International Management Essay
Evaluate the selection of negotiators from Canada Timber. Were any mistakes made in the selection? Answer 1: The success of international business relationships depends on effective business negotiations. Negotiators need to be well prepared. Understanding how to achieve international business negotiation outcomes and the factors relevant to the process will allow negotiators to be more successful. Negotiation is an inherent part of being in business. Negotiating is an acquired skill, but is very important part of your role as an entrepreneur.
4 Negotiators from Canada Timber went to Japan for Business negotiation,Tim Wilder-CEO of Canada Timber,John Sharkey-an attorney,Bill Hudak-production supervisor and Kevin Peterson-a regional salesperson.
The first negotiator,Tim Wilder-CEO of Canada Timber, As a business owner, negotiations with other businessmen are inevitable. He wanted to establish a corporate partnership with another business. One of the most exciting times in the life of a business owner is when an opportunity arises to enter into an agreement that will take the business to another level. (http://www.startupbizhub.com/how-can-you-become-a-good-negotiator.htm)
CEO are the highest ranking executive in a company whose main responsibilities include developing and implementing high-level strategies, making major corporate decisions, managing the overall operations and resources of a company, and acting as the main point of communication between the board of directors and the corporate operations. The CEO will often have a position on the board, and in some cases is even the chair.So the selection of Tim Wilder,CEO from Canada Timber as a negotiator was a correct decision.
Second negotiator Mr John Sharkey-An Attorney works with business owners to make sure that there are no unresolved or, as is usually the case, unrecognized deal points that might be overlooked in the excitement of reaching an agreement.The deal negotiation attorney also helps to ensure that the deal is properly structured to suit both parties’ needs. A clearly written agreement that is satisfactory to both companies is the best foundation for a good business relationship which will be an asset to your company. A major deal is a break-through moment for any growing company. By having a negotiation attorney on your side, you can be sure that the agreement is one that will help propel your business to new heights of success.
(http://www.davidmwalkeresq.com/pages/deal-negotiation.php)An Attorney manages all legal transactions and litigation on behalf of entrepreneurs, offering precisely targeted solutions for a full range of problems and who understand the value of maintaining an on-going relationship with counsel. They help draft, review, and negotiate contracts, advise you on legal problems and questions, and if you become involved in a dispute, handle negotiations and/or litigation. If your new venture requires more specialized services, we bring in and manage other professionals on your behalf.They provide an efficient and cost-effective service to manage all of the legal needs while the company CEO focus on the business venture. So the selection of Mr John Sharkey-An Attorney as a negotiator was a correct decision.
Third Negotiator,Mr Bill Hudak a production supervisor,his knowledge of hardwoods and the production procedures of Canada Timber made him an obvious choice for inclusion on the negotiating team. He direct and supervise day to day production,job assignment,and workstation set-up.working in a co-operative effort with Canada Timber team.He participates in the development of new production processes,developing strategies for meeting production demands.Monitor production practices for the most efficient use of material to assure that we are producing a product that meets customer needs and as well is profitable for the organization.He has extensive knowledge of the methods,principles,techniques,and tools of industrial wood production.So the selection of Mr John Sharkey-An Attorney as a negotiator was a correct decision. (http://www.helenaindustries.org/images/WoodShopSupervisor.pdf)
4th Negotiator,Kevin Peterson,a regional salesperson.Not every salesperson will be a natural at negotiation. Salespeople are there to close business. This doesn’t mean they should use strong-arm tactics to close deals. For the salesperson that doesn’t have the necessary negotiation skills, there’s always the price to fall back on. It’s a crutch and an excuse, but one that’s easily accepted by businesses and managers alike.
For salesperson, negotiation is second nature. Even Kevin is married to a woman of Japanese descent ,knowa a few words in Japanese and somewhat familiar with Japanese culture,selection of Kevin Peterson as a negotiator was not a correct decision. (http://www.driveyoursuccess.com/2010/07/secret-of-successful-b2b-sales-having-strong-negotiation-skills-.html) After evaluating the negotiators from Canada Timber,we felt that chosing Mr Kevin Peterson,A regional salesperson was a wrong decision made by Tim Wilder.
