10

International Negotiations
In this chapter, we shall only consider the distinctive features of international
negotiations. We shall consider the types of international negotiations and the special
issues of place, time, language, etc. Other aspects of negotiation discussed in earlier
chapters remain applicable to international negotiations. The problems of understanding
different cultures in negotiations will be dealt within the next chapter. .
Features
The main features of international negotiations are:
1. Multiple parties Whether the issues involved have commercial or non-commercial
obectives, their outcome can have far-reaching effects on the industry, economy or on
the socio-cultural aspects of either of the parties involved. !ence apart from the three
main parties, in collaboration negotiations, namely the host country"s partner, the host
country"s government and the foreign collaborator, many other interests are also involved,
which have to be #ept in mind during the process of negotiation.
$or example, when %itsubishi and &hrysler were negotiating a oint venture in 'apan
some years ago, it too# many years to be completed. (mong other reasons, an important
one was that in the case of %itsubishi, it had to ta#e care of the interests of the %inistry
of Trade and Industry )%ITI*, +overnment of 'apan, the politicians, bureaucracy, the
(utomobile (ssociation of 'apan, other competitors li#e ,issan and Toyota, the -...
(uto Industry, media, %itsubishi"s relationship with the -... +overnment, and the
'apanese public. .imilarly, this was true for &hrysler which had to contend with similar
players and issues in its own country and in 'apan.
2. Multiple motivations /ach player has his own frame of reference depending on his
personal interests, which must be analysed by the parties before negotiation.
$or example, in the case referred to, the +overnment of 'apan recognised the need for
trade and capital liberalisation in 'apan. 0et, its basic philosophy was to proceed as
slowly as possible. On the other hand, %ITI was concerned about the effect on 'apan"s
economy and society as a result of massive direct foreign investments. The 'apanese
automobile industry was interested in thwarting the oint venture since it was afraid that
such liberalisation by the +overnment of 'apan would eventually lead to much greater
liberalisation, i.e. with 122 percent foreign ownership. %itsubishi"s interest was to
participate in the growing auto industry )especially for passenger cars* and to diversify its
product-mix for mass mar#ets while recognising its wea#ness in mar#eting, which it
hoped to compensate through &hrysler, and also to thwart %ITI"s policy of reorganising
the auto
industry into two giant groups headed by Toyota and ,issan.
.imilarly, all the other players had different motivations. These had to be clearly
identified for aiding the negotiation process.
3. High concern and role of governments The governments of both nations, and
especially of the host nation, play very important roles, by way of various controls and
regulations they enforce due to their overall concern for the industry and the growth of
their economies. While the businesses are more concerned about the level of profitability,
the concern of the host government is to promote local ownership, foreign exchange
earning or saving, modern technology transfer, local sourcing, import substitution,
employment creation and local value addition, before they can be politically acceptable.
These concerns, therefore, involve considerations of internal processes such as existing
industrial policies and regulations as well as external pressures from other competitors
and interest groups.
$or example in %itsubishi"s case, the +overnment of 'apan was guided by four #ey
business-government aspects of concern:
The need for a more liberal policy on foreign direct investment into 'apan.
3iberalisation viewed as a "price" to be paid for gaining access to foreign mar#ets.
%itsubishi"s need for a oint venture.
%itsubishi-&hrysler oint venture becoming a test case for the 'apanese
+overnment which would affect similar negotiations in the future.
( proper understanding of the business-government concerns is essential in order to
aim for a congruence between the goals of the concerned businesses and those of the
country. In the ultimate analysis, a company can be successful in international
negotiations only if it is able to achieve congruence at various levels, i.e. between the
company and the host government, between the company and the foreign company,
between the company and the foreign government, etc.
4. Important role of the context of negotiation
)a* (t the micro level, it involves consideration
4
of four &s:
&ommon interests
&onflicting interests
&riteria
&ompromise level
In international negotiations, it is imperative to analyse each of these aspects in order
to understand the 5(T,( )5est (lternative to a ,egotiated (greement* at various
levels, i.e. at the domestic level as well as the international level.
$or example, in the case of the %itsubishi-&hrysler negotiation, each was able to
clearly identify its strengths and wea#nesses so that the strength of one company could
fill the wea#ness of the other company and vice versa. This would help to achieve three
maor obectives 6 to expand areas of agreement, reduce areas of disagreement, and
distinguish true conflicts from apparent and perceived conflicts.
%itsubishi and &hrysler built upon their commonality of interests for compensating
each other"s wea#nesses by sharing their worldwide production. %itsubishi"s wea#ness in
the international mar#eting networ# could be balanced by &hrysler"s wea#ness in truc#
production. (lso, conflicting interests and areas of disagreement, such as %itsubishi"s
)and the 'apanese (utomobile Industry"s* fear that &hrysler could ta#e over the oint
venture was filled by agreeing for a low e7uity share, 42-82 per cent for &hrysler, and
ensuring that %itsubishi"s share would not be available in the mar#et, as all would be
held by the %itsubishi group.
)b* (t the macro level 8, the contextual factors to be considered are:
9olitical context
/conomic context
.ocial context
&ultural context
(t the political level, the important factor to be considered is how stable is the present
system. (re there any chances of" political ris# due to competing political philosophies
)vi:. nationalism; socialism; communism*, social interest; disorder, and vested interest of
local business groups, new international alliances, etc.
(t the economic level are 7uestions dealing with exchange rate stability, laws on
remittances, restrictions on margins, corporate tax laws, double taxation arrangements,
mar#et si:e and potential, tariff and non-tariff barriers, etc.
(t the socio-cultural level, it is important to understand that each person represents the
interaction of his own personality with the collective forces of the socio-cultural milieu in
which he has developed. The tas# of the international negotiator is to recognise both the
similarities and differences in cultural perceptions for effective negotiation. &ulture can
influence. communication, language, dress, food and feeding habits, time consciousness,
sense of self and space, learning process and values among other things . It can also
impact norms and beliefs and attitudes. We shall discuss this in more detail in the next
chapter.
&ultures can be high context cultures or low context cultures. In the latter, messages
are explicit and words carry most of the information, whereas in high context cultures,
there is less information in verbal messages and more information in the context of the
communication, i.e. bac#ground, associations and the basic values of the communicators.
'apan has been categorised as a high context culture and the -...(. as a low context
culture, which is evident from the low level of legal paper wor#, faith in a man"s word,
and spatial closeness in 'apan. On the other hand the importance of lawyers, faith in the
written word, "bubble" of space between people, etc. characterise the -...(. This is one
reason why negotiations in 'apan are lengthy, since a great part of the time is spent in
getting to #now the other party, and in developing sufficient trust and understanding, to
enter into an agreement for a long-term relationship.
<
Considerations
There are some maor considerations to be ta#en into account in international
negotiations. They are:
1. Empathy
The contextual environment of any country should be understood and accepted, not
7uestioned and belittled. There must be an understanding of the different ways of
thin#ing and behaviour. .ome examples are:
=ifferent attitudes towards legal agreements
(cceptable negotiating behaviour
=ifferent expectations of human relations
9roviding opportunity for face saving
2. Role of Government
The characteristics of the government"s role must be understood, especially in relation to
its attitudes towards private enterprise, perception of the host country government and
attitudes towards the foreign government.
3. Decision-a!in" Characteristics
(ttention should be paid to political considerations in evaluating investment proposals,
the differences in levels at which approvals are given, implementation at the government
level, personal relations and personalities involved in the host country, and ade7uate
allocation of time for negotiation. Without these considerations, decision ma#ing will
suffer in international negotiations.
4. #r"anisin"
It is also imperative to pay attention to the changes in negotiation strength of the parties
during the process of negotiation, especially for planning the renegotiation alternatives.
To the extent possible, interference by head7uarters should be avoided, lest it damages
the negotiator"s credibility. The internal communication within one"s group should be
well planned and the role of the negotiator should be clearly recognised as interpreter,
intermediary or counselor, > within his own group, and the opponent"s group.
(n understanding of the diverse centres of power in the government and the strengths
of the competitors is also essential.
