Saudi Electronic University Euro Disneyland Case Study

Euro Disneyland
This week you were introduced to several decision-making tools in the course content.
Using the Decision Matrix Analysis along with the Decision Matrix Analysis video, make
the following decisions relative to the case study about Euro Disneyland (p. 262):
The first section of your paper should be an explanation of this process and how you
decided on each of the factors in the matrix.
1. List all of the cultural challenges posed by Disney’s expansion into Europe. (Side of
matrix.)
2. Next, list the variables that influenced these challenges. (Top of matrix.)
3. Decide on a score (1-5) for each of these challenges according to the relative
importance of the factors. Multiply each of these scores by 2 to find the weighted scores
for each option/factor combination.
Next, respond to the following questions in the rest of your essay:
1. Using Hofstede’s four cultural dimensions as a point of reference noted in the case,
what are some of the main cultural differences between the United States and France?
2. In managing its Euro Disneyland operations, what are three mistakes that the company
made? Explain your response with examples.
3. As a conclusion, reflect on your overall thoughts on this case.
Your well-written paper should meet the following requirements:
•
Be 5-6 pages in length, which does not include the title page, abstract, or required
reference page, which are never a part of the content minimum requirements.
•
Use Saudi Electronic University academic writing standards and APA style guidelines.
•
Support your submission with course material concepts, principles, and theories from
the textbook and at least two scholarly, peer-reviewed journal articles.
Decision Matrix Analysis link

Decision Matrix Analysis

Video link

Chapter 7 Cross-Cultural Communication and Negotiation
c­ haracterized by the desire to identify those who are reasonable and those who are not.
In contrast to negotiators in many other countries, those in the United States often give
little attention to this phase; they want to get down to business immediately, which often
is an ineffective approach. Adler notes:
Effective negotiators view luncheon, dinner, reception, ceremony, and tour invitations as
times for interpersonal relationship building and therefore as key to the negotiating process.
When American negotiators, often frustrated by the seemingly endless formalities, ceremonies, and “small talk,” ask how long they must wait before beginning to “do business,” the
answer is simple: wait until your counterparts bring up business (and they will). Realize
that the work of conducting a successful negotiation has already begun, even if business has
yet to be mentioned.67
Exchanging Task-Related Information
In this part of the negotiation process, each
group sets forth its position on the critical issues. These positions often will change later
in the negotiations. At this point, the participants are trying to find out what the other
party wants to attain and what it is willing to give up.
Persuasion This step of negotiations is considered by many to be the most important.
No side wants to give away more than it has to, but each knows that without giving some
concessions, it is unlikely to reach a final agreement. The success of the persuasion step
often depends on (1) how well the parties understand each other’s position, (2) the ability of each to identify areas of similarity and difference, (3) the ability to create new
options, and (4) the willingness to work toward a solution that allows all parties to walk
away feeling they have achieved their objectives.
Agreement The final phase of negotiations is the granting of concessions and hammer-
ing out a final agreement. Sometimes, this phase is carried out piecemeal, and concessions
and agreements are made on issues one at a time. This is the way negotiators from the
United States like to operate. As each issue is resolved, it is removed from the bargaining
table and interest is focused on the next. Asians and Russians, on the other hand, tend to
negotiate a final agreement on everything, and few concessions are given until the end.
Once again, as in all areas of communication, to negotiate effectively in the international arena, it is necessary to understand how cultural differences between the parties
affect the process.
Cultural Differences Affecting Negotiations
In international negotiations, participants tend to orient their approach and interests
around their home culture and their group’s needs and aspirations. This is natural. Yet,
to negotiate effectively, it is important to have a sound understanding of the other side’s
culture and position to better empathize and understand what they are about.68 The cultural aspects managers should consider include communication patterns, time orientation,
and social behaviors.69 A number of useful steps can help in this process of understanding. One negotiation expert recommends the following:
1. Do not identify the counterpart’s home culture too quickly. Common cues
(e.g., name, physical appearance, language, accent, location) may be unreliable. The counterpart probably belongs to more than one culture.
2. Beware of the Western bias toward “doing.” In Arab, Asian, and Latin
groups, ways of being (e.g., comportment, smell), feeling, thinking, and
talking can shape relationships more powerfully than doing.
3. Try to counteract the tendency to formulate simple, consistent, stable images.
4. Do not assume that all aspects of the culture are equally significant. In Japan,
consulting all relevant parties to a decision is more important than presenting
a gift.