What differences in culture between the Japanese and Canadians can be found in this case? Answer 2: 1.Directness. Canadians tend to be more direct than Japanese. They are more likely to say “No” to things openly and are more forward about their opinions, even when they differ from or contradict another person’s opinions. This may come across as offensively blunt to many Japanese people. In most cases, they don’t mean any offense, so try not to take it personally. Understand that the Japanese prefer not to use the word no. If you ask a question they may simply respond with a yes but clearly mean no. Understanding this is critical in the negotiation process. In Japan it may be considered rude to say no or turn someone down.
(http://2vancouver.com/en/articles/cultural-differences-between-canada-japan) 2. Body Language. When indicating “me” in conversation, Canadians point to their chest rather than their nose. When indicating for you to come to them, Canadians will wave you toward them with their hand palm up rather than palm down. If you wave someone over with your palm down, they may confuse this to mean that you’re trying to wave them away. (http://2vancouver.com/en/articles/cultural-differences-between-canada-japan)
3. Silence. Japanese people tend to be silent when thinking in conversation. Canadians, on the other hand, hedging sounds like “Hmm…” or start a sentence without finishing it (i.e. “Let me think…” or “Let’s see…”). If
you don’t use any hedging language like this, you may find that Canadians will rush to fill what they see as an awkward silence, not knowing that you’re actually thinking and have something to say.
4.Business cards. In Japan, business cards are called meishi. Japanese give and receive meishi with both hands. It should be printed in your home language on one side and Japanese on the other. Present the card with the Japanese language side up. Take special care in handling cards that are given to you. Do not write on the card. Do not put the card in you pocket or wallet, as either of these actions will be viewed as defacing or disrespecting the business card. Upon receipt of the card, it is important to make a photocopy of the name and title of the individual in your mind. Examine the card carefully as a show of respect. (http://www.indianchild.com/languages/japanese_business_phrases.htm) 5.Touching in public.The Japanese frown on open displays of affection. They do not touch in public. It is highly inappropriate to touch someone of the opposite sex in public.(http://www.cyborlink.com/besite/japan.htm)
6.Respect culture.Just try to be over polite and dont do anything stupid because they are a culture based on honor and respect. As long as you’re making an effort to be polite (as it seems you are) people will notice that and give you the benefit of the doubt in most cases. If you’re acting like a pompous *** and being disrespectful, that’s another story. (http://www.cyborlink.com/besite/japan.htm) 7.Business Meeting Etiquette Don’t be surprised if your hosts give you something from their country too. If the gift is wrapped, don’t open it until you leave. If the gift is not wrapped, make sure to express copious appreciation (whether you like it or not). Ask some questions about the gift to show interest. (http://www.japan-guide.com/e/e2195.html)
8.Social Interaction If you do go out for dinner, keep in mind that “going Dutch” is not normal in Japan. If you’re the buyer, you’ll likely be in for a free evening of entertainment. If you’re the seller… well, if you were a local, you’d probably be picking up the tab. However, it’s not quite this simple since your hosts may still insist on paying because you are a visitor in their country. Also, it is normal for the inviting party to pay.
(http://www.japan-guide.com/e/e2195.html) 9.Gifts. Don’t be surprised if your hosts give you something from their country .If the gift is wrapped, don’t open it until you leave. If the gift is not wrapped, make sure to express copious appreciation (whether you like it or not). Ask some questions about the gift to show interest. (http://www.japan-guide.com/e/e2195.html)
What could have been done differently in order to produce a more desirable outcome? Answer 3: 1.Understand the Cultural Value Differences between Canadian and Japanese. Cultural distance or dissimilarity affects the ability of managers to be effective in foreign markets. Cultural distance is the difference between culture, language and social structure (Root 1987) that affects managers’ perceptions of what should constitute culturally appropriate behavior in a foreign market (Adler, Doktor, and Redding 1986).To achieve project goals and avoid potential risks, project managers should be culturally sensitive. However, cultural differences can interfere with the successful completion of projects in today’s multicultural global business community.Table below shows the impact of differences in cultural values to the Project results. Table Adapted from Kohls (1981); Marquardt and Kearsley (1999)
Figure 1: Value Differences between Canadian and Japanese Cultures Canadian Cultural Values
Japanese Cultural Values
Impact on Project Management.
