Chapter 07 – Cross-Cultural Communication and Negotiation
b) If no common ground is reached, a neutral third party can come in; the third-party
person has the last word in what the true “final draft” is. If the parties decide it is still
unacceptable, walk away from negotiations.
Bargaining Behaviors
1) Verbal behaviors are critical to the success of negotiations. Make high initial offers, ask a
2) Use of Extreme Behaviors: Some negotiators begin by making extreme offers of
requests. An extreme bargaining position
a) Shows the bargainer will not be exploited
3) Promises, Threats, and Other Behaviors: Another approach to bargaining is the use of
4) Nonverbal Behaviors: Nonverbal behaviors also are very common during negotiations.
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Chapter 07 – Cross-Cultural Communication and Negotiation
The World of International Management―Revisited
Questions & Suggested Answers
1. How is cultural communication in India similar to that of Europe and North
America? How is it different?
Answer: On the surface, communication in India is similar to that of Europe and
North America in that India also uses communications tools like the telephone and
e-mail. However, Indians tend to be vague with their messages as compared to
2. What kind of managerial relationships could you assume exist between the
American financial services firm (mentioned in The World of International
Management) and its employees in India?
Answer: Many students will suggest that the relationship between the American
firm and its Indian employees is a distant and hierarchical one in which U.S.
3. What kind of negotiations could help engage Indian employees and overcome some
of the cultural problems encountered? How might culture play a role in the
approach the Indian employees take in their negotiation with the financial firm?
Answer: Negotiation is the process of bargaining with one or more parties to arrive
at a solution that is acceptable to all. In this particular case it might be wise to
provide cross-cultural training to both sides to help ensure that each better
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Chapter 07 – Cross-Cultural Communication and Negotiation
Key Terms
Chromatics―The use of color to communicate messages
Chronemics―The way in which time is used in a culture
Communication―The process of transferring meanings from sender to receiver
Context―Information that surrounds a communication and helps convey the message
Distributive negotiations―Bargaining that occurs when two parties with opposing goals
compete over a set value
Downward communication―The transmission of information from managers to subordinate
Haptics―Communicating through the use of bodily contact
Integrative negotiation―Bargaining that involves cooperation between two groups to
integrate interests, create value, and invest in the agreement
Intimate distance―Distance between people that is used for very confidential
communications
Kinesics―The study of communication through body movement and facial expression
Monochromic time schedule―A time schedule in which things are done in a linear fashion
Negotiation―Bargaining with one or more parties for the purpose of arriving at a solution
acceptable to all
Nonverbal communication―The transfer of meaning through means such as body language
and the use of physical space
Oculesics―The area of communication that deals with conveying messages through the use
of eye contact and gaze
Perception―A person’s view of reality
Personal distance―In communicating, the physical distance used for talking with family and
close friends
Polychromic time schedule―A time schedule in which people tend to do several things at the
same time and place higher value on personal involvement than on getting things done on
time
Proxemics―The study of the way people use physical space to convey messages
Public distance―In communicating, the distance used when calling across the room or giving
a talk to a group
Social distance―In communicating, the distance used to handle most business transactions
Upward communication―The transfer of meaning from subordinate to superior
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Chapter 07 – Cross-Cultural Communication and Negotiation
REVIEW AND DISCUSSION QUESTIONS
1. How does explicit communication differ from implicit communication? Which is
one culture that makes wide use of explicit communication? Implicit
communication? Describe how one would go about conveying the following
message in each of the two cultures you identified: “You are trying very
hard, but you are still making too many mistakes.”
Answer: Explicit communication involves directly saying exactly what you mean,
whereas implicit communication requires making inferences about meanings. The
U.S. culture makes wide use of explicit communication. For example, most
American managers are taught to set objectives in quantitative terms with
2. One of the major reasons that foreign expatriates have difficulty doing business in
the United States is that they do not understand American slang. A business
executive recently gave the authors the following three examples of
statements that had no direct meaning for her because she was unfamiliar
with U.S. slang: He was laughing like hell. Don’t worry; it’s a piece of cake.
Let’s throw these ideas up against the wall and see if any of them stick. Why
did the foreign expat have trouble understanding these statements, and what
could be said instead?
Answer: The foreign expatriate had trouble understanding these statements because
she had misinterpreted their meaning. Statements that would be less likely to be
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3. Yamamoto Iron & Steel is considering setting up a minimill outside Atlanta,
Georgia. At present, the company is planning to send a group of executives
to the area to talk with local and state officials regarding this plant. In what
way might misperception be a barrier to effective communication between
the representatives for both sides? Identify and discuss two examples.
Answer: The way in which Yamamoto and the state officials see reality may vary,
and this will influence their judgment and decision making. Thus, perceptions of
the two parties can become a barrier to effective communication.
After greeting the executives from Yamamoto, the state officials may choose to get
right down to the business at hand. The Japanese executives might perceive the
4. Diaz Brothers is a winery in Barcelona. The company would like to expand
operations to the United States and begin distributing its products in the Chicago
area. If things work out well, the company then will expand to both coasts. In its
business dealings in the Midwest, how might culture prove to be a communication
barrier for the company’s representatives from Barcelona? Identify and discuss two
examples.