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Part 2 The Role of Culture
5. Recognize that norms for interactions involving outsiders may differ from
those for interactions between compatriots.
6. Do not overestimate your familiarity with your counterpart’s culture. An
American studying Japanese wrote New Year’s wishes to Japanese contacts in
basic Japanese characters but omitted one character. As a result, the message
became “Dead man, congratulations.”70
Other useful examples have been offered by Trompenaars and Hampden-Turner,
who note that a society’s culture often plays a major role in determining the effectiveness
of a negotiating approach. This is particularly true when the negotiating groups come
from decidedly different cultures such as an ascription society and an achievement society. As noted in Chapter 4, in an ascription society, status is attributed based on birth,
kinship, gender, age, and personal connections. In an achievement society, status is determined by accomplishments. As a result, each side’s cultural perceptions can affect the
outcome of the negotiation. Here is an example:
Sending whiz-kids to deal with people 10–20 years their senior often insults the ascriptive
culture. The reaction may be: “Do these people think that they have reached our own level
of experience in half the time? That a 30-year-old American is good enough to negotiate
with a 50-year-old Greek or Italian?” Achievement cultures must understand that some
ascriptive cultures, the Japanese especially, spend much on training and in-house education
to ensure that older people actually are wiser for the years they have spent in the corporation
and for the sheer number of subordinates briefing them. It insults an ascriptive culture to
do anything which prevents the self-fulfilling nature of its beliefs. Older people are held to
be important so that they will be nourished and sustained by others’ respect. A stranger is
expected to facilitate this scheme, not challenge it.71
U.S. negotiators have a style that often differs from that of negotiators in many
other countries. Americans believe it is important to be factual and objective. In addition,
they often make early concessions to show the other party that they are flexible and
reasonable. Moreover, U.S. negotiators typically have authority to bind their party to an
agreement, so if the right deal is struck, the matter can be resolved quickly. This is why
deadlines are so important to Americans. They have come to do business, and they want
to get things resolved immediately.
A comparative example would be the Arabs, who in contrast to Americans, with
their logical approach, tend to use an emotional appeal in their negotiation style. They
analyze things subjectively and treat deadlines as only general guidelines for wrapping
up negotiations. They tend to open negotiations with an extreme initial position. However, the Arabs believe strongly in making concessions, do so throughout the bargaining
process, and almost always reciprocate an opponent’s concessions. They also seek to
build a long-term relationship with their bargaining partners. For these reasons, ­Americans
typically find it easier to negotiate with Arabs than with representatives from many other
regions of the world.
Another interesting comparative example is provided by the Chinese. In initial negotiation meetings, it is common for Chinese negotiators to seek agreement on the general
focus of the meetings. The hammering out of specific details is postponed for later gettogethers. By achieving agreement on the general framework within which the negotiations
will be conducted, the Chinese seek to limit and focus the discussions. Many Westerners
misunderstand what is happening during these initial meetings and believe the dialogue
consists mostly of rhetoric and general conversation. They are wrong and quite often are
surprised later on when the Chinese negotiators use the agreement on the framework and
principles as a basis for getting agreement on goals—and then insist that all discussions
on concrete arrangements be in accord with these agreed-upon goals. Simply put, what is
viewed as general conversation by many Western negotiators is regarded by the Chinese
as a formulation of the rules of the game that must be adhered to throughout the negotiations. So in negotiating with the Chinese, it is important to come prepared to ensure
that one’s own agenda, framework, and principles are accepted by both parties.
Chapter 7 Cross-Cultural Communication and Negotiation
233
Table 7–9
Negotiation Styles from a Cross-Cultural Perspective
Element
United States
Japanese
Arabians
Mexicans
Group composition
Marketing oriented
Function oriented
Committee of specialists
Friendship oriented
Number involved
2–3
4–7
4–6
2–3
Space orientation
Confrontational;
competitive
Display harmonious
relationship
Status
Close, friendly
Establishing rapport
Short period; direct
to task
Longer period; until
harmony
Long period; until trusted
Longer period; discuss
family
Exchange of
information
Documented; step by
step; multimedia
Extensive; concentrate
on receiving side
Less emphasis on technology, more on relationship
Less emphasis on technology, more on relationship
Persuasion tools
Time pressure; loss
of saving/making
money
Maintain relationship
references; intergroup
connections
Go-between; hospitality
Emphasis on family and on
social concerns; goodwill
measured in generations
Use of language
Open, direct, sense
of urgency
Indirect, appreciative,
cooperative
Flattery, emotional,
religious
Respectful, gracious
First offer
Fair ±5 to 10%
±10 to 20%
±20 to 50%
Fair
Second offer
Add to package;
sweeten the deal
−5%
−10%
Add an incentive
Final offer package
Total package
Makes no further
concessions
−25%
Total
Decision-making
process
Top management
team
Collective
Team makes recommendation
Senior manager and
secretary
Decision maker
Top management
team
Middle line with team
consensus
Senior manager
Senior manager
Risk taking
Calculated personal
responsibility
Low group
responsibility
Religion based
Personally responsible
Source: Lillian H. Chaney and Jeanette S. Martin, International Business Communication, 3rd Edition © 2004. Electronically reproduced by permission of Pearson
Education, Inc., Upper Saddle River, New Jersey.
