at the terrible

weather. We are about to crash!

Mini-case about a culture gap in

communication

Culture mini-case about „form‟

BCG p71

• “As he spoke, I interrupted several times

with comments and questions – in an

interested and friendly way that would be

considered quite normal in the US/UK.

Korean began to look more and more

annoyed. Something went wrong with me or

with him?”

Consider a gap in the East v West

communication style

West

Effusive East

Reserved

It may explain why Koreans are „reserved‟ and

Americans are „effusive”

Reserved

• I think you

should talk only

when you have

something

relevant to say

Effusive

• Lots of talk

indicate warmth

and interest.

Silence should be

avoided

This may explain why Americans interrupted

your PT with comments. (BCG, p72)

• Some culture (UK and US, for example)

expect conversation to be fairly interactive.

To them, interrupting with the odd relevant

comment or question is good form. The

Americans will often make comments that

build on what the other person is saying.

British tend to interact by asking quesitons.

If they have a partner who sits and listens to

them in silence, it can make them uneasy.