Knowledge in International Business

Meetings and negotiations in intercultural context

Meetings and negotiations in the intercultural context Beginnings: Meetings are not begun in the same way as we move from culture to culture.  Some are opened punctually, briskly and in a “businesslike fashion.  Others start with chitchat, and some meetings have difficulty getting going at all.  The following table gives some examples of different kinds of starts in a selection of countries. Name of the country Duration of warm up time Custom Germany  A few minutes Formal introduction. Sit down. Begin. Finland A few minutes Formal introduction.  Cup of coffee. Sit down. Begin. U. S A few minutes Informal introduction.  Cup of coffee. Wisecrack. Begin. U. K. 10 minutes Formal introduction.  Cup of tea and biscuits.  10 mins. Small talk (weather, comfort, sport). Casual beginning. France 15 minutes Formal introduction.  15 mins.  Small talk (politics, scandal, etc.) Begin. Japan 15-20 minutes Formal introduction.  Protocol seating. Green tea. Small talk (harmonious, pleasantries).  Sudden signal from senior Japanese. Begin. Spain/Italy 20-30 minutes Small talk (soccer, family matters) while others arrive.  Begin when all are there. Structuring a meeting Monochronic people are fond of strict agendas; others, more imaginative minds, (usually Latins) tend to wander, wishing to revisit or embellish, at will, points already discussed.  Asians, especially Japanese, concentrate on harmonizing general principles prior to examining any details.  Guidelines for the chairperson to structure the meeting: 1.     Be sensitive to the expectations of various cultures and be quick to define a mutually shared aim.  2.     Address contrasting requirements openly and analyse certain wishes; accommodate a few of these.  3.     Cultivate tolerance and a sense of humor. Meeting behaviour and comportment The non-verbal and the physical comportment of participants is of utmost importance and varies to a great degree. You must pay attention to factors such as venue, comfortable seating arrangements, hierarchy of seating, dress (formal or informal), deliberate use of silence, listening habits and the importance given to protocol.  Negotiating Managing Cross-cultural negotiations: Negotiation is the process of bargaining with one or more parties to arrive at a solution that is acceptable to all.  It has been estimated that managers can spend 50 percent or more of their time on negotiation processes.  Therefore, it is a learnable skill that is imperative not only for the international manager but for the domestic manager as well, since more and more domestic businesses are operating in multicultural environments.  Negotiation often follows assessing political environments and is a natural approach to conflict management.  Often the MNC must negotiate with the host country to secure the best possible arrangements.  The MNC and the host country will discuss the investment the MNC is prepared to make in return for certain guarantees or concessions.  The initial range of topics typically includes critical areas such as hiring practices, direct financial investment, taxes, and ownership control.  Negotiation also is used in creating joint ventures with local firms and in getting the operation off the ground.  After the firm is operating, additional areas of negotiation include expansion of facilities, use of more local managers, additional imports or exports of materials and finished goods, use of more local managers, additional imports or exports or materials and finished goods, and recapture of profits (Luthans & Doh, p.204) When different cultures are involved in negotiations, the approach of each side will be defined or influenced by cultural characteristics.  Nationals of different cultures could negotiate in completely different ways.  For example, Germans will ask you all the difficult questions from the start.  You must convince them of your efficiency, quality of goods and promptness of service.  These are features Germans consider among their own strong cards and they expect the same from you, at the lowest possible price.  They will give you little business at first but will give you much more later when they have tested you – and if you prove trustworthy and your product of good quality.  The French tend to move much faster, but they may also withdraw their business more quickly.  Spaniards often seem not to appreciate the preparations you have made to facilitate a deal.  They do not study all the details of your proposal or play, but they do study you.  They will do business with you if they like you and think you are honourable. Although the examples described above could help you categorize cultures in terms of negotiating behaviours, they could also mislead, making it difficult to “see” the priorities or intention pattern of others.  Stereotyping is one of the flaws in the master programming supplied by our culture that often leads us to make false assumptions.  Here are three examples: 1.     French refusal to compromise indicates obstinacy (Reality: The French see no reason to compromise if their logic stands undefeated) 2.     Japanese negotiators cannot make decisions (Reality: The decision was already made before the meeting, by consensus.  The Japanese see meetings as an occasion for presenting decisions, not changing them.) 3.     Mexican senior negotiators are too “personal” in conducting negotiations.  (Reality: Their personal position reflects their level of authority within the power structure back home). It is important to note the cultural differences in terms of various aspects of negotiations: 1.     