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TABLE OF CONTENTS
1.0 EXECUTIVE SUMMARY ...................................................................................... 1
2.0 INTRODUCTION .................................................................................................. 1
3.0 NEGOTIATION STYLE ........................................................................................ 1
3.1 NEGOTIATING GOAL: CONTRACT OR RELATIONSHIP ............................... 2
3.2 NEGOTIATING ATTITUDE: WIN-WIN OR WIN-LOSE .................................... 2
3.3 PERSONAL STYLE: INFORMAL OR FORMAL ............................................... 2
3.4 COMMUNICATION: DIRECT OR INDIRECT ................................................... 3
3.5 SENSITIVITY TO TIME: HIGH OR LOW .......................................................... 3
3.6 EMOTIONS: HIGH OR LOW ............................................................................ 3
3.7 FORM OF AGREEMENT: GENERAL OR SPECIFIC....................................... 3
3.8 BUILDING AN AGREEMENT: BOTTOM-UP OR TOP-DOWN......................... 4
3.9 TEAM ORGANIZATION: ONE LEADER VERSUS CONSENSUS
/LEADERSHIP STYLE............................................................................................ 4
3.10 RISK TAKING: HIGH OR LOW ....................................................................... 4
4.0 DECISION MAKING ............................................................................................. 4
5.0 COMMUNICATION STYLE .................................................................................. 5
6.0 PROTOCOL ......................................................................................................... 7
7.0 COMPANY LOYALTY .......................................................................................... 8
8.0 GENDER ROLES ................................................................................................. 8
9.0 REWARDS ........................................................................................................... 8
10.0 WORK DISCIPLINE ........................................................................................... 9
11.0 CONCLUSION ................................................................................................... 9
REFERENCE LIST................................................................................................... 11
APPENDIX ............................................................................................................... 13
2.0 INTRODUCTION
As a result of the economic globalization, it contributed to the multinational business
to increase customer demands, financial market, share the knowledge of research
and development and global sourcing. Although the advanced technology abridges
the distance between nations, management practice has been restricted by the
culture boundary. In virtue of the involvement of joint ventures or prolonged
negotiations in partnership with foreign countries, the knowledge of cultural diversity
provides hints of reaction in others behaviour (Lewis 1996). Thus, in order to
successfully access the global market, organisations should gain a better
understanding of the cultural diversity before planning business strategies.
This report will analyse the first two largest economic countries around the world, the
United States (US) and China respectively, which was predicted that the rank of
those two countries will swap in 2020 (Euromonitor International 2010). It will refer to
Geert Hofstedes five dimensions of national culture and various academic theories
to identify their national management style.
To recall the Hofstedes five dimensions of national culture in US and China,
Appendix-1 shows the grades of each dimensions and briefly descriptions.
Problem
Identification
Problem
Analysis and
Decision
Decision
Implementation
In US, managers and supervisor who are highly responsible to identify the problem,
often ignore subordinators opinions or not offer them in the first place. They are also
accountable to analyse and resolve it. The assistances often get from senior
managers or outside specialists and consultants instead of first-line subordinators.
The participation of this process for subordinators is only receiving the decision from
managers and then implements it (Steers et al.2010). America has lower power
distance culture; decision making is more likely to spread throughout the
organisation. High individualism in America also contributes the fact that too many
managers make the decision individually in decentralized organisation. Nevertheless,
it is argued that decentralized organisation with many decision makers might make a
bad outcome from a large number of good decisions. Bad personal chemistry,
ineffective leadership, failed group processes, groupthink and the overconfidence of
decision makers might come out improper decisions that against organisational
objective (Bandias 2012).
Meanwhile, China has the same decision process as America but in different
representation, since most Chinese firms are either family-based or built under
guanxi (relationship) which constrain a single leaders ability to change the
organizational culture and widen the scope of cultural change (Dong &Liu 2010) .
Despite being a collectivistic country, the decision-making is led by the hierarchical
and centralized power which is affected by the political philosophies of Communism
(Steers et al. 2010, Dong &Liu 2010). The problem identification is recognized by
supervisors or owner-managers with rigid management and production control
system. The problem discussion and analysis are conducted by owner-managers
who obtain assistance from family members or guanxi relationships. Chinese
managers exchange information, negotiate with planning authorities and accelerate
decision-making processes according to their personal guanxi (Wong et al. 2003).
6.0 PROTOCOL
Table-1 is introduced by a consultation that provides professional cross-cultural
trainings in UK. Table lists some of the example that needs to be noticed in crosscultural workplace in terms of business greeting and meeting.
Business Meeting
Business Greeting
China
9.0 REWARDS
Rewards system is a motivational element and mainly depended on an
organizational culture. It should clearly show the balance between effort and
performance. According to Expectancy theory, employees effort, performance and
rewards associate with each other (Bandias 2012). The organization should
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11.0 CONCLUSION
This report analyse the approaches of business operating in cross-cultural
negotiation, making decision and communicating with foreign clients or partners as
well as what business protocol should be noted, how employees representing their
company loyalty and gender roles in US and China. The findings are:
Firstly, in cross-cultural negotiation table, American negotiators tend to aim at signed
the contract and the win-win attitude is not as strong as China. They talk informally
but straightforward to the point. Though they do not like spend much time on long
negotiation process, a specific agreement is often bargained first, and then
concluding a general contract. A leader represents their group or company to make
decisions and they like to take the challenge. Chinese negotiators prefer aiming at
building relationship with counterparty. Confucian principle leads to showing good
manners with formal communication style of the Chinese. A long-negotiated process
will be held to build the relationship. They emphasize a general agreement initially
and then discuss specific items after. A leader in the group might take time to
converse or discuss to group members to reduce the risk before decide the deal.
