The Fundamentals of Cross-Cultural International Business - Essay Example

Heading: Cross-Cultural International Business Your name: Course name: Professors’ name: Date Introduction International project managers experience serious difficulties in the coordination of individuals that originate from various countries, and in the management of sub-group that are based in different countries. Cultural difference result in misunderstanding and miscommunication because team members possess different cultural beliefs and values, and also due to the fact that subgroup have various ways of organizing people and enforcing tasks; hence, worsening the internal difficulty of international business projects. Besides, cultural variations absolutely play major roles in the increasing complexities of worldwide projects. Culture emanates from a set of common understandings, experiences, and meanings among organizational, group or nation members. Every group, at whatever level, has its unique culture developed from sharing one history and sequence of shared successes and struggles. This paper seeks to explore effects of cultural differences in relation to of decision-making, negotiation, and ethical practices. How does cultural differences affect in decision making? According to Danciu (2011, pp. 175-194), cultural values are the significant cultural elements that affect organizations. They refer to conceptions of desirable and preferred, as well as the creation of principles to which available behavior or structures may be compared and evaluated. This implies that cultural values are important to mental programming that guides individuals in the way to think, feel, or act under a particular circumstance and context. Notably, Congress (2004, pp. 2-14) says that cultural values can be characterized by five dimensions that include power distance; masculinity versus feminity; individualism versus collectivism; short-term versus long-term; and uncertainty avoidance. The knowledge of these dimensions’ nature is influential in predicting how individual team participants behave in the communication and decision making process. To start with, power distance is refers to the degree to which less authoritative organization and institution members accept and anticipate that authority is unequally distributed. This inequality is explained form lower tiers of authority hierarchy; hence, advocating that society’s inequality level is approved by the followers and the leaders. Secondly, Ditzel (2006, pp. 1-18) says that individualism versus collectivism entails the extent to which people are incorporated into groups. The individualist position descries communities with loose ties between people; while the collectivist side demonstrates communities with strongly integrated, grouped, and cohered people. In terms of the masculinity versus feminism dimension, there is a distribution of duties and responsibilities between genders. Notably, Congress (2004, pp. 2-14) asserts that women’s values are less different across societies compared to the men’s. Gender values range from competitive, assertive, and maximally dissimilar from females’ values on one end, to caring, modest, and comparable to females’ values on the other end. While the assertive pole is termed masculine, the caring and modest pole is termed feminine. In the case of uncertainty avoidance, Negulescu, Lascu, Oprean (2007, pp. 1-5) note that this handles a society’s forbearance for ambiguity and uncertainty. This defines a man’s continuous hunt for truth. It also shows the degree to which a culture plans its members to attain a sense of contentment in unstructured circumstances. In such a culture, the society tries to reduce the probability of such unstructured circumstances by use of stringent rules and laws, security and safety measures. Individuals based in uncertainty avoiding nations seem emotional and driven by internal nervous force. By contrast, Congress (2004, pp. 2-14) says that those in uncertainty accepting areas tend to be tolerant of various ideas, and have few rules. What is more, the long-term orientation individuals are featured by thrift, persistence, and shame. Their order of relationships is by status, and they strictly observe the order. On the other hand, individuals with short-term orientation have personal stability and steadiness. This implies that they care about reciprocating tradition, favor, reciprocating greetings, and favors. In relation to cross-cultural business, Congress (2004, pp. 2-14) argues that cultural differences affect decision making in a number of ways. To start with, customs, gesture, and mannerism differ across communities in the world. The understanding of client’s cultural background is vital in the satisfaction of their needs. For instance, if a salesperson wants to convince a person from a different community, lack of knowledge on the client’s cultural background might lead to poor performance. This means that a customer might decide against buying something because of misunderstanding and misinterpretation between him and the salesperson. According to Drake (2001, pp. 317-347), cultural differences also affect business because of language barrier. In certain countries like Germany and United States, it is normal for people to speak loudly, with assertiveness and aggressiveness when sharing opinions or providing direction. On the other, some nations like Japan have people naturally speaking softly, with passiveness when making suggestions, or sharing ideas. As a result, business transactions can be negatively affected if parties involved do not understand, or consider others’ cultural backgrounds. Therefore, when communicating with people from diverse cultures, it is vital to speak in impartial tone, and be considerate of others’ ideas. Moran (2011, pp. 235-250) demonstrate that cultural differences affect businesses because time orientation. Time