In the period of rapid growth in context of the globalization and development of economy, there are many companies that have tried to expand their business in international markets. A subsequent issue in this development in the administrative connotation of the cross culture management. The aim of this report is to gain the understanding about the managers who are trying to analyze the global market in order to expand their business operations in the United States and China, who are the world’s top economy, and give wide opportunities for business expansion. The report will also include about the impact of culture on different aspects of the business like communication style, styles of negotiation, loyalty of the company, protocol followed in business, role of genders at the workplace and business decision making. This report focuses on the businesses in America that are more open and direct and don’t take much time before taking any decisions. In China, they stress over the prestige of others; therefore, they prefer indirect communication approach. In China, they consider decision making as time consuming.
Due to the globalization and developments taking place in economies, multinational companies are getting even more prevalent (Hofstede, Hofstede and Minkov 2010). It’s noted that cross cultural communication brings challenge for the managers. Culture as defined by Hofstede, Hofstede and Minkov (2010) mentions it as software of mind, which creates influence on the patterns of people behavior and thinking. People thinking influences the living and working life of the people. For example, United States and China have different cultures that create difference in their way of behavior and in thinking. It’s evident that economic globalization is also contributing the multinational organizations in order to enhance the demands of the customers, increase in research and developments projects, global outsourcing and increase in demand at financial markets (Hofstede, Hofstede and Minkov 2010).
Though there is advancement in technology that creates the distance among the nations, as well as management practices that are avoided due to the cultural boundaries (Hofstede, Hofstede and Minkov 2010). It’s noted that in businesses through negotiation and joint venture with the companies in foreign countries, the cultural diversity has offered the hint of reaction about the behavior of others. Therefore, for becoming successful in accessing the international markets, it’s important that the companies should gain the knowledge about the diversity in cultures before they formulate any business strategy (Hofstede, Hofstede and Minkov 2010). Organizations that are expanding their business in overseas market have to face the various issues due to cross cultural communication.
Bandias (2012) have claimed about the communication, which is the approach through which every member could try to establish cooperation in order fulfill the goal of the company (Bandias 2012). In the multi-cultural companies it is significant that the managers should hold on to the frequent communication and knowledge about the goals of the company (Bandias 2012). This report will try to analyze about United States and China, which are the largest economies of the world. The report will also refer the five dimensions of Greet Hofstede that focuses on national culture along with different academic theories in order to explore the style of national management (Hofstede, Hofstede and Minkov 2010).
According to Salacuse (1991), there exist ten components that mostly occurs to create challenges in the negotiations between inter cultures (Salacuse 1991). The report will make use of these components in order to explore the differences in cultures that mainly occur through the process of negotiation among the leading international powerhouses like United States and China (Salacuse 1991). This report will make use of cultural factors in order to measure the negotiating styles of United States and China, although it’s is claimed by Salacuse (1991) that through initiating the national negotiations must consider the national culture along with the influence of individuals like the cultures of gender, background, age, religion, race, and education. Salacuse (1991) explores the 10 traits, which mainly encounter the negotiations taking place in cross culture (Salacuse 1991).
The main aim of the negotiation differentiates between the cultures. The basic goal of negotiation for some cultures is to move towards the deal and the sign in the contract, where else in some cultures it is viewed as the set up for the long term relationship among the parties that lead towards the contract (Rudman and Kilianski 2000). It’s noted that in China, the development of intercultural relations holds the highest priority above the commercial transactions (Rudman and Kilianski 2000). It’s true that relationships are in the Confucianism heart. According to the perception of Chinese, any relationship among the business groups is mainly built over the relationship that exists between the individuals. Therefore, trust needs to be set up before participating in the relationship of business that too at the stage of negotiation that is important in china.
In contrast to this, people of United States are more attached with the signed contract (Rudman and Kilianski 2000). This might happen as the negotiators over there are lawyers and as per the virtue of the training given in the law schools they prefer negotiation according to signed contract (Rudman and Kilianski 2000). Therefore, once the agreement is meet out, it is considered as final and every party should adhere with the signed contract. Therefore, they rush towards the preliminary stage that leads towards the misunderstanding that too mutually that could negatively impact the process of negotiation (Rudman and Kilianski 2000).
