Chapter 07 – Cross-Cultural Communication and Negotiation
4. What negotiation approaches may Hatley use if she wants to continue with the deal
in order to increase her confidence that it will be successful?
Should Hatley decide to pursue the deal with the South Korean company, a lot of
planning is necessary. Dealing with Asian cultures requires a tremendous amount of
relationship-building, as trust and long-term relations are necessary foundations for
successful business. Moreover, Hatley needs to extensively communicate with her
That is why Hatley should also start training and grooming some of her staff to act
as liaisons between the two companies, and be willing to send them often or
relocate them in Korea, in order to coordinate operations and maintain close,
positive relationships.
Brief Integrative Case 2.1: Coca-Cola in India
1. What aspects of U.S. and Indian culture may have been causes of Coke’s difficulties
in India?
Answer: Coca-Cola first experienced difficulties when the Indian government
demanded Coke’s secret formula. Indians are highly suspicious of foreign investors
and any proposals they put forward. Therefore, when a few bottles of Coke
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2. How might Coca-Cola have responded differently when this situation first occurred,
especially in terms of reacting to negative perceptions among Indians of Coke and
other MNCs?
Answer: Coca-Cola probably should have responded much more quickly to reassure
consumers of the safety of Coke products. The allegations of politicians spread
rapidly through India and some even believe that the company was deliberately
3. If Coca-Cola wants to obtain more of India’s soft drink market, what changes does
it need to make?
Answer: Over the last decade, Coca-Cola has invested over $1 billion in India, and
now employs some 5,500 people. In addition, the company is responsible for
creating another 150,000 jobs with related companies. These efforts will help the
company gain respect and loyalty from the Indian population. In the future, Coca-
the future.
4. How might companies like Coca-Cola and PepsiCo demonstrate their commitment
to working with different cultures and respecting the cultural and natural
environments of those societies?
Answer: Coca-Cola has learned the hard way that doing business is tough when the
culture is vastly different. Some of the things that Coca-Cola and PepsiCo may
want to do to demonstrate their commitment is to improve their feedback systems.
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Brief Integrative Case 2.2: Danone’s Wrangle with Wahaha
1. When and how did Danone expand into the Chinese market? What problems did
Danone Group encounter while operating in China?
Answer: Danone initially entered China in the late 1980s, and since then has made
significant investments in the country, and now employs some 23,000 people in its
Asia-Pacific area. Some 57 percent of the company’s Asian sales come directly
from China. Things were not always easy for Danone in China, however. The
2. How was the Danone and Wahaha JV formed? What was its structure? Why did
Danone decide to form a joint venture rather than establish a 100 percent-owned
subsidiary?
Answer: Danone’s lack of knowledge of the Chinese market perhaps contributed to
its decision to form a joint venture in 1996 with China’s Wahaha Group. The initial
joint venture was a three-way partnership among Danone, Wahaha, and Bai Fu Qin
Ltd. Danone later bought Bai Fu Qin’s share of the venture. Under the terms of the
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3. What was the problem of Danone Wahaha joint venture that triggered the conflict
between the companies? What were the differences in Danone’s and Wahaha’s
understanding of their own respective roles and responsibilities in this venture?
What aspects of national and organizational culture affected this perspective?
Answer: The dispute between Danone and Wahaha involved differences on how the
trademarks in the joint venture were to be used, and who actually controlled the
company. Wahaha believed that it owned all rights to the Wahaha trademark and
was able to establish brands outside the joint venture that used the Wahaha name.
Danone felt that the trademark belonged to the joint venture, a company that
Danone believed it controlled. Because Wahaha did not fully understand the
4. Was Danone successful in proving its claims in court? How was the conflict
between the two companies resolved? What were the key lessons for Danone about
doing business in China?
Answer: In 2006, Danone accused Wahaha of violating the terms of the joint
venture and offered to buy the company out. When Wahaha rejected the offer,
Danone immediately filed lawsuits claiming that Wahaha had used the trademark
illegally and in doing so, threatened the viability of the joint venture. A total of ten
5. Did Danone follow the advice regarding JVs in China listed in the list just above?
Which aspects did it follow and which did it not?
Answer: Most students will probably agree that Danone failed to fully follow any of
the rules for joint ventures in China. The company made assumptions about how
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Chapter 07 – Cross-Cultural Communication and Negotiation
In-Depth Integrative Case 2.1a: Euro Disneyland
1. Using Hofstede’s four cultural dimensions as a point of reference, what are some of
the main cultural differences between the United States and France?
Answer: Perceptions of how Americans see the French include arrogance,
flamboyance, hierarchical, and emotional. Perceptions of how the French view
Americans include naive, aggressive, unprincipled, and workaholics.
expected to perform to avoid uncertainty whenever possible.
Individualism is the tendency of people to look after themselves and their
immediate family only. In the American culture it is characterized by individualism.
An employee looks after one’s self and his or her immediate family. In the more
collective French culture, what is best for the group is emphasized. This is a
proponent of communism, which may apply in some industries in France.
Masculinity exists in a culture when the dominant values in society are success,
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2. In what way has Trompenaars’ research helped explain cultural differences between
the United States and France?
Answer: According to Trompenaars, there are cultural differences between the
American and French culture. The four organizational cultures are:
Family Culture―A culture that is characterized by a strong emphasis on
hierarchy and orientation to the person.
In the United States an egalitarianism philosophy exists that is characterized by a
guided missile culture. This type of culture is exemplified by a formal organization
promoting a task orientation and support for people in the work environment. A
manager will make decisions for the greatest good for the greatest number in this
type of work environment. The Eiffel Tower culture is exemplified in the northwest
3. In managing its Euro Disneyland operations, what are three mistakes that the
company made? Explain.
Answer: A mistake Euro Disneyland has made is the lack of understanding of the
French culture. The decision to offer wine in Euro Disneyland restaurants was
essential to meet the needs of this French culture. Another mistake of management
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