differences affect managers’ decision making across the world. For instance, managers based in Egypt make their decisions more slowly and deliberately than their US counterparts, because of time orientation. Additionally, decision making is influenced by cultural difference in terms of significance of rationality. For instance, North American mangers make vital decisions intuitively because they value rationality. On contrast, East countries like Iran do not value rationality. In addition, Drake (2001, pp. 317-347) notes that some cultures focus on problem solving, whereas others accept situations as they come. For example, US managers strive to find solutions to problems, while Indonesia and Thailand managers do not solve problems; hence, they have different decision making mechanisms. Furthermore, some cultures like Japanese focus on group work, value conformity, and cooperation, while others like US are less group-oriented. Therefore, Japanese tend to make significant decisions based on gathered information. How does cultural differences affect in negotiation patterns? Notably, Karma, Kask, Vadi (2009, pp. 163-171) argue that cultural differences create variations in negotiating norms. It is, therefore, vital to know the relationship existing between cultural values and negotiation strategies of the other business partner. In the western culture, like the United States’, much focus is on the goals and needs of an individual. The culture highly regards and protects autonomy in society. Unlike collectivism, individualism is independent on the features of a bigger group. People in an individualistic community seem to fix higher personal objectives during negotiation process. Besides, these people seem to reject unfavorable results in a negotiation process. These consequences can certainly be tolerable, nevertheless, the hunt will persist till a solution is achieved that satisfies the person’s needs. As Drake (2001, pp. 317-349) puts, in a collectivist society, members found their personality on the features of a large group to which they belong. These members are more responsive to other’s needs, and they enter a negotiation process with other people’s needs in mind. Whenever they negotiate, they tend to be more cooperative only if negotiating with like-minded people. Nevertheless, when negotiating with various groups, such people appear more competitive (Christopher, Pesantez, Rizvi 2005, pp. 2-10). Egalitarianism versus hierarchy dimension also demonstrates that cultural differences influence negotiation process. Hierarchical societies have social statuses that imply power. Having a hierarchical structure in society is instrumental in the reduction of conflict through provision of a norm, which people do not always endeavor outside it. As an advantage, people in hierarchical societies are needed to look for those that are socially lesser to them, which is quite the contrary in egalitarian community. Instead, egalitarian society encourages conflict resolution on social and one’s own limits are permeable (Drake, LE 2001, pp. 317-347). As Horii (2005, pp. 1-27) argues, in the process of negotiation, information is valued highly and communication approach is influential in the consequence of intercultural contact. High communication context in which implication is deduced and depends on pre-existing information may result in conflict when met with low communication context needs, which necessitate precise and clear detail. Significant information might not be communicated and the most favorable solution might not be attained. Christopher, Pesantez, Rizvi (2005, pp. 2-10) says that the theory of culture as shared values is founded on the variations between cultures and cultural values and the way in which it causes varied negotiation strategies, particularly between collectivistic and individualistic societies. Notably, collectivistic societies appear to be less competitive, more integrative and posses higher information communication. Nonetheless, there are some deviations from the set standards, and culture does not essentially establish the way in which one will conduct negotiation. Further, Christopher, Pesantez, Rizvi (2005, pp. 2-10) the theory of culture in context considers culture as, but a single element in an intricacy of a negotiator conduct. At times, variations in distributive and integrative negotiating preferences can have to do much with background factors as compared to where a person is on the collective-individual scale. It has been indicated that integrative bargaining is more advantageous to sellers, whereas distributive negotiation is more advantageous to purchasers. What is more, Brett (2000, pp. 97-104) asserts that collective-individual in unnecessarily the only connection to the way bargainer predicts competitiveness in a bargain. Even thought individualism versus collectivism is termed as a symbol of legendary set pie beliefs; buyer-seller duties may at times be a better forecast of these beliefs. Despite the cultural differences described above, negotiation processes can be attained. There are three major elements that ensure success including valuing information sharing; looking for an appropriate way of searching information; and willingness to look for information (Karma, Kask & Vadi 2009, pp. 163-171). Additionally, Pitta, Fung and Isberg (1999, pp. 1-17) note that some cultures like the Chinese view contracts and negotiations as connections of relationships between people by proofing a powerful human bond instead of the legal bond to which Americans resort. Many western people are convinced that Chinese businesspersons use banquets as a way of getting improved negotiating position. This is because banquets are strategies used in order to know more about the other party prior to any official bargaining. While Americans are open to discuss alternatives, benefits and risks; Chinese