Values : The following table shows how different cultures place emphasis on different values and rituals: Americans Statistical data and personal drive to compress as much action and decision making as possible into the hours available Germans Emphasis on thoroughness, punctuality and meeting deadlines, require full information and context French Pride of place to logic, rational argument, aesthetics of the discussion; so imaginative debating style and preoccupation with the proper form Japanese Have their own aesthetic norms; value the creation of harmony and quiet “groupthink” British Priority to quiet, reasonable, diplomatic discussion; preoccupation with “fair play” and using it as a yardstick for decision making Latins Emphasis on personal relationships, honourable confidences and the development of trust between parties 2.     Compromise: When negotiations enter a difficult stage (for example, a deadlock), each culture will use a well-tried mechanism: changing negotiators or the venue, adjourning the session or “repackaging the deal” to regain momentum and save loss of face for either side.  For instance, the Arabs teams will take a recess for prayer, Japanese delegations will bring in senior executives to “see what the problem is”; Swedish opponents will go out drinking together; Finns will retire to the sauna. However, such mutually agreeable mechanisms are not available in international negotiations.  Anglo-Saxons and Scandinavians may use compromise as a mechanism for breaking a deadlock.  Other cultures may view compromise in an unfavourable light and remain unconvinced of its merit.  For the French, it may be an inelegant, crude tactic for chiselling away at the legitimate edifice of reason they have so painstakingly constructed.  The Japanese prefer an adjournment to compromise during a negotiation as it is a departure from a company-backed consensus.  The Spaniards and South Americans see compromise as a threat to their dignity; several nations, including Argentina, Mexico and Panama, display obstinacy in conceding anything to “insensitive, arrogant Americans”.  Intelligent, meaningful compromise is only possible when one is able to see how the other side prioritizes its goals and views the related concepts of dignity, conciliation and reasonableness.  These are culturally relative concepts and an effort to accommodate them form the unfailing means of unblocking the impasse.  These moves require knowledge and understanding of the traditions, cultural characteristics and ways of thinking of the other side. 3.     Decision making: Negotiations lead to decisions.  How these are made, how long they take to be made and how final they are once made are all factors that will depend on the cultural groups involved.  Americans love making decisions because they usually lead to action and Americans are primarily action oriented.  The French love talking about decisions, which may or may not be made in the future.  If their reasoned arguments do not produce what in their eyes is a logical solution, then they will delay decisions for days or weeks if necessary.  The Japanese hate making decisions and prefer to let decisions be made for them by gradually building up a weighty consensus.  This exasperates Americans and many North Europeans, but the Japanese insist that big decisions take time.  They see American negotiators as technicians making a series of small decisions to expedite one (perhaps relatively unimportant) deal.  Once the Japanese have made their decisions, however, they expect their American partner to move like lightning toward implementation.  This leads to further exasperation.  Mediterranean and Latin American teams look to their leader to make decisions and do not question his or her personal authority.  The leader’s decision making, however, will not be as impromptu or arbitrary as it seems.  Latins, like the Japanese, tend to bring a cemented-in position to the negotiating table, which is that of the power structure back home.  This contrasts strongly with the Anglo-Saxon and Scandinavian willingness to modify stances continuously during the talk if new openings are perceived.  Once a decision has been made, the question arises as to how final and binding it is.  Anglo-Saxons and Germans see a decision, once it has been entered into the minutes of a meeting, as an oral contract that will shortly be formalized in a written, legal document.  Ethically, one sticks to one’s decisions.  Agenda items that have been agreed on are not to be resurrected or discussed again.  Neither Japanese nor Southern Europeans see anything wrong, ethically, in going back to items previously agreed on.  “Chop and change” (anathema in Anglo-Saxons) holds no terrors for many cultures. The French show a lack of respect for adherence to agenda points or early mini-decisions.  This is due not so much to their concern about changing circumstances as to the possibility (even likelihood) that, as the discussions progress, Latin imagination will spawn clever new ideas, uncover new avenues of approach, improve and embellish accords that later may seem naïve or rudimentary.  For them a negotiation is often a brainstorming exercise.  Brainwaves must be accommodated!  Italians, Spanish, Portuguese and South Americans all share this attitude. 4.     Contracts: Diverse ethical approaches or standards reveal themselves in the way diverse cultures view written contracts.  Americans, Germans, Swiss and Finns are among those who regard a written agreement as something that, if not holy, is certainly final.  For the Japanese, on the other hand, the contract they were uncomfortable in signing anyway, is merely a statement of intent.  They will adhere to it as best as they can but will not feel bound by it if market conditions suddenly change, if anything in it contradicts common sense, or if they feel cheated or legally trapped by it.  New tax laws, currency devaluations or drastic political changes can make previous accords meaningless.  If the small print turns out to be rather nasty, they will ignore or contravene it without qualms of conscience.  