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Beyond Stereotypes – Building Cross-Cultural Relationships

Don’t assume everyone in the same culture has the same norms. Getting beyond cultural stereotypes, and seeing the individual, is key to good cross-cultural negotiation preparation.

In our previous article, we kicked off our recap of, and insight into, the intricacies of cross-cultural negotiations.

In the second part of the series, our negotiation experts discuss cultural dimensions literature, the importance of moving beyond stereotypes, and why time should always be on your mind.

Hofstede’s Cultural Dimensions

The participants were asked to reflect on the landmark research on cross-cultural negotiations of Geert Hofstede. Hofstede identified six key cultural dimensions, which would vary from culture to culture, that all need to be considered as part of negotiation preparation.

These are:

  • Individualist vs. collectivistic
  • Power distance (i.e. egalitarian or hierarchical)
  • Masculinity or femininity (focus on task vs. relationship)
  • Uncertainty avoidance (related to taking risk)
  • Long term vs short term orientation
  • Indulgence vs. severity (the attitude toward enjoying life and having fun).

Each culture will approach these dimensions differently, taking a spot on a sliding scale between the two extremes. Knowing where cultures sit can be a huge assistance when going into cross-cultural negotiations.

Understanding Cultural Differences

Three of the Roundtable participants discussed their experiences in negotiations when taking these dimensions into consideration. Bérénice Bessiere, Director, Procurement and Travel Division at World Intellectual Property Organization, discussed the different approaches to gender between European and Chinese companies.

Bérénice visited China to lead a negotiation. Although she was the senior buyer, she was assumed to be junior to her younger, male colleague. During the trip, it became clear that the supplier treated its female employees in a way that wouldn’t be acceptable in Europe.

The supplier didn’t win the business in the end (although for reasons other than this). Bérénice admitted she had wondered how the relationship would have worked if they had.

Another example was offered by Xin-jian Carlier Fu, Strategic Sourcing Commodity Manager at Honeywell. She highlighted the cultural differences between Chinese and Americans in business negotiations.

While many Chinese organisations operated with a very traditional, reserved culture, the Americans projected a very over-confident, talkative image in negotiations. Such was the difference to how business was conducted in China that it actually worked as a negative in negotiations between the two groups.

Finally, Carina Kaldalian, External Supply Governance Specialist at Merck, shared her experience based on her own cultural differences. In her home country of Lebanon, being an hour late to a social event is entirely acceptable.

So when Carina arrived for her first social meeting in Switzerland 10 minutes late, she thought she was doing ok. However, it was seen as unacceptable by the people she was meeting with.

This helped her make changes to her own behaviour, while giving her a better understanding of punctuality in different cultures.

Going Beyond Stereotypes

Giuseppe Conti made the point that cultural averages and stereotypes don’t necessarily apply to all individuals. Individual culture is instead influenced by a number of factors including work experience, upbringing, family values, and education, amongst other things.

When negotiating in a cross-cultural situation, it’s important to get past stereotypes, and uncover specific traits of the individuals you are dealing with.

The participants had a number of ways that this could be done. Thierry Blomet, Senior Vice President at Kemira, suggested an informal discussion over dinner the day before the negotiation. This would allow people to avoid entering negotiations without having ever met the other party before.

Other participants highlighted the importance of building relationships, and getting to know the other party better. This was especially important when dealing with Asian counterparts.

Other good strategies were identified as building information through local agents, creating an emotional connection, and building trust in the early stages. With high value placed against trust by many cultures, it’s key to get it right. Participants even highlighted instances where contracts had been signed on the basis of trust alone.

All Down to Timing
Laurence Perot
Laurence Perot

Time was also a factor mentioned by the Roundtable. Laurence Pérot, Director of Global & Strategic Sourcing at Logitech, recommended planning for time, as it’s likely to be treated differently in different cultures.

Laurence recommended planning for more time than you think you will need. This will help ensure you have good conversations, and get what you need. It will also help to show the other party that you’re not just rushing to close the deal.

However, there were also warnings that suppliers might try to use time to their advantage. Ali Atasoy, CMO Operations Manager (Intercontinental) at Merck, stated that the other party may be deliberately slowing the negotiation down, as efficiency may not be at the top of their agenda. He advised patience in this situation, helped by knowing that there were no major time limitations for your negotiations.

Finally, the reputation of an organisation was also highlighted. Matthias Manegold, Head of Procurement and Supply Chain Practice at Kinetic Consulting, advised that procurement professionals need to be consistent in their negotiations, and make sure the other party feels good about the outcomes.

Outcomes will drive what people say about you, and negative comments could harm your reputation with the wider supply base.

In the final article in this series, we’ll look at discussions on how individuals can adapt their behaviours based on information that is gathered, as well as the experts’ advice on how to negotiate with people of their own nationality.