$reparation
$reparin" for %nternational &e"otiations
4
There are elements in the negotiating environment which have an effect on the
negotiating process, which are even more relevant in international negotiations. These
must be noted, studied, and prepared for:
1. Place Where is the negotiation to ta#e place? There are four options:
%y place
0our place
.ome other place
",o place"
&ric#eters and other sportsmen #now the advantage of playing on "home grounds". The
crowds are sympathetic, the wic#et can be prepared to suit the team, changes in the team
are easily made, and there are well-wishing advisors who are observing the game and are
easily available to the team. The negotiator on home ground has the advantage of
familiarity. There is no culture shoc#. Indeed, it is the other side that has to face it. The
negotiator can control the environment and even if desired, create annoyance and
pressure on the other side )e.g. as claimed by an /nglish cric#et team playing in %adras
which lost to India 6 @They were given hot prawn curry and could not remain for long on
the field the next dayA "). ( host can always ma#e a special impression on the other side
with his organisation, connections, and hospitality. The host avoids the debilitating
effects of et lag after a long ourney. !e has easy access to experts. It is much cheaper to
negotiate at home. The visiting negotiating team is also under time pressure to complete
within a given time. )Of course, the sensible international negotiator visiting another
country which is far away, will give himself extra time to adust to the et lag, and will
leave as planned and meet again rather than be pressurised into an agreement by lac# of
time.*
( negotiation is not a competitive sport in which one side wins and the other loses. It is
intended to build a long-term wor#ing relationship. It is important to learn as much about
the other side as possible and that is best done in their territory. &ulture shoc# is
inevitable, unless the negotiator ac7uires s#ills to cope with new and different
environments. $urther, there are countries in which the government officials are not
permitted to travel abroad, and when they do, are subect to severe restrictions on
allowances. (lso, many negotiators have more authority at home, 6 since they can
fre7uently refer to their superiors. .o going to the home ground of the other party should
be seriously considered. There could also be alternation between the two. .
The choice of a third country may be useful if there is no need to learn more about the
other party. This occurs when many meetings have already ta#en place in each other"s
countries, or there is a long-standing relationship which the negotiation is trying to
expand.
In these days of instant communication by telephone, fax, and video teleconferencing,
negotiations are possible without travel. !owever, these devices are useful for wor#ing
out details. They cannot substitute the personal e7uations that can be built in face-to-face
negotiations. ,uances of non-verbal communication tend to be lost in the electronic
media. They are useful when there is a simple transaction li#e the purchase of a standard
product but not for any complex negotiation.
2. Time The international negotiator wor#s in three time dimensions:
3ocal time
!ome time
=eal time
There are good and bad times for different countries. Bam:an is not the best month for
negotiating in %uslim countries because %uslims fast from sunrise to sunset every day.
(ugust is a vacation month in $rance. The days from &hristmas to the ,ew 0ear are not
good days in countries with a predominantly &hristian population. .imilarly, it is
important to #now the country"s calendar. 5engal stops wor#ing during the 12 days of
=urga 9ooa in October. The school summer vacation in %ay-'une is when many Indians
ta#e their vacations. (lso, the ones who are li#ely to be involved in international
negotiations go abroad or to the hills.
The negotiator abroad has to #eep in touch with his head7uarters. (n Indian in ,ew
0or# can tal# to his home or office people only in the early morning or late evening,
outside his office hours. !e has to arrange to call his superiors and advisers at their
homes. !e would do well to warn them about this and plan for it before leaving the
country, so that they are available. ( regular call schedule is useful in these
circumstances.
The amount of time ta#en in reaching agreement in international negotiations could be
considerable. Time is consumed over four phases:
1. Preparation 6 deciding your and the other side"s needs, positions, options,
currencies, 5(T,(, etc.
4. Pre-negotiation 6 to get to #now each other and decide whether others want to
commit time to a negotiation, and the modalities for doing so. This will usually involve
meetings in either country of the negotiating parties.
8. Diagnosis 6 to agree on a common concept for the final agreement: e.g., it could be a
technology collaboration, oint ventur or maority venture for the overseas party.
<. Agreement 6 the phase in which the details are wor#ed out. This leads to the final
agreement being signed.
To put it facetiously, for example, in the -...(. the experienced negotiator can mar#
the progress from the way in which his counterpart schedules the steps of the negotiation
in time and space.
$rom across the des#
To beside the des#
To the coffee table
To the conference table
To the luncheon table
To the golf course
/ven to the home
3. Language /nglish is the language of international business, though there are still
countries where /nglish is not generally used. +eorge 5ernard .haw said, C/ngland and
(merica are two countries separated by the same language.C !ow much more true is this
today when each country has its own version of the usage of the /nglish language,
pronounciation of words, grammar, syntax, even the meaning of words, and the
assimilation of words from the local languages, creating new versions, e.g. "!inglish" a
peculiar Indian /nglish using a combination of !indi and /nglish.
!ere are some examples of how /nglish is used in different countries.
D
C9lease leave your values at the front des#,C says the door sign at a 9aris hotel. (t a
'apanese hotel, Cyou are invited to ta#e advantage of the chambermaid,C a Eurich hotel
advises, C5ecause of the impropriety of entertaining guests of the opposite sex in the
bedroom, it is suggested that the lobby be used for this purpose.C
!ungry? $rom a 9olish menu, select Croasted duc# let loseC or perhaps Cbeef rashers
beaten up in the country people"s fashionC. ( .wiss eatery proudly warns, Cour wines
leave you nothing to hope for.C 5y any and all means, avoid the (capulco hotel that gives
new meaning to 7uality control: CThe manager has personally passed all the water served
here.C
/xcellent child-care benefits in ,orway do not extend to a coc#tail lounge where
C3adies are re7uested not to have children at the bar.C
$rom %oscow: C0ou are welcome to visit the cemetry,C reads a sign in the hotel across
the street, Cwhere famous Bussian and .oviet composers, artists and writers are buried
daily except Thursday.C (nd here is an example of 5ucharest bluntness: C The lift is
being fixed for the next day. =uring that time we regret that you will be unbearable.C
( 5udapest :oo puts people first: C9lease do not feed the animals. If you have any
suitable food, give it to the guard on duty.C (t a !ong Fong dentist"s, teeth are Cextracted
by the latest %ethodistsC. (nd a refreshingly honest airline office in &openhagen Cwill
ta#e your bags and send them in all directionsC.
&lothing signs can also be unfitting. ( .wedish furrier: C$ur coats made for ladies
from their own s#in.C ( 9aris shop advertises, Cdresses for street wal#ingC. ( To#yo
shop"s nylon stoc#ings are costly but Cbest in the long runC. (nd a Bhodes tailor wants
early orders for summer suits, Cbecause in big rush we will execute customers in strict
rotation.C
5ut who needs clothing? @=rop your trousers here for best results suggests a 5ang#o#
dry-cleaner, while a laundry in Bome says: @3adies, leave your clothes here and spend
the afternoon having a good time.G ,earby is a Boman doctor with manifold talents:
@.pecialists in women and other diseases.G
It is easy for the inexperienced negotiator to thin# that he can use his better #nowledge
of /nglish to overwhelm the other party. In reality, however, it is short-sightedness and
does not lead to an agreement to which there is commitment. In some countries,
negotiators insist on using their own language. In such cases it is useful to spea#, or at
least to understand their language.
When one party uses a language that the other does not #now, the use of an interpreter
becomes unavoidable. This increases the time re7uired and the possibility of
misunderstanding particularly because the interpreter is unli#ely to #now the business
and its nuances. The interpreter is one more person in the team, adding to the costs. -sing
the intermediary also ma#es the nurturing of a close relationship between the parties
more difficult.
If an interpreter is unavoidable, the negotiator must
1. -se his own interpreter 6 not one given by the other side, and preferably of his own
nationality.
4. /nsure that the interpreter understands the main features of the business and the
purpose of the negotiation.
8. When there is an interpreter, it is essential that statements are short, with fre7uent
pauses to enable the translation to ta#e place. The short statements ma#e
misinterpretation less li#ely.