Guilt (internal self-control)
Shame (external control)
Respect for results
Respect for status/Ascription
Respect for competence
Respect for elders
Time is money
Time is life
(+) = Positive impact of combining both values on outcomes (-) = Negative impact of combining both values on outcomes (culture clash) (X) = No direct
impact on outcomes
Adapted from Kohls (1981); Marquardt and Kearsley (1999)
1.1 Cultural Values on International Business Negotiation Process International Business
Impact of Cultures
Japanese negotiators value long-term relationships. Canadian negotiators aim at signing a contract. Protocol The degree of formality in a negotiation can vary from culture to culture. Japanese value etiquette and respectful manners. Canadian negotiators are very formal and highly concerned with proper protocol. Communication
Japanese tend to speak softly and use almost no gestures, and prefer indirect language. Canadian are direct and prefer a straightforward presentation with a minimum of game playing. Time Canadian are sensitive to time. They view it as a limited resource that must not be wasted. Japanese regard time as long duration, spending time to learn counterparts. Groups versus individuals In decision making, a more collective culture places emphasis on group priority. An individual-oriented culture is more independent and assertive. Japanese negotiators rely on consensus
2. Provide Training to the negotiators and Characteristics of a good sales negotiator. Train your Negotiator team to be expert negotiators, says Kelley Robertson, a sales training expert and CEO of Robertson Training Group in Burlington, Ontario.
Here are nine characteristics of a good sales negotiator, according to Robertson: 1. Exhibits Creativity. A good negotiator looks for creative solutions to help close the deal. Depending on your industry, you could barter with a potential customer or create a partnership. “For example, I will waive part of my speaking fee at a conference in return for the attendee list,” says Robertson. In that situation, both parties achieve
2. Has a win-win attitude. The best way to achieve this is to look at the sale from the other party’s perspective. What are their risks, hesitations, concerns? By determining those before you reach the negotiating table, you can better create win-win solutions for both sides. 3. Has keen listening skills. Customers will often give you clues about what they need. Say you’ve e-mailed a sales presentation to a potential client, but they keep claiming they haven’t had time to read it. What they’re really telling you is they doesn’t want to—so instead, tell them your sales pitch over the phone.
Missing a clue like that can cost you a sale. 4. Exhibits patience. Without patience, you may make early concessions just to get the process moving—especially if you’re negotiating with a larger company. “Their sales process takes a lot longer than other small businesses or consumers,” says Robertson. But making the right deal, rather than a swift one, will be better for your company. 5. Understands the negotiating process. Salespeople must understand that there’s a beginning, middle and end to the sales process, and that once the relationship begins, everything you do afterward either adds value or takes away value. So remain positive, continue to be responsive, and don’t let the customer fall off your radar.
6. Clarifies ambiguity. A good negotiator takes time to get clarification. Let’s say a customer at a restaurant doesn’t like their food. The waiter shouldn’t assume they didn’t like their entire meal, and should ask specifically what went wrong. Perhaps he’ll find out it was undercooked, or just a portion of the meal was wrong. The lesson: A negotiator doesn’t take what they hear at face value and takes the time to get clarification on the other party’s qualms. 7. Shows curiosity. Being able to ask insightful questions, and having the courage to ask those questions, is another critical characteristic. “I knew a prospective customer had met with my competitor, and since I was curious I asked how my presentation stacked up against his,” says Robertson. “So I then had a leg up in the negotiating process, because I knew what I was up against.” 8. Has the ability to walk away. Most small business owners put themselves in a position where they’re unwilling to walk away from a sale because they feel they desperately need it. This is a mistake.
When you hold that mindset, a customer has a better chance of taking advantage of you. “Every deal has to make good business sense,” says Robertson. 3.Harmony. Harmony is the key value in Japanese society. Harmony is the guiding philosophy for the Japanese in family and business settings and in society as a whole. They place great emphasis on politeness, personal responsibility and working together for the universal, rather than the individual, good. They see working in harmony as the crucial ingredient for working productively. 4.Japanese Non-Verbal Communication Since the Japanese strive for harmony and are group dependent, they rely on facial expression, tone of voice and posture to tell them what someone feels.
They often trust non-verbal messages more than the spoken word as words can have several meanings. Frowning while someone is speaking is interpreted as a sign of disagreement. Most Japanese maintain an impassive expression when speaking. Expressions to watch out for include inhaling through clenched teeth, tilting the head, scratching the back of the head, and scratching the eyebrow. It is considered disrespectful to stare into another person’s eyes, particularly those of a person who is senior to you because of age or status. In crowded situations the Japanese avoid eye contact to give themselves privacy.
