March 9, 2022

Danones Wrangle with WahahaThis weeks discussion will focus on cultural negotiation using the case study about Danone in China (p. 25

Danone’s Wrangle with WahahaThis week’s discussion will focus on cultural negotiation using the case study about Danone in China (p. 255 in the textbook).This case is a cautionary tale of how important cultural differences are when forming strategic partnerships or joint ventures with companies from different countries. Our content this week reflects on the impact of conflict on decision-making. As a decision-maker within your organization, it is important for you to deal with conflict in a skilled manner. Doing so can create positive outcomes and provide opportunities for improvement rather than undesirable results. After reading the case, reflect and write your paper on the following:

What was the problem in the joint venture that triggered the conflict between the two companies?
What were the differences of each company’s understanding of their own respective roles and responsibilities in this venture?
Did any aspect of organizational culture or national culture affect this perspective?
As a leader, what are some ways you can handle conflict when it arises?

Embed course material concepts, principles, and theories, which require supporting citations along with two scholarly peer-reviewed references supporting your answer. Keep in mind that these scholarly references can be found in the Saudi Digital Library by conducting an advanced search specific to scholarly references.Be sure to support your statements with logic and argument, citing all sources referenced. Post your initial response early and check back often to continue the discussion. Be sure to respond to your peers’ posts as well.

International Management

© 2018 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Chapter 7

Cross-Cultural Communication and Negotiation

Learning Objectives

Define the term communication, examine some examples of verbal communication styles, and explain the importance of message interpretation

Analyze the common downward and upward communication flows used in international communication

Learning Objectives (continued 1)

Examine the language, perception, culture of communication and nonverbal barriers to effective international communications

Present the steps that can be taken to overcome international communication problems

Learning Objectives (continued 2)

Develop approaches to international negotiations that respond to differences in culture

Review different negotiating and bargaining behaviors that may improve negotiations and outcomes

World of International Management – Netflix's Negotiations

Faces setbacks due to negotiation and communication difficulties in:

China – Setbacks due to a long negotiation process

Russia – Setbacks because of Netflix’s lack of communication and negotiation prior to entry

Communication

Process of transferring meanings from sender to receiver

Advent of the telephone, Internet, and personal communication devices has influenced the way people communicate

Types – Verbal or nonverbal

Verbal Communication Styles – Context

Information that surrounds a communication and helps convey the message

Plays a key role in explaining many communication differences

High-context societies

Messages are often highly coded and implicit

Low-context societies

Messages are often explicit and speaker says precisely what s/he means

Table 7.1 – Major Characteristics of Verbal Styles

Indirect and Direct Styles

High-context cultures – Messages are implicit and indirect

Voice intonation, timing, facial expressions play important roles in conveying information

Low-context cultures – People often meet only to accomplish objectives

Direct and focused in their communications

Degrees of Communication Quantity

Elaborate style – Most popular in high-context cultures that have a moderate degree of uncertainty avoidance

Widely used in Arabic countries

Involves talking, detailed descriptions, and repetition

Exacting style – Focuses on precision and use of the right amount of words to convey message

Degrees of Communication Quantity (continued)

More common in low-context, low-uncertainty-avoidance cultures

Used in England, Germany, and Sweden, etc.

Succinct style

More common in high-context cultures with considerable uncertainty avoidance

People say few words and allow understatements, pauses, and silence to convey meaning

Most common in Asia

Contextual Styles

Focus on the speaker and the relationship of parties

Associated with high-power-distance, collective, and high-context cultures

Speakers choose words that indicate their status relative to the status of the others

Personal Styles

Focus on the speaker and the reduction of barriers between the parties

More popular in low-power-distance, individualistic, and low-context cultures

Speaker uses first names while addressing others

Affective Styles

Characterized by language that requires the listener to carefully note what is said and to observe how the message is presented

Meaning is conveyed nonverbally and requires the receiver to use intuitive skills to decipher the message

Common in collective, high-context cultures

Middle East, Latin America, and Asia

Instrumental Styles

Goal-oriented

Focuses on the sender who clearly lets the other party know what s/he wants the other party to know

Found in individualistic, low-context cultures

Switzerland, Denmark, and the United States

Table 7.2 – Verbal Styles Used in 10 Select Countries

Source: Anne Marie Francesco and Barry Allen Gold, International Organizational Behavior: Text, Readings, Cases, and Skills, 1st ed. (Upper Saddle River, NJ: Prentice Hall, 1998). © 1998. Reproduced by permission of Barry Allen Gold.