This roundtable was organised by Conti Advanced Business Learning (www.cabl.ch), a Swiss training company that specialises in Negotiation & Influencing training. Giuseppe Conti, has over 20 years of Procurement experience and 10 years of negotiation teaching experience at leading Business Schools (including Oxford, HEC Paris, IMD and ESADE).

Celebrating Supply Chain – The Organisation’s Unsung Hero

It exists in the background. When it works seamlessly, you wouldn’t know it was there at all. But the supply chain really is the unsung hero of the organisation.

Alice Catherine Evans. Dr. Megan Coffee. Gunner the Dog. Rick Rescorla. Heard of any of these individuals? They are just some of the unsung heroes from the past 150 years. They have all made a huge difference to the world, and arguably deserve much more recognition.

While maybe not at the same level, the same could be said for the organisational supply chain. It exists in the background. If it works seamlessly, then people don’t really take any notice of it. But, without it, organisations would grind to a halt. It really is the unsung hero of an organisation (as are all the people working in it!).

This week, supply chains have been in the news for the right reasons. The US Aerospace and Defence Industry and Domino’s Pizza were just a couple of organisations to highlight the good work their supply chains were doing.

However, it wasn’t all good news, as supply chains came under fire again for not doing enough to combat modern slavery.

SMEs the Unsung Hero for A&D

The Farnborough International Airshow, held in the past week, presents a fantastic opportunity of organisations further down the supply chain to present their new technologies and ideas. This year it also allowed the US A&D Industry the chance to celebrate its SMEs.

According to data from the Aerospace Industries Association (AIA), the US A&D Industry has exports totalling $142 billion last year. Of that, the supply chain generated 58 per cent of the exports, a whopping $78 billion.

The numbers go to show the strength of the supply chain companies, as well as the global partnerships they have built across the world. The importance of the supply chain SMEs is clear to the US A&D industry too. They have led the way in building a solid reputation of US technology and innovation across tens of thousands of projects worldwide.

AIA CEO David Melcher also sees a bright future of the SMEs. With trade agreements in place, Melcher argued that “small- and medium-sized companies can generate exports for decades more to keep this equipment operating effectively and efficiently.”

Supply Chain Success

Another unsung hero, at least until this week, was the supply chain for Domino’s pizza. The fast-food giant announced a 12 per cent increase in sales in the second quarter of 2016, beating profit and revenue forecasts.

The company attributed increased supply chain sales, including increased volumes and store growth, as a key reason for this. The supply chain sales themselves also saw a 12 per cent increase in the quarter.

Heroes Required

However, the week wouldn’t be complete without stories of what organisations need to do to combat slavery in their supply chains. A report released this week showed that the ICT industry has plenty to do in this area.

KnowTheChain compared 20 ICT companies, including Apple, HP and Samsung, on their supply chain practices. The results were not pretty, with the majority of the organisations scoring under 50 (out of 100) for efforts to eradicate forced labour, and how transparent their efforts were in doing this.

However, according to a business leader in the cosmetics industry, eradicating forced labour and slavery completely is an on-going battle. Simon Constantine, of British retailer Lush, stated that even though Lush is willing to pay more for ethically sourced goods, the company has still struggled to keep up.

Constantine said, “With the amount of work you need to do to stay on top of things, and everything changing so rapidly…I would never be comfortable saying our supply chain is 100 per cent clean.”

But with new regulations increasingly putting the onus on companies to ensure their supply chains are clean, it’s a battle that is set to be fought just as hard as ever.

Is your supply chain an unsung hero? Why not let us know and we can help you tell your story?

We’ve been pouring over the news and digital media to make sure you don’t miss the key headlines this week…

Brexit Causes “Dramatic Deterioration” in UK Economy
  • The decision by UK voters to leave the EU has led to a “dramatic deterioration” in economic activity in Britain.
  • Markit’s Purchasing Managers Index shows a fall in economic output to 47.7 in July, the lowest since the end of the Global Financial Crisis.
  • Both manufacturing and service sectors saw a decline, though exports were up due to the weakening pound.
  • Chris Williamson, Chief Economist at IHS Markit, said the downturn has been “most commonly attributed in one way or another to ‘Brexit’.”

Read more at The BBC

Turkish Procurement Programme Delays
  • The failed coup attempt to overthrow the national Government in Turkey will delay multi-billion dollar procurement programmes.
  • Members of the coup took senior army officials hostage last weekend, with their actions leading to over 200 deaths.
  • Although incomparable to loss of life, senior officials have admitted that procurement is “nowhere in the military command’s priority list.”
  • It has raised concerns that this will leave the army short of operational resources in the fight against ISIS.

