Chapter 7 F 23 Cross Cultural Communication & Negotiation
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INTB 656
Fall 2023
NAME Jasmine Benson
Chapter 7 Cross-Cultural Communication & Negotiation
Key Terms. Define the following:
Chromatics
: This term refers to the study of the use and perception of color, especially in communication. It encompasses the psychological and cultural effects of color, how colors are used to convey messages, and the impact they have on human behavior and emotions.
Chronemics
: Chronemics deals with the use of time in communication. It includes the study of how people perceive and structure time, the role of time in communication (e.g., waiting, response times, punctuality), and how different cultures view and utilize time.
Distributive Negotiations
: This negotiation approach focuses on dividing a fixed amount of resources, such as money, goods, or assets, among parties who have conflicting interests. It's a competitive negotiation where each side tries to maximize its share of the resources.
Haptics
: This refers to the study of touch in communication. It includes the use of touch to convey messages, emotions, and the interpretation of touch-based communication in different cultural contexts.
Integrative Negotiations: In contrast to distributive negotiations, integrative negotiations focus on expanding the available resources and options to create a win-win scenario. The parties collaborate to find solutions that satisfy the interests of all involved.
Intimate Distance: Refers to the zone of personal space that is typically reserved for close relationships and usually ranges from touching to about 18 inches apart.
It's the distance used for close interactions with family, close friends, or intimate partners.
Kinesics: The study of body language, facial expressions, gestures, and posture and their role in communication. It involves the interpretation and use of nonverbal cues to convey meaning or emotions.
Monochronic Time Schedule: This is a concept where individuals tend to do one thing at a time and strictly follow schedules. Time is seen as linear and segmented, and punctuality is highly valued.
Oculesics: The study of eye behavior, including eye contact, gaze, and movement, and their role in communication. It involves understanding how eye behavior can convey messages and emotions.
Personal Distance: This refers to the space maintained between individuals in social interactions. It's farther than intimate distance and is usually around 1.5 to 4 feet and is used in conversations with friends and acquaintances.
Polychronic Time Schedule
: In contrast to monochronic time, this concept involves the simultaneous handling of multiple tasks or activities and a more flexible approach to time. Interruptions and multitasking are more acceptable, and time is viewed as more fluid and less strictly segmented.
Proxemics: This term refers to the study of the use of space in communication. It includes the perception and use of personal space, territoriality, and how different cultures define and utilize space in various social contexts.
Public Distance: This is the furthest zone of personal space, usually beyond 12 feet. It's used for public speaking or situations where individuals are not engaged in direct interaction but are part of a larger audience.
Social Distance: This is the intermediate zone between personal and public distance, usually around 4 to 12 feet. It's used in formal or social gatherings where there's a degree of formality but not close intimacy.
Upward Communications: This refers to the flow of information within an organization from lower levels to higher levels. It involves subordinates communicating with their superiors, such as providing feedback, suggestions, or reporting on progress or issues.
Discussion Questions
How does explicit communications differ from implicit communications?
Explicit communication involves the use of clear, direct, and unambiguous language to convey a message. It's straightforward and easily understood.
Implicit communication, on the other hand, involves conveying messages indirectly or subtly, often relying on context, nonverbal cues, or cultural nuances.
Why is nonverbal communication a barrier to effective communications?
Nonverbal communication, including body language, facial expressions, gestures, tone of voice, and other non-spoken cues, can be a barrier to effective communication due to its subjectivity and potential for misinterpretation. Different cultures interpret nonverbal cues differently, leading to misunderstandings, confusion, or miscommunication when individuals from different cultural backgrounds interact.
For U.S. companies going abroad for the first time, which form of nonverbal communications barriers would be the greatest, kinesics or proxemics?
For U.S. companies entering a new international market, the greatest nonverbal communication barrier might vary based on the destination culture. However, proxemics (the study of personal space and how people use it) could pose a significant challenge. Different cultures have varying norms regarding personal space, and misinterpreting or not respecting these norms can lead to discomfort or misunderstanding.
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Which elements in the negotiation process should be done only with your side of the negotiations?