Parties from the variant cultures comes together for the negotiation with the attitude of either win-lose or either win-win (Rudman and Kilianski 2000). The negotiators with the attitude of win-win perceive the negotiators as they are placing the collaborative efforts, through which both the parties could get benefit. Where else the negotiators having the attitude of win-lose mainly result at one side of win and other side of lose. It’s noted that both China and America perceive negotiation with the attitude of win-win.
Culture often influences the negotiators personal style (Cellich and Jain 2004). Negotiators that follow the formal style actually address their counterparts through the titles and try to avoid the discussion on the personal issues (Cellich and Jain 2004). In contrasts to this, negotiators from the informal cultures try to attempt towards setting up the friendly relations (Cellich and Jain 2004). It’s noted that Americans are actually more informal in comparison to the Chinese. Americans often address one another through their first name, even if they are acquaintances of each other (Cellich and Jain 2004).
In contrast to this, people in china often address one another in the very formal manner as they consider it as the sign of respect; only people who know one another call others with their name such as spouses or either friends (Cellich and Jain 2004). In China it is advised that the negotiators should try to respect the relevant formalities while working in the foreign culture. It’s noted that Americans try to prefer the informal conversations in order to develop the relationship with each other, by using the first name and they can even discuss the contract details (Cellich and Jain 2004). Where else, Chinese prefer to address the counterparts through their titles and aim that the business talks to be formal instead of private at the table of negotiation (Cellich and Jain 2004).
Cultures might get differ in the styles of preferred communication (Cellich and Jain 2004). There are some cultural values that are direct and there are some simple methods of communication, where else the preferred complex and indirect methods are use of speech, body language, along with facial expressions. The direct style is considered as the feature of the United States that is conveyed straightforward with trustworthiness and honestly (Cellich and Jain 2004). Where else, it’s evident that Chinese holds the indirect style that is considered as ambiguous and vague. For instance, smiling is considered as the common communication means, when the people interact. However, it could express various meanings like denial as well as cooperation, joy or either anger, distrust or either trust; therefore it could be perceive as mask (Cellich and Jain 2004).
It’s true that attitude sometimes can get different between the various cultures (Dong and Liu 2010). The people in China prefer to have slow negotiations, where else the Americans believe that the time is actually money and they are usually in the hurry to come at the deal conclusion. This implies there contrasting perception over the reason behind the negotiation (Dong and Liu 2010). The culture of China has the long lasting orientation that moves towards the situations of consuming the important time in order to analyze the situation for building up the relationship with the counterparts. There are some people in China who explore that the higher the time spends over the situation of negotiation; the higher will be the probability of achieving the success on the table of negotiation (Dong and Liu 2010). The United States people often try to minimize the formalities and try to get the contrast signed, where else the people from china usually invest their time on the phase of pre-negotiation in order to understand their potential partner of business and they try to determine if there exist any possibility of going into the long term relationship of business.
There are some cultures that depict their emotions at the table of negotiation; where else there are some cultures who try to hide their feelings (Dong and Liu 2010). It’s noted that Chinese often tend towards depicting the low emotion at the time of negotiation and they are mainly focused about saving their faces and trying to maintain their composure (Dong and Liu 2010). Therefore, they are actually offended through opposing the negotiators that might make them embarrass either intentionally or unintentionally. In the sharp contrast, people from America mainly speak out of their mind even if their counterparts might get embarrassed (Dong and Liu 2010). They understand and feel all the facts that need to be presented before the agreement is come up. The above is actually not required in the case of personalities of an individual (Dong and Liu 2010). However, it is significant for the negotiators to become aware about the specific tendency of the culture to act emotionally (Dong and Liu 2010).
Cultures often impact the written agreements types (Hall 1990). It’s noted that people from United States prefer to get all the detailed contrasts, in which every possible risk as well as eventualities are anticipated (Hall 1990). This is due to the contract that is governed through the law. In contrast to this, people from China usually prefer to get into more general agreement as the base of the contrast that lies in the relationship among the parties (Hall 1990). Therefore, the detailed agreement acts as the proof about the lack of trust among the different parties (Hall 1990). If the unforeseen issues occur, the people in china would select negotiation or the mediation in order to resolve the matters that are compared with the litigation that is preferred by the America (Hall 1990).