Before beginning any negotiations, negotiators should review the negotiating style
of the other parties. (Table 7–9 provides some insights regarding negotiation styles of
the United States, Japanese, Arabians, and Mexicans.) This review should help to answer
certain questions: What can we expect the other side to say and do? How are they likely
to respond to certain offers? When should the most important matters be introduced?
How quickly should concessions be made, and what type of reciprocity should be
expected? These types of questions help effectively prepare the negotiators. In addition,
the team will work on formulating negotiation tactics. The International Management in
Action “Negotiating with the Japanese” demonstrates such tactics, and the following
discussion gets into some of the specifics.
Sometimes, simply being familiar with the culture is still falling short of being
aptly informed. We discussed in Chapter 2 how the political and legal environment of a
country can have an influence over an MNC’s decision to open operations, and those
external factors are good to bear in mind when coming to an agreement. Both parties
may believe that the goals have been made clear, and on the surface a settlement may
deliver positive results. However, the subsequent actions taken by either company could
prove to exhibit even more barriers. Take Pirelli, an Italian tire maker that acquired
Continental Gummiwerke, its German competitor. Pirelli purchased the majority holdings
of Continental’s stock, a transaction that would translate into Pirelli having control of
the company if it occurred in the United States. When Pirelli attempted to make key
managerial decisions for its Continental unit, it discovered that in Germany, the corporate
governance in place allows German companies to block such actions, regardless of the
shareholder position. Furthermore, the labor force has quite a bit of leverage with its
International Management in Action
Negotiating with the Japanese
Some people believe that the most effective way of getting the Japanese to open up their markets to the
United States is to use a form of strong-arm tactics, such
as putting the country on a list of those to be targeted
for retaliatory action. Others believe that this approach
will not be effective because the interests of the United
States and Japan are intertwined and we would be hurting ourselves as much as them. Regardless of which
group is right, one thing is certain: U.S. MNCs must learn
how to negotiate more effectively with the Japanese.
What can they do? Researchers have found that besides
patience and a little table pounding, a number of
­important steps warrant consideration.
First, business firms need to prepare for their negotiations by learning more about Japanese culture and the
“right” ways to conduct discussions. Those companies
with experience in these matters report that the two best
ways of doing this are to read books on Japanese business practices and social customs and to hire experts to
train the negotiators. Other steps that are helpful include
putting the team through simulated negotiations and
­hiring Japanese to assist in the ­negotiations.
Second, U.S. MNCs must learn patience and sincerity. Negotiations are a two-way street that require the
mutual cooperation and efforts of both parties. The
U.S. negotiators must understand that many times,
Japanese negotiators do not have full authority to
make on-the-spot decisions. Authority must be given
by someone at the home office, and this failure to act
quickly should not be interpreted as a lack of sincerity
on the part of the Japanese negotiators.
Third, the MNC must have a unique good or service.
So many things are offered for sale in Japan that unless
the company has something that is truly different, persuading the other party to buy it is difficult.
Fourth, technical expertise often is viewed as a very
important contribution, and this often helps to win concessions with the Japanese. The Japanese know that
the Americans, for example, still dominate the world
when it comes to certain types of technology and that
Japan is unable to compete effectively in these areas.
When such technical expertise is evident, it is very influential in persuading the Japanese to do business with
the company.
These four criteria are critical to effective negotiations with the Japanese. MNCs that use them
report more successful experiences than those that
do not.
ability to elect members of the supervisory board, which in turn chooses the management
board.72 Pirelli essentially lost on an investment; that is, unless Continental can be profitable under its current management. If Pirelli had known that this was going to happen,
it probably would have reconsidered. One solution could be for Pirelli’s management to
begin some positive rapport with the labor force to try to sway viewpoints internally.