<. The negotiator has to thin# carefully and spea# slowly so that what he wants to say is
clear. /very attempt has to be made to prevent a possibility of misunderstanding.
D. The interpreter must get time off after perhaps H2 minutes of interpretation so that he
remains fresh.
I. The interpreters are professionals and must be treated as such so that they feel part of
the team.
4. Other factors %any other factors must be ta#en into account. 3awyers in the team may
invite the suspicion of the other side. 9erhaps they should come in only at the contract
stage when relationships have been established and agreements have been reached. When
abroad it is important that the team has only one spo#esman and that care is ta#en to
avoid any sign of disunity. Tas#s must be agreed upon in advance for each member of the
team. It is useful to have a draft agreement prepared and ta#en by the team. The party that
is able to present its draft first has a tactical advantage. !owever, the draft is not the
purpose of the negotiation and the negotiator must not ma#e it an issue as to whose draft
will form the basis for discussion. !aving oneJs own draft is sufficient to counter any
other draft that may be placed on the table. If the other party"s draft is to be used, the
negotiator should 7uic#ly produce a counter draft. !is foresight in coming prepared with
a draft will help in producing a counter draft without much delay.
The (merican might thin# that the negotiation is concluded when the contract is
signed. The &hinese views it as the beginning of a close relationship and will open all the
points of dispute that the (merican might consider discussed and closed. The +ree#
would see the contract only as a stage in the negotiation, which is completed once the
contract has been executed. $or the (rab, a word when given, is as binding if not more,
as any written contract. With increasing travel and trade, people have been exposed to
many influences. .tereotype behaviours may not be as routine as they used to be. 5ut
they do indicate something of the attitudes.
I
International negotiations have features that are additional to those in domestic
negotiations. The principles remain the same. What ma#es international negotiations
more complicated is the aspect of differing cultures. We shall loo# at cross-cultural
relationships in the next chapter.
C'(E
E)ercise in %nternational &e"otiation
The negotiators are from different countries. ( strategy should be wor#ed out in advance
on the appropriate style at different stages, the needs, positions and currency for each, the
cultural aspects, and the means to deal with them.
R'*+E, CER'%C(
Bate# &eramics is a new company set up for the manufacture of sanitaryware. The
promoters are basically financiers now moving into manufacturing. The total proect cost
is Bs 12 crore of which Bs < crore is #ept for purchase, installation and commissioning of
an up-to-date and sophisticated tunnel #iln from 'apan. The 7uotation for the #iln that has
been made verbally to the %anaging =irector, %r. (.F. .araf, is for (s 4.D crore and free
delivery at the factory site in %oga. %r .araf has another 7uotation from an Italian
manufacturer for a #iln with somewhat superior 7uality at a full price of Bs 8 crore
including commissioning. %r .araf is also loo#ing for the overseas supplier to buy a
sta#e in the company )with the guarantee that the shares will always be used by himself
and his nominees*. The Italians are not interested in such additional commitments. The
'apanese are willing to do so. ( representative of the 'apanese manufacturers, %r (.
.aito is negotiating with %r. .araf for the final terms.
References
1. %asaru .a#uma and (sho# Fapoor, C%itsubishi-&hrysler (utomobile 'oint Kenture:
,egotiation for /ntry Into 'apan 6 &ase .tudyC in International Business Negotiations,
/dited by (sho# Fapoor.
4. 'eswald W. .alecuse, C%a#ing =eals in .trange 9lacesC in Making Global Deals, Times
5oo#s, 1HH1.
8. Ingo Walter and Tracy %urray )/ditors*, Hanbook of International Business, 'ohn
Wiley, 1HL4.
<. /dward T. !all, CThe .ilent 3anguage In Overseas 5usiness,C Har!ar Business
"e!ie#, %ay-'une 1HI2.
D. International Heral $ribune, $ebruary 1I, 1HH8.
I. William =avidson, Global %tratetic Management, 'ohn Wiley, 1HL4.
#thers
M. +avin Fennedy, Negotiate An&#'ere (Ho# to %uccee in International Markets),
(rrow 5oo#s, 1HLM.
11
Cross-Cultural Dimensions in Negotiations
C&ulture is the collective programming of the mind that distinguishes members of one
category of people from those of anotherC )+. !ofstede and %ichael !arvis 5ond*. It
consists of a variety of factors that describe people: #nowledge, beliefs, art, morals, law,
custom, and any other capabilities and habits ac7uired by a person as a member of
society.
Characteristics of Culture
1
We tend to characterise a culture through some distinguishing variables:
1: )ommunication 6 5oth verbal and non-verbal. .ome cultures are polite and
gracious, others demanding and ac7uisitive. The 'apanese are more non-verbal than
verbal, and you have to understand their total communication because their words by
themselves may not convey the full meaning.
4. *anguage uses labels to convey meaning. The labels may not mean the same thing
to different people and the language becomes a source of confusion. There is a theory that
language also influences thought .ans#rit is believed to stimulate logical processes while
some other language would stimulate artistic ideas.
8. Dress an appearance identify a culture. The emergence of satellite TK and easy
travel are blurring these distinctions. =ress is becoming cross-cultural. %a#e-up and even
cosmetic surgery are beginning to presage universal appearance. In India, the salwar-
#amee:, Faneevaram and other "ethnic" handloom sarees, the universal use of "#um#um"
)a beauty mar# on the forehead*, giving up of traditional local styles of dress, and draping
of the saree, have begun to homogenise Indian women. It is difficult to guess as to which
particular part of India they belong.
<. +oo an feeing 'abits also characterise a culture, though, here again,
homogeneity is emerging. The masala osa, mutter paneer and naan now typify Indian
food.
D. $ime an time consciousness $rom the punctuality of the 'apanese and the
(merican to the flexible attitude of Indians, and a further relaxed attitude in 3atin
(merica, you find cultural stereotypes of attitudes to time.
I. "e#ars an recognitions These vary in different countries. The standard 1D
percent tip in ,ew 0or# to the cabbie, compares with the option to give or not to give in
India.
M. "elations'ips between men and women, within family, #inship, tribe, religion,
language and region, also typify a culture.
L. ,alues an norms can vary, e.g. the attitudes towards corruption and bribe ta#ing
are not the same in +ermany as they might be in Italy or Indonesia.
H. %ense of self an space $'e sense of individual identity may be stronger among
Indians than among 'apanese who might submerge it in their organisation. (mericans
have a strong sense of "personal space" while the (rabs do not as they get very close.
12. Mental process an learning There are people who are able to conceptualise and
engage in abstract thin#ing while others whose strength lies in good memory and the
ability to learn by rote. There are stereotypes of mystical versus practical people, and
those who are direct or devious in behaviour. The stereotype of the "crabby" 'ew, devious
.indhi, miserly .cot. are present in every country.
11. Beliefs an attitues characterise a culture and are a result of the history, tradition
and environment in which the individual has been brought up.
+he -ofstede odel for .nderstandin" Cultural Differences in /usiness
ana"ement
2
+eert !ofstede surveyed responses collected by psychologists to 7uestionnaires
distributed among employees of I5% in D8 countries. The comparisons were always of
employees in similar occupations. I5% has a reputation for standardising its systems in
every country. It is said that an employee of I5% anywhere in the world can be easily
identified. !ofstede was therefore able to study differences between these respondents
from different countries and be confident that they could not be due to either occupation
or employer but had to result from nationality. !is analysis showed that the differences
between the countries reflected the existence of four underlying value dimensions among
which the countries could be positioned. They were:
1. 9ower distance
4. %asculine )tas#-oriented* versus $eminine )7uality of life oriented* cultures
8. -ncertainty )or ris#* avoidance
<. Individualism versus collectivism
( brief description of each is given on the next page.