Read more at Defense News

Rio Olympics Highlights Cross-Border Procurement Risks
  • The Rio Olympics, due to start in a few weeks, represents a massive opportunity for cross-border commerce.
  • The organising committee has already procured more than 30 million goods, including sports equipment and accommodation items.
  • However, organisations still need to be aware of the potential risks, such as logistical issues, and currency exchange rate fluctuation.
  • Reggie Peterson, Director of Indirect Supply Programmes at AmeriQuest, highlighted the importance of carrying out due diligence for organisations before getting involved.

Read more at PYMNTS.com

Facebook Drones Close to Taking Flight
  • Drones, built with the purpose of bringing connectivity to remote regions of the world, are closer to taking flight.
  • Facebook-owned British company, Ascenta, has run a successful test of its drones in the skies above Arizona.
  • The the solar-powered drones will be airborne for months at a time, beaming signals down to users on the ground.
  • The project is in competition with Google’s ‘Project Loon’, which aims to use high altitude balloons for the same purpose.

Read more on The BBC

Cloudy Future for ERP Based Procurement

Traditional ERP systems just don’t do the job for procurement. However, an integrated, Cloud-based approach could be the answer the profession is looking for.

This article was written by Daniel Ball, director at eProcurement specialist, Wax Digital.

The benefits offered by best-of-breed eProcurement technology are well documented. Procurement professionals don’t need much convincing of the advantages of using them.

However, for some organisations, stepping away from using their Enterprise Resource Planning (ERP) system’s in-built purchasing tools isn’t always an easy option.

Modern ERP systems offer organisations a way to manage, collect and interpret data from a variety of business activities across seemingly all business functions, from purchasing and finance to HR and customer service. They also integrate all internal data-collection systems so that all business functions rely on one single database.

This one source of real-time data can help businesses to make decisions based on facts rather than assumptions. To coin a well-used phrase, they could be considered something of a panacea capable of eradicating all business process ills.

There is another way…                                                                                                             

However, for all of the many benefits ERP offers to the organisation as a whole, it’s not uncommon for procurement teams, amongst others, to be frustrated by its rigidity and functional limitations. While core functions such as Finance, Manufacturing and HR are well supported by ERP systems, Procurement, it would seem, is often less so.

Procurement teams will therefore inevitably face the choice between continuing to use ERP, or move to an alternative best-of-bread solution. Today this almost invariably means a cloud-based system that needs to integrate seamlessly with ERP.

The Integration Challenge

But how can procurement convince the rest of the business, and especially the IT department, that the existing functionality on offer to them is no longer adequate for their needs and that moving to a cloud-based system that can be integrated with ERP can be done easily and securely?

We’ve seen many of our customers seek to replace the procurement modules offered to them by their ERP systems but who have been stopped by the integration challenge. They have faced concern from IT managers that integrating with a remotely-hosted, third-party system may pose a risk to the organisation, especially when business-critical master data and finance systems are concerned.

However, the tide is now turning. Some cloud-based eProcurement solutions can securely integrate with ERP and their finance systems. This offers users freedom of choice and the ability to automate, improve, and better manage many of their day-to-day procurement processes.

Feasibility of Integrated Systems

A platform which comes with its own ready configured Integration Platform as a Service (iPaaS) is certainly a major step forward in convincing the finance and IT departments and using a separate but integrated system is not just possible, but advantageous.

We’ve worked with many procurement teams in leading organisations who’ve decided to reject the functionality on offer to them from ERP, and integrate cloud-based eProcurement.

One of our customers uses JD Edwards’ (JDE) ERP system for finance, and had used its procurement module for over ten years to raise purchase orders and approve invoices.

The system wasn’t very efficient or easy-to-use so certain departments chose to bypass it all together, preferring instead to manually process their orders.

However, the complexity and limited functionality of the existing system was preventing the organisation from making wide-scale purchasing efficiencies and not giving a clear view on organisational-wide spend.

Deciding to integrate a new eProcurement system with the JDE finance system that would enable a number of efficiencies including better spend control, more efficient order processing and payments, the organisation decided on a hybrid cloud approach allowing us to host our cloud-based service from within its data centres.

Wide Reaching Benefits

At another of our customers the procurement team was keen to make efficiencies to the management of its indirect spend across Europe.

Multiple systems were being used across the region for indirect purchasing, and these were largely manual, paper-based processes that did not provide full visibility and control over expenditure.

As a result, collaboration between the purchasing teams and finance, as well as with suppliers, was not integrated and could have lead to duplication on spend, or even the business purchasing goods or services it didn’t need.

In order to improve indirect purchasing across Europe, the organisation chose to move its entire European operations to a single, cloud-based eProcurement system to integrate with SAP.

Best-of-breed cloud-based, eProcurement solutions offer a host of benefits across the business, that are far reaching and extend beyond the walls of the procurement department.

Big Ideas Summit 2016: Big Idea #6 – Strategic Brand Value

Tom Derry believes procurement needs to move away from a traditional cost focus, and create a more strategic brand value for the profession.

