Cross-Cultural Training — A key factor for International Business Negotiation Essay
Cross-Cultural Training — A key factor for International Business Negotiation
As the process of globalization keeps advancing and the era of information has already brought significant influences to our life, the world is becoming, although not from a geographical perspective, smaller and international communication happens more frequent. Such cross-cultural contact becomes stronger both in depth and width and leads to the desire and demands for communication of individuals from different regions, societies and cultures.
Owning to globalization, cross-cultural business negotiation is highlighted an unprecedented level as one of the most important types of intercultural communication. Communication between different cultures is undoubtedly crucial, while there are still many problems and conflicts exist in business negotiation because of cultural differences. In order to solve these cultural problems and reach a successful business negotiation, the concept of Cross-Cultural Training is raised as one of the key solutions.
The Cross-Cultural Training is defined as a series of efforts to equip individuals with more effective cooperation and adjustment when they interact frequently with individuals from other culture (Brislin and Yoshida, 1993). The essay will give a brief definition of cross-culture communication and the cultural factors influencing the business negotiation first. Secondly, example of cultural conflicts will be shown to illustrate culture influences business negotiation. Thirdly, Cross-Cultural Training will be discussed in four aspects which are definition, effects, methodology and implication.
2. HOW CULTURE INFLUENCES BUSINESS NEGOTIATION
A bottom-up sequence of the elements in business negotiation is made by Vincent Guy and John Mattock (1995) in which cultural background stays at the bottom of all the other elements which are the characteristics of the company, personal character, skills, occasion and negotiation strategy. The important position of the cultural factors in a business negotiation leads to a number of influences that they will bring to the business negotiation. Salacause (2004) states ten areas that cultural can make influence on business negotiation.
They are Negotiation Goal, Negotiation Attitude, Personal Style, Communication, Sensitivity to Time, Emotionalism, Form of Agreement, Building an Agreement, Team Organization and Risk Taking. Any of the elements above may affect the negotiation and even cause a cultural conflict. Taking the Enron as an example, it lost a contract during a business negotiation in India because the local company felt that Enron pushed the negotiation too fast.
In fact, different sensitivity to time must be contributed to the loss of the contract since for Enron’s negotiator, time equals to profit, while for the businesspeople of India, slower negotiation leads to better trust in the other side (Salacause, 2004). The great diversity of the cultures worldwide makes it difficult for negotiators, even an experienced one, to adapt well to all the cultures that may confront them.
3. CROSS-CULTURAL TRAINING IS A KEY FACTOR FOR A SUCCESSFUL BUSINESS NEGOTIATION As shown in the example above, cultural conflicts may result in an unsuccessful business negotiation and Black and Mendenhall (1989) claimed that the business negotiation between different cultures often fail due to problems related to cultural differences. Such conflicts are probably led by cultural shock which is to describe the problems encountered by individuals who go from one culture to another (Bhawuk & Brislin, 2000).
Serious obstacles to cross-cultural offered relevant practitioners with a legitimate reason to provide cross-cultural training since it would result in the relief, if not being totally removed, of culture shock (Bhawuk & Brislin, 2000) and therefore improve the performance of expatriates in business activity and negotiation. As Black and Mendenhall (1990) state, Cross-Cultural Training designed for expatriation is helpful for expatriates to develop performance or learn appropriate behaviors to achieve better adjustment in foreign countries through observation and experience of different cultures ( Moon, Choi, Jung, 2012).
If negotiators experience Cross-Cultural Training Program, they can soon know well about knowledge of acceptable behaviors as well as taboos of the host country (Black, 1991). Therefore, negotiators can improve their skills on how to deal with
cross-cultural business and negotiation in cognitive and interpersonal perspective. (Littrell, Salas, Hess, Paley, and Riedel, 2006).
Taking Cross-cultural Training before cultural interaction helps to relief the severity of the cultural shock and shortens the duration of not being acclimated to the new culture. An appropriately designed Cross-Cultural Training program can improve the adaption of the negotiator to the new cultural situation (Shen and Lang, 2009). In 1983, Brislin presented several Cross-Cultural Training methodologies which then became popular:
(1) Fact-Oriented Training which is the most basic type of Cross-Cultural Training in which trainees will be exposed to various facts or information about the culture of the host country (Black and Mendenhall,1989);
(2) Attribution Training, communicating with culture assimilator to enable trainees to internalize values and standard of behavior of the host culture;
(3) Cultural Awareness Training, which is to provide the expatriate deep understanding about the concept of culture and cultural differences through teaching awareness about the home culture (Hånberg, Österdahl, 2009);
(4) Cognitive-Behavior Modification, making trainees know about what activity is rewarding or punishing and thus they can focus on the rewarding one and deal with the challenge better (Hånberg, Österdahl, 2009);
(5) Experiential Learning, to personally be a participant and learn about a specific host culture; and
(6) Interaction Learning, it is designed for trainees to feel more comfortable with host nation and to understand life in the host country in detail (Eschbach, Parker and Stoeberl, 2001).
By taking Cross-Cultural Training, businesspeople can improve their adjustment to a new cultural environment and thus they are not able to meet cultural problems when they are involved in a cross-cultural business negotiation. People who receive Pre-Cross-Cultural Training will do better in identifying the cultural elements of the host country such as the concept of time, values, characteristics of language and the taboo, which can lead to a successful business negotiation without any misunderstanding and confusion.
Nevertheless, there are many companies remain blind to the effect of Cross-Cultural Training because it needs money to be invested and such investment will not be profitable in a short-term period of time. It is also concerned by many firms that Cross-Cultural Training can be useful during the training program but it may not work after the training program is completed since it may not practical enough.
Blake and Heslin(1983), Blake et al.(1996), and Kealey and Protheroe(1996) argued that the previous reviews hold a more favorable attitude toward the effectiveness of Cross-Cultural Program (Dan, Janet , Milton, 2003). Dan, Janet and Milton (2003) states that there is no proofs lead to the ineffectiveness of this kind of training but it is shown that the it is not effective in achieving all the objectives associated with Cross-Cultural Training in practice because the effect of the Cross-Cultural Training varies relying on the differences (knowledge, behavior, etc) of the individuals.
Intercultural business deals not only cross nations, but also cross cultures. Culture may result in profound influences on an individual’s thoughts, communication, and behavior. It also affects their methods and strategies of negotiation (Salacuse, 2004). Many enterprises refuse the program because of its extra requirement of money and inconspicuous effects. It is estimated by Birdseye and Hill (1995) that the direct cost of sending a businessperson overseas may reach $220,000 and the cost of such issues to America, for instance, may be as high as $2 billion annually (Mark and Chet, 2001).
According to the research conducted by Eschbach, Parker and Stoeberl (2001), the cost of failed international business negotiations has been estimated as up to $500,000 and Black and Mendenhall (1990) and Walton (1990) estimated that the failure rates ranges from 20 per cent to 85 per cent.
The results of the studies demonstrated that comprehensive Cross-Cultural Training is effective in reduce the time necessary to achieve sound adjustment and to attain cultural proficiency and shortens the time necessary to become effective and productive in business negotiation (Eschbach, Parker and Stoeberl, 2001). It is the high cost and risk of reaching a successful intercultural negotiation that makes Cross-Cultural Training the key solution and since it is proved to be an effective way for negotiator to perform better in international business negotiations, more and more companies should focus on investigation and investment of the Cross-Cultural Training Program.
List of Reference
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