-ofstedt0s 4-d odel
3
$o1er Distance
A #a& of measuring 'o# comfortable ifferent cultures are #it' (or 'o# normal t'e&
percei!e to be) t'e istance bet#een t'e less po#erful an t'ose in c'arge-
2ar"e po1er distance (mall po1er distance
.uperiors are inaccessible .uperiors are accessible
/veryone has a rightful place Ine7uality should be minimised
9ower-holders are entitled to privileges (ll should have e7ual rights
3atent conflict between powerful and
powerless is accepted
3atent harmony between powerful and
powerless is accepted
%f po1er distance is hi"h
1. $ilial piety, loyalty, respect and devotion to parents are considered supreme virtue. (
good supervisor is expected to behave li#e a good father.
4. .uperiors and subordinates expect power differences to be translated into visible
differences in status.
8. Bespect for older person in wor#, organisation as well as in social life outside.
<. %anagement by Obectives )%5O* assures relative independence of subordinate from
the superior. It is unli#ely to happen when there is high power distance. .uperiors do not
respect employeesJ agreed obectives but interfere arbitrarily.
D. Two-way communication between superior and subordinate is unli#ely. ,egative
approvals may have to be given indirectly.
I. Organisations are more centralised.
0asculine0 3+as!-oriented4 Cultures v. 0Feminine0 35uality-of-2ife-#riented4
Cultures
asculine Feminine
5iological differences determine Belative overlapping role for the
different social rules for the sexes sexes
%en are expected to be ambitious, 9articular men need not be
competitive, to strive for material ambitious or competitive, but may
success and respect whatever is put 7uality of life over material
big, strong and;or fast success and may value whatever
is small, wea# and;or slow
Women are expected to nurture, Women are no different from men
care for 7uality of life and the wea# and have similar attitudes
If masculinity is high
1. &ompetitiveness seen as a good thing 6 the strong should win.
4. !igh masculinity stands for stress on performance.
8. 3ess concern for 7uality of wor# life.
<. .ymbolism of career becomes more important.
D. .howing off or aggressiveness is common.
I. .peed even in important decisions is desired.
.ncertainty 3or Ris!4 'voidance
A #a& of measuring t'e e.tent to #'ic' people of ifferent cultures are mae ner!ous or
an.ious b& situations t'e& interpret to be risk&, unstructure, unclear or unpreictable
(N/$01 /ften, measures taken #'en a culture interprets a situation as angerous or
t'reatening in!ol!e a belief in absolute trut' an aoption of a strict coe of be'a!iour-)
.trong ris# avoidance Wea# ris# avoidance
&onservative Bis#-ta#ing
/motional -nemotional
Intolerant Belatively tolerant
If uncertainty avoidance is low
1. There are written and unwritten rules but they are considered more a matter of
convenience
)not sacrosanct*.
4. 3ess formalisation and standardisation: proper words, dress, not very important.
8. +od is easy to communicate with. .o, there is a strong belief in luc# reflected for
example in resistance to preventive maintenance. +reater willingness for strategic
thin#ing, fre7uent rethin#ing of goals and activities of organisation.
<. 3ess hurried: time is not a scarce resource.
D. 3ess stress on punctuality and precision.
I. /xpression of emotions less tolerated.
M. =eviant behaviours and ideas tolerated. %ore innovative ideas do come up but less
action is ta#en upon them.
0%ndividualism0 v. 0Collectivism0
%ndividualism Collectivism
3oose-#nit social framewor# Tight-#nit social framewor#.
Individual ta#es care of self and &lan, relatives, in-group ta#es care
immediate family of individual in exchange for loyalty
"I" consciousness "We" consciousness
/motional independence of /motional dependence of
individual from organisation individual on organisation
,eed for specific friends $riendships are predetermined by
stable social relationships
Collectivism implies
1. Interest of group over self-interest.
4. 5elongingness needs over ego needs li#e self-actualisation and self-esteem.
8. %oral component to employer-employee relationship.
<. Belationships have priority over tas#-gifts and services are regarded as investments in
the relationship.
D. =isagreement expressed more effectively in indirect ways than in direct
confrontations. &ompetitor"s issues handled by third party to save face.
In a subse7uent article
<
, a fifth dimension was added: "&onfucian dynamism", which
deals with a society"s search for virtue. The two ends of the scale are shown below.
Relative %mportance of Relative .nimportance of
9ersistence )perserverence* 9ersonal steadiness and stability
Ordering relationships by status and
observing this order
9rotecting your "face"
Thrift Bespect for tradition
!aving a sense of shame Beciprocation of greetings, favours, gifts.
The results of the study among I5% managers around the world were mapped on a
scale. The comparisons are interesting. Indians are found to be fairly individualistic, with
high power distance, high masculinity, and low uncertainty avoidance. They are able to
face considerable ris# in a fairly hierarchial and structured environment which is very
tas#-oriented. The 'apanese by contrast are fairly individualistic, with less power
distance, highly tas#-oriented, and with very low tolerance for uncertainty. The behaviour
of 'apanese negotiators bears this out. They believe in consensus and many times the first
visitors to loo# over a prospective collaboration will be middle-level executives and not
the top ones. They will wor# on the situation with single-minded devotion and loo# at
every possible aspect. Indians, on the other hand, would tend to send the top people who
might not have much consultation and consensus with lower levels for every possible
eventuality. )Witness the large amounts of unutilised international loans on which India
pays commitment charges chiefly because of not having wor#ed out all details before
signing for the loan, and facing hindrances in implementation.*
!ow does this framewor# help the negotiators? The !ofstede model is based on a good
sample of managers across countries. There is probably no similar body of data on which
such a framewor# has been developed. (t the same time, all models are generalisations
and must be used with caution. With increasing exposure to world business, negotiators
may lose wholly, or to some extent, their distinct cultural identities. /ducation and
awareness of such differences might also ma#e for change. !owever, !ostedt does
provide a framewor#. (n awareness of the differences on these important characteristics
between cultures can help develop a strategy for tac#ling them. Fnowing of the high
uncertainty avoidance of 'apanese negotiations, it would help to be thoroughly prepared
with answers to all possible 7uestions. 5etween (rabs and Indians, the model shows
maor difference in the relatively less ris# tolerance of the (rabs. 9erhaps the recent
wealth of (rab countries ma#es them hesitant and suspicious. The wise negotiator goes
prepared to allay suspicion, build confidence, and does not push his position hard. Forea
is the opposite of India, in tolerance for uncertainty and masculinity. Foreans would,
hence, tend to be as thoroughly prepared as the 'apanese. !owever, their individual
members may not have as much need for material success as for 7uality of life. 9ersonal
success may not be as relevant as success for the group.
-nderstanding different cultures is a tas# that calls for conscious attempts to study,
observe and learn. The cross-cultural negotiator must start with respect for people,
irrespective of how different they are from himself. !e must develop high tolerance for
ambiguity and have the patience to strive for clarity. !e must relate to people, and a
prere7uisite for that is respect for different customs, foods, local fine arts )music, dance,
theatre, etc.*, wor#s of local writers even in translation, and so on. !e must try to
understand the history of the place. (ll these are parts of an attempt to relate to different
people and cultures. The cross-cultural negotiator is non-udgemental. !e observes and
adapts, but does not evaluate and udge. !e persists, despite apparent barriers and
difficulties. !e has to develop the ability to empathise. While doing all this, he does not
give up his own values or needs, but is better able to match them in the negotiation.
(ome Generalisations
Feeping these characteristics in view, generalisations have been made about different
nationalities. .o long as we remember that there are always exceptions to them, and that
the person fre7uently exposed to other cultures will have those influences superimposed
on his original characteristics, the generalisation gives us a framewor# which help us in
building on our #nowledge through further observations.
We reproduce such observations about &hina and 'apan, and some other countries.
Chinas
6
($'ese escriptions relate to t'e late &ears of t'e monolit'ic )'inese communist state-
2it' t'e opening up of t'e econom&, t'ere #oul 'a!e been c'anges as people influence
b& ot'er cultures-)
1. !igh level of generalisation. They ump from abstractions of "general principles" to
concrete points of detail. Once general principles have been established, negotiations can
7uic#ly get swamped in details.
4. &hinese negotiating teams are always larger than -... or even 'apanese teams.
