Business Etiquette in a Cross-Cultural Banking Industry - Essay Example

A Study Case of Business Etiquette in a Cross-Cultural Banking Industry (Standard Chattered Bank and Bank of Baroda) Researcher’s Name: Institution: Date: 1. Introduction 1.1 Background information A study of Cross-cultural communication has shown that the current corporate business world it’s inter-cultural and that the leaders in it should provide the resources needed to their managers as an international assignment to adopt a cross-cultural etiquette. Study cases (Asante & Yin, 2007; Chaney & Martin, 2011) Illustrates that global cross-cultural etiquette will enable managers to cope with cultural differences. As Connerley and Paul (2005) noted, cross-cultural communication skills and interpersonal negotiation competence are essential to effective management of the multination workforce. Research evidence demonstrates that corporations are increasingly establishing joint ventures, building strategic alliances, and establishing direct investments. Successful and effective communication in an international business environment is necessary for business growth as Reynolds and Valentine (2011) have determined.( Lok & Crawford, 2004) Due to the globalisation of business it has become exceedingly important to have an exemplary cross and intercultural communication so as to gain competitive advantage. In current years, scholarly debates have been focusing on globalization of the economy and the diverse workforce that emphasises on appropriate business etiquette that leads to sustainable business relations across international business. Cook and Cook (2011) place premium manners of managers in public and professional while undertaking official duties. Other studies have highlighted that small business and upcoming entrepreneurs have started to invest heavily and competing in the international market. Recent developments show that many businesses are cultivating a global focus by sourcing, producing, importing, or exporting their goods and services around the globe, which makes intercultural communication and negotiation gain substantial prominence in the international business management. Further, international business etiquette (the expected rules of behaviour for intercultural communication and management) has become increasingly important because of the mobility of people. Due to the different systems in politics and economy of the world, and the different history and cultural tradition. Sebenius (2002) points out that cultural difference can influence business negotiations in significant and unexpected ways. Negotiation is an important part of developing business in any market. (Xiaohua et al., 2003). 1.2 Problem Statement The increasing globalization in the world and the increased mobility of people settling in foreign countries in search of better opportunities and working conditions. With the growth of companies in foreign countries, outsourcing of foreign workforce and globalization of the business has made it necessary for the international stakeholders to invest heavily on inter-cultural business etiquette and communication for sustainable growth. Cross-cultural negotiations are a field of considerable interest in this age of the global economy (Ghauri, 2003).A new focus and enlightenment is required to keep up the highly competitive business world. Wheeler, (2006) argues that one part of new thinking is to understand and make agreements in other countries with different cultures. This is a challenge that has to be handled through intense and thorough negotiations.(Gelfand, Erez, & Aycan, 2007) Saner (2000, p.17) suggest that negotiations is a process that strengthens relationships therefore leaders in the corporate world need to learn the cultural diversities in their country and those of the other countries. In my personal experience abroad in a European country, I learnt that different countries have their cultural standards of thinking, acting and being. As a researcher and a student in business, this literature review will focus on the importance of negotiation business etiquette.(Fischer, 2009) 1.3 Justification The increasing emphasis on workforce diversity in recent years makes it extremely important that domestic and global managers should devote more time to learning appropriate communication strategies, especially for effective management of a diverse organization to attain the needed business etiquette for a substantial growth. As Deresky explained, effective cross-cultural communication indicates whether or not the receiver is from a country with a monochromic or a polychromic time system, high-context or low-context environment, collective or individualistic cultural orientation. For instance, the global business etiquette entails that managers should have the abilities to interact with the clientele and other business partners. This is what drove me to study this area of cultural difference in the business Community since it is vital in the way people involved relate in terms of dress etiquette, dinner etiquette and gift giving etiquette.(Den Hartog et al., 1999) 1.4 Purpose of the Study The purpose of this study is to investigate the effectiveness of negotiation between partners of different cultures in the international business for instance in Standard Chattered Bank (a western oriented culture) and Bank of Baroda (a Hindu oriented culture). 