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The US has been described as a litigious society.

East Asian countries, on the other hand, tend to rely more on relationships rather than the law to resolve problems. How should companies from Australia and New Zealand cope with these very different approaches?

In order to conduct business in a globalised world companies must be able to understand the differences that are present in various societies. The United States is a litigious society in the sense that theirs is a matured judicial s ystem which holds the peoples confidence. Countries like Korea and China, that is, East Asian countries, are only partially litigious and often prefer to use forms of dispute resolution such as arbitration and mediation (Frenkel & Peetz, 1998). This is just an example of the various dynamics that exist in international markets; as such, any country that wants to invest in others should ensure proper preparation and analysis of culture takes place before a business relationship commences. Both Australia and New Zealands judicial system is governed by common law and essentially uses commercial codes in governing most business transactions. The ability for two or more countries to trade is affected by their legal regulations. The following case study (Czinkota et al, 2011) outlines a scenario where a conflict arose between two countries that had different forms of dispute settlement. A US warship submarine collided with a Japanese research vessel near Hawaii. In this unfortunate event the research vessel was subjected to serious damage and there were numerous fatalities to people on board, whilst the US warship submarine was unharmed. As is the norm with North American society the case was swiftly taken to court. Following the advice of his legal advisors, Commander Scott Waddle delayed his apologies to the Japanese government and families of the victims. This did not sit well with the Japanese and they found it extremely disrespectful to their culture. Similar disputes can be found in an international business context and so Australian and New Zealand companies have to clearly determine how they are going to interact with different cultures to prevent and resolve problems. When conducting business with East Asian countries it is essential to realise that they value personal contact with their business partners. Failure to realise this can result in being branded as having a bad attitude and being extremely arrogant. This would most certainly strain relationships among the parties involved and would naturally result in reduced trading with them. Additionally, countries such as China have high context cultures, that is, there is a major emphasis on commitment and the need to support each other. Australia and New Zealand need to take this into consideration when they decide to conduct business with such cultures. In case of conflict Australia and New Zealand would need to recognise that they need to adjust their methods of conflict resolution to maintain the relationship (Yama & Zakaria, 2004).

When interacting with those from East Asia, it is important to realise that they do not value verbal communication as much as the non-verbal components (Kim & Park, 1998). Gifts, tokens of appreciation and social gatherings are often vital to build strong relationships. As such, care should be taken to ensure that communication is carried out in a culturally sensitive way to ensure there are no misunderstandings. It is also important to realise that people from East Asian countries tend to interpret situations differently to those from low context cultures, that is, cultures where relationships are not as highly regarded. When introducing a new concept, Australia and New Zealand may want to work with countries such as China from the ground up to ensure that everyone starts at the same page and moves forward together. The US is an ideal example of a low context society. Here, a contract is a fundamental principle to starting a business relationship. A company in the US can easily conduct business with Australia and New Zealand without necessarily developing personal relationships (Kim & Park, 1998). More specifically, should a conflict arise, they quickly dispatch their legal team to look into the matter. Australia and New Zealand should respond rapidly with their own legal advisors to counter threats of desired compensation that US companies may feel entitled to. If they do not take this approach, it may be seen as cowardly. They then would be considered helpless and guilty (Czinkota et al, 2011). The high context nature of countries in East Asia can serve Australia and New Zealand well depending on how they approach it. For example, by forming long lasting relationships they can be assured of improved business among them. However, if disputes are settled in a culturally insensitive way it could be an end to a once successful partnership. In contrast, the US is a low context nation which relies more on contracts and court settlements. In this case, Australia and New Zealand would need to prepare all kinds of legal documents relevant to their potential business operations in order to successfully conduct business with the US (Czinkota et al, 2011). Failure to do this could result in continuous disagreements and possibly extended hours in courts. It is these variations that bring forth the necessity for countries to understand their various counterparts way of operating to avoid conflict. Should conflicts arise, nations should be aware of how each party is expected to approach the issue (Frenkel & Peetz, 1998). In order to retain international business relationships, companies must research and observe the very different approaches to conflict resolution evident in low context societies such as the US and high context societies like those in East Asia

1. Czinkota, M. et al. (2011) International Marketing Second Asia-Pacific Edition. 2nd ed. Melbourne: Cengage Learning, p.172 175

2. Felix T Mavondo, Elaine M Rodrigo, The effect of relationship dimensions on interpersonal and interorganizational commitment in organizations conducting business between Australia and China, Journal of Business Research, Volume 52, Issue 2, May 2001, Pages 111-121, ISSN 0148-2963, 10.1016/S0148-2963(99)000648. http://www.sciencedirect.com/science/article/pii/S0148296399000648

3. Frenkel, S, & Peetz, D 1998, 'Globalization and industrial relations in East Asia: A three-country comparison', Industrial Relations, 37, 3, p. 282, Business Source Complete, EBSCOhost, viewed 11 March 2013. http://zh9bf5sp6t.scholar.serialssolutions.com/?sid=google&auinit=SJ&aulast=Frenke l&atitle=Globalization+and+Industrial+Relations+in+East+Asia:+A+Three%E2%80 %90Country+Comparison&id=doi:10.1111/00198676.00089&title=Industrial+relations+(Berkeley)&volume=37&issue=3&date=1998 &spage=282&issn=0019-8676 4. Gupta, D. S. 2006. High Context versus Low Context. A quick guide to cultural competency, 2, 1-2. http://www.guptaconsulting.com/docs/CrossCulturalSamplePage.pdf

5. Kim, D, Pan, Y, & Park, H 1998, 'High- Versus Low-Context Culture: A Comparison of Chinese, Korean and American Cultures', Psychology & Marketing, 15, 6, pp. 507521, Communication & Mass Media Complete, EBSCOhost, viewed 12 March 2013.