(ssigning of a superior interpreter is a reliable indication of the depth of &hinese
"interests". It is difficult to identify functions of different members of the team as also the
reporting relationship, and the place of the team leader in the overall hierarchy. )This was
with reference to teams from government and public enterprises.*
8. There is relative inexperience in dealing with other countries and hence the
tentativeness and a fre7uent need to consult superiors.
<. When in doubt or when wanting to increase pressure on the other party, the &hinese
are prone to slow down or even postpone negotiations.
D. There is the problem of suspicion and the craving for trust.
I. 5y having your own &hinese language specialists in your team, you open the
possibility of profitable informal exchange of views.
M. -seful to have ethnic &hinese in your team for it ta#es away some of the advantage
you have as a stranger but also puts pressure on the &hinese team who #now that you can
understand their private comments.
L. The &hinese become rigid whenever they feel their goals are being compromised.
H. &hinese negotiators are given little authority and 7uestions are repeatedly referred bac#
to their superiors. Therefore, &hinese fre7uently respond with silence. They #eep their
cards close to their chest since their behaviour suggests inflexibility, until the moment of
accommodation.
12. 5eing followers of %ao, in all negotiations the &hinese must give "tit-for-tat" by
escalating demands or in expecting returns or concessions. )This is changing as mar#et
forces and entrepreneurship sweep &hina.*
11. They try to ma#e you feel uncomfortable.
14. They tend to ma#e unacceptable demands so as to get concessions.
18. In their use of time, they do not respond promptly to the other party"s invitations but
expect prompt response to their own. They raise #ey issues at aw#ward moments, e.g.
late on a drun#en evening.
1<. They have great staying power and #eep coming bac# to the same issue. They use the
tactic of giving up what they do not haveA
1D. They loo# for mutual interests, oint endeavours, commonality of purpose, unli#e the
(mericans who want compromises spelt out first.
1I. They are scrupulous in adhering to an agreement but have no inhibitions in proposing
changes or suddenly terminating it, if the terms permit.
1M. Bepeated insults and flatteries are part of the negotiating process.
*apan
(ome E)perience in *apanese /usiness
7
(B& stu&ing t'e obser!ations of an Inian Manager #orking in 3apan #e 'ope t'at
Inian negotiators #ill unerstan t'e cultural conte.t of t'eir 3apanese counterparts-)4
#penin" a +o!yo /ranch
In 1H<I at the end of the .econd World War, To#yo %arine, the leading insurance
company of 'apan, was in a difficult position. To effect worldwide reinsurance it needed
foreign exchange, but 'apan was devastated and ban#rupt. $oreign exchange was ust not
available. %r. 5. F. .hah, then %anaging =irector of the ,ew India (ssurance &ompany
3td, which had been dealing with To#yo %arine till the .econd World War had stopped
all business with 'apan. When the war was over, he felt that the 'apanese general
insurance mar#et had great potential. !e offered to treat foreign exchange due from
To#yo %arine under reinsurance contracts as a loan repayable after five years. To#yo
%arine was delighted and used the ,ew India example to enter into similar deals with
insurance companies around the world. In 1HD4 %r. 5.F. .hah re7uested To#yo %arine
for help in starting a branch office in To#yo. To#yo %arine gave enthusiastic and
unstinting assistance and that is how ,ew India started operations in To#yo in 1HD4.
Today, it has branches in Osa#a, ,agoya, .apporo, $u#uo#ax, !iroshima, +ifu,
O#ayama, (sahi#awa and other cities. %r 5 F .hah is long retired, and the then
9resident of To#yo %arine is long dead, but To#yo %arine remains a good friend of ,ew
India to this day. $'e 3apanese, e!en 3apanese companies, o not easil& forget 5ol
friens5-
Doin" #ne0s 8or!
I had been in Osa#a for two months. The office timing was from H.82 a.m. to D.82 p.m. I
used to live in Fobe which was 4D #m away. One evening I left the office as usual at I.22
p.m., went home, and was playing badminton at the Fobe &lub, when at H.22 p.m. I was
called by the waiter to attend a telephone call. I went down and lifted the phone, and
found !oshine .an my /nglish-spea#ing development inspector on the line. In the
bac#ground I could hear the clatter of typewriters.
C(re you spea#ing from the office !oshine .an?C I as#ed.
C0es,C he replied
CWho else is there?C
C(ll of us, .ir.C
N This note on his experiences as a manager in 'apan is by %r Ken#atesh 3. Bao,
9resident, 'apan India $riendship (ssociation, 5angalore, Farnata#a.
CWhat are you all doing?C I as#ed in astonishment.
C.irCO he said, Cafter you left, we got a call from ,i##yo .hoi )agents for ,issho Iwai,
one of the largest trading companies in 'apan*. They gave us 82 applications for marine
insurance and re7uested that the policies be delivered at H.22 a.m. tomorrow, when they
want to give shipping documents to their ban# to encash the letters of credit. We are ust
about to finish typing the policies, .ir, and the reason for calling you is to re7uest you to
come to the office tomorrow at L.<D instead of H.82, so that you can sign the policies and
we can deliver them to ,i##yo .hoi by H.22 a.m.C
I am sure a few of you will have had such an experience in your country. What is the
secret? It Cis the 3apanese sense of responsibilit&, no matter what their ob is, and t'eir
compulsion to #ork toget'er as a group- 'apanese assistants were a treasure I enoyed
throughout my twelve years in 'apan. 6ou coul gi!e t'em a 7ob an forget it, for it
#oul be one-
8hat is the ana"er0s 8or!9
=uring my two years of training at the 5ombay !ead Office as a management trainee
with ,ew India )then a Tata &ompany*, we trainees had been taught typing. The idea was
that we could type confidential letters ourselves. I had done this during my five years in
(ustralia. When I too# over in Osa#a I continued this practice. I would give most of the
letters for typing to the seniormost /nglish-spea#ing assistant, and type confidential
letters myself. Kery soon I discovered that the atmosphere in the office, which had been
very pleasant when I too# over, became very tense. 9eople became edgy. %y typist
assistant would tal# to me only in monosyllables. I ust couldn"t fathom what was going
on. One evening a cable came which re7uired an immediate confidential reply. I had an
appointment and was in a hurry. I therefore departed from my usual routine and gave the
reply to %iss .hibata to type and send by cable. ,ext day when I came to the office, I
received COhio +o:aimasusC )good mornings* from left and right. /very one was smiling
and the atmosphere was calm and relaxed. It too# a while for me to lin# cause and effect.
(fter that I had all my letters typed by %iss .hibata, and the really confidential ones I did
at home without anyone #nowing about it. /ventually I stripped myself of all routine
wor# and found things moving at a galloping pace. &oming to the office became a
pleasure. I had discovered the #ey to the behaviour of my 'apanese assistants. $'e& like
oing t'eir o#n #ork- When I did their wor#, I insulted them.
$lannin" #ne0s 8or!
In the second or third month after my arrival in Osa#a, one morning I told my /nglish-
spea#ing development inspector that we should visit Fyoto and meet our agent there.
3i#e most Indians I am always in a great hurry. !oshine .an wanted to ma#e the visit
after a couple of days, but I was impatient and saw no reason why we could not go
immediately. !oshine .an therefore rang up the agent and told me that we could leave in
a few minutes. The few minutes stretched to an hour before he said he was ready. I was
7uite annoyed and showed it by not spea#ing to him till halfway during the hour long
train ourney. 5y then I had cooled down and I as#ed him why it too# him an hour to get
ready to leave. !e explained that he had typed and collected pending policies" for the
agent and had ta#en a copy of the agent"s commission statement for reconciliation. On
finding that the gent was left with only two cover notes, he had brought a new cover note
boo#, had ta#en the list of renewals for the next month, and had collected a number of
pamphlets on 9ersonal (ccident Insurance which the To#yo office wanted pushed during
that month. -nfortunately all this had ta#en too long and he was very sorry for his
tardiness in doing this wor#. That explanation deflated me considerably. I encountered
t'is capacit& of t'e 3apanese, at all le!els, to plan an&t'ing t'e& o, again an again- It
seems to be a 7uality they are born with.