Secondly, both countries adopt centralized decision approach to make decision.
However, Chinese are more likely to obtain the recommendation from family or
friends, who have greater quanxi (relationship), while the suggestions are required
from senior managers or outside consultants.
Thirdly, Americans communicate in low-context approach. Outside of words tend to
no hinting more information, due to their directness. When non-verbal message is
sent, recipient can effortlessly pick up the true meaning of emotion. On the other
hand, China is long-context culture, the words recipient heard might not as
9
10
REFERENCE LIST
Bandias, S 2012, Student Study Pack: PRBM016- Cross-Cultural Management,
Charles Darwin University, Darwin.
Cellich, C & Jain S.C. 2004, Global Business Negotiations: A Practical Guide, 1st
edn, South-Western, Thomson, USA.
Dong, K &Liu, Y 2010,Cross-cultural management in China, Cross Cultural
Management: An International Journal, vol. 17, no. 3, pp. 223-243, via Emerald.
Euromonitor International 2010, Top 10 largest economies in 2020, Euromonitor
International, viewed 22 August 2012, <http://blog.euromonitor.com/2010/07/specialreport-top-10-largest-economies-in-2020.html>.
Falcao, H 2008, Social Media in Cross-culture negotiations: Avoiding the pitfalls,
INSEAD, viewed 12 September 2012, <http://www.youtube.com/watch?v=4GjC0ipJIA&feature=player_embedded>
Graham, J.L & Sano, Y 1989, Smart Bargaining-Doing Business with the Japanese,
Revised edn, Ballinger Publishing Co. USA.
Hall, E. T 1976, Beyond culture, Doubleday, New York. (as cited in Kapoor 2003 et
al.)
Hall, E.T 1990, The Silent Language, Anchor, New York. (as cited in Steers et al.
2010)
Hofstede, G, Hofstede, G J & Minkov, M 2010, Cultures and Organizations: Software
of the Mind, 3rd edn, McGraw-Hill, New York.
Kapoor, S, Hughes, P.C, Baldwin, J.R & Blue, J 2003, The relationship of
individualismcollectivism and self-construals to communication styles in India and
US, International journal of Intercultural Relations, vol. 27, no. 6, pp. 683-700, via
Science Direct.
Kolesnikova, N.A & Liu, Y 2011, Gender wage gap may be much smaller than most
think, The Regional Economist, viewed 07 October 2012,
<http://www.stlouisfed.org/publications/pub_assets/pdf/re/2011/d/gender_wage_gap.
pdf>.
Kwintessential 2012a, USA- Language, Culture, Customs And Etiquette,
Kwintessential, viewed 06 October 2012,
<http://www.kwintessential.co.uk/resources/global-etiquette/usa.html>.
Kwintessential 2012a, China - Language, Culture, Customs And Etiquette,
Kwintessential, viewed 06 October 2012,
<http://www.kwintessential.co.uk/resources/global-etiquette/china-countryprofile.html>.
Lewis, R 1996, When Cultures Collide: Managing successfully across cultures,
2ndedn, Nicholas Brealey Publishing, London.
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APPENDIX
Appendix -1 Comparison of Five Dimensions of Hofstedes Model
between US and China (Sun 2012)
PDI
IDV
MAS
UAI
LTO
IND
US
Strong equal right
Legitimately in decentralization
Flatter structure organization
Intimate relationship between
subordinates and superiors
Informal communication
Highest concern of individual right
Independent and self-reliant
Effort decides success
Have open mind to share opinions
Share value
Assertiveness
Work hard and expect monetary
rewards and promotion
Enjoy challenge from new ideas
More creative
Flexible regulation
Higher tolerant to receive positive
and negative information
Short-term strategy for decision
maker
Focus on personal achievement
and material possessions
Love small and informal talks
Pursue objectives and goals
Quick decision makers
Optimistic and opportunistic
Short-term performance is more
important than long-term one
More happy people
Less stress in flexible rules
Higher involvement of leisure
activities
Grade
40
80
91
20
62
66
46
80
29
68
118
24
China
High loyalty towards leader
Uneven income distribution
Centralized with strong hierarchies
Acknowledge leaders power
Polarization relationship between
subordinates and superiors
Collectivist society
Group harmony
Suppress feeling and emotions for
peaceful work environment
High trust relations in a group
Women is inferior
Women should looking after family
members
Men should focus on agricultural work
and earn income
Informal business attitude
Emphasize quanxi (Relationship) and
mutual trust
Polite and honest
Adaptable
Flexible regulation
Emphasize mien-tzu (dignity, selfrespect, prestige)
Social harmony
Well-behaviour
Authority belongs to men and seniors
Success belongs to oneself and
family
More unhappy people
Higher stress
Follow by numerous norms and ethics
Lower involvement of leisure activities
13
Appendix- 2
The Impact of Culture on Negotiation (Salacuse 1991)
Appendix-2
The Impact of Culture on Negotiation
Negotiation Factors
Goal
Contract
Relationship
Attitudes
Win/Win
Win/Lose
Personal Styles
Formal
Informal
Communications
Indirect
Direct
Time Sensitivity
Low
High
Emotionalism
High
Low
Agreement Form
Specific
General
Agreement Building
Top-Down
Bottom-Up
Team Organization
One Leader
Consensus
Risk Taking
High
Low
Appendix- 3
The grades in the Impacts of Culture on Negotiation in US and China
(Salacuse 1998)
Appendix- 3 The grades in the Impacts of Culture on Negotiation
in US and China
US
China
Goal
54
45
Attitudes
71
82
Personal Styles
17
46
Communications
18
Time Sensitivity
15
Emotionalism
74
73
Agreement Form
22
27
Agreement Building
47
54
Team Organization
63
91
Risk Taking
78
82
14