2. Objectives of the study The objectives of this study will be to; Investigate the different dominant cultures that exist in the international business industry. Determine the ways in which these cultures can co-exist in the business world fostering growth. Determine what business etiquette rules need to be applied by managers while conducting official duties within a cross-cultural environment. Determine the current issues and trends affecting business etiquette in an intercultural business setup. 3. Literature Review This chapter discusses both a review of literature related to the study, as well as a summary of the reviewed studies. The literature review is drawn from books, periodicals, journals, newsletters, research thesis among others. Usunier, (2003, p.30) suggests that cultural factors may hinder relations in general, and even complicate, prolong, and even frustrate particular negations where there otherwise exists an identifiable basis for cooperation. However, the skill and experience of diplomats will often prevent incipient misunderstandings from getting out of hand. To use cross-cultural approaches effectively requires training, education and experience to discover how to get beyond one’s own cultural stereotypes and misconceptions. (Trompenaars et al., 2007) There are arguments that propose that culture is inconsequential to cross-cultural negotiation. To begin with, a YouTube video by Falcao (2008) stresses that when entering into negotiations, cultural factors should be considered such as the educational or religious background of the person sitting across the table, but many people both underestimate and overestimate the cross-cultural aspects that are vital for effective communication. Furthermore Weiss (1994) explains how most cross-cultural negotiations involve more than two cultures; most individuals belong to more than one group; negotiations often occur between teams that have their team cultures in addition to the member’s ethnic, national, and organizational backgrounds; and multi-party, multicultural negotiations occur as well. According to Holden (2002), national culture is one of many factors that influence behaviour at the negotiation table, albeit an important one (Stephan & Uhlaner, 2010). Individualistic cultures like UK are more self-centred and emphasize mostly on their individual goals, whereas India are more of a collectivist society where individuals set aside personal goals for the good of the whole. (Rugman, 2000). Kumar et al. (2005), emphasises that India is considered an affectionate culture. Indians are neutral in affection but are allowed to show assertiveness and are taught to be non-violent. The UK is also regarded as a high neutral culture as they try not to show their feelings; they act socially and maintain their composure (Cherunilam, 2007 p.83). When doing business in India, it is important to build a good relationship with the Indians. UK is seen as more of a particular culture, where they are more focused on getting to the point of things (sealing a deal) and less interested in friendship making. (Katz, 2008) Most Indians value ascription because of their reliance on the caste and this is where my case studies come in (Bank of Baroda and Standard Chattered). 4. Research Methodology This chapter presents research methodology to be employed in this study under the following subsections: Research design, the study area, the target population, the sample and sampling procedure, data collection instruments, validity, reliability and data analysis procedure. 4.1 Research Design Kothari, (2008) defines research design as the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. He further states that research design is important because it facilitates the smooth sailing of the various research operations, thereby making research as efficient as possible yielding maximal information with minimal expenditure of effort, time and money. This study will adopt a descriptive survey design because it will enable the researcher to collect information on the subject of study in its current state. Mugenda and Mugenda (1999) say that the design will also provide the researcher with the opportunity to capture human attitudes, opinions and other emotions of the respondents.(Weisinger & Trauth, 2003) Kothari, (2008), notes that descriptive survey design provides the researcher with an opportunity to receive detailed information from respondents who are actually involved in the management of education in the District. Engel hart, (1972) argues that descriptive survey methods are widely used to obtain data which can effectively be used to evaluate present practices and decision making. 4.2 Area of Study The study will be conducted on two banks that have different cultures namely Bank of Baroda and Standard Chattered Bank which will enable me to asses the effects of cross-culture and the business etiquette needed to cope with it. I will use Hofstedes five cultural dimensions, cultural differences among India and The UK. INDIA Power distant: Looking at the figure shows that India scored rather high with a score of 77. Indian people tend to be very sensitive to the position of people. All seniors and elders are expected to be treated respectfully. In the workplace, a system of hierarchy exists where senior colleagues are obeyed and respected. 