E)patriate /osses
In 1HM1, I was transferred to To#yo. Till then the 'apanese operations had been headed by
Indian managers deputed from the !ead Office. ( 'apanese, who was the first ,ew India
recruit in 'apan, was no. 4. In 1HM1, the !ead Office too# a decision to ma#e him no. 1.
5ecause of my #nowledge of 'apan and the 'apanese language, I was no.4. !ead Office
felt this arrangement was best suited for our 'apanese operations, particularly as the
'apanese officer concerned had by then been wor#ing with ,ew India for twenty years,
and was mainly responsible for the considerable development that had ta#en place in
,ew India"s business. /xactly the same thing happened in I5% 'apan, &oca&ola 'apan,
,&B 'apan, and many other foreign companies which had been doing business in 'apan.
On the other hand, there were foreign companies li#e 5ritish Insurance +roup, Insurance
&ompany of ,orth (merica, 5an# of India and many others which to this day have three
or four expatriates managing 'apanese operations and 'apanese officers )no matter how
senior in service, are unior to all the expatriates in the management of the branch*. %ost
of these companies have not developed to their full potential, and suffer from poor
employee relations. I feel in countries like 3apan, it is a #rong polic& to manage #it'
e.patriates onl&- .tarting the operations may need expatriates, but once a certain si:e is
reached, senior 'apanese employees should be allowed to manage the branch.
$ersonnel $ro:lems
1 was calling on the Facho, .ection Officer, of ,i##yo .hoi, the company which acts as
an insurance agent for the giant trading company ,issho Iwai. .ince the Insurance
&ompany people are regular callers, they are allowed into the office. While 1 was tal#ing
to %r Tana#a, one of his assistants came up to him and said rather rudely:
CFacho, I want to spea# to you.C
I rose and told %r Tana#a I would call again, but he would not let me go and insisted on
that I stayed on. !e then as#ed his assistant what the problem was. The assistant
complained that he had been given only a minimum increment and wanted to #now the
reason. %r Tana#a thereupon too# out of his drawer a piece of paper detailing the
assistant"s record and showed it to him.
C0ou have got only 1 point out of 12 for cooperation with colleagues, and 1 point out
of 12 for punctuality and leave ta#ing. This has brought down your score greatly.C
The assistant replied: CWhy have you given me such low points on these?C
%r. Tana#a then too# out another piece of paper and narrated five occasions in the
previous year when the assistant had rubbed his colleagues the wrong way, and 1D
occasions when he had been late for wor#. !e gave him dates, times, chapter and verse.
The assistant had nothing to say except CWa#arimashitaC )I understand*. I told %r
Tana#a, C0ou should have let me go. Why did you ma#e me stay? It must have been very
embarrasseing for your assistant.C %r Tana#a replied, Cwell, it was 7uite rude of him to
spea# to me li#e that in front of a visitor. 1 made sure he won"t do it again.C
What I want to emphasise is that the employeeJs confidential reports are not
considered confidential as far as the employee is concerned. It is a factual report based on
happenings during the year and can be shown to the employee with little fear of
contradiction. It is not filed under loc# and #ey in the 9ersonnel =epartment, but is #ept
by the .ection Officer or the immediate superior, in his drawer. It is important to note
that in 3apanese companies t'e abilit& to get along #ell #it' one5s colleagues is con-
siere an important 8ualit&- Inabilit& or ifficult& in getting along #it' one5s group can
be fatal to a person5s, career-
Compromise
$'e 3apanese belie!e t'at all isputes must be settle b& compromise- In a !er& strong
case, t'e compromise mig't be nominal, an in a #eak case it mig't be substantial- But a
confrontation is a!oie #'ic' enables bot' parties to sa!e t'eir face-
In 1HIH, I had to tac#le a claim which appeared fraudulent. The agent concerned had
apparently issued a cover note for a building on a .unday, and the building had burnt
down the following day. There was strong suspicion that the client had no insurance
when the building burnt down and had bribed the agent to issue a cover note
retrospectively. I appointed a private investigator to investigate the client and the
surveyor. The investigations went on for a long time. %eanwhile the client complained to
the %inistry of $inance. I was called by the %inistry to explain the case. (fter I had
explained the matter, the official concerned simply as#ed me: C%r Bao, when do you
expect to complete the investigation.C I was trapped and replied, CWithin a month.C CKery
well,C the official told me, Cplease see me after a month if you have still not settled the
claim. 0ou are a foreigner %r Bao, and I find it difficult to explain to you how things are
done in 'apan. I suggest you consult a senior 'apanese official of another company to see
how they would handle such a matter.C
(ccordingly, the next day I met the =irector of a local insurance company and as#ed
him to explain what the %inistry of $inance official meant. This gentleman explained:
C%r. Bao, his meaning is very clear. 6ou must compromise- It is t'e 3apanese #a&-" I was
7uite aghast on hearing this. .uch things are ust not done in India or (ustralia where I
had wor#ed. Going to court in t'ese countries is an e!er&a& occurrence, but !er& rare in
3apan- I therefore consulted %r Taira )I was then in Osa#a* and he also advised me to
compromise. ,ext day I called the claimant over and he happily* compromised the claim
at D2 per cent. What would have happened if I could have proved the fraud, I later as#ed
%r Taira.
CThe client would have 7uietly withdrawn his claim,C %r Taira told me. .ince I could
not prove anything I had to compromise. (t D2 per cent, the compromise was 7uite good.
(lso, if the client had actually gone to court and I had not been able to prove the fraud, he
would have got the full amount. %eanwhile both he, and my company would have lost
face. (nd in 3apan, nobo& likes to lose face-
France
;
( firm and pumping handsha#e is considered uncultured. ( 7uic# sha#e with some
pressure in the grip is the correct way. ( $rench woman offers her hand first.
9unctuality in business and social interaction is important. If invited home, a gift of
flowers is polite but not roses or chrysanthemumsO neither perfumes. ,eatness and taste
are the #ey.
iddle-East
;
%aintain strong eye contact.
=o not gesture with the left hand.
=o not cross your legs to point the sole of your foot to someone.
(rabs li#e proximity.
=o not express admiration for any possession because your host will feel honour-bound
to give it to you. They are emotional and easily outraged by even the slightest
provocation. (rabs li#e expressive, assertive persons and expect periodic display of
emotions from others. =o not launch a full-scale verbal assault on an opponent in front of
others. ,ever publicly criticise a colleague. (rabs lose respect for you because of your
lac# of loyalty. =o not ma#e polite en7uiries about an (rab"s wife or daughters or discuss
your own.
%ndia
It is easier to generalise about other nationals than your own. It is even more dangerous to
generalise about Indians. It is a country of continental proportions, and the second most
populated in the world. There are 1D official languages recognised in the &onstitution out
of an estimated 1ID4 languages and dialects. /very racial strain is represented, as is every
climate and religion. It is the place of origin of two of the most widespread religions in
the world, 5uddhism and !induism. It is among the earlier &hristian countries
&hristianity came to India with .t Thomas, the apostle. It has other religions that are
uni7ue to it li#e .i#hism, 'ainism and Eorastrianism )followed by the 9arsee community*.
There are four main castes in !induism and an estimated 1II< sub-castes and tribes.
/very conceivable political ideology participates in this democracy. 9eople of Indian
origin are found in almost every country of the world. The last estimate put the
population of overseas Indians at 14 million. It is a country with extremes of poverty and
wealth. (ny generalisation of a people of such diversity is therefore bound to attract
criticism. I am attempting it because it might be of use as a frame of reference to Indian
negotiators, and to others.
+eert !ofstede in his C.urvey of /mployee %otivation, %anagerial .tyles, and
Organisation &ulturesC based on the evidence of a company operating throughout the
world
4
, developed hypotheses about different national cultures. !e rated them according
to four characteristics. In relation to these, Indians are found to have
3arge power distance
Wea# uncertainty avoidance
.omewhat collectivist tendencies but with individualist strea#s
$airly high masculinity.
