Tag Archives: cross-cultural relationships

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.

Stereotypes

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).

Navigating Rule Based Cultures

When dealing with different or rule based cultures, it’s important to remain mindful of differences, so as to avoid misunderstandings.

Rule Based Cultures

Last month I had an assignment in Japan.  On our first night in town, five colleagues and myself met in the bar of a major hotel where we had planned to have a pre-dinner drink and decide on a dinner location.

Upon arrival, we ordered our drinks and were each served a very small bowl of nuts. After a brief discussion, and review of the hotel menu, it was decided that we would eat at the hotel restaurant.  Given that we didn’t have to travel anywhere for dinner, we decided to spend a bit more time relaxing and catching up before heading to the restaurant.

One of my colleagues politely asked the barman for a second bowl of nuts, to which the barman replied, “No, it is only one bowl per drink.” After some discussion it was clear that the barman was not going to bend the rules, there wasn’t going to be a second bowl of nuts unless a second drink was ordered.

In response to this inflexibility, we decided against having another drink and eating dinner at the hotel restaurant.  Following our earlier conversation with the restaurant manager regarding the menu, on our departure he questioned why we were leaving.

We told him of our reason for leaving, to which he was very apologetic, thanked us for the feedback and then proceeded to escort us to the concierge, while also suggesting other local restaurants.

His friendly manner persuaded us to dine at one of the other restaurants within the hotel. We appreciated his demeanour and kind generosity – providing our table with a surprise complimentary bottle of wine.

Appreciate the Differences

The point of this story is to emphasise the differences of rule based cultures, that some cultures are bound by rules, formalities and regulations more than others. This doesn’t make one better than the other, more rude or generous than another, it just makes them different.

We need to understand and appreciate these differences. In the moment they may seem significant or even pedantic but their effects can be long reaching and detrimental toward future relationships, behaviours, attitudes and biases.

Strong rule based cultures tend to encourage conformity, embracing the status quo, while other cultures tolerate greater degrees of flexibility and adaptability.

The key to successfully navigating, working and interacting within and across cultures is to understand that these traits are often hidden, unspoken, understated characteristics that are bound up in the unspoken cultural rules, expectations, systems and processes.

Reflection and Mindfulness

They can appear when you are engaging in cross-cultural social and professional interactions i.e. different expectations and formalities of hierarchical and equality based structures, during negotiations, navigating through ambiguous, tense situations or when establishing and maintaining trusted working relationships with internal and external stakeholders.

The barman serving us was not rude, rather he was efficiently performing his job, behaving in a manner that was appropriate for a barman in his role, respecting the rules and processes of his job. Our observations and expectations of the barman’s behaviour and attitude were considered through our own cultural lenses.

This example highlights how interpretations of social rules and behaviours can quickly become construed as impolite, disrespectful and inappropriate. Reflection and mindfulness are valuable skills, especially when interacting with differences of any kind!

Dr. Tom Verghese is the Founder and Principal Consultant at Cultural Synergies, a leading global intercultural and diversity consultancy that specialises in developing and sustaining cultural intelligence.

Manufacturing in China? Here’s What You Need to Know

Manufacturing in China might be a cost-effective solution, but it can bring with it inherent risks to global brands.

Manufacturing in China

For procurement professionals, that means trying to understand the cultural nuances that dictate how to do business in China.

Stories of issues have appeared in the media, including now-defunct Australian boot manufacturer Bennett’s Boots blamed a Chinese factory for trying to reduce its margins for the collapse of the entire business. While early orders were perfect and business grew, subsequent orders were cheap imitations, with 80 per cent of the container load of boats un-sellable.

Company founder Amanda Bennett told BRW magazine that: “Success to the Chinese is trying to do things behind your back and get away with it. I don’t mean that in a derogatory way, it’s a cultural thing.”

Navigating the Cultural Landscape

But there are companies that specialise in helping foreign companies wanting to manufacture in China navigate the cultural landscape.

Chris O’Halloran is the founder of Striking Group, a project management consultancy, and has been to China dozens of times to build the bridge between China and Australian companies since launching in 2008.

O’Halloran admits that the Chinese do business by going in cheap and then trying to recover the margins by cutting corners, hoping no-one notices.

When manufacturing in China, the biggest trap Australian companies fall into is sending a drawing to China, and asking for 10,000 products to be manufactured without enough instruction, he says.

“To the Chinese, if it looks the same to them, then it is the same. They’re not trying to be nasty, it’s just the way they do business.

“Having said that, I’ve been to factories in China completely automated where you can eat off the factory floor that are far beyond anything we’ve got here.”

New Wave of Challenges

China has emerged as a manufacturing powerhouse, with immaculate robotic factories and far greater capability to manufacture luxurious goods rather than just mass produce cheap items.

However, the country faces new challenges. According to this report by McKinsey & Company, these include increasing wages, more complex value chains, and consumers growing more sophisticated and demanding.

Australian companies trying to do business with China also often fall down by thinking they’re dealing direct with the manufacturer, when in fact there’s two or even three middle men shielding the manufacturing operator, O’Halloran explains.

“The Chinese like to keep their cards close to their chest, so often you don’t really know if you’re dealing with the manufacturing facility or not. This is very common in Australia, and not the best way to do business.

“However, no-one can build to scale as well in Australia. They are light years ahead of many major manufacturing hubs around the world, and often Australian companies don’t realise how big these Chinese companies are.”

Fostering Relationships

O’Halloran shortlists a number of factories for his clients and helps them foster a relationship with the business owner and arranges guided factory tours. He also conducts spot checks for clients.

“We’re looking for things like, do they have a quality control process in place, and how do they buy their goods, and whether Fair Trade Agreements are in place. We always try to establish if they’re managing the entire manufacturing process in-house, because sometimes they’ll outsource some of the work to a sweat factory down the road without telling you.”

He also says that the Chinese are not great at design, but they’re amazing at copying and reproducing something, and mass producing it. Smaller scale runs are also increasingly cost-effective. Australian companies also need to understand cultural nuances, such as the importance of hierarchy to the Chinese, he adds.

The Chinese are also very superstitious, and their lucky number is eight, he says.

“The Chinese will go out of their way to find the number eight in their business dealings. They even design buildings with eight floors or eight windows in a room, and other things based around feng shui,” O’Halloran concludes.

Top Tips for Manufacturing in China

  • Don’t try and navigate the Chinese manufacturing industry alone, hire an expert.
  • Explain what you want in as few words as possible. Don’t leave anything open to interpretation.
  • Always start slow, on a small scale.
  • Understand cultural nuances and the importance of hierarchy.
  • As a sign of respect, when you accept a business card with two hands, and look at it carefully. Put the card on the table in front of you, never in your pocket.

 Source: Chris O’Halloran, Striking Group.