17 Collectivism versus individualism with a score of 48 shows that Indians are extremely family orientated people. Indian collectivism is derived from traditional Indian family values. Indians tend to avoid conflict and opt for indirect communication.(Cohen, 2009) Collectivism versus individualism: With a score of 48 shows that Indians are extremely family orientated people. Indian collectivism is derived from traditional Indian family values. Indians tend to avoid conflict and opt for indirect communication.(Hofstede & McCrae, 2004) UK Power distant: At 35 Britain sits in the lower rankings of PDI – i.e. a society that believes that inequalities amongst people should be minimized and where you are born should not limit how far you can travel in life (Hofstede & McCrae, 2004). Collectivism versus individualism: At a score of 89 the UK is amongst the highest of the individualistic scores, beaten only by some of the Commonwealth countries i.e. Australia and the USA. The British are a highly individualistic and private people. From an early age, Brits are to think for themselves and to find out what their unique purpose in life is and how they uniquely can contribute to society. The route to happiness is through personal fulfilment (Hofstede & McCrae, 2004). 4.3 Questionnaires The questionnaires will be used to obtain information from; Standard Chattered chairpersons and Bank Baroda chairpersons and principals. The open-ended questions will be preferred because they will enable the respondents to respond to items exhaustively. While close-ended questions will give specific responses on the objectives of the research and finally the use of Questionnaires is economical in terms of time and money. 4.4 Interview Schedule An interview schedule is a set of questions that an interviewer asks when interviewing respondents. This enables the researcher to obtain information required hence meeting the specific objectives of the study (Orotho, 2004). The interview schedule was chosen in this research because interviews are brief. This will provide the respondents with an opportunity to exhaustively explain issues related to the ministry of education policy issues. Interview schedule will be used because it will provide the researcher with the chance to probe and guide the respondents towards the objectives of the study, and finally interviews will also provide the researcher with in-depth data which is not possible to get if only questionnaires are used (Mugenda and Mugenda, 1999). The senior managers and the Junior Managers are the key respondents who are charged with the responsibility of enforcing Cultural policy guidelines related to resource mobilization in the banking sector.(Holden & Lynch, 2004) 4.5 Document Analysis Document analysis will allow the researcher to access the Banks’ and Boards of Governors meeting minutes’ files, memos. Data will be used to fill the document analysis schedule. These records will provide essential data on the banks request from respective banking authorities. Likewise the same will provide information on banks’ staffing and recruitment. The review will cover five years period from 2005-2009.(Smith, 2012) 4.6. Validity To ensure validity, the researcher will develop research instruments with the help of research methodology experts and the supervisors from the Department of National Banking and Management of The Standard Chattered Bank and The Bank of Baroda. This will enable the researcher to develop an instrument that will yield valid content data by ensuring that the instruments will be adequate in coverage of the topics under study. 4.7. Reliability A pilot study to assess the accuracy of research instruments will be undertaken in the mother countries. This will assist the researcher to address any shortcomings in the research instruments. 4.8. Administration of Research Instruments The researcher will get a letter of introduction from the University, School of Graduate Studies. This is to assist the researcher acquire research permit from the Ministry of Finance. The researcher will then visit the respective top managers of both banks. The purpose of the visit will be to inform them of the intended research in the area. A total of 115 questionnaires will be issued to top managers, and board chairpersons. 4.9. Data Analysis and Procedure Data received from the Questionnaire and interview schedules will be coded. The analysis will be facilitated by use of Statistical Package for Social Science (SPSS). Descriptive statistics will be used in analyzing data and presented in the form of frequencies, graphs, central tendency and spread. Findings will be presented in the form of tables and percentages. Further qualitative data and responses will be grouped in terms of titles/themes and findings reported. Findings will be reported according to categories of the samples. Finally conclusion will be drawn and recommendations made in relation to the findings.(Peffers, et al, 2007) Reference list Lok , P., & Crawford , J . (2004). 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