The better option, though, would be for international managers to be as informed as
possible and avoid trouble before it occurs.
Negotiation Tactics
A number of specific tactics are used in international negotiation. The following discussion examines some of the most common.
Location Where should negotiations take place? If the matter is very important, most
businesses will choose a neutral site. For example, U.S. firms negotiating with companies
from the Far East will meet in Hawaii, and South American companies negotiating with
European firms will meet halfway, in New York City. A number of benefits derive from
using a neutral site. One is that each party has limited access to its home office for receiving a great deal of negotiating information and advice and thus gaining an advantage
on the other. A second is that the cost of staying at the site often is quite high, so both
sides have an incentive to conclude their negotiations as quickly as possible. (Of course,
if one side enjoys the facilities and would like to stay as long as possible, the negotiations could drag on.) A third is that most negotiators do not like to return home with
nothing to show for their efforts, so they are motivated to reach some type of agreement.
Time Limits Time limits are an important negotiation tactic when one party is under
a time constraint. This is particularly true when this party has agreed to meet at the home
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Chapter 7 Cross-Cultural Communication and Negotiation
site of the other party. For example, U.S. negotiators who go to London to discuss a joint
venture with a British firm often will have a scheduled return flight. Once their hosts
find out how long these individuals intend to stay, the British can plan their strategy
accordingly. The “real” negotiations are unlikely to begin until close to the time that the
Americans must leave. The British know that their guests will be anxious to strike some
type of deal before returning home, so the Americans are at a disadvantage.
Time limits can be used tactically even if the negotiators meet at a neutral site.
For example, most Americans like to be home with their families for Thanksgiving,
Christmas, and the New Year holiday. Negotiations held right before these dates put
Americans at a disadvantage because the other party knows when the Americans would
like to leave.
Buyer-Seller Relations
How should buyers and sellers act? As noted earlier, A
­ mericans
believe in being objective and trading favors. When the negotiations are over, Americans
walk away with what they have received from the other party, and they expect the other
party to do the same. This is not the way negotiators in many other countries think,
however.
The Japanese, for example, believe that the buyers should get most of what they
want. On the other hand, they also believe that the seller should be taken care of through
reciprocal favors. The buyer must ensure that the seller has not been “picked clean.” For
example, when many Japanese firms first started doing business with large U.S. firms,
they were unaware of U.S. negotiating tactics. As a result, the Japanese thought the
Americans were taking advantage of them, whereas the Americans believed they were
driving a good, hard bargain.
The Brazilians are quite different from both the Americans and Japanese. Researchers have found that Brazilians do better when they are more deceptive and self-interested
and their opponents more open and honest than they are.73,74 Brazilians also tend to make
fewer promises and commitments than their opponents, and they are much more prone to
say no. However, Brazilians are more likely to make initial concessions. Overall, ­Brazilians
are more like Americans than Japanese in that they try to maximize their advantage, but
they are unlike Americans in that they do not feel obligated to be open and forthright in
their approach. Whether they are buyer or seller, they want to come out on top.
Negotiating for Mutual Benefit
When managers enter a negotiation with the intent to win and are not open to flexible
compromises, it can result in a stalemate. Ongoing discussion with little progress can
increase tensions between the two groups and create an impasse where groups become
more frustrated and aggressive, and no agreement can be reached.75 Ultimately, too much
focus on the plan with little concern for the viewpoint of the other group can lead to missed
opportunities. It is important to keep objectives in mind and at the forefront, but it should
not be a substitute for constructive discussions. Fisher and Ury, authors of the book Getting
to Yes, present five general principles to help avoid such disasters: (1) separate the people
from the problem, (2) focus on interests rather than positions, (3) generate a variety of
options before settling on an agreement (as mentioned earlier in this section), (4) insist that
the agreement be based on objective criteria, and (5) stand your ground.76
Separating the People from the Problem Often, when managers spend so much time
getting to know the issue, many become personally involved. Therefore, responses to a
particular position can be interpreted as a personal affront. In order to preserve the personal relationship and gain a clear perspective on the issue, it is important to distinguish
the problem from the individual.
When dealing with people, one barrier to complete understanding is the negotiating
parties’ perspectives. Negotiators should try to put themselves in the other’s shoes. Avoid
blame, and keep the atmosphere positive by attempting to alter proposals to better
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Part 2 The Role of Culture
t­ranslate the objectives. The more inclusive the process, the more willing everyone will
be to find a solution that is mutually beneficial.