Some cultures often start negotiating over the basic principles and then they proceed towards the details such as approach of bottom up or the process of inductive (Kapoor, Hughes, Baldwin and Blue 2003). In contrast to this, other prefer towards first obtaining the agreements over the particular details like delivery of date and price and then they try to merge every detail in order to come at the final contract such as deductive process or either approach of top down. It’s noted that American prefer to have the deductive process and try to seek an agreement over details where else Chinese prefer to adopt the bottom up approach (Kapoor, Hughes, Baldwin and Blue 2003).
The values of the culture highly influence over how the negotiating team is actually organized along with the power of process and power (Kapoor, Hughes, Baldwin and Blue 2003). There are some cultures that provide more significance towards the individuals where else others towards the groups. It’s noted that people from United States prefer to adopt the one person leadership in case of negotiation such as leaders within the team will have full power to make the decisions. On contrast to this, Chinese prefer towards having huge negotiating team as it’s noted that authority reside with the decision making and groups take place by the consensus (Kapoor, Hughes, Baldwin and Blue 2003). In result of that it becomes challenging to explore who holds the power of decision making. The overseas parties not only negotiate with their counterparts, but indirectly they negotiate with the stakeholders like the government and the local authorities (Kapoor, Hughes, Baldwin and Blue 2003).
It is actually observed that there are some cultures that are more risky in comparison with others (Lewis 1996). This creates influence over the behavior of the counterparts negotiated, whether they are able to reveal the information and how they actually deal with the uncertainties (Lewis 1996). As per the survey, both the Chinese as well as people from United States consider to be risk takers (Lewis 1996). It’s noted that Americans mainly relates with the tendency to take on more risks. On the other side, Chinese place more stress over the huge amount of information that include background details and they hold the complex process of taking group decisions (Lewis 1996).
Lewis (1996) explores about the long term framework that is based on the normative decision model that make use of degree of participating employees that are permitted and encouraged in the decision making of organization (Lewis 1996). This process participation for the subordinates only receives the decisions from their bosses and then only they implement these decisions (Lewis 1996). It’s noted that American holds the low power distance culture; therefore, their decision making process is spread in entire company (Lewis 1996).
In America high individualism also includes the facts that there are many managers that take the decisions individually in the organizations that are decentralized (Martin 1997). Nevertheless, it is actually argued that the organizations that are decentralized with various decision makers might come up with the bad results due to many decisions (Martin 1997). Meanwhile, its noted that China has the similar process of taking decisions as America but that too in different representation, since most of the companies in China are based on family or either they are built under the relationship which creates barriers of single ability of leaders to change the culture of the organization and include wide scope of changes in culture (Martin 1997).
Communication is considered as the method to convey meaning and exchange the information from formalities, status, words, messages and body language. Kapoor, Hughes, Baldwin and Blue (2003) explores the high content communication or either the message in which information is internalized or either in physical context in the person, and the other one is low context messages with is different, as in this huge information is vested in the code of explicit. In the cultures of low context, US apply the verbal communication (Kapoor, Hughes, Baldwin and Blue 2003). Therefore, People in US communicate in straightforward way without any doubt about the recipients. The messages of low context invest in words of explicit code. In the culture of high context, China adopt the verbal communication is actually indirect for the purpose of maintaining social harmony. Chinese often don’t reject directly and they even prefer to tell the reason through non-verbal messages (Kapoor, Hughes, Baldwin and Blue 2003).
It is mentioned below by the help of consultation that gives training about professional cross culture in the UK (Kapoor, Hughes, Baldwin and Blue 2003). Below are some examples that require to be paid attention in the workplace having cross culture in context of meetings and business greeting, and this comparison is made between China and America.
The Comparison between China and America Business Greetings
The Comparison between China and America in Business Meeting
Loyalty of the employees is influenced through the motivational system of the company, and it’s also considered as national culture (Hofstede, Hofstede and Minkov 2010). It could also be measured through the theory of Hofstede. The power distance dimensions in China are more than America. The leadership style of autocratic cause’s loyalty combination towards the team leader and they are afraid of the results that lead through the harmony value and development of group in the society of China (Hofstede, Hofstede and Minkov 2010). In comparison to this, America is the individualistic society, and people only care about themselves and stress over their achievements. They spend their time enjoying and give more value over self sufficiency; therefore, American’s are not loyal in comparison to Chinese.