Many problems arise between Japanese and U. S firms on account of this attitude.  The French tend to precise in the drawing up of contracts, but other Latins require more flexibility in adhering to them.  An Italian or Argentinean sees the contract as either an ideal scheme in the best of worlds, which sets out the prices, delivery dates, standards of quality and expected gain, or as a fine project that has been discussed.  But the way they see it, we do not live in the best of worlds, and the outcome we can realistically expect will fall somewhat short of the actual terms agreed.  Italian flexibility in business often leads Anglo-Saxons to think they are dishonest.  They frequently bend rules, break or get around some laws and put a very flexible interpretation on certain agreements, controls and regulations.  There are many gray areas where shortcuts are, in Italian eyes, a matter of common sense.  In a country where excessive bureaucracy can hold “business up” for months, smoothing the palm of an official or even being related to a minister is not a sin.  It is done in most countries, but in Italy they talk about it.  Solutions Cross cultural factors will continue to influence international negotiation and there is no general panacea of strategies which ensure quick understanding.  The only possible solutions lie in a close analysis of the likely problem.  These will vary in the case of each negotiation; therefore, the combination of strategies required to facilitate the discussions will be specific on each occasion.  Before the first meeting is entered into, the following questions should be answered: 1.     How much protocol does the other side expect? (Formality, dress, agenda) 2.     Which debating style does the other side expect? (Deductive, inductive, free-wheeling, aggressive, courteous) 3.     Who on their side is the decision maker? (One person, several, or only consensus?) 4.     How much flexibility can be expected during negotiation? (Give-and-take, moderation, fixed positions?) 5.     How sensitive is the other side? (National, personal?) 6.     How much posturing and body language can be expected? (Facial expressions, impassivity, gestures, emotion?) 7.     What are the likely priorities of the other side? (Profit, long-term relationship, harmony, victory?) 8.     How wide is the cultural gap between the two sides? (Logic, religion, political, emotional?) 9.     How acceptable are their ethics to us? (Observance of contracts, time frame?) 10.           Will there be a language problem? (common language, interpreters) 11.           What mechanisms exist for breaking deadlocks or smoothing over difficulties? 12.           To what extent may such factors as humor, sarcasm, wit, wisecracking and impatience be allowed to spice the proceedings? Good answers to the questions in the checklist will help to clear the decks for a meeting that will have a reasonable chance of a smooth passage.  It is to be hoped that the other side has made an attempt to clarify the same issues.  Sources: Richard Lewis: When Cultures Collide: Leading Across Cultures, 3rd edition, Boston: Nicholas Brealey Publishing, 2006   Fred Luthans & Jonathan P. Doh, International Management: Culture, Strategy, and Behaviour, 7th edition, New Delhi: McGraw Hill Education (India) Private Limited, 2009

Learn the basics - What is culture?

Module 1 What is culture? Papiya De ·         What is culture? ·         How to decode culture ·         Study of individuals and cultures ·         Categorization of cultures ·         Culture shock Communication and culture According to Rao and Thombre in Intercultural Communication : The Indian Context, in the larger Indian worldview and philosophy, communication is viewed as a process of achieving sadharanikaran, which essentially means simplification.  Conceptually, it means achieving oneness or commonness through sharing, and comes close to the Latin word communis or its modern English version communication.  The concept is linked to sahridayata- being kindred in spirit.  It is only due to sahridayata that two-way communication and mutual understanding are possible in a society with asymmetrical relationships.  When sadharikaran is successful, commonness of experience takes place.  Communication skill is intrinsically related to the culture of the group to which the individual belongs.  Messages that we send individually or as members of a group or receive are processed by a cultural/mental filter. This filter or the mindset is forged by our family, friends, neighbourhood, the school, and society at large.  In India, even caste, community, and class contribute to the making of this mental filter.  The mental filter or mindset makes us understand each other better, but at times leads to misunderstandings.  Unless we understand the attitude, the mindset and the background of the person with whom we interact, our communication skills would be imperfect and ineffective.  Reciprocal relationship between Communication and Culture The two terms are interconnected in fundamental ways.  Communication influences culture and in turn culture influences communication.  Culture is created, shaped, transmitted, and learned through communication.  The reverse is also the case: that is, communication practices are largely created, shaped, and transmitted by culture.  What is culture? . As we grow up, these learned national and/or regional concepts become our core beliefs, which The word culture comes from the Latin cultura, which is related to cult or worship. (Luthans & Doh, p.96). Geert Hofstede defined culture as “the collective programming of the mind that distinguishes the members of one category of people from another.”  According to Richard Lewis, the key expression in this definition is collective programming. Although not as sinister as brainwashing, with its connotations of political coercion, it nevertheless describes a process to which each one of us has been subjected since birth.  