Emotional factors arise as well. Negotiators often experience some level of an
emotional reaction during the process, but it is not seen by the other side. Recognize
your own emotions and be open to hearing and accepting emotional concerns of the other
party. Do not respond in a defensive manner or give in to intense impulses. Ignoring the
intangible tension is not recommended; try to alleviate the situation through sympathetic
gestures such as apologies.
As mentioned earlier, good communication is imperative to reaching an agreement.
Talk to each other, instead of just rehashing grandiose aspects of the proposal. Listen to
responses and avoid passively sitting there while formulating a response. When appropriate, summarize the key points by vocalizing your interpretation to the other side to ensure
correct evaluation of intentions.
Overall, don’t wait for issues to arise and react to them. Instead, go into discussion
with these guidelines already in play.
Focusing on Interests over Positions
The position one side takes can be expressed
through a simple outline, but still does not provide the most useful information. Focusing
on interests gives one insight into the motivation behind why a particular position was
chosen. Digging deeper into the situation by both recognizing your own interests and
becoming more familiar with others’ interests will put all active partners in a better
position to defend their proposal. Simply stating, “This model works, and it is the best
option,” may not have much leverage. Discussing your motivation, such as, “I believe
our collaboration will enhance customer satisfaction, which is why I took on this project,”
will help others see the why, not just the what.
Hearing the incentive behind the project will make both sides more sympathetic,
and may keep things consistent. Be sure to consider the other side, but maintain focus
on your own concerns.
Generating Options Managers may feel pressured to come to an agreement quickly
for many reasons, especially if they hail from a country that puts a value on time. If
negotiations are with a group that does not consider time constraints, there may be
temptation to have only a few choices to narrow the focus and expedite decisions. It turns
out, though, that it is better for everyone to have a large number of options in case some
proposals prove to be unsatisfactory.
How do groups go about forming these proposals? First, they can meet to brainstorm
and formulate creative solutions through a sort of invention process. This includes shifting
thought focus among stating the problem, analyzing the issue, pondering general approaches,
and strategizing the actions. After creating the proposals, the groups can begin evaluating
the options and discuss improvements where necessary. Try to avoid the win-lose approach
by accentuating the points of parity. When groups do not see eye to eye, find options that
can work with both viewpoints by “look[ing] for items that are of low cost to you and high
benefit to them, and vice versa.”77 By offering proposals that the other side will agree to,
you can pinpoint the decision makers and tailor future suggestions toward them. Be sure to
support the validity of your proposal, but not to the point of being overbearing.
Using Objective Criteria In cases where there are no common interests, avoid tension
by looking for objective options. Legitimate, practical criteria could be formed by using
reliable third-party data, such as legal precedent. If both parties would accept being
bound to certain terms, then chances are the suggestions were derived from objective
criteria. The key is to emphasize the communal nature of the process. Inquire about why
the other group chose its particular ideas. It will help you both see the other side and
give you a springboard from which you can argue your views, which can be very persuasive. Overall, effective negotiations will result from international managers being
flexible but not folding to external pressures.
Chapter 7 Cross-Cultural Communication and Negotiation
These are just general guidelines to abide by to try and reach a mutual agreement.
The approaches will be more effective if the group adhering to the outline was the one
with more power. Fisher and Ury also looked at what managers should do if the other
party has the power.
Standing Ground Every discussion will have some imbalance of power, but there is
something negotiators can do to defend themselves. It may be tempting to create a “bottom line,” or lowest possible set of options that one will accept, but it does not necessarily accomplish the objective. When negotiators make a definitive decision before
engaging in discussion, they may soon find out that the terms never even surface. That
is not to say that their bottom line is below even the lowest offer, but instead that without working with the other negotiators, they cannot accurately predict the proposals that
will be devised. So what should the “weaker” opponent do?
The reason two parties are involved in a negotiation is because they both want a
situation that will leave them better off than before. Therefore, no matter how long negotiations drag on, neither side should agree to terms that will leave it worse off than its best
alternative to a negotiated agreement, or BATNA. Clearly defining and understanding the
BATNA will make it easier to know when it is time to leave a negotiation and empower
that side. An even better scenario would be if the negotiator learns of the other side’s
BATNA. As Fisher and Ury say: “Developing your BATNA thus not only enables you to
determine what is a minimally acceptable agreement, it will probably raise that minimum.”78
Even the most prepared manager can walk into a battle zone. At times, negotiators
will encounter rigid, irritable, caustic, and selfish opponents. A positional approach to
bargaining can cause tension, but the other side can opt for a principled angle. This entails
a calm demeanor and a focus on the issues. Instead of counterattacking, redirect the conversation to the problem and do not take any outbursts as personal attacks. Inquire about
their reasoning and try to take any negative statements as constructive. If no common
ground is reached, a neutral third party can come in to assess the desires of each side and
compose an initial proposal. Each group has the right to suggest alternative approaches,
but the third-party person has the last word in what the true “final draft” is. If the parties
decide it is still unacceptable, then it is time to walk away from negotiations.