At the Big Ideas Summit 2016, we challenged our thought leaders to share their Big Ideas for the future of procurement.

From ideas that have the potential to change the very nature of the procurement profession, to ones that got the assembled minds thinking about the profession’s impact outside of the organisation, the response we received was amazing.

Tom Derry, CEO of the Institute of Supply Management (ISM), believes that it’s time for procurement to have a more strategic brand value, and transition away from a traditional focus on cost, to support the greater dimensions of value for organisations.

As CEOs are becoming more concerned about risk profiles (brand risk; risk of disruption), the brand of procurement is being enhanced by offering value in risk management and mitigation, as well as adding value and managing cost.

Catch up with all the thought leadership and ours delegates’ Big Ideas from the 2016 Summit at the Procurious Learning Hub.

If you want to find out more about Big Ideas 2016, and what we have planned for 2017, you can visit our dedicated website!

If you like this (and you haven’t done so already) join Procurious for free today, and connect with over 15,500 like-minded procurement professionals from across the world.

Taking the Global Pulse of Procurement

How do you take the global  pulse of procurement and understand key current trends? Here’s a survey that helps do just that.

Zycus recently published their 2016 Pulse of Procurement report, an annual survey and report that highlights key procurement trends around the world.

The report draws on the thoughts and inputs of 650 procurement leaders worldwide, helping to draw valid, statistical conclusions across a number of topics.

The key areas of discussion in the 2016 report include:

  • The present state of procurement
  • The role of procurement technology
  • Hot current trends of procurement
  • The future of procurement

With participation in the survey increasing year on year, and the consumption of the report also increasing, it’s becoming one of the key information sources for procurement leaders. Procurious caught up with Richard Waugh, VP Corporate Development at Zycus, to talk through some of the key messages in 2016.

Procurement Technology 
Adoption vs. Satisfaction

One of the key findings Richard highlighted in this year’s report was the disparity between the high adoption of, but low satisfaction with, procurement technology.

In European countries all of the components of procurement technology have more than 50 per cent adoption. Core technologies such as P2P, eSourcing, Contract Management and Spend Analysis above 70 per cent.

However, only 1 in 5 survey respondents believed their technology solution was best in class or state of the art. One of the key reasons behind this, is that procurement are often left with a version of a legacy system, leading to low satisfaction.

Richard stated that, “These ‘best of breed’ procurement systems do exist, but it’s really only in the e-Sourcing area that state of the art tools are more prevalent.

“There is still a pent up demand for these best in class tools. These would help organisations make a step-change in performance, but many organisations are forced to make do with what they have.”

Supplier Performance Management

Richard believes that having the tools and technology available to enable closer collaboration with suppliers, will in turn drive innovation. These tools can help to measure the value of contributions that suppliers can bring to the table.

Richard stated that the more advanced procurement teams are already using technology to get closer to their supply base, and bring forward the best ideas for profit enhancement.

In addition to this, automation and procurement technology can help to significantly reduce manual, transactional activities, helping procurement get more from their resources, and at the same time enable the profession to be more strategic.

Spend, Perception & Risk
Spend Under Management

The Pulse of Procurement report also highlighted encouraging signs in the management of enterprise spend by procurement. In 2016, 26 per cent of the respondents have achieved an average of 80 per cent of spend under management.

These best in class performers have gone down the path of better stakeholder management and involvement. This allows them to access traditional ‘sacred cows’ of marketing, legal and IT spend.

However, according to Richard, there is still room for improvement. “The weighted average is only 57 per cent spend under management. If you’re average, you’re barely getting over 50 per cent of your spend managed.”

Perception

The report supports the idea that procurement is more of a strategic partner for the business now in many regions. This positive perception, and better visibility with stakeholders is more important, particularly in light of budget pressures.

In Europe, 9 out 10 leaders highlighted a positive perception of procurement by the C-suite. However, this region also has the greatest budget pressure. The majority of European respondents said that procurement budgets for 2016 were either flat or declining. This has led to teams being asked to do more with the same, or more with less.

In Asia-Pacific, the strategic role of procurement is still developing. Richard said, “There is an opportunity for Asia-Pacific to catch up this lag. As you start to manage the spend, the possibilities for savings are better. In fact, the savings goals for procurement are actually highest in this region as they address these categories for the first time.”

Risk

For the first time, supplier risk management fell out of the top 5 priorities for procurement in North America, although it remained in the top 5 in Europe. While this is probably reflective of the current macro-economic conditions in Europe (Brexit; political instability), it does show a potentially short-sighted approach in North America.

In better economic conditions, it’s easy to let risk fall down the ladder. And with less volatility in America, even with a Presidential election coming up, organisations may have changed their focus. However, as Richard states, now is not the time to take your eye off the ball on risk.