Parents and teachers obviously give children the best advice they can to prepare them for successful interactions in their own culture and society, where good and bad, right and wrong, normal and abnormal are clearly defined.  It is perhaps unfortunate in one sense that each cultural group gives its children a different set of instructions, each equally valid in their own environment we find almost impossible to discard.  We regard others’ beliefs and habits as strange or eccentric, mainly because they are unlike our own.  On the other hand, we have a sneaking feeling that “deep down all people are alike.” There is also truth in this, for there are such things as universal human characteristics.  They are not as numerous as one might think, for our national collective programming distorts some of our basic instincts.  Some people, by dint of personal originality, extra powers of perception, stubbornness or even genius, stand apart from their colleagues and deviate sharply from the national track.  Such people often become famous for their idiosyncrasies, and a few have actually changed the course of their nation’s destiny, for example, Kemal Ataturk.  In general, however, our national or regional culture imposes itself on our behaviour rather than the other way round, and we become a solid German, a good Swede, a real American or a true Brit, as the case may be.  Interacting with our compatriots, we generally find that the closer we stick to the rules of our society, the more accepted we become. (Lewis, pp 19-20). Culture is something that members of groups have in common.  It is the glue that binds groups together.  Without cultural patterns – organized systems of significant symbols – people would have difficulty in living together.  Culture is a way of life of a people which demonstrates their celebrated achievements in thought, morals, and material production, and a community’s body of knowledge, beliefs and values.  Individuals are products of their culture, and their social groupings.  Culture is neither a system of abstract values that exists independently of individuals, nor can it be separated from the historical context.  Culture is to society what memory is to individuals.  It includes the things that have worked well in the past.  It includes shared beliefs, attitudes, norms, roles, and values found among speakers of a particular language who live during the same historical period in a specific geographic region.  These shared elements of subjective culture are usually transferred from generation to generation.  Often people refer to culture as an environmental influence, as if it is outside the person, but it is an integral aspect of a person (Rao & Thombre, pp. 8-9).   For the purposes of the study of international management, culture is acquired knowledge that people use to interpret experience and generate social behaviour.  This knowledge forms values, creates attitudes, and influences behaviour (Luthans & Doh, p.96). How to decode culture:  Every group or category of people carries a set of mental programs that constitutes its culture, so the term “culture” can be attributed to different collectives such as nations, regions within nations, ethnic or tribal groups, occupations, organizations, and even gender or age cohorts.  Thus, there are several layers of culture.  However, and primarily, culture is divided into two main aspects: the material and the immaterial or spiritual.  The material part consists of our dressing styles, eating habits, and use of household goods among other things.  The immaterial aspects of culture consist of ways of our thinking, ideals, emotions, and beliefs.  For want of a better definition, it is best conceptualized as a totality.  It is composed of a complex system of symbols possessing subjective dimensions such as values, feelings, and ideals and objective dimensions including beliefs, traditions, and behavioural prescriptions, articulated into laws and rituals.  The unique capacity of culture is to bind the objective world of perceived reality to the subjective world of the personal and intimate (Rao & Thombre, p.11).  According to Elizabeth Tuleja, culture is, in some ways, like an iceberg.  What we see on the surface is the most familiar and readily identifiable.  The usual associations with culture are a people’s language, traditions, customs, food, dress, and more.  Such things are noticeable, identifiable and observable.  What we can’t see below the surface is what supports those external trappings.  What we can see is simply an outward manifestation of all of those underlying factors that inform our behaviour and shape our world view -  our attitudes, beliefs and values.  Values are fundamental, unmovable tenets that make us who we are and that shape all other structures in our attitudinal system.  We acquire them at an early age from people we trust, before rational thought begins to play a role in what we know and hold to be true.  Those values serve as the foundation for everything else in our attitudinal system. These provide the basis for our beliefs, those truths that we hold to be self-evident because they are based on our value.  If friendship, for example, is a fundamental value for us, then we believe that genuine friends will behave in certain ways and will expect certain things of us.  We, in turn, can expect certain things of them and will be more willing to go out of our way to help our friends – because we believe in them.  Attitudes, in turn, arise from and are consistent with those beliefs.  It’s a navigational term, really, meaning orientation and position.  Thus, an attitude gives some meaning and direction to our beliefs, serving as a guide to general thinking and our views of life over the near term.  