Fisher and Ury compiled a comprehensive guide as to how to approach negotiations. While no guideline has a 100 percent effective rate, their method helps gain a
position where both sides win.
Bargaining Behaviors
Closely related to the discussion of negotiation tactics are the different types of bargaining
behaviors, including both verbal and nonverbal behaviors. Verbal behaviors are an important part of the negotiating process because they can improve the final outcome. Research
shows that the profits of the negotiators increase when they make high initial offers, ask
a lot of questions, and do not make many verbal commitments until the end of the negotiating process. In short, verbal behaviors are critical to the success of negotiations.
Use of Extreme Behaviors Some negotiators begin by making extreme offers or requests.
The Chinese and Arabs are examples. Some negotiators, however, begin with an initial position that is close to the one they are seeking. The Americans and Swedes are examples here.
Is one approach any more effective than the other? Research shows that extreme
positions tend to produce better results. Some of the reasons relate to the fact that an
extreme bargaining position (1) shows the other party that the bargainer will not be
exploited, (2) extends the negotiation and gives the bargainer a better opportunity to gain
information on the opponent, (3) allows more room for concessions, (4) modifies the
opponent’s beliefs about the bargainer’s preferences, (5) shows the opponent that the bargainer is willing to play the game according to the usual norms, and (6) lets the bargainer
gain more than would probably be possible if a less extreme initial position had been taken.
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Part 2 The Role of Culture
Although the use of extreme position bargaining is considered to be “un-American,”
many U.S. firms have used it successfully against foreign competitors. When Peter Ueberroth managed the Olympic Games in the United States in 1984, he turned a profit of well
over $100 million—and that was without the participation of Soviet-bloc countries, which
would have further increased the market potential of the games. In most other Olympiads,
sponsoring countries have lost hundreds of millions of dollars. How did Ueberroth do it?
One way was by using extreme position bargaining. For example, the Olympic Committee
felt that the Japanese should pay $10 million for the right to televise the games in the
country, so when the Japanese offered $6 million for the rights, the Olympic Committee
countered with $90 million. Eventually, the two sides agreed on $18.5 million. Through
the effective use of extreme position bargaining, Ueberroth got the Japanese to pay over
three times their original offer, an amount well in excess of the committee’s budget.
Promises, Threats, and Other Behaviors Another approach to bargaining is the use
of promises, threats, rewards, self-disclosures, and other behaviors that are designed to
influence the other party. These behaviors often are greatly influenced by the culture.
Graham conducted research using Japanese, U.S., and Brazilian businesspeople and
found that they employed a variety of different behaviors during a buyer-seller negotiation simulation.79 Table 7–10 presents the results.
Table 7–10
Cross-Cultural Differences in Verbal Behavior of Japanese, U.S., and Brazilian Negotiators
Number of Times Tactic Was Used in
a Half-Hour Bargaining Session
Behavior and Definition
Japanese
United States Brazilian
Promise. A statement in which the source indicated an intention to provide the target
with a reinforcing consequence that the source anticipates the target will evaluate as
pleasant, positive, or rewarding.
7
8
3
Threat. Same as promise, except that the reinforcing consequences are thought to be
noxious, unpleasant, or punishing.
4
4
2
Recommendation. A statement in which the source predicts that a pleasant environmental
consequence will occur to the target. Its occurrence is not under the source’s control.
7
4
5
Warning. Same as recommendation except that the consequences are thought to be
unpleasant.
2
1
1
Reward. A statement by the source that is thought to create pleasant consequences
for the target.
1
2
2
Punishment. Same as reward, except that the consequences are thought to be unpleasant.
1
3
3
Positive normative appeal. A statement in which the source indicates that the target’s
past, present, or future behavior was or will be in conformity with social norms.
1
1
0
Negative normative appeal. Same as positive normative appeal, except that the target’s behavior is in violation of social norms.
3
1
1
Commitment. A statement by the source to the effect that its future bids will not go
below or above a certain level.
15
13
8
Self-disclosure. A statement in which the source reveals information about itself.