Answer: The biggest cultural barriers to communication will probably stem from
lifestyle differences between the midwest and Barcelona. A prime example is
lunchtime behavior. In Chicago it is not uncommon to see managers eating lunch at
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5. Why is nonverbal communication a barrier to effective communication? Would this
barrier be greater for Yamamoto Iron & Steel (question 3) or the Diaz Brothers
(question 4)? Defend your answer.
Answer: The use of body language (kinesics) and the use of physical space
(proxemics) can account for many perceptual problems, which act as barriers to
6. For U.S. companies going abroad for the first time, which form of nonverbal
communication barriers would be the greatest, kinesics or proxemics? Why?
Defend your answer.
Answer: Both kinesics and proxemics will be barriers to communication, but in
most cases proxemics will be the greater of the two. A great deal of communication
7. If a company new to the international arena was negotiating an agreement with a
potential partner in an overseas country, what basic steps should it be
prepared to implement? Identify and describe them.
Answer: Negotiation is an important part of managing political risk and involves
bargaining with one or more parties for the purpose of arriving at a solution that is
8. What elements of the negotiation process should be done with only your group?
Which events should take place with all sides present? Why?
Answer: The first phase, planning, should be done only with your group. This is
when negotiators identify the objectives they would like to attain. Then they
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9. An American manager is trying to close a deal with a Brazilian manager, but has
not heard back from him for quite some time. The American is getting very nervous
that if he waits too long, he is going to miss out in any backup options due to
waiting for the Brazilian. What should the American do? How can the American tell
it is time to drop the deal? Give some signs that suggest negotiations will go no
further.
Answer: In American culture, time is considered an asset and should not be wasted.
The American manager should not let one deal ruin the chances of settling the deal
elsewhere. Americans believe it is important to be factual and objective. They often
make early concessions to show the other party that they are flexible and
10. Wilsten Inc. has been approached by a Japanese firm that wants exclusive
production and selling rights for one of Wilsten’s new high-tech products. What
does Wilsten need to know about Japanese bargaining behaviors to strike the best
possible deal with this company? Identify and describe five.
Answer: In doing business with Japan, Wilsten needs to become familiar with the
Japanese negotiating style so that the end result is a more effective negotiating
session. Patience and sincerity will go a long way in dealing with the Japanese.
Some Japanese behaviors to be aware of include the following:
The Japanese like a good emotional climate for decision making where they are
given a chance to know the decision makers.
Many Japanese negotiators do not have the authority to make on-the-spot
decisions.
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Chapter 07 – Cross-Cultural Communication and Negotiation
Internet Exercise: Working Effectively at Toyota
Suggestion for Using the Exercise
1. After students have completed the material assigned in the exercise, ask them to
complete some or all of the same steps for Ford, a major U.S. automaker. Ask your
students to note the similarities and differences between the way Toyota and Ford
communicate with the general public. Which of these differences in communication
styles can be attributed to differences between the ways that Japanese and U.S.
companies communicate with the public?
In The International Spotlight: China
Questions & Suggested Answers
1. Do you think China will continue to achieve record growth? What factors could
hurt its prospects?
The Chinese economy continues to achieve tremendous growth, even during the
global economic crisis, although more conservative assessments show that the rate
of growth is slightly lower than what it is claimed to be. Advanced technology, as
consistent favoritism for local companies; corruption; and continued problems with
piracy, counterfeiting, industrial spying, and human rights violations.
2. Because of an abundance of cheap labor, China has been called “the workshop of
the world.” Do you think this will still be the case a decade from now? Why or why
not?
Answer: Apparently, this trend is already changing. Besides China’s competitive
labor costs, a highly educated and technologically adept workforce is gradually
becoming the primary attraction for companies that are outsourcing to China. Time
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3. What communication and negotiation approaches are likely to work best when
foreign MNCs experience demands from Chinese workers for higher wages?
Answer: In a Chinese company, managers and employees are likely to have a
contextual, implicit, indirect, succinct, affective communication style, which is
opposite to the style that would be used by U.S. companies. Silicon Valley
companies, for example, are likely to have incubator organization cultures, in
States. However, if those negotiations have gone badly in the past, the U.S.
companies may enter into negotiations with labor in China with a negative attitude.
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Chapter 07 – Cross-Cultural Communication and Negotiation
You Be the International Consultant: Foreign or Domestic?
Questions & Suggested Answers
1. What specific types of communication problems might Hatley encounter in dealing
with the South Koreans?
Answer: There are going to be many communication problems with the Koreans
even if things go well. There will be written and verbal communication problems
with English, Korean, and the translations. Perceptual differences in the way things
2. Can these communication problems be resolved, or are they insurmountable and
simply have to be tolerated?
Answer: Many steps could be taken by Hatley to improve communication if she
chooses to go with the Korean offer. One of the most important ways of increasing
effectiveness in communication is through open feedback systems―both personally
and impersonally. Such feedback systems keep both sides aware of progress and aid
in monitoring and controlling of operations. Face-to-face meetings and liaisons are
communication process.
Based on communication problems alone, should Hatley back away from the deal
or proceed? Give your recommendation; then defend it.
Answer: Hatley should not back away from the Korean deal simply on the basis of
communication problems. If the Korean forecasts are really true, and Hatley could
earn an ROI 50 percent higher than on the American deal, she needs to evaluate the
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