If a fundamental value of ours tells us that living a healthy lifestyle is important, than a consistent belief might be that smoking cigarettes is not a good idea.  The attitude that arises from that belief would tell us, for example, that we not only shouldn’t smoke, but that we should dissuade others from smoking. Behaviour is the direct result of all these structures and is found at the uppermost level of our attitudinal system.  It not only gives meaning and life to our more basic attitudes and beliefs, but it is the most visible portion of our system of beliefs.  We observe behaviours and infer the attitudes and beliefs that animate them.  Behaviour is often expressed in the form of opinion: for the moment, at least, it’s our opinion that we will vote for this person, dine at that restaurant, or purchase a particular brand.  It’s all subject to change, of course, and is less predictable than the underlying attitudes, beliefs, and values that support it. Edward Hall, who gave the analogy of the iceberg suggests that the only way to learn the internal culture of others is to actively participate in their culture.  When one enters a new culture, only the most overt behaviours are apparent.  As one spends more time in that new culture, the underlying beliefs, values, and thought patterns that dictate that behaviour will be uncovered.  This model teaches to not judge a new culture based only on what we see when we first enter it.  We must take time the time to get to know individuals from that culture and interact with them.  Only by doing so, we can uncover the values and beliefs that underlie the behaviour of that society. The importance of studying intercultural communication The business world is becoming more international and interrelated, and international economies are bound together and are interdependent.  Widespread population migrations have changed the demographics of several nations, and new intercultural identities and communities have been born.  Cultural diversity and multiculturalism are the realities of working and domestic life everywhere.  In order to live and function in this multicultural environment as effectively and meaningfully as possible, people must be competent in intercultural communication.    If international managers do not know something about the cultures of the countries they deal with, the results can be quite disastrous.  For example, a partner in one of New York’s leading private banking firms tells the following story: I travelled nine thousand miles to meet a client and arrived with my foot in my mouth.  Determined to do things right, I’d memorized the names of the key men I was to see in Singapore.  No easy job, inasmuch as the names all came in threes.  So, of course, I couldn’t resist showing off that I’d done my homework.  I began by addressing top man Lo Win Hao with plenty of well-placed Mr. Hao’s – sprinkled the rest of my remarks with a Mr. Chee this and a Mr. Woon that.  Great show.  Until a note was passed to me from one man I’d met before, in New York.  Bad news.  “Too friendly too soon, Mr. Long,” it said.  Where diffidence is next to godliness, there I was, calling a room of VIPs, in effect, Mr. Ed and Mr. Charlie.  I’d remembered everybody’s name – but forgot that in Chinese the surname comes first and the given name last” (Luthans & Doh, pp.96-97).  Study of individuals and cultures The challenge of studying culture in the present times is to understand what contributes to the development of toxic, pathological cultures of tyranny, terrorism, and despair as well as to understand what contributes to healthy and salugenic (transformative) cultures of freedom, compassion and optimism.  Six false or inadequate assumptions of culture: 1.       Culture is homogenous: There are internal paradoxes, differences and contradictions in all cultures 2.       Culture is a thing: Culture is not always concrete; it can be manifested in many ways beyond the concrete and sometimes, even beyond the other senses. 3.       Culture is uniformly distributed among members of a group: Even in a small, specifically identifiable group, all members do not share a uniform culture. 4.       An individual is a member of a single culture: We are members of a variety of several cultural groups – religious, social, political, economic, etc.  5.       Culture is custom: Since customs and traditions that change over time are influenced by a variety of historical, economic, political and other factors, we can surmise that not every girl growing up in Chennai learned to wear a sari, nor does every Delhi bridegroom ride in a baraat to the wedding. 6.       Culture is timeless: Traditions, behaviours, attitudes, and beliefs change over time.  Modernity has wrought major changes and globalization is bringing more changes faster.   Dimensions of culture Hofstede’s Cultural Dimensions Dutch researcher Geert identified four dimensions and later, a fifth dimension, of culture that help explain how and why people from various cultures behave as they do.  His initial data were gathered from two questionnaire surveys with over 116,000 respondents from over 70 different countries around the world – making it the largest organizationally based study ever conducted.  The individuals in these studies all worked in the local subsidiaries of IBM.  The dimensions examined were as follows: 1.       Power distance: This is the extent to which less powerful members of institutions and organizations accept that power is distributed unequally.  Countries in which people blindly obey the orders of their superiors have high power distance.  In such countries, strict obedience is found even at the upper levels.  Examples include Mexico, South Korea, and India.  The effect of this dimension can be measured in a number of ways.  For example, organizations in low-power-distance countries generally will be decentralized and have flatter organization structures.  