34
36
39
Question. A statement in which the source asks the target to reveal information about
itself.
20
20
22
Command. A statement in which the source suggests that the target perform a certain
behavior.
8
6
14
First offer. The profit level associated with each participant’s first offer.
61.5
57.3
75.2
Initial concession. The differences in profit between the first and second offer.
6.5
7.1
9.4
Number of no’s. Number of times the word “no” was used by bargainers per half-hour.
5.7
9.0
83.4
Source: Adapted from John L. Graham, “The Influence of Culture on the Process of Business Negotiations in an Exploratory Study,” Journal of International Business
Studies, Spring 1983, p. 88. Reprinted by permission from Macmillan Publishers Ltd., Journal of International Business Studies, March 1, 1985. Published by Palgrave
Macmillan.
Chapter 7 Cross-Cultural Communication and Negotiation
239
The table shows that Americans and Japanese make greater use of promises than
do Brazilians. The Japanese also rely heavily on recommendations and commitment.
The Brazilians use a discussion of rewards, commands, and self-disclosure more than
Americans and Japanese. The Brazilians also say no a great deal more and make first
offers that have higher-level profits than those of the others. Americans tend to operate between these two groups, although they do make less use of commands than
either of their opponents and make first offers that have lower profit levels than their
opponents’.
Nonverbal Behaviors
Nonverbal behaviors also are very common during negotiations. These behaviors refer to what people do rather than what they say. Nonverbal
behaviors sometimes are called the “silent language.” Typical examples include silent
periods, facial gazing, touching, and conversational overlaps. As seen in Figure 7–3,
the Japanese tend to use silent periods much more often than either Americans or
Brazilians during negotiations. In fact, in this study, the Brazilians did not use them
at all. The Brazilians did, however, make frequent use of other nonverbal behaviors.
They employed facial gazing almost four times more often than the Japanese and
almost twice as often as the Americans. In addition, although the Americans and
Japanese did not touch their opponents, the Brazilians made wide use of this nonverbal tactic. They also relied heavily on conversational overlaps, employing them more
than twice as often as the Japanese and almost three times as often as Americans.
The number of times (per 10 minutes)
that both parties to the negotiation
would talk at the same time
The number of minutes negotiators
spend looking at their opponent’s
face per 10-minute period
28.6
5.2
3.3
12.6
10.3
1.3
Japanese
United States
Brazilian
Number of 10-second gaps
per 30 minutes of conversation
Japanese
United States
Brazilian
Incidents of negotiators’ touching
one another per half-hour
4.7
5.5
3.5
Japanese
United States
0
0
0
Brazilian
Japanese
United States
Brazilian
Source: Original graphic by Ben Littell under supervision of Professor Jonathan Doh based on data from John L. Graham,
“The Influence of Culture on the Process of Business Negotiations in an Exploratory Study,” Journal of International Business Studies,
Spring 1983, p. 88. Reprinted by permission from Macmillan Publishers Ltd., Journal of International Business Studies, March 1,
1985. Published by Palgrave Macmillan.
Figure 7–3
Cross-Cultural Differences
in Nonverbal Behavior of
Japanese, U.S., and
Brazilian Negotiators
240
Part 2 The Role of Culture
Table 7–11
Culture-Specific Characteristics Needed by International Managers
for Effective Negotiations
U.S. managers
•  Preparation and planning skill Ability to think under pressure
­Judgment and intelligence Verbal expressiveness Product
­knowledge Ability to perceive and exploit power Integrity
Japanese managers
•  Dedication to job Ability to perceive and exploit power Ability
to win respect and confidence Integrity Listening skill Broad
­perspective Verbal expressiveness
Chinese managers
(Taiwan)
•  Persistence and determination Ability to win respect and confidence
Preparation and planning skill Product knowledge Interesting
­Judgment and intelligence
Brazilian managers
•  Preparation and planning skill Ability to think under pressure Judgment and intelligence Verbal expressiveness Product knowledge
Ability to perceive and exploit power Competitiveness
Source: Adapted from Nancy J. Adler, International Dimensions of Organizational Behavior, 2nd ed. (Boston: PWS-Kent
Publishing, 1991), p. 187; and from material provided by Professor John Graham, School of Business Administration,
University of Southern California, 1983.
Quite obviously, the Brazilians rely very heavily on nonverbal behaviors in their
­negotiating.