Interpretation of Communications

Effectiveness of communication is determined by how closely the sender and receiver have the same meaning for the same message

If the meaning is different, effective communication will not take place

Downward Communication

Transmission of information from manager to subordinate

Purpose – Convey orders or information

Managers use this channel for instructions and performance feedback

Channel facilitates the flow of information to those who need it for operational purposes

Sending mixed signals is never helpful in communication

Downward Communication (continued)

Challenges posed by downward communication in an international context

Communication is direct and extends beyond business matters in European countries

Communication is less direct in Asian countries

Upward Communication

Transfer of information from subordinate to superior

Purpose – Provide feedback, ask questions, or obtain assistance from higher-level management

Upward communication is not popular outside Asian countries

Communication Barriers – Language

Knowledge of the language used at the headquarters of an MNC is essential for personnel placed in a foreign assignment

Fluency, technical knowledge, and writing skills

Misinterpretations often result from unskilled use of a language

Inadequate language training

Cultural Barriers in Language

Geographic, cultural, and institutional distance challenge international managers

Native speakers might deviate from the standard business communication practices of other cultures

Perceptual Barriers

Perception

Person’s view of reality

Advertising messages

Misunderstandings caused when words are misinterpreted by others

View of others

May be different from what one thinks

Perceptions influence how individuals see others

Nonverbal Communication

Transfer of meaning through means such as body language and use of physical space

Types

Kinesics

Proxemics

Chronemics

Chromatics

Table 7.7 – Common Forms of Nonverbal Communication

Source: Adapted from Kendra Cherry, “Types of Non-Verbal Communication,” VeryWell, December 17, 2015, –>https://www.verywell.com/types-of-nonverbal-communication-2795397 –>.

Kinesics

Study of communication through body movement and facial expression

Areas of concern – Eye contact, posture, and gestures

Oculesics: Area of communicating through the use of eye contact and gaze

Haptics: Communicating through the use of bodily contact

Proxemics

Study of the way people use physical space to convey messages

Intimate distance: Used for very confidential communications

Personal distance: Used for talking with family and close friends

Social distance: Used to handle most business transactions

Public distance: Used when calling across room or giving a talk to a group

Figure 7.2 – Personal Space Categories for Those in the U.S.

Chronemics

Way in which time is used in a culture

Types

Monochronic time schedule: Things done in linear fashion

Used in societies which consider time schedules important and time to be a controllable factor that needs to be used wisely

Chronemics (continued)

Polychronic time schedule: Several things are done at the same time

Place higher value on personal involvement than on getting things done on time

Consider personal relationships more important than time schedules

Chromatics

Use of color to communicate messages

Knowing the importance and the specifics of chromatics helps avoid embarrassing situations

Achieving Communication Effectiveness

Open feedback systems

Personal – Face-to-face, phone, or e-mail

Impersonal – Reports, budgets, or plans

Provide language training

Non-native speakers of English need to be provided training to aid them in making face-to-face conversations and telephonic conversations

Written communication is important in achieving effectiveness

Achieving Communication Effectiveness (continued)

Provide cultural training

At least one party has to understand the other’s culture

Increase flexibility and cooperation

Improves effectiveness in communication and understanding and cooperation

Negotiation

Process of bargaining with one or more parties to arrive at a solution that is acceptable to all

Follows assessing political environments

Used in creating joint ventures with local firms

Once a firm starts operating, additional areas of negotiation are included

Types of Negotiations

Distributive negotiation: Occurs when two parties with opposing goals compete over a set value

Integrative negotiation: Involves cooperation between two groups to integrate interests, create value, and invest in an agreement

Table 7.8 – Negotiating Types and Characteristics

Source: Adapted from Harvard Business Essentials: Negotiation (Boston: Harvard Business School Press, 2003), pp. 2–6.