Elements involving internal strategies, confidential information, and your limitations or boundaries should generally be managed and decided upon by your side before entering negotiations. It's crucial to have a clear understanding of your own position, goals, and strategies before engaging in negotiations.
Which elements in the negotiations process should be done with all sides present?
As a general rule, the negotiation of terms, compromises, agreements, and open discussions should involve all parties present. This includes discussing the terms of the deal, compromises, clarifications, and anything that directly impacts all sides. Transparency and direct communication with all parties involved are key to reaching mutual understanding and agreements in negotiations.
Case Synopsis: “Walmart”. P. 274
In the early 1990s, Walmart began its international expansion by opening a Sam's Club near Mexico City. This marked the creation of Walmart International two years later. While its big-box, low-price model succeeded in some overseas markets, it faced challenges in others, notably in Mexico, China, and the U.K., where established retailers resisted Walmart's pricing strategy. In Germany and Japan, Walmart struggled to adapt its model to local preferences. It faced setbacks in various countries, including store closures in Hong Kong and Indonesia
due to operational and cultural issues. Walmart experienced difficulties in several countries due to mismatched consumer preferences, distribution problems, and competition from established brands. Additionally, it faced controversies related to labor practices and ethics, notably in China. Despite these challenges, Walmart International grew significantly, operating in 26 countries outside the U.S., generating $118 billion in revenue. It maintained its position as a top global retailer. The company focused on the Americas initially, entering Mexico, Brazil, and Argentina. European markets were less appealing due to mature competition and cultural differences. While the Asian market held potential, the cultural and logistical differences from the U.S. made it a challenging entry. Walmart gradually
expanded into China and introduced retail innovations to cater to local shoppers. The company's entry into different markets wasn't without issues, facing bribery allegations in Mexico and dealing with complex market landscapes, yet still achieving notable success in Mexico and China. Walmart's global expansion, despite facing various setbacks and challenges, succeeded in establishing a significant presence in several countries. It continued to adapt its strategies, emphasizing the importance of understanding local cultures and preferences while expanding its international operations. Shanghai Bailian Group, a major player in China's retail market, significantly expanded by acquiring four rival supermarkets and department stores a decade ago. With over 6,000 stores and more than 200,000 employees, they've grown substantially. China Resources Enterprise, another domestic competitor, adopted strategies to enhance profitability by hiring managers from foreign chains and cutting staff, intensifying competition in China's $5 trillion retail market, especially after the country's opening to foreign retailers post its WTO entry. In Europe, Walmart faced challenges upon entering Germany in 1998 by acquiring Wertkauf hypermarkets, aiming to establish a foothold in the European market. However, the venture proved to be a costly struggle due to underestimating critical factors. Walmart encountered geographic dispersion of stores, cultural differences, and strong competition from established German discounters like Aldi and Lidl, which dominated the grocery market with cut-rate offerings. The German market's price-conscious nature, combined with intense competition and low-profit margins, made it difficult for Walmart to establish its price-driven model effectively, unlike its success in the United States. Walmart faced significant struggles in Germany, losing about €200 million annually despite efforts to turn around its business. The company finally withdrew from the German market in 2006, selling its stores to the rival supermarket chain Metro, incurring a pre-tax loss of about US$1 billion on the failed venture. However, Walmart found success in the United Kingdom by acquiring ASDA Group PLC in 1999. Although its performance was moderately successful, ASDA became a center for excellence in global grocery sales. In Japan, Walmart entered through the Seiyu chain, initially facing issues but gradually stabilizing its operations by adjusting to the market's demands. In Latin America, Walmart made strategic moves. In Central America, it
acquired a significant stake, operating stores across several countries. However, its performance in Brazil was turbulent, leading to substantial losses and eventually selling a major portion of its operations. The company made efforts to expand in South Africa but encountered challenges due to infrastructure issues. In
response, it aimed to build standalone stores to enhance its presence. Moreover, Walmart's ambition to challenge Amazon in e-commerce resulted in substantial investments in digital infrastructure and online ordering capabilities. Walmart strategized its global presence, refocusing on high-growth markets like India, Canada, and select African countries. In India, it partnered with local companies and acquired Flipkart to boost its e-commerce sales. In Canada, Walmart invested in store renovations, distribution networks, and e-commerce projects. However, challenges remained, notably in terms of global corporate responsibility, as the company faced issues in its supply chain, particularly in Bangladesh, and worked to address safety concerns in factories producing its goods.