To start with the theory of Hofstede’s about the high human equality sense is mentioned in the United States due to their high individualism as well as low power distance in the society of males (Hofstede, Hofstede and Minkov 2010). It’s noted that individuals share the information; they even challenge the authorities, opinion, which present the equality sign among the two genders in the country. It’s noted that In China males tend to be given administrative as well as bureaucratic positions that hold the sway in the Chinese minds. Although there are female who also contribute in growth of career, it is some time before they also hold the managerial posts (Hofstede, Hofstede and Minkov 2010).
Reward system is considered as the motivational component and mainly it relies over the culture of an organization. It should be made clear about the balance among the performance and efforts (Hofstede, Hofstede and Minkov 2010). As per the theory of expectancy, efforts of the employees, performance, and reward associates with one another. It is important that organizations should try to penetrate with the ability and performance of the workforce, and they should even understand their personals aims in order to offer them with the opportunity to undertake individual developments (Hofstede, Hofstede and Minkov 2010). However, it’s noted that the reward system is not only lined with the theory of expectancy, rather it also relies with the theory of work motivation like the Maslow Needs Hierarchy.
Basically Americans might proceed with the rewards that are non-financial such as holidays or either promotion that leaves them with the purpose of fulfilling their short term achievements and they even spend more time with their close ones as per the indulgent culture (Hofstede, Hofstede and Minkov 2010). While in China they like to pursue both the non financial and financial rewards for the purpose of demonstrating their social status as per the mien-tzu principles.
It’s noted that the lower work discipline in America is actually reflected through the low power distance in the society of individuals. It’s also noted that people in America re more independent as well as self centered that might lead to more work conflicts in comparison to china (Hofstede, Hofstede and Minkov 2010). They even don’t stress over the work discipline and regulations. It’s noted that Confucianism in China, that significantly implies with the work discipline and even try to acknowledge the power through the help of hierarchies. People are also made to learn to respect the school rules or rules at company, home and in society when they are young (Hofstede, Hofstede and Minkov 2010).
In the global business negotiations, it is significant to understand the counterpart’s culture along with issues that might occur in the negotiation process. Through this study one can easily view that are certain marked variations in the negotiation styles of America and Chinese people that stem from the differences in culture between the two countries. Knowledge about these variations will enable the negotiators to analyze and understand the behavior of negotiation of their counterparts through the perception towards taking the negotiation proceeds forward. However, it is also crucial not to permit the stereotypes of culture to determine about the relationship through the help of potential partners of business.
Bandias, S. 2012. Student Study Pack: PRBM016- Cross-Cultural Management. Darwin: Charles Darwin University.
Cellich, C. and Jain S.C. 2004. Global Business Negotiations: A Practical Guide, 1st edn. USA: South-Western, Thomson.
Dong, K. and Liu, Y. 2010.’Cross-cultural management in China’. Cross Cultural Management: An International Journal, 17(3), pp. 223-243.
Hall, E.T. 1990. The Silent Language, Anchor. New York. Steers et al.
Hofstede, G., Hofstede, G. J. and Minkov, M. 2010. Cultures and Organizations: Software of the Mind, 3rd edn. New York: McGraw-Hill.
Kapoor, S., Hughes, P.C., Baldwin, J.R. and Blue, J. 2003. ‘The relationship of individualism–collectivism and self-construals to communication styles in India and US’. International journal of Intercultural Relations, 27(6), pp. 683-700.
Lewis, R. 1996. When Cultures Collide: Managing successfully across cultures, 2nd edn. London: Nicholas Brealey Publishing.
Martin, D. 1997. ‘Contractual aspects of cross-cultural negotiations’. Marketing Intelligence & Planning, 15(1), pp. 19-27.
Rudman, L.A. and Kilianski, S.E. 2000. ‘Implicit and Explicit Attitudes Toward Female Authority’. Personality and Social Psychology Bulletin, 26(11), pp. 1315- 1328.
Salacuse, J.W. 1991. Making Global Deals: Negotiating in the International Marketplace. Boston: Houghton Mifflin.
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