The only other countries that share these characteristics with India are .ingapore and
!ong Fong, both island countries, racially mixed, but with a high &hinese component.
!ofstede"s explanation of these characteristics is helpful in generalising about the
negotiating behaviours of Indians in business. We shall use his interpretation to explain
these characteristics.
( large power distance indicates that subordinates have strong dependence needs. This
would imply that Indians loo# for approval and especially so, from people they consider
superior. (dmiration for their presentation or for some other plausible factor about them
would help in a negotiation. .ubordinates expect superiors to act autocratically. The ideal
superior is a benevolent autocrat or paternalist. .tatus symbols are very important and
contribute strongly to the superior"s authority. The superior in a negotiation would expect
to be recognised and treated as such by visible signs of deference and privilege 6 the best
seat, first to be served tea, respectful attitude when he tal#s, etc.
%en are expected to be assertive but not women. .ex roles are clearly differentiated
and it is accepted that the man will dominate, and the woman will be nurturing. )These
are stereotypes and do not reflect the author"s normative values.* It would be more
effective while negotiating with Indians for this to be #ept in mind. 0ou live in order to
wor# 6 not for pleasure or other things, though you might enoy them. %oney and posses-
sions are important )but not aggressively so there is respect for sacrifice and austerity*.
Indians are marginally collectivist, i.e. there is a tendency to expect protection from
the extended clan )tribe, caste, language, school, college, organisation, etc.* in exchange
for loyalty. .elf-image is based on the social system )caste has been an important factor
in this self-image*.
The wea# uncertainty avoidance means that each day is ta#en as it comes 6 uncertainty
is accepted as inherent in life. Time is free and hard wor# as such is not a virtue. =issent
is easily accepted, and deviation is not considered threatening. There should be as few
rules as possible and these are easily changed. 5elief is placed in generalists, and on
common sense. 5ecause uncertainty is not feared, the Indian can enter a complex situa-
tion with little preparation. !e is not worried about what issues might come up in the
situation. !e is 7uite comfortable with the future, which for others is uncertain.
There are .ociologists who have argued that an Indian has low self-esteem and is
constantly loo#ing for approval and assurance. !e feels easily slighted and will brood
even when there is little reason to.
The woman"s status in the household rises as she produces male children and she tends
to give them excessive attention, satisfying all their needs, and prevents them from
experiencing frustrations. When the boys become men they are easily frustrated by
obstacles and may not show persistence in fighting them. 0et while they might give up
relatively easily, they will harbour a sense of having been exploited and try to undermine
the other party during the implementation. =efeat is not accepted gracefully. They also
do not prepare for all eventualities and leave many details to be thought out and dealt
with afterwards. This can delay implementation and sometimes even ma#e it impossible
to implement. )(ll this may not be as applicable to women though.*
Indians are articulate and thin# 7uic#ly on their feet. They have instant answers to most
obections, and solutions to most problems. They can overwhelm others with the speed of
their response.
=ecision ma#ing is by the boss who might consult others but it remain is indisputable
decision. There tends to be a great deal of flexibility 6 positions are changed soon
because the person is easily persuaded, and usually without much discussion with the rest
of the group. $ailure is individual and the rest of the group tries to distance itself from a
decision that failed. (t the same time, in groups, there is a tendency to try and impress
the boss, get maximum attention and to agree with those in power.
They can be very friendly and hospitable 6 calling home a stranger met for the first
time is common. There tends to be a colour preudice in favour of the fair-s#inned. With
a colonial history of over 822 years, this results in an exaggerated degree of attention to
the &aucasian.
$amily ties in India tend to be strong. The family goes beyond the immediate family of
parents, brothers, sisters, sons and daughters. It extends many times to other blood
relations 6 first and second cousins, nephews and nieces, etc. $amilies hold together
when there is an older member who has authority and commands respect. They could
drift apart when such a person ceases to be and there is no replacement of e7ual stature.
!owever, family members are more loyal to each other than to outsiders.
Team spirit is not strong and Indian sports are notorious for individual members of a
team pushing their own ambition against that of the team. !owever, teams have wor#ed
very well when they have shared common organisational framewor#s, systems and
vision. &ommercial organisations and the defence forces are good examples of successful
team spirit created among Indians.
There is a tendency to wait for "authority" to decide, or to initiate action and wait to be
told what to do. This attitude of a "child" loo#ing up to its "parent" for instructions extends
to the point of testing limits. It is not uncommon, especially in new situations, for the
subordinate, customer, or some other, attempting to test how far demands can be pushed
before they invite a negative reaction. (t that point of time there is a withdrawal to what
clearly are acceptable boundaries.
CThere is a noticeable absence of commitment in contemporary Indian character, an
absence of the total involvement that enables one to carry a tas# from start to finish
through all trials and difficulties. It expresses itself at many levels. (t the individual
level, promises are freely made which are either not #ept or incompletely #ept. ( great
amount of initial enthusiasm may be shown, but it soon dissipates. (t the collective level,
faith in obectives is proclaimed, but the re7uisite amount of sustained effort is not
forthcoming. /ven in fantasy, loved obects are given up or surrendered when confronted
with difficulties. &haracter lac#s definiteness, resulting in an incapacity to show
forthrightness, determination, and doggedness. There is great patience, but little
perseverance in the Indian character.G
L
$inally, it is important once again to emphasise that all the observations about
national cultures are generalisations. There will be a great many exceptions. /ducation,
exposure and travel contribute to changes in behaviour. It is said that the 'apanese of the
1HH2s is more aggressive, articulate, 7uic#er to react, more confrontational than in earlier
years. If true, this must be a reaction to the realisation of 'apan"s economic power and
having had to deal with many different cultures. The same can be said of Indians,
&hinese and others. The observations in this chapter must serve to sensitise the negotiator
to cultural differences, so that he does not inadvertently tread on sensitive cultural toes.
(ome other Generalisations a:out Cultures
<
,ever touch the head of a Thai. =o not pass an obect over a Thai head. The head is
considered sacred in Thailand. ,or must you point your soles in the direction of another
person in Thailand )or India*. In Thailand you must not cross your legs while sitting,
especially in the presence of an older person.
Triangular shapes are taboo in !ong Fong, Forea, or Taiwan. The triangle is
considered "bad luc#" or a negative shape in these countries.
The number M is bad luc# in Fenya, but it is good luc# in &:ech slova#ia, and has
magical connotations in 5enin.
Bed is a positive colour in =enmar#, but represents witchcraft and death in many
(frican countries.
( nod means "no" in 5ulgaria, and sha#ing the head side-to-side means "yes". The ,orth
Indian and the .outh Indian sha#e their heads differently and for opposite meanings.
.
In +autemala, you have to engage in small tal#, indicate an interest in the families of
business associates and go with them for a meal. 0ou allow time for a personal
relationship to develop. .olid business opportunities usually follow a strong personal
relationship in +uatemala. This holds true for 3atin (merica in general.
When crossing cultural lines, something as simple as a greeting can be misunderstood.
The form of greeting differs from culture to culture. Traditional greetings may be a
handsha#e, hug, nose rub, #iss, placing the hands in praying position, and so on. 3ac# of
awareness concerning the country"s accepted form of greeting can lead to aw#ward
encounters.
The "O.F." sign commonly used in the -nited .tates is a good example of a gesture that
has several different meanings in different countries. In $rance, it means ":ero", in 'apan it
is a symbol for money and in 5ra:il, it has a vulgar connotation.
The use of a palm-up hand and moving index finger signals @come hereG in the -nited
.tates and some other countries but is considered vulgar in others. In /thiopia, holding
out the hand palm down and repeatedly closing the hand means @come hereG. In India a
sibilant @sshhG or clapping of hands to summon a menial is accepted.
9roper use of names and titles is often a source of confusion in international business
relations. In many countries )including the -nited Fingdom, $rance, and =enmar#*, it is
appropriate to use titles, until use of first names is suggested.