“The more mature procurement organisations are doing a better job of managing supply risk. They realise the cyclical nature of risk and the potential for a downturn, and understand the need to be more prepared. However, there is still a significant component who are tactically focused, and dealing with the current reality, rather than looking ahead.”

Pulse of Procurement

Finally, we asked Richard why procurement professionals should download the Pulse of Procurement report. For Richard, it was as simple as saving yourself time with data analysis, and getting a better view of the world outside your organisation.

“For most organisations, everyone is stretched, doing more with less. People tend to have a myopic view of what’s going on in their organisation, without seeing the bigger picture. They can’t readily benchmark themselves against the wider function.

“The Pulse of Procurement report gives you the chance to have data synthesised for you, and to gain some context as to how you compare to the function overall. This then allows you to see where you are leading and lagging in comparison.”

You can download the Pulse of Procurement report on the Zycus website. For more information on how to be involved with the next Pulse of Procurement survey, contact Zycus.

Australia’s Love of Credit Set to Continue

Australia’s love of credit isn’t likely to fade anytime soon, a conference in Sydney was told last week. But that’s no bad thing.

The Banking and Financial Stability Conference, hosted by the University of Sydney Business School, brought together senior representatives of the US Federal Reserve Bank, the Reserve Bank of Australia, the Australian Prudential Regulation Authority, the Bank for International Settlements, and The Bank of Finland.

The one-day conference also discussed:

  • The current global obsession with monetary policy;
  • The constant pressure banks face from new fintech players; and
  • The Brexit vote and what its broader impact could be.
“Over-exuberant Lending”

The Reserve Bank of Australia’s Head of Financial Stability Department, Luci Ellis, spoke on the topic of ‘Financial Stability and the Banking Sector’.

Ellis told the conference that Australia’s ongoing need for credit can mean that the value of a well-functioning creditor sector is sometimes under-appreciated.

“Especially since the (global financial) crisis, the dangers of too much credit have become all too apparent. Over-exuberant lending and borrowing can mean that some people are getting loans that they have little prospect of being able to repay, even in good times.”

Importance of Credit

Less well appreciated are the costs of having too little credit available, Ellis added.

“The point here is simply that in recognising that too much credit can be dangerous, we should not instead fall into the trap of thinking of all borrowing as illegitimate, or somehow immoral. Less credit isn’t always better,” she said.

“The low credit levels available in regulated past decades are not the benchmark we should be evaluating ourselves against now, when trying to assess risk in the system. Some activities can and should be financed with at least some debt, even in bad times. And even thought there are plenty of others that should not.”

While Australia doesn’t have this problem, some recent examples overseas show the damage that can be done when there isn’t enough credit available, Ellis told the audience.

“Australia is one of the more bank-orientated financial systems when it comes to providing credit, but it is hardly alone. Some of the countries at the lower end of the range, such as the United States and Canada, are there partly because their governments support the securitisation market in various ways.

“These interventions allow banks to take some exposures, particularly mortgage exposures, off their balance sheets. In some cases they also allow some non-bank loan originators to operate at larger scale than might otherwise be possible,” Ellis says.

Broader Brexit Impact

Conference Co-Chair and Associate Professor in Finance at Sydney Business School, Eliza Wu, says pull-back in bank lending to Asia-Pacific by global, and in particular European, banks can be expected as a result of the Brexit. This is a major concern for the region’s investment and growth.

“This trend started with the GFC, continued into the European debt crisis, and now with Brexit,” Wu says.

Wu told the conference that, “enhancing financial stability in the face of unprecedented monetary policy regimes, and new risks that have developed, will remain a major challenge for policy makers and conference attendees alike.”

Associate Professor within the Discipline of Finance, Professor Suk-Joong Kim, added: “The most immediate concern is the increased level of uncertainty and volatility expected, and experienced, in the international financial markets due to the Brexit vote. Brexit has cast doubt over London as the world’s most important financial centre, and the future of the international banks that operate there.”

Regulation & Supervision

Luci Ellis also spoke on the role that major banks will play in the future. In a world where banks are central to financial stability, they will always need to be regulated and supervised.

“The Australian financial system has managed to weather the external shocks of the past two decades reasonably well. Strong prudential supervision has helped achieve that positive outcome.”

However, supervision goes far beyond ensuing that banks have enough capital, she added. History shows that banks can have much higher shares of capital in their liabilities than we see nowadays.

“We should remember that the policy measures that safeguard the liquidity of bank deposit liabilities, such as deposit insurance and liquidity provision by the central bank, can create incentives for banks to take those risks,” Ellis said.

“If the ultimate goal of financial stability policy is the real economy, it isn’t enough to require banks to hold enough capital to absorb losses, while disregarding the scale of those losses. The losses themselves can represent distress in the economy. The holders of capital are often part of the same economy, so absorbing the losses does not make them go away,” she says.