5.Meet Meeting Etiquette & Customs in Japan Greetings in Japan are very formal and ritualized.It is important to show the correct amount of respect and deference to someone based upon their status relative to your own.If at all possible, wait to be introduced.It can be seen as impolite to introduce yourself, even in a large gathering.While foreigners are expected to shake hands, the traditional form of greeting is the bow. How far you bow depends upon your relationship to the other person as well as the situation. The deeper you bow, the more respect you show.A foreign visitor (‘gaijin’) may bow the head slightly, since no one expects foreigners to generally understand the subtle nuances of bowing.
6.Gift Giving Etiquette Gift-giving is highly ritualistic and meaningful.The ceremony of presenting the gift and the way it is wrapped is as important–sometimes more important–than the gift itself.Gifts are given for many occasions.The gift need not be expensive, but take great care to ask someone who understands the culture to help you decide what type of gift to give. Good quality chocolates or small cakes are good ideas.Do not give lilies, camellias or lotus blossoms as they are associated with funerals.Do not give white flowers of any kind as they are associated with funerals.
Do not give potted plants as they encourage sickness, although a bonsai tree is always acceptable.Give items in odd numbers, but not 9.If you buy the gift in Japan, have it wrapped.Pastel colours are the best choices for wrapping paper.Gifts are not opened when received. 7.Relationships & Communication The Japanese prefer to do business on the basis of personal relationships.In general, being introduced or recommended by someone who already has a good relationship with the company is extremely helpful as it allows the Japanese to know how to place you in a hierarchy relative to themselves.One way to build and maintain relationships is with greetings / seasonal cards.It is important to be a good correspondent as the Japanese hold this in high esteem.
8.Business Meeting Etiquette Appointments are required and, whenever possible, should be made several weeks in advance.It is best to telephone for an appointment rather than send a letter, fax or email. Punctuality is important. Arrive on time for meetings and expect your Japanese colleagues will do the same.Since this is a group society, even if you think you will be meeting one person, be prepared for a group meeting. It may take several meetings for your Japanese counterparts to become comfortable with you and be able to conduct business with you.
This initial getting to know you time is crucial to laying the foundation for a successful relationship.You may be awarded a small amount of business as a trial to see if you meet your commitments.If you respond quickly and with excellent service, you prove your ability and trustworthiness. Never refuse a request, no matter how difficult or non- profitable it may appear. The Japanese are looking for a long-term relationship.Always provide a package of literature about your company including articles and client testimonials.Always give a small gift, as a token of your esteem, and present it to the most senior person at the end of the meeting. Your Japanese contact can advise you on where to find something appropriate.
9.Business Negotiation The Japanese are non-confrontational.They have a difficult time saying ‘no’, so you must be vigilant at observing their
non-verbal communication.It is best to phrase questions so that they can answer yes. For example, do you disagree with this?Group decision-making and consensus are important.Written contracts are required. The Japanese often remain silent for long periods of time. Be patient and try to work out if your Japanese colleagues have understood what was said.Japanese prefer broad agreements and mutual understanding so that when problems arise they can be handled flexibly.Using a Japanese lawyer is seen as a gesture of goodwill.
Note that Japanese lawyers are quite different from Western lawyers as they are much more functionary. Never lose your temper or raise your voice during negotiations.Some Japanese close their eyes when they want to listen intently.The Japanese seldom grant concession. They expect both parties to come to the table with their best offer.The Japanese do not see contracts as final agreements so they can be renegotiated 10.Business Cards Business cards are exchanged constantly and with great ceremony.Invest in quality cards.Always keep your business cards in pristine condition.Treat the business card you receive as you would the person.You may be given a business card that is only in Japanese.
It is wise to have one side of your business card translated into Japanese.Give your business card with the Japanese side facing the recipient. Make sure your business card includes your title, so your Japanese colleagues know your status within your organization.Business cards are given and received with two hands and a slight bow.Examine any business card you receive very carefully.During a meeting, place the business cards on the table in front of you in the order people are seated.When the meeting is over, put the business cards in a business card case or a portfolio 11.Business ethics Japanese believe in business ethics. They provide products and services to the customers and never ready to cheat them. Thus they provide service to the community and fulfill social responsibility. They do business fairly. They earn profit but not at the cost of quality.