&ustoms concerning gift-giving are extremely important to understand. In some
cultures, gifts are expected, and failure to present them is considered an insult, whereas in
other countries offering a gift is considered offensive. 5usiness executives also need to
#now when to present gifts whether on the initial visit or afterwards and where to present
gifts, whether in public or private also what type of gift to present, what colour it should
be, and how many to present.
+ift-giving is an important part of doing business in 'apan. /xchanging gifts
symbolises the depth and strength of a business relationship to the 'apanese. +ifts are
usually exchanged at the first meeting. When presented with a gift, companies are
expected to respond by giving a gift in return.
In sharp contrast, gifts are rarely exchanged in +ermany and are usually considered
inappropriate. .mall gifts are fine, but gifting expensive items is not a general practice.
+ift-giving is not customary in 5elgium or the -nited Fingdom, although in both
countries, flowers are a suitable gift if invited to someone"s home. /ven that is not as easy
as it sounds. International executives must use caution to choose appropriate flowers. $or
example, avoid sending chrysanthemums )especially white* in 5elgium and elsewhere in
/urope since they are mainly used for funerals. In /urope, it is considered bad luc# to
present an even number of flowers. 5eware of white flowers in 'apan where they are
associated with death, and purple flowers in %exico and 5ra:il.
In 'apan, it is particularly important to be aware of the way business cards should be
exchanged. The western tradition of accepting a business card and immediately putting it
in the poc#et is considered very rude there. The proper approach is to carefully loo# at
the card after accepting it, observe the title and organisation, ac#nowledge with a nod,
and perhaps ma#e a relevant comment, or as# a polite 7uestion. =uring the meeting,
spread the cards in front of you relating to where people are sitting. In other words, treat a
business card as you would treat its owner 6 with respect.
C'(E
Cross-Cultural %nternational &e"otiations
One team will represent the .even .isters Oil &ompany )..O&* from !ouston, -.(,
while another will represent &ha:i7ue in &entral (frica. The obect of the negotiation is
to reach an agreement. /ach team will notify to the other the names, titles, and a two line
bac#ground, about each of its members. ( written plan will be prepared which will
evaluate the concerns and positions of each side, tal# of possible common ground,
behavioural styles to be adopted at different stages, roles of different members of the
team, and pre-negotiation tactics. The two teams will start negotiations at an informal
meeting, when they first meet each other, then spend fifteen minutes in preparation, the
next I2 minutes in the actual negotiation and the last 82 minutes to discussing the
planning and implementation by each team. )The setting is in late 1HH4.*
The following brief is to be given only to the ..O& team.
+he (even (isters #il Company
The .even .isters Oil &ompany )..O&* has had an oil exploration lease in the &entral
(frican country &ha:i7ue for the last ten years. ..O& is one of the seven sisters, among
the seven largest oil companies in the world, whose original leases in the %iddle /ast
have been ta#en over by the local countries who now sell the oil at varying prices
depending on the mar#et, to transnationals. ..O& has its own oil fields in ,orth (merica
but the cost of getting the oil out at -.P 18 per barrel is high against the mar#et price of
-.P 42 per barrel. ..O& found oil in &ha:i7ue three years ago and estimated costs of
extraction are -.P D per barrel. They have not informed the +overnment of &ha:i7ue
about this find. They are paying &ha:i7ue -.P 1 million per year as lease rent while
recent agreements in other countries also provide for an escalating share of oil produced.
They estimate that &ha:i7ue fields have a potential reserve of 42 billion barrels. ..O&
does not want to extract oil ust now because they fear that a new find li#e this could
further depress the mar#et. They want a long lease and do not wish to substantially
increase their payments to &ha:i7ue. The &ha:i7ue 9rime %inister is paid -.P12,222
per annum in a .wiss (ccount by ..O&.
The ..O& delegation is led by their /xecutive Kice 9resident 6 ,ew 9roects 6 %s
.hirley Williams, <D years old, %5( from !arvard and %Tech from %IT. .he is having
attractive and unmarried, full power to sign a deal. .he is supported by 9eter !oward,
$inance Kice 9resident, 6 age DD, and =on Bogers, 3egal (dviser and !ead of a
prestigious law firm.
The following is to be given only to the &ha:i7ue team.
Cha=i>ue
&ha:i7ue is a &entral (frican country with a population of three million, landloc#ed with
.outh (frica as a neighbour where most of its able-bodied people go for employment and
whose remittances support the country"s foreign exchange budget, along with the oil lease
income from ..O&. They are a democracy and have been so since the 5ritish left in
1HI<. The 9rime %inister is an Oxford educated economist. (n election is due next year.
The country has been hurt by disturbances in .outh (frica since many citi:ens have
returned from .outh (frica due to the poor ob mar#et there.
The &ha:i7ue delegation is led by the Oil %inister, 'im !endrix, blac#, school
dropout, 8D, powerful orator and trade union leader who is very close to the 9%, the
$inance .ecretary, Baan 9atel, a chartered accountant, and the 3aw %inister, 'ac#
Obote, also blac#, graduate of the -niversity of ,igeria, 8L, and a number of alongwith
blac# officials. &ha:i7ue suspects that there is a lot of oil in their country since oil has
been found across the border in 3uwandi. The oil lease contracts around the world, since
the earlier &ha:i7ue lease was signed, have become contracts based on lease rent, and an
escalating share of the actual oil brought out of the fields. &ha:i7ue has access to experts
from elsewhere who have confirmed that &ha:i7ue might in fact possess good oil
reserves, though none has yet been confirmed as identified by ..O&. &ha:i7ue is a maor
importer of foodstuffs, clothing, and other necessities. It is basically a sheep-rearing
nation with some palm oil plantations and palm oil exports.
References
1. 9hilip B. !am and Bobert T. %oran, C%anaging &ultural =ifferencesC in International
Management Proucti!it& %eries, Kolume I, +ulf
. 9ublication &ompany, 5oo# =ivision.
4. +eert !ofstede, C&ultural =imensions in %anagement and 9lanning,C Asia Pacific
3ournal of Managemmt, 'anuary 1HL<.
9- )ulture5s )onse8uences, .age 9ublications, 1HL2,1HL<, and %ichael !arris 5ond,
CThe &onfucious &onnection 6 $rom &ultural Boots to /conomic +rowth,C from
/rganisational D&namics, Kol. 1I, ,o.
<. .pring 1HLL, (merican %anagement (ssociation.
D. 3ucian 9ye, C&hinese &ommercial ,egotiating .tyleC in /elges'lager, +unn and !ain
9ublishers Inc., 1HL4, &ambridge, %assachussetts.
I. Ken#atesh 3. Bao, 9resident, 'apan-India $riendship (ssociation, 5angalore,
Farnata#a )1HH1-H8* based on his nine years" of wor# experience in 'apan, it is
reproduced with his permission.
M. /dward T. !all, CThe .ilent 3anguage in Overseas 5usiness,C Har!ar Business
"e!ie#, %ay-'une 1HI2.
L. =hirendra ,arain, CIndian ,ational &haracter in the Twentieth &entury,C in the Annals
of t'e American Acaem& of Political an %ocial %ciences, Kol. 8M2, %arch 1HIM.
H. % Fatherine +lover, C=o"s and Taboos,C Business America, (ugust 18,1HH2.
#thers
12. (ndreas $uglesang, About :nerstaning 6 Ieas an /bser!ations on )ross-
)ultural )ommunication, =ecade %edia 5oo#s Inc., ,ew 0or#, 1HL4.
11., .engupta and .. 5. Ful#arni, C&ross &ultural =imensions of International
&ommercial ,egotiations,C +oreign $rae "e!ie# (Inia)-
For E)amples of Cultural Dimensions in %nternational &e"otiations? see:
14. &hristopher &. 'oyner, CThe (ntarctic %inerals ,egotiating 9rocess,C American
3ournal of International *a#, October 1HLM.
18. 'ames +. 5light, 'oseph .. ,ye 'r, =avid (. Welch, CThe &uban %issile &risis
Bevisited,C +oreign Affairs, $all 1HL4.2
1<. =hirendra ,arain, C+rowing -p in India,C in +amil& Process, Kol. 8, ,o. 1, %arch
1HI<.