“Absorbing the losses, and thus avoiding a collapse of the banking system, prevents knock-on effects to other parts of the economy, which is better than nothing. But it would be irresponsible to disregard the risk profile of the banking system’s assets, as long as banks have enough capital to cover those risks,” Ellis says.

The Art of Cross-Cultural Negotiation

Negotiations can be tricky. A cross-cultural negotiation presents an entirely different challenge, one with countless pitfalls and potential faux-pas.

Andrey_Popov/Shutterstock.com

Negotiations in a business setting can be difficult at the best of times. Throw cross-cultural diversity into the mix, and the difficulty level rises again.

The way you speak, behave, control your body language, and operate can change hugely from culture to culture. This increases the chance of making a mistake, or accidentally offending the other party.

Some people may also make the mistake of assuming that when we talk about culture, we are limiting this to a purely geographical standpoint.

When referring to a cross-cultural negotiation we often talk about different nationalities as a primary characterisation. But this is not the only element that affects culture.

Culture is the unique characteristics of a social group, and the values and norms shared by its members. This social group may be a country, a corporation, a religion, gender, an organisational function, or one of many others.

Dealing with Cross-Cultural Negotiation

How can you prepare for a cross-cultural negotiation? What do you need to know? What do you need to prepare in advance? And how should you approach negotiating with different cultures? This is where expert advice can help.

Procurious were lucky enough to be invited to listen in on a cross-cultural negotiation roundtable, organised by Giuseppe Conti, Founder of Conti Advanced Business Learning. Participants came from a range of businesses and diverse backgrounds, and comprised 8 different nationalities. The discussion was fascinating, and provided some great insights into a complex subject.

In this series of articles, we will examine key factors to be taken into consideration during cross-cultural negotiations, and see some real-world examples straight from the experts.

Power Dynamics and Balance

Giuseppe kicked off the discussion by asking the participants to talk about their own experiences of cross-cultural negotiations.

Jonathan Hatfield, Director of Purchasing, EMEA at PPG Industries, talked about his first trip to Russia to purchase chemicals.

Supplier power played a large part in the negotiations. Jonathan visited factories in Siberia, where no-one spoke any English. In line with the strong hierarchical culture of the country, he was also dealt with several junior product managers before he could access more senior people.

While Jonathan’s aim was to create a relationship with the supplier, the supplier cut straight to the point. They only wanted to know what he wanted to buy, where it was going, and what the price would be.

Jonathan left Russia not even knowing if he had managed to secure any materials (happily he did!). It taught him about power balance, and also to make sure that he had approvals lined up in advance.

Language Barriers and Coffee

Two other participants gave examples highlighting the difficulties of language barriers and body language.

Thierry Blomet, Senior Vice President at Kemira, took part in a negotiation with an Indian customer, who appeared to be shaking their head from side to side at every argument that was presented. This left Thierry feeling that none of his ideas had been accepted.

When he questioned this with his local representative however, he was told that he was doing fine. The shake of the head was actually a sign of agreement with what he was saying.

Matthias Manegold, Head of Procurement and Supply Chain Practice at Kinetic Consulting, talked about a situation where language barriers played a major role.

He was negotiating with an Asian business to bring new technology to Europe. Each statement in the negotiation was met with a “Hai” (Japanese for yes), but it wasn’t until later on that Matthias was told that this actually meant, “Yes, we hear you, but we don’t necessarily agree”.

Jean-Noel Puissant
Jean-Noel Puissant

One final example came from Jean-Noël Puissant, Head of Procurement EMEA at Monsanto International. Jean-Noël highlighted the difference in how negotiations start in different cultures.

In one negotiation in the South of Italy, the owner of the supplier arrived with his wife, listened to the agenda being laid out, then suggested everyone get a coffee.

It was his way of starting the negotiation by getting to know the other party better with some conversation before the business discussions kicked off.

Company Cultures

The participants also reflected on company cultures, and how current or former employers’ cultures had shaped their own negotiation approaches.

Stephane Guelat, Senior Director – Supply Chain at Pentair Valves and Controls, spoke about one of the key factors for procurement and supply chain – ethics.

Stephane said that, while many organisations will put employees through ethics training, the ethical standards may be different across cultures. For instance, the exchange of services or gifts may be perceived as completely unethical in Western Europe, while fully normal in India.

Xin-jian Carlier Fu, Strategic Sourcing Commodity Manager at Honeywell, argued that there are likely to be many different cultures within the same organisation.

This was confirmed by Jonathan Hatfield, who said that this is ever more the case as organisations from different cultures and countries merge. He added that it was something buyers needed to be cognisant of when dealing with companies which had been taken over.

Finally, Giuseppe highlighted how his first job with a large multinational with a very competitive culture shaped his initial approach to negotiation.