What is Hofstede’s dimension of culture? Which category does Malaysia falls into?
We know we are living in a global age. Technology has brought the world much closer together. This means that people of different cultures find themselves working together and communicating more and more. (http://www.ctp.bilkent.edu.tr/~aydogmus/Hofstede_Hall.pdf) This is exciting and interesting, but it can also be frustrating and fraught with uncertainty. How do you relate to someone of another culture? What do you say, or not say, to start a conversation off right? Are there cultural taboos you need to be aware of? Building connections with people from around the world is just one dimension of cultural diversity. You also have issues like motivating people, structuring projects, and developing strategy. What works in one location may or may not work somewhere else. The question is, “How can I come to understand these cultural differences?” Are we relegated to learning from our mistakes or are there generalized guidelines to follow?
Fortunately, a psychologist named Dr Geert Hofstede asked himself this question in the 1970s. What emerged after a decade of research and thousands of interviews is a model of cultural dimensions that has become an internationally recognized standard. With access to people working for the same organization in over 40 countries of the world, Hofstede collected cultural data and analyzed his findings. He initially identified four distinct cultural dimensions that served to distinguish one culture from another. Later he added a fifth dimension and that is how the model stands today. He scored each country using a scale of roughly 0 to 100 for each dimension. The higher the score, the more that dimension is exhibited in society. The Five Dimensions of Culture
Armed with a large database of cultural statistics, Hofstede analyzed the results and found clear patterns of similarity and difference amid the responses along these five dimensions. Interestingly, his research was done on employees of IBM only, which allowed him to attribute the patterns to national differences in culture, largely eliminating the problem of differences in company culture.(http:/www.mindtools.com)
The five dimensions are:
1. Power/Distance (PD) – This refers to the degree of inequality that exists
– and is accepted – among people with and without power. A high PD score indicates that society accepts an unequal distribution of power and people understand “their place” in the system. Low PD means that power is shared and well dispersed. It also means that society members view themselves as equals. Application: According to Hofstede’s model, in a high PD country like Malaysia (104), you would probably send reports only to top management and have closed door meetings where only a select few, powerful leaders were in attendance.
Large gaps in compensation, authority, and respect.
Acknowledge a leader’s power.
Be aware that you may need to go to the top for answers
Supervisors and employees are considered almost as equals.
Involve as many people as possible in decision making.
2. Individualism (IDV) – This refers to the strength of the ties people have to others within the community. A high IDV score indicates a loose connection with people. In countries with a high IDV score there is a lack of interpersonal connection and little sharing of responsibility, beyond family and perhaps a few close friends. A society with a low IDV score would have strong group cohesion, and there would be a large amount of loyalty and respect for members of the group. The group itself is also larger and people take more responsibility for each other’s well being. Application: Hofstede’s analysis suggests that in the Central American countries of Panama and Guatemala where the IDV scores are very low (11 and 6, respectively), a marketing campaign that emphasized benefits to the community or that tied into a popular political movement would likely be understood and well-received.
High valuation on people’s time and their need for freedom.
An enjoyment of challenges, and an expectation of rewards for hard work. Respect for privacy.
Don’t ask for too much personal information.
Encourage debate and expression of own ideas.
Emphasis on building skills and becoming masters of something. Work for intrinsic rewards.
Harmony more important than honesty.
Show respect for age and wisdom.
Suppress feelings and emotions to work in harmony.
Respect traditions and introduce change slowly.
3. Masculinity (MAS) – This refers to how much a society sticks with, and values, traditional male and female roles. High MAS scores are found in countries where men are expected to be tough, to be the provider, to be assertive and to be strong. If women work outside the home, they have separate professions from men. Low MAS scores do not reverse the gender roles. In a low MAS society, the roles are simply blurred. You see women and men working together equally across many professions. Men are allowed to be sensitive and women can work hard for professional success. Application: Japan is highly masculine with a score of 95 whereas Sweden has the lowest measured value (5). According to Hofstede’s analysis, if you were to open an office in Japan, you might have greater success if you appointed a male employee to lead the team and had a strong male contingent on the team. In Sweden, on the other hand, you would aim for a team that was balanced in terms of skill rather than gender.
Men are masculine and women are feminine.