These organizations also will have a smaller proportion of supervisory personnel, and the lower strata of the workforce often will consist of highly qualified people.  By contrast, organizations in high-power-distance countries will tend to be centralized and have tall organization structures.  Organizations in high-power-distance countries will have a large proportion of supervisory personnel, and the people at the lower levels of the structure often will have low job qualifications.  This latter structure encourages and promotes inequality between people at different levels.  Power distance in Indians: Indians score 77 on the power distance index (compared to the world average of 56.5) indicating that Indians are accustomed to and like a top-down structure and hierarchy.  Indian corporate workforce power distance relates to acceptance of unequal rights between the power-privileged and those who are lower down the pecking order.  Likewise, in a typical corporate set up, immediate superiors are accessible but are paternalistic in leadership order. 2.       Uncertainty avoidance:  This is the extent to which people feel threatened by ambiguous situations and have created beliefs and institutions that try to avoid these.  Countries populated with people who do not like uncertainty tend to have a high need for security and a strong belief in experts and their knowledge; examples include Germany, Japan, and Spain.  Cultures with low uncertainty avoidance have people who are more willing to accept that risks are associated with the unknown and that life must go on in spite of this.  Examples include Denmark and Great Britain.  The effects of this dimension: Countries with high-uncertainty-avoidance cultures have a great deal of structuring of organizational activities, more written rules, less risk taking by managers, lower labour turnover, and less ambitious employees.  Low-uncertainty-avoidance societies have organization settings with less structuring of activities, fewer written rules, more risk taking by managers, higher labour turnover, and more ambitious employees.  The organization encourages personnel to use their own initiative and assume responsibility for their actions. Uncertainty avoidance for Indians: India scores 40 (as against the world average of 65) on this dimension and thus a medium to low preference for avoiding uncertainty.  In India, there is acceptance of imperfection; nothing has to be perfect nor has to go exactly as planned.  India is traditionally a country with a long-term view, where tolerance for the unexpected is high, and even welcomed as a break from monotony.  People generally do not feel driven and compelled to take action initiatives.  They comfortably settle into established roles and routines without questioning.  This behaviour is much evident in the chalta hai attitude which has become the bane of Indian society.  3.       Individualism: This is the tendency of people to look after themselves and their immediate family only.  Hofstede measured this cultural difference on a bipolar continuum with individualism at one end and collectivism at the other.  Collectivism is the tendency of people to belong to groups or collectives and to look after each other in exchange for loyalty.  The effects of this dimension:  Hofstede found that wealthy countries have higher individualism scores and poorer countries higher collectivism scores.  The United States, Canada, Australia, Denmark, and Sweden, among others, have high individualism and high GNP.  Conversely, Indonesia, Pakistan, and a number of South American countries have low individualism (high collectivism) and low GNP.  Countries with high individualism also tend to have greater support for the Protestant work ethic, greater individual initiative, and promotions based on market value.  Countries with low individualism tend to have less support for the Protestant work ethic, less individual initiative, and promotions based on seniority.  Individualism for Indians: A comparison of India and the US, on this dimension, reveals a marked difference between the two cultures.  This implies that the Indian culture reinforces taking responsibility for extended family and fellow members of the group. 4.       Masculinity: This has been defined as the extent to which the dominant values in society emphasize the relationships among people, concern for others, and overall quality of life.  It also deals with gender differentiation in the form of degree of reinforcement by the society for traditional masculine role models of male achievement and power and control (McShane, Glinow & Sharma).  Traditionally men are more assertive, achieving status and material gain for the family, while women are the nurturers assigned to a clear role as caregiver for the family.  Feminine cultures accept that both men and women can be ambitious and are comfortable with overlapping gender roles that include both those of provider and those of the empathic care-giver.  The countries with cultures that emphasize distinct differences in gender roles and are considered high on the masculinity scale include Arab countries, Mexico, Japan, Switzerland, Great Britain, and Germany.  Masculinity for Indians: India has a ranking of 56 on this dimension as compared to the world average of 51.  This indicates a gap between the values of the males and females in India. 5.       Long-term/Short term orientation: Hofstede added another dimension that relates to a long-term versus short-term focus on life. The long-term focus includes persistence, maintaining order in relationships through status, thrift, and having a sense of shame.  The short-term focus includes stability, saving face, respecting tradition, and giving favours and sharing gifts.  Values toward the long-term pole are more future-oriented and dynamic.  Countries that tend to be more long-term oriented include China, Hong Kong, Taiwan, Japan South Korea, Brazil, and India.  Values that reflect a more short-term orientation (focus on past and present) are usually more static.  Countries with short-term orientation include Pakistan, Nigeria, the Philippines, Canada, Great Britain, the United States, and New Zealand.  This is demonstrated in the business world by the notion of reciprocity.  Part of the Asian way of developing and maintaining strong business relationships is through trust and mutual respect.  Meetings serve the purpose of establishing the relationship.  Taking time to get to know your clients is paramount to Asian ways of thinking; after all, how can you do business (which requires trust) with strangers?  6.       High-context v/s Low context cultures: Anthropologist Edward T. Hall created the notion of high-and-low context cultures.  Hall developed a continuum along which he charted the communication patterns of various cultures: In high-context cultures meaning is derived from the subtle, tacit actions and reactions of the communicators and not necessarily the words they use.  Communication is less direct.  Relationships are especially important, so the manner in which something is said, and the attention paid to the audience for those remarks are carefully observed.  For example, silence can mean that a person is thinking, is showing deference, or is simply taking the time to respond while observing the reactions of the receiver.  A speaker from a high context culture will understand the importance of that silence and will infer that implicit meanings often speak louder than words.  A low-context culture relies more on the explicit or actual words that are spoken.  Emphasis is placed on being direct, and receivers are meant to the respond to the verbal code in more literal ways.  The task is more important than the relationship, so low-context speakers will use clear language, and a lot of it, to get the point across.  Low-context speakers are uncomfortable with silence and will quickly try to fill it with words.  Such speakers may interpret silence as a lack of understanding and will, therefore, feel as if they have to explain in more detail. Because people of low-context cultures favour directness, they are likely to consider high-context communication a waste of time.  An awareness of how high-and-low context cultures approach conflict is important; U.S. Americans, for example, will raise their voices, speak rapidly, and express clearly what is on their minds.  People of China, on the other hand, will be less open and will use body language, silence and pauses to convey messages.  An example of high-context communication is the way the Japanese indicate “no”.  They say “yes” for “no” but indicate whether “yes” is “yes” or really “no” by the context, tone, time taken to answer, and facial and body expressions.  This use of high-context communication can be very confusing to the uninitiated non-sensitive intercultural business person.  In the United States, which is a low-context society, “no” means “no”.  Group oriented collectivistic cultures tend to use high-context languages; individualistic cultures tend to use low-context languages. Culture shock: This generally goes through five stages: excitement or initial euphoria, crisis or disenchantment, acceptance, and re-entry. It has been visualized as being represented by a U-curve, with the top of the left side of the curve representing the positive beginning, the crisis stage starts down the left side to the base of the U, the adjustment phase starts at the base of the curve, then acceptance moves up the right side of the curve, and re-entry into the original curve is at the top of the right side of the curve.  1.      The initial euphoria or the honeymoon stage:  The first stage may last only a few days or several months.  During this time, everything is new and different; you are fascinated with the food and the people.  Your enthusiasm for the new culture causes you to overlook minor problems, such as having to drink bottled water and the absence of air conditioning. 2.      The crisis or the disenchantment period: Your excitement has turned to disappointment as you encounter more and more differences between your own culture and the new culture.  Problems with transportation, unfamiliar food and people who do not speak English now seem overwhelming.  Emotions of homesickness, irritation, anger, confusion, resentment, helplessness and depression occur during the second stage.  People at this stage often cope with the situation by making disparaging remarks about the culture; it is sometimes referred to as the “fight-back” technique.  Others deal with this stage by leaving, either physically, emotionally or psychologically.  Those who remain may withdraw from people in the culture, refuse to learn the language, and develop coping behaviours of excessive drinking or drug use.  3.      The adjustment phase:  You begin to accept the new culture or your return home.  Those who stay will try new foods and make adjustments in behaviour to accommodate the new lifestyle.  You begin to see the humour in situations and realize that a change in attitude toward the host culture will make the stay abroad more rewarding. 4.      The Acceptance phase:  You feel at home in the new culture, become involved in activities of the culture, cultivate friendships among the nationals, and feel comfortable in social situations with people from the host culture.  You learn the language and may adopt the new culture’s style of doing things.  You even learn to enjoy some customs. 5.      The re-entry shock:  This can be almost as traumatic as the initial adjustment to a new culture, particularly after an extended stay abroad.  Many individuals are shocked at the fact that they feel the same emotional, psychological, and physical reactions they did when they entered the new culture. 