Case Questions: “Walmart”. P. 281
1.
What was Walmart's early global expansion strategy? Why did it choose to first enter Mexico and Canada rather than expand into Europe and Asia?
a.
Walmart's early global expansion strategy focused on a step-by-step approach, initially targeting markets in North America before venturing into Europe and Asia. The company chose to enter Mexico and Canada before Europe and Asia due to proximity, cultural similarities, and regulatory ease. Canada and Mexico shared some commonalities with the U.S., which facilitated the expansion process.
2.
What cultural problems did Walmart face in some of the international markets it entered? Which early strategies succeeded, and which failed? Why? What lessons did Walmart learn from its experience in Germany and in Japan?
a.
Walmart faced various cultural challenges in international markets. Some strategies succeeded, such as adapting stores to local preferences and implementing cost-effective strategies. However, in Germany and Japan, Walmart faced significant difficulties due to
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cultural differences, local shopping habits, and regulatory issues. Walmart's standardized approach did not align with German preferences for local, smaller stores, and in Japan, it struggled due to cultural dissimilarities. Walmart learned the importance of adapting to local cultures, preferences, and shopping habits for success.
3.
How would you characterize Walmart's Latin America strategy? What countries were targeted as part of this strategy? What potential does this region bring to Walmart's future global expansion? What cultural challenges and opportunities has Walmart faced in Latin America?
a.
Walmart targeted countries like Mexico and Brazil as part of its Latin America strategy. The region presented growth opportunities due to a growing middle class, expanding markets, and economic potential. However, cultural challenges included adapting to diverse consumer behaviors, preferences, and local competition.
4.
What group of countries will be targeted for Walmart's future growth? What are the attractiveness and risk profiles of these countries? What regions of the world do you think will be vital for Walmart's future global expansion?
a.
Walmart targeted countries like Mexico and Brazil as part of its Latin America strategy. The region presented growth opportunities due to a growing middle class, expanding markets, and economic potential. However, cultural challenges included adapting to diverse consumer behaviors, preferences, and local competition.
5.
How would you characterize Walmart's response to pressure for greater ethics and social responsibilities in its expansion strategy and supply chain? Are its responses appropriate and adequate?
a.
Walmart faced criticisms related to its supply chain practices, labor issues, and environmental impact. In response, the company implemented various sustainability initiatives, committed to renewable energy, and took steps to improve labor conditions. However, opinions on the adequacy of its responses vary among stakeholders, with ongoing debates regarding the company's efforts towards ethical and social responsibilities in its expansion strategy.
Current Events Article: “Cross Cultural Negotiations”
The article provides an in-depth analysis of how cultural differences impact business negotiations. It highlights the significance of cultural understanding beyond mere etiquette and behavior. The focus shifts to the ways in which various cultures approach decision-making, governance processes, and negotiations, with examples demonstrating how these differences have resulted in the failure of promising international deals. It emphasizes the importance of recognizing and adapting to the decision-making processes of other cultures, be it
top-down authoritative approaches, consensus-based decision-making, or coalition-building dynamics.
The article explores how different cultures have distinct approaches to decision-making processes in business negotiations. Understanding who holds decision-making power is critical, and assumptions based on one's home culture might be misleading in an international context. Beyond formal decision-making bodies, informal influences, such as keiretsu in Japan or powerful families in Italy, significantly impact negotiations. It delves into the differences between top-
down, authoritative decision-making and consensus-based decision-making prevalent in certain cultures. Recognizing winning or blocking coalitions is crucial, and understanding governance structures can help anticipate obstacles and opportunities in negotiations.
The article stresses the importance of discarding presumptions based on one's home market, emphasizing the need to thoroughly understand the various players involved in decision-making and adopting appropriate negotiation strategies tailored to different cultural decision-making processes.
https://hbr.org/2002/03/the-hidden-challenge-of-cross-border-negotiations