There is a well defined distinction between men’s work and women’s work. Be aware that people may expect male and female roles to be distinct. Advise men to avoid discussing emotions or making emotionally-based decisions or arguments. Low MAS
A woman can do anything a man can do.
Powerful and successful women are admired and respected.
Avoid an “old boys’ club” mentality.
Ensure job design and practices are not discriminatory to either gender. Treat men and women equally.
4. Uncertainty/Avoidance Index (UAI) – This relates to the degree of anxiety society members feel when in uncertain or unknown situations. High UAI-scoring nations try to avoid ambiguous situations whenever possible. They are governed by rules and order and they seek a collective “truth”. Low UAI scores indicate the society enjoys novel events and values differences. There are very few rules and people are encouraged to discover their own truth. Application: Hofstede’s Cultural Dimensions imply that when discussing a project with people in Belgium, whose country scored a 94 on the UAI scale, you should investigate the various options and then present a limited number of choices, but have very detailed information available on your contingency and risk plans. (Note that there will be cultural differences between French and Dutch speakers in Belgium!)
Very formal business conduct with lots of rules and policies. Need and expect structure.
Sense of nervousness spurns high levels of emotion and expression. Differences are avoided.
Be clear and concise about your expectations and parameters. Plan and prepare, communicate often and early, provide detailed plans and focus on
the tactical aspects of a job or project. Express your emotions through hands gestures and raised voices. Low UAI
Informal business attitude.
More concern with long term strategy than what is happening on a daily basis. Accepting of change and risk.
Do not impose rules or structure unnecessarily.
Minimize your emotional response by being calm and contemplating situations before speaking. Express curiosity when you discover differences.
5. Long Term Orientation (LTO) – This refers to how much society values long-standing – as opposed to short term – traditions and values. This is the fifth dimension that Hofstede added in the 1990s after finding that Asian countries with a strong link to Confucian philosophy acted differently from western cultures. In countries with a high LTO score, delivering on social obligations and avoiding “loss of face” are considered very important.
Application: According to Hofstede’s analysis, people in the United States and United Kingdom have low LTO scores. This suggests that you can pretty much expect anything in this culture in terms of creative expression and novel ideas. The model implies that people in the US and UK don’t value tradition as much as many others, and are therefore likely to be willing to help you execute the most innovative plans as long as they get to participate fully. (This may be surprising to people in the UK, with its associations of tradition!)
Family is the basis of society.
Parents and men have more authority than young people and women. Strong work ethic.
High value placed on education and training.
Show respect for traditions.
Do not display extravagance or act frivolously.
Reward perseverance, loyalty, and commitment.
Avoid doing anything that would cause another to “lose face”. Low LTO
Promotion of equality.
High creativity, individualism.
Treat others as you would like to be treated.
Self-actualization is sought.
Expect to live by the same standards and rules you create.
Be respectful of others.
Do not hesitate to introduce necessary changes.
For a list of scores by dimension per country and more detailed information about Hofstede’s research, visit his http://geert-hofstede.com/. You can also find out more about his research in the books http://www.amazon.com/ and http://www.mindtools.com/pages/article/newLDR_66.htm Note:
Hofstede’s analysis is done by country. While this is valid for many countries, it does not hold in the countries where there are strong subcultures that are based on ethnicity of origin or geography. In Canada, for instance, there is a distinct French Canadian culture that has quite a different set of norms compared to English-speaking Canada. And in Italy, masculinity scores would differ between North and South. Key Points:Cultural norms play a large part in the mechanics and interpersonal relationships at work.
When you grow up in a culture you take your norms of behavior for granted. You don’t have to think about your reactions, preferences, and feelings. When you step into a foreign culture, suddenly things seem different. You don’t know what to do or say. Using Hofstede’s Cultural Dimensions as a starting point, you can evaluate your approach, your decisions, and actions based on a general sense of how the society might think and react to you. Of course, no society is homogenous and there will be deviations from the norms Hofstede found, however, with this as your guide you won’t be going in blind. The unknown will be a little less intimidating and you’ll get a much-needed boost of confidence and security from studying this cultural model. Apply This to Your Life:
Take some time to review the for the various cultural dimensions Hofstede identified. Pay particular attention to the countries from which the people you deal with on a day-by-day basis come. In light of these scores, think about some interactions you’ve had with people in other countries. Does your conversation or association make more sense given this newly found insight? Challenge yourself to learn more about one culture in particular. If your work brings you in contact with people from another country, use that country as your point of reference.