The important thing to remember is that in international negotiations, people use
a wide variety of tactics, and the other side must be prepared to counter or find a way
of dealing with them. The response will depend on the situation. Managers from different cultures will employ different tactics. Table 7–11 suggests some characteristics
needed in effective negotiators, as exemplified by various cultures. To the extent that
international managers have these characteristics, their success as negotiators should
increase.
The World of International Management—Revisited
The chapter’s opening World of International Management explored some of the international communication and negotiation challenges that Netflix has faced when expanding into Russia and attempting to enter China. Despite an entry strategy that proved
successful in markets in Europe and the Americas, Netflix encountered a longer and
more complex negotiation process in China than expected. And in Russia, Netflix’s lack
of communication and its failure to recognize the necessary involvement of government
officials in its expansion plans resulted in a political backlash. As this chapter revealed,
understanding the communication styles of different cultures is a critical variable in
entering foreign markets, managing relationships among employees and customers, managers and subordinates, and in all business relationships.
A key to success in today’s global economy is being able to communicate effectively within and across national boundaries and to engage in effective negotiations across
cultures. Considering the communication challenges faced by offshoring firms, along
with what you have read in this chapter, answer the following questions: (1) How is
communication in India similar to that of Europe and North America? How is it different? (2) What kind of managerial relationships could you assume exist between an
American financial services firm and its employees in India? (3) What kind of negotiations could help engage Indian employees and overcome some of the cultural problems
encountered? How might culture play a role in the approach the Indian employees take
in their negotiation with the financial firm?
Chapter 7 Cross-Cultural Communication and Negotiation
241
SUMMARY OF KEY POINTS
1. Communication is the transfer of meaning from
sender to receiver. The key to the effectiveness of
communication is how accurately the receiver interprets the intended meaning.
2. Communicating in the international business context
involves both downward and upward flows. Downward flows convey information from superior to
subordinate; these flows vary considerably from
country to country. For example, the downward system of organizational communication is much more
prevalent in France than in Japan. Upward communication conveys information from subordinate to
superior. In the United States and Japan, the upward
system is more common than in South America or
some European countries.
3. The international arena is characterized by a number of communication barriers. Some of the most
important are intrinsic to language, perception,
culture, and nonverbal communication. Language,
particularly in written communications, often
loses considerable meaning during interpretation.
Perception and culture can result in people’s seeing and interpreting things differently, and as a
result, communication can break down. Nonverbal
communication such as body language, facial
expressions, and use of physical space, time, and
even color often varies from country to country
and, if improper, often results in communication
problems.
4. A number of steps can be taken to improve communication effectiveness. Some of the most important include improving feedback, providing language
and cultural training, and encouraging flexibility
and cooperation. These steps can be particularly
helpful in overcoming communication barriers in
the international context and can lead to more
effective international management.
5. Negotiation is the process of bargaining with one or
more parties to arrive at a solution that is acceptable to all. There are two basic types of negotiation: distributive negotiation involves bargaining
over opposing goals while integrative negotiation
involves cooperation aimed at integrating interests.
The negotiation process involves five basic steps:
planning, interpersonal relationship building,
exchanging task-related information, persuasion, and
agreement. The way in which the process is carried
out often will vary because of cultural differences,
and it is important to understand them.
6. There are a wide variety of tactics used in international negotiating. These include location, time limits, buyer-seller relations, verbal behaviors, and
nonverbal behaviors.
7. Negotiating for mutual benefit is enhanced by separating the people from the problem, focusing on
interests rather than positions, generating a variety
of options, insisting that the agreement be based on
objective criteria, and standing one’s ground.
KEY TERMS
chromatics, 225
chronemics, 225
communication, 210
context, 210
distributive negotiations, 229
downward communication, 214
haptics, 224
integrative negotiation, 230
intimate distance, 224
kinesics, 224
monochronic time schedule, 225
negotiation, 229
nonverbal communication, 223
oculesics, 224
perception, 219
personal distance, 224
polychronic time schedule, 225
proxemics, 224
public distance, 224
social distance, 224
upward communication, 215
REVIEW AND DISCUSSION QUESTIONS
1. How does explicit communication differ from
implicit communication? Which is one culture that
makes wide use of explicit communication? Implicit
communication? Describe how one would go about
conveying the following message in each of the two
cultures you identified: “You are trying very hard,
but you are still making too many mistakes.”
2. One of the major reasons that foreign expatriates
have difficulty doing business in the United States
is that they do not understand American slang. A
business executive recently gave the authors the following three examples of statements that had no
direct meaning for her because she was unfamiliar
with slang: “He was laughing like hell.” “Don’t

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