Negotiation Process

Planning

Involves identifying objectives, exploring options to attain objectives, and finding areas of common ground between parties

Interpersonal relationship building

Getting to know people on the other side

Exchanging task-related information

Parties setting forth its position on critical issues

Negotiation Process (continued)

Persuasion

Success of a negotiation depends on:

Understanding each parties’ position

Identifying areas of similarity and difference

Creating new options

Working toward a solution

Agreement

Granting of concessions and hammering out of a final agreement

Understanding Cultural Differences

Counterpart’s home culture should not be identified too quickly

Western bias toward doing should be approached with caution

Tendency to formulate simple, consistent, and stable images should be counteracted

Understanding Cultural Differences (continued)

Significance of all aspects of the culture should not be assumed to be equal

Differences might exist between the norms for interactions involving outsiders and between the compatriots

Familiarity with counterpart's culture should not be overestimated

Negotiation Tactics

Location

Businesses choose a neutral site to avoid gaining advantage of a location and to finish negotiations soon due to the cost of staying at site

Time limits

Important negotiation tactic when one party is under a time constraint

Negotiation Tactics (continued)

Buyer-seller relationship

Different for certain countries

Americans believe in trading favors

Japanese believe they should get most out of a purchase

Brazilians are deceptive and self-interested

Negotiation Tactics – Five General Principles

Understand other’s position, avoid blame, stay positive, and recognize emotions

Separate the people from the problem

Gives one insight into the motivation behind why a particular position was chosen

Focus on interests over positions

Includes brainstorming and shifting thought focus about the problems

Generate a variety of options before settling on an agreement

Negotiation Tactics – Five General Principles (continued)

Emphasize the communal nature of the process

Insist that the agreement be based on objective criteria

Neither side should agree to terms that will leave it worse off than its best alternative to a negotiated agreement, or BATNA

Stand ground

Bargaining Behaviors

Verbal and nonverbal

Verbal behaviors are important as they improve the final outcome and are critical to the success of a negotiation

Use of extreme behaviors

Some begin with an extreme offer or request, while some begin with an initial initial position that is close to the one they are seeking

Bargaining Behaviors (continued)

Promises, threats, and other behaviors

Influenced by culture, and is designed to influence the other party

Nonverbal behaviors

Silent language (silent period, facial gazing, touching, and conversational overlaps)

Be the International Management Consultant – China

If you are working as a consultant for Coca Cola, how does the dismissal of the deal by the Chinese government affect your continued investment in the country?

What more could private business, like Coca Cola, do to convince the government that new enterprise can bring positive economic development to the country?

Be the International Management Consultant – China (continued)

Is the prospect of China’s sheer volume of potential customers too good to pass up?

Do the actions of the government and the country’s recent stock market woes indicate a signal that investment should be reconsidered?

Review and Discuss

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”

Review and Discuss (continued 1)

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

Review and Discuss (continued 2)

“He was laughing like hell”

“Don’t worry. It’s a piece of cake”

“Let’s throw these ideas up against the wall and see if any of them stick”

Why did the foreign expat have trouble understanding these statements, and what could be said instead?

Review and Discuss (continued 3)

Yamamoto Iron & Steel is considering setting up a minimill outside Atlanta, Georgia

At present, the company is planning to send a group of executives to the area to talk with local and state officials regarding this plant

In what way might misperception be a barrier to effective communication between the representatives for both sides? Identify and discuss two examples

Review and Discuss (continued 4)

Diaz Brothers is a winery in Barcelona

The company would like to expand operations to the United States and begin distributing its products in the Chicago area

If things work out well, the company then will expand to both coasts. In its business dealings in the Midwest, how might culture prove to be a communication barrier for the company’s representatives from Barcelona? Identify and discuss two examples

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Danones Wrangle with WahahaThis weeks discussion will focus on cultural negotiation using the case study about Danone in China (p. 25

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