Apply Hofstede’s scores to what you discover and determine the accuracy and relevance for you. The next time you are required to work with a person from a different culture, use Hofstede’s scores and make notes about your approach, what you should be prepared to discuss, and why you feel the way you do. Afterward, evaluate your performance and do further research and preparation for the next time. Above all, make cultural sensitivity a daily part of your life. Learn to value the differences between people and vow to honor and respect the things that make each nation of people unique.
Which category does Malaysia falls into?
What about Malaysia?
If we explore the Malaysian culture through the lens of the 5-D Model, we can get a good overview of the deep drivers of Malaysian culture relative to other world cultures. (http://predicate.wordpress.com)
This dimension deals with the fact that all individuals in societies are not equal – it expresses the attitude of the culture towards these inequalities amongst us. Power distance is defined as the extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally.
Malaysia scores very high on this dimension (score of 104) which means that people accept a hierarchical order in which everybody has a place and which needs no further justification. Hierarchy in an organisation is seen as reflecting inherent inequalities, centralization is popular, subordinates expect to be told what to do and the ideal boss is a benevolent autocrat.
Challenges to the leadership are not well-received.
The fundamental issue addressed by this dimension is the degree of interdependence a society maintains among its members. It has to do with whether people´s self-image is defined in terms of “I” or “We”. In Individualist societies people are supposed to look after themselves and their direct family only. In Collectivist societies people belong to ‘in groups’ that take care of them in exchange for loyalty.
Malaysia, with a score of 26 is a collectivistic society. This is manifest in a close long-term commitment to the “member” group, be that a family, extended family or extended relationships. Loyalty in a collectivist culture is paramount and overrides most other societal rules and regulations. Such a society fosters strong relationships, where everyone takes responsibility for fellow members of their group. In collectivistic societies, offence leads to shame and loss of face. Employer/employee relationships are perceived in moral terms (like a family link), hiring and promotion take account of the employee’s in-group. Management is the management of groups.
Masculinity / Femininity
A high score (masculine) on this dimension indicates that the society will be driven by competition, achievement and success, with success being defined by the winner / best in field – a value system that starts in school and continues throughout organisational behaviour. A low score (feminine) on the dimension means that the dominant values in society are caring for others and quality of life. A feminine society is one where quality of life is the sign of success and standing out from the crowd is not admirable. The fundamental issue here is what motivates people, wanting to be the best (masculine) or liking what you do (feminine).
At 50, Malaysia can be considered a masculine society – highly success oriented and driven. In masculine countries, people “live in order to work”, managers are expected to be decisive, and the emphasis is on equity, competition and performance. Conflicts are resolved by fighting them out. A
clear example of this dimension is seen around election time, with ferocious, no-holds barred battles between candidates.
The dimension Uncertainty Avoidance has to do with the way that a society deals with the fact that the future can never be known: should we try to control the future or just let it happen? This ambiguity brings with it anxiety and different cultures have learnt to deal with this anxiety in different ways. The extent to which the members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these is reflected in the UAI score.
Malaysia scores 36 on this dimension and thus has a low preference for avoiding uncertainty. Low UAI societies maintain a more relaxed attitude in which practice counts more than principles and deviance from the norm is more easily tolerated. In societies exhibiting low UAI, people believe there should be no more rules than are necessary and if they are ambiguous or do not work, they should be abolished or changed. Schedules are flexible, hard work is undertaken when necessary but not for its own sake. Precision and punctuality do not come naturally, innovation is not seen as threatening. Long term orientation
The long term orientation dimension is closely related to the teachings of Confucius and can be interpreted as dealing with society’s search for virtue, the extent to which a society shows a pragmatic future-oriented perspective rather than a conventional historical short-term point of view. (http://predicate.wordpress.com, http://predicate.wordpress.com/about, http://predicate.wordpress.com/writers-notebook)
No score available for Malaysia on this dimension.
Geert Hofstede’s Cultural Dimensions on Malaysia
Official name – Malaysia
Population – 23,522,482* (July 2004 est.)
Official Language – Bahasa Malaysia (also known as Bahasa Melayu and the Malay language). English, Chinese dialects, and Tamil are also widely spoken. Currency – Ringgit (MYR)
Capital city – Kuala