The concept of time in the cultural context

The concept of time Cultural anthropology systematically seeks to examine how societies define themselves according to their views of time.  Research in this field began with Edward T. Hall in the 1930s and indicated that some cultures with a past orientation view the traditions of what came before as being more important in many ways than the present.  Japan, India, China, and numerous cultures of Eastern Europe have always placed a significant value on past achievement and on honoring the lives and spirits of ancestors.  Many cultures throughout Asia and the Latin world have a strong sense of the past and the role that traditional values must play in present-day decisions.  Cultures with present orientation are focused on the moment, neither invoking the past nor wondering about the future.  Societies with simple patterns of organization, fewer rules and norms, and very little outside influence often exhibit such views.  The Bedouin tribes of northern Africa, numerous Pacific Islanders, and the Maori of New Zealand see time as a seamless continuum that passes over us – a phenomenon we are neither able to understand or influence.  The developed nations of the modern, global economy exhibit still another view of time; they tend to have a strong future orientation, focusing on what’s ahead, planning for contingencies that may never come about, and anticipating the divisions and demarcations in time that linear, forward-thinkers value.  Edward Hall coined the concepts of polychronic and monochronic time.  Monochronic socieities are punctual and efficient.  These are made of rational thinkers who see time as a valuable resource and something to be saved or lost.  They feel comfortable if they are able to stick to original plans, meet deadlines, and use their time wisely.  They expect others to be prompt and make the most of the time they have been given.  Nations with a monochronic view of time are usually among the more individualistic cultures, such as the U.S, Canada and northern Europe, but other collectivistic cultures, such as Japanese (largely because of global economic development) also fall into this category.  Keeping in schedule and completing tasks in a timely fashion demonstrate respect for the larger group. Varying degrees of dimensions in business cultures Very monochronic business cultures Moderate monochronic business cultures Polychronic business cultures Nordic and Germanic Europe, North America, Japan Australia/New Zealand, Russia and most of East-central Europe, Southern Europe, Singapore, Hong Kong, Taiwan, China, South Korea Arab countries, Africa, India, Latin America, South and Southeast Asia In polychronic societies, people are more relaxed about time because relationships are more important than schedules.  Relationships are crucial to developing trust, which evolves through those relationships and ultimately makes for good business.  Hurrying any proposition is considered superficial and deadlines are never missed (they are simply adjusted) but that is part of the process.  Usually the more collectivistic cultures see time this way, such as cultures from Asia, Latin America, and the Middle East.  Other European cultures, such as French, Spanish, and Irish, also fall into this category.  Another interesting phenomenon common to polychronic societies is the “one among many” philosophy of business meetings.  You may schedule a meeting that you believe is reserved solely for you, and be surprised when you arrive.  Often, people in such societies will be multitasking while they are meeting with you – an administrative assistant may interrupt you to ask a question, another employee may enter and ask for a brief micromeeting on the spot, or the person running the meeting may step out for a while only to return and expect you to still be there.

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Helps in understanding factors that one needs to consider while starting a new business in a foreign country. Gives thinking direction to guide students on right path

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An internship is a period of work experience offered by an organization for a limited period of time.[1]Once confined to medical graduates, the term is now used for a wide range of placements within businesses, non-profit organizations and government agencies. They are typically undertaken by students and graduates looking to gain relevant skills and experience in a particular field. Employers benefit from these placements because they often recruit employees from their best interns, who have known capabilities, thus saving time and money in the long run. Internships are usually arranged by third-party organizations which recruit interns on behalf of industry groups. Rules vary from country to country about when interns should be regarded as employees. The system can be open to exploitation by unscrupulous employers. Internships for professional careers are similar in some ways, but not as rigorous as apprenticeshipsfor professions, trade, and vocational jobs.[2] The lack of standardization and oversight leaves the term "internship" open to broad interpretation. Interns may be high school students, college and university students, or post-graduate adults. These positions may be paid or unpaid and are temporary.[3]

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The file presents to you the notes on international finance which will help in understanding international business.