When working later in his career with a smaller, family-owned organisation, he learned to adapt and broaden his approach to negotiation. According to Jean-Noël, we cannot assume one-size-fits-all. We need to understand the specific culture of each large or small organisation.

There’s much more to come on this topic, including tips on negotiating with different nationalities, and applications of cross-cultural research in negotiations. Come back next week for more.

This roundtable was organised by Conti Advanced Business Learning (www.cabl.ch), a Swiss training company that specialises in Negotiation & Influencing training. Giuseppe Conti, has over 20 years of Procurement experience and 10 years of negotiation teaching experience at leading Business Schools (including Oxford, HEC Paris, IMD and ESADE).

Gotta Catch Them All! But Is Pokémon Go a Cyber Crime Target?

Pokémon Go is the new craze sweeping the world. It’s just a game, but how does it relate to real-life laws? And could it really be a target for cyber criminals?

Matthew Corley/Shutterstock.com

Last week, Nintendo launched its new ‘augmented reality’ game, Pokémon Go, across the world. Nintendo spread the launch dates out, with the USA, Australia and New Zealand first, and Europe and other parts of Asia launches in the following days.

For the uninitiated (and you’ll be hard pushed to be one of those with the blanket media coverage), the game blends digital characters from the successful Pokémon franchise, with GPS and location based technologies on smart phones.

Global Craze…and Growing

Within 24 hours of its US release last Tuesday, Pokémon Go had already overtaken its competition to be the biggest game of 2016. It moved to number 1 on App Store, and after 3 days had become the biggest mobile game in US history.

The game surpassed Twitter in terms of daily active users, and Facebook in terms of user engagement on its app. It’s also estimated that it may overtake Google Maps as the largest user of Alphabet’s mapping data.

The incredible growth has also helped Nintendo’s market value jump. It marks the end of a difficult period for Nintendo, who’s market value has been in decline since October 2015.

Nintendo’s market value increase by 10 per cent when the game went viral in the first week of July, with a further 25 per cent added by last Tuesday. This equates to nearly $9 billion added to the market value in less than a week.

Safety First!

The new craze has not been without its hiccups, however. In addition to people walking into walls and falling down holes while glued to their phones, there have also been reports of muggings and armed robbery facilitated by the game’s geolocation software.

Police in Australia have also issued a couple of public announcements in light of these incidents. They have asked the public to be aware of their surroundings while hunting Pokémon, that they shouldn’t use the app while driving, and that “I was collecting Pokémon” is not a defence for trespassing.

The final point brings into focus the issue of how augmented reality games will cope with country laws. As users are collecting characters in the real-world, the potential for trespass grows.

How this will be handled by businesses (some of whom are taking advantage of the craze) and locations (like Arlington National Cemetery) in the future will be interesting to see.

Pokémon Go a Cyber Target?

A number of experts have also argued that Nintendo’s launch could leave some users potentially vulnerable to cyber criminals. With a staggered launch, some users may have been tempted to download a version of the app from unverified third-party app stores. This could subsequently leave them vulnerable to malicious apps and malware.

These apps could then allow criminals to access smartphone data, spy on users, or even control phones remotely. Another report by security software company, Trend Micro, highlighted the risk posed by the game to individuals’ data.

Gamers who downloaded Pokémon Go and registered using a gmail account, could inadvertently give third parties access to private data. However, this issue could be mitigated by ensuring the correct privacy settings in the app.

Connected Devices

While the cyber crime risk for Pokémon Go seems fairly low, it may signify the start of a larger issue. The growth of augmented reality games, smartphone technology, and connected devices via the Internet of Things, does pose a cyber security risk.

But what is certain is that as the technology leaps forward, security provisions and investment needs to move forward too.

Have you jumped on the Pokémon Go bandwagon? Do you think talk about cyber crime for these games is realistic? Let us know. 

We’ve dragged ourselves away from virtual creature capture long enough this week to bring you the weekly headlines…

General Motors Deal with Bankrupt Supplier
  • GM’s contract dispute with Clark-Cutler-McDermott Co. (CCM) has forced the parts supplier into bankruptcy protection, with plans to sell its remaining assets.
  • CCM has argued that unprofitable contracts have led them to lose $12 million since 2013.
  • GM will purchase a quantity of critical factory equipment and parts necessary to continue production across their North American factories.
  • The well-publicised dispute in the bankruptcy court has shed light on the uneven power dynamic between car makers and parts suppliers.

Read more at the Wall Street Journal

Retailers Struggling with Reverse Supply Chain
  • Customer returns and product recalls are becoming increasingly common, with the most notable recent event being IKEA’s massive recall of 36 million dressers worldwide.
  • Returns and recalls pose a significant challenge for the retail sector to build a ‘reverse supply chain’.
  • This term can be misleading, as it is not simply the usual supply chain run backwards, but a complex network of transportation and resellers.
  • Retail Industry Leaders Association VP Adam Siegel warns: “You’re not going to succeed if you’re losing money on your reverse supply chain because, inevitably, the reverse supply chain is going to grow.”

