THE SOCIOCULTURAL ENVIRONMENT — Hofstede 1980 Culture is

THE SOCIOCULTURAL ENVIRONMENT - Hofstede (1980): “Culture is the collective programming of the mind which distinguishes the members of one human group from another… Culture, in this sense, includes systems of values; and values are among the building blocks of culture. ” - Visible (body language, clothing, lifestyle etc. ) and invisible parts (family values, sex roles, national identity, religion) of culture – the Iceberg - Culture is the learned ways in which a society understands, decides and communicates 1

1. LAYERS OF CULTURE • The behavior of an individual is influenced by different layers of culture that are interrelated in a complex way and each level influencing the individual’s probable behavior • National culture giving the overall framework of cultural concepts and legislation for business activities • Business industry culture is very much related to a branch of industry and is similar across borders – behavior and ethics • Organizational culture contains subcultures of various functions expressed through shared values, beliefs, meanings and behaviors of the members of a function • Individual behavior (Global culture could be added as the outer boundary) 2

2. HIGH- AND LOW-CONTEXT CULTURES - Edward T. Hall - Low-context cultures rely on spoken and written language. Low degree of complexity in communication. - High-context cultures use more elements surrounding the message. High degree of complexity in communication. 3

3. ELEMENTS OF CULTURE - Verbal language - Non-verbal language - Manners and customs - Technology and material culture - Social institutions - Education - Values and attitudes - Aesthetics - Religion 4

4. HOFSTEDE’S 4+1 DIMENSIONS MODEL • Power distance • Uncertainty avoidance • Individualism • Masculinity + • Time perspective Ø Discuss in teams how would you evaluate yourself on each of Hofstede’s dimensions 5

5. MANAGING CULTURAL DIFFERENCES • Self-reference criterion – our unconscious reference to our own cultural values • How to eliminate self-reference: 1. Define the problem or goal in terms of home country culture, traits, habits and norms. 2. Define the problem or goal in terms of the foreign culture, traits, habits and norms. 3. Isolate the SRC influence in the problem and examine it carefully to see how it complicated the problem. 4. Redefine the problem without the SRC influence and solve for the foreign market situation. 6

NEGOTIATION • the process in which at least two conflicting, interdependent parties attempt, through the communication process, to reach a mutually satisfying agreement (J. Rudd) • working together to find an agreement, which fits the needs of both parties and which lasts

• all negotiations involve • parties • issues • alternatives • positions • interest

SOME POINTS TO BE REMEMBERED • People and the issues under negotiation separate • Good outcome reached efficiently and in a friendly way • Communication to the point, listening • Focus on interests • Help each other find a solution – develop options • Know your options, have options BATNA - never accept an agreement that is not at least as good as the BATNA

STAGES OF NEGOTIATION • Prenegotiation • Negotiation • Agreement

PRENEGOTIATION STAGE 1. • Know the Other Party’s Culture • Subcultures • Organizational Culture • The Individual • The Other Party’s Options - the best alternative to be negotiated BATNA and the worst alternative to be negotiated WATNA provide a range for compromising and collaborating to develop workable agreements

2. Know Thyself • Who am I? • What are My Options? • What is My Communication Style? • What is My Negotiation Approach? - win-lose/competitive tactics OR win-win/cooperative tactics • What is My Organizational Culture?

ROLE OF CULTURE • definition of negotiation • selection of negotiators • protocol • communication • time • risk propensity • groups vs individuals • nature of agreement

WHY NEGOTIATIONS IN A MULTICULTURAL ENVIRONMENT ARE THE ISSUE? • we live in an international, multi-cultural world • we are required to interact with people from different cultures • differences can cause difficulties

NEGOTIATION STYLE Cellich – Jain: Global Business Negotiations • depends on negotiator’s cultural background, professional responsibilities, the context, whether seeking one-time deal or repeat business • Dodgers • • do not like facing situations where decisions must be made and risks assumed Dreamers • major goal is to preserve the relationship, willing to accept lower outcomes on substantive issues for the sake of the relationshiop

• Hagglers • • willing to lower their expectations if they can obtain some benefits from the other party • • view negotiations as a give-and take-game seek instant compromises Competitors • enjoy conflicts, are comfortable with aggressive behavior, use hardball tactics • satisfying own interests is primary goal • persuasive in discussions, persist in controlling the discussions limited information exchanged

• Problem solvers • aim at finding mutually satisfying agreements taking into consideration the relationship as well as the substantive issues • ask plenty of questions, share information openly, suggest options and alternatives

3. Contextual Factors • Ripeness • Role • Negotiation Team

NEGOTIATION • Introduction and Relationship Development • Discussion of Issues and Exchange of Information • Order of Issues (sequential discussion, general discussion, packaging issues)

• Information Sharing • Win-lose approach: as little as possible of information shared • Win-win approach: information freely shared in pursuit of the shared goal of problem solving • • Types of Goals Concessions • Can indicate a willingness to work with another party • Who makes concessions and at which rate • Concessions critical for an agreement and long-term relationship AGREEMENT

Communication skills • negotiating first and foremost about communications • levels of communication: logical (e. g. special price offer) and pragmatic (e. g. semantics, syntax and style) 2/13/2018 Laureaammattik 21

1. PROBLEMS WITH CROSS-CULTURAL COMMUNICATION • Perceptual bias: stereotyping – individual assigned to a group based on very little perceptual information, other characteristics are derived or assumed, halo effect – generalisation made of a person, selective perception – choosing certain information that supports earlier beliefs and leaving out other, projection – use of own attributes to describe the characteristics of another person • Errors in processing information 2/13/2018 Laureaammattik 22

• 2. IMPROVING COMMUNICATION • Listening • Passive listening – acknowledgement – active listening • Good listeners do more than listen; they think, analyse and assess what the other party is saying, effective listening identification of alternatives and options not considered during the preparatory phase • Indicate the willingness to listen longer – “Yes”/”Please go on”/questions for clarification • Observe body language (words 7%, voice 38%, body language 55% of the message) 2/13/2018 Laureaammattik 23

• Asking questions • Open questions – allow respondents to talk freely about their needs What do you think of our proposal? Can you provide us with the necessary additional information so we can reconsider your offer? What is your exact production capacity? • Conditional questions – at the phase where proposals and counterproposals are exchanged If we guarantee weekly shipping, would you agree to…. ? If we modify our specifications, will you consider…. . ? • Ensuring clear understanding - restating, rephrasing, reframing, summarising 2/13/2018 Laureaammattik 24

• NONVERBAL COMMUNICATION • • Vocalics - tone, volume, sounds that are not words • Touching • Use of space • Time – keeping appointments, pursuing the meeting agenda, devoting time to unrelated items • • Body language – gestures, body movement, facial movement, eye contact Physical appearance Video: Cross-cultural negotiations avoiding pitfalls http: //www. youtube. com/watch? v=4 Gj. C 0 ip. JIA&feature=related 2/13/2018 Laureaammattik 25

NEGOTIATION EXERCISE • select one person with whom you will negotiate - not one of your usual working team mates, someone of a different culture • spend 10 minutes to discuss and select some point that you will negotiate – something you don’t agree

• prepare your negotiation by yourself • what do you want to achieve? • how will you achieve that? • what is acceptable? What is not acceptable? • what is your plan? • negotiate with your partner 15 -20 minutes