would address all; discussion and bargaining at ago, but the main thing in the bargaining process is to create shared bond or feelings between involved parties. This mechanism is intended to attain a win-win objective situation. Additionally, during negotiation process, Chinese do not talk much like the Americans. This is because the former want to give objective facts devoid of biased feelings (Pitta, Fung & Isberg 1999, pp. 1-17). How does cultural differences affect in ethical practices? There is a widespread accord that a nation’s culture is straightforwardly connected to the ethical conduct of its managers. The conduct is displayed in tow major ways: the first one is by over acts like corporate or public actions and statements on ethical conduct; and the second one is through collection of ethical values and attitudes group. There are numerous types of cultural conflicts that affect cross-cultural businesses. Moran (2011, pp. 235-250) holds that managers like using explicit guidelines in decision-making. A set of rules that show prohibitions and acceptable practices is usually beneficial. Gift giving is allowed in most of the cultures, while in others, the practice is termed unethical. In China, a small, cautiously selected gift portrays a great sense of respect, and a valued business association. Nevertheless, gifts intended to affect the decision maker’s ruling is essentially or actually a bribe, and it is universally seen as unethical. In terms of the Chinese culture, Pitta, Fung and Isberg (1999, pp. 1-17) note that concept of harmony is valued in that they believe everything should be done in harmony, and have long-term perspective of things. On the other hand, the Americans believe in effectiveness and efficiency therefore, action and competition that will bring outcomes are seen as crucial and important. They trust in rational reasoning, which is founded on facts, and are often direct with them. In terms of relationship, Pitta, Fung and Isberg (1999, pp. 1-17) notes that Chinese are convinced that they are reliant on four societal groups that include schoolmates, relatives, personal friends, as well as indirect associations from the three. Therefore, they focus on humanity, and expansion of human relationships. Conversely, Americans attain identity by their personal accomplishments and conduct, even though relationships contribute. They have association network that is vital in business transactions, but it seems to comparably faint. Whereas Americans easily and openly make and dissolve friendships, Chinese people view friendships as long-term dedications; hence, do not easily make close friends. What is more, Pitta, Fung and Isberg (1999, pp. 1-17) assert that Chinese culture is founded on subtlety; thus, they value courtesy as a top virtue among honor, ethics and righteousness. Unlike western managers, Chinese managers do not criticize, or put another to shame in business transactions and other aspects of life. In the case of communication style, Chinese regard silence that is seen vital in routine activities. They see it as a form of careful thinking and reflection. While Americans like to talk and feel uncomfortable with silence, Chinese prefer to keep silent most of the times, as they think that the more speech, the more mistakes made. In relation to physical contact, Chinese people hate touching, while Americans like it. Whereas Americans touch business partners to express friendship, Chinese prefer to evade express eye contact to respect the other party’s privacy. Conclusion Explicitly, cultural differences have a great impact on cross-cultural businesses. These effects are evident in the decision making process of businesspersons in that decisions are based on their cultural beliefs and values. Cultural differences also affect negotiation process since businesspeople approach bargaining depending on their cultural values. In terms of ethical practices, cultural differences greatly influence cross-cultural businesses. Therefore, every culture has its norms, beliefs and values that guide the way they conduct business. References Brett, JM 2000, ‘Culture and Negotiation’, International Journal of Psychology, vol. 35, no.2, pp. 97-104. DOI: 10. 1080/002075900399385 Christopher, H, Pesantez, M, Rizvi, S 2005, Cross-Cultural Communication and Negotiation, Pp. 2-10. http://www.hooper.cc/pdfs/cross-culture_negotiation.pdf Congress, EP 2004, Cultural and Ethical Issues in Working with Culturally Diverse Patients and Their Families: The Use of the Culturagram to Promote Cultural Competent Practice in Health Care Settings, pp. 2-14. http://www.hispanichealth.arizona.edu/cultural%20and%20ethical%20issues%20working%20w%20diverse%20patients%20culturagram%20(2).pdf Danciu, V 2011, ‘International Business Negotiation Under The Impact of Cultural Distance’, The Romanian Economic Journal, Vol. 14, no. 2, pp. 175-194. http://www.rejournal.eu/Portals/0/Arhiva/JE%2042/Danciu.pdf Drake, LE 2001, ‘The culture-negotiation link: Integrative and distributive bargaining through an intercultural communication lens’, Human Communication Research, vol. 27, no.3, pp. 317-349. 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Pp. 235-250. http://books.google.co.ke/books?id=ESfcPSU5DJ4C&pg=PR3&lpg=PR3&dq=Managing+cultural+differences+global+leadership+strategies+for+cross-cultural+business+success,&source=bl&ots=0VjiARppRL&sig=8WqtJ6qVBWc6jM3HVVN5ELf1pR0&hl=en#v=onepage&q=Managing%20cultural%20differences%20g Negulescu, SC, Lascu, AL, Oprean, C 2007, Cultural differences in decision-making. A Transcultural interface for gambler's fallacy, Pp. 1-5. http://www.cedc.ro/media/Papers/Lascu4.pdf Pitta, DA, Fung, H-G & Isberg, S 1999, ‘Ethical issues across cultures: managing the differing perspectives of China and the USA’, Journal of Consumer Marketing, vol. 16, no.3, pp. 1-17. http://home.ubalt.edu/ntsbpitt/ethics.pdf Read More