Read more at PYMNTS.com

Palm Oil Industry Rife with Human Rights Abuses
  • The palm oil industry has come under further scrutiny for human rights abuses.
  • The Rainforest Action Network (RAN) has released an animated video that highlights the organisation’s largest criticisms of the palm oil industry.
  • The video focuses on the non-compliance of a PepsiCo joint venture and endemic labour abuses in Indonesia. 
  • RAN claims workers at palm oil plantations have been subjected to excessively long work hours for low wages, dangerous exposure to agricultural chemicals, confiscation of passports, and child labour.

Read more at Triple Pundit

IBM Pushes Blockchain in Supply Chain
  • IBM has launched a platform for companies to test “blockchain” record-keeping technology in their supply chains.
  • The service is an attempt to expand the use of blockchain beyond the financial services industry.
  • IBM’s new service lets supply chain customers build and test blockchains using a version of the company’s LinuxOne system.
  • The service is aimed at companies that need to track high-value items through complex supply chains.

Read more at the Wall Street Journal

5 Things To Know When Looking for a Job Abroad

Moving and finding a job abroad is something that many people do during their lives. But what do you need to know before you start looking?

Leaving your home, friends and family behind and moving to another country, where everything that surrounds you is completely different from that to which you are used to, is not an easy task.

New countries have different people, different cultures, different food and sometimes even a different language.

However, for some people leaving their country of origin and traveling to settle down for a while on the other side of the planet represents a personal goal or even a milestone they need to achieve.

In order to get established in a new country, there are some important things you will need to take into account: finding a job, a house, a room or an apartment, learning the native language, basic cultural norms, and so much more! But let’s focus on finding a job for now.

Follow these simple recommendations and you will be well on your way to successfully finding a job abroad:

1. Do your research

Before applying for a job abroad, you need to be informed about how they manage resumes in the country you are moving to. Do you need a cover letter? Short or long resume? Do you need to attach your certificates? Or is your resume acceptable as is?

In some countries including a photo is the norm, in others it is frowned upon. In some cases, you will need to translate and notarise your degree and other certificates, so it is very important to do your research.

2. Spread the news

Once you make a decision about the place you are going to be living next, tell every single person you know. This way, you will probably meet people who went through a similar experience or that are native of the country you chose.

Your aunt will always have a friend of a friend who spent their summer in a far away and exotic country.

3. Consider all your possibilities

Before quitting your job and booking the first ticket to Timbuktu, find out if the company you are currently working for offers exchange programs, or if you have the possibility of being transferred to another branch.

Other options are searching online for a job abroad, as well as searching your alumni networks and social network connections. Volunteering is also a great way to work abroad – it’s also a very rewarding experience.

4. Be smart

Always let the employer know, in your cover letter or during the interview, that you have done your research about the different aspects of their country and that you are willing and prepared to start working. Furthermore, assure them that you are flexible enough so as to adapt to a foreign environment.

5. Don’t be scared, relax

You have done your research, and have talked to every person you know about working abroad. You have looked for jobs online, and you know everything there is to know about your target country. And you have saved enough money to survive at least two months without a job. You are officially ready.

Of course it is scary to live somewhere completely new, but it will probably be the most exciting adventure of your life. So go for it!

Vanessa Fardi is the Leader of US, Central America, and Latin America Team for Canadian startup neuvoo. Neuvoo is a job search engine that indexes jobs available online in one unique platform, without any charge for the source of the job. It was created in 2011 and is currently available in more than 60 countries.

Big Ideas Summit 2016: Big Idea #5 – Eliminating Supplier Enablement

Gabe Perez believes that procurement needs to move towards real-time services, and eliminate traditional supplier enablement processes.

At the Big Ideas Summit 2016, we challenged our thought leaders to share their Big Ideas for the future of procurement.

From ideas that have the potential to change the very nature of the procurement profession, to ones that got the assembled minds thinking about the profession’s impact outside of the organisation, the response we received was amazing.

Gabe Perez, Vice President, Strategy & Market Development at Coupa Software, believes now is the time for procurement eliminate supplier enablement, and move towards the real-time services we have in our personal lives.

Gabe also believes that it’s now time for procurement, and the wider corporate world, to refocus their objectives to place value at the centre of all activities, as well as create and participate in open networks where collaboration can thrive.

Catch up with all the thought leadership and ours delegates’ Big Ideas from the 2016 Summit at the Procurious Learning Hub.

If you want to find out more about Big Ideas 2016, and what we have planned for 2017, you can visit our dedicated website!

If you like this (and you haven’t done so already) join Procurious for free today, and connect with over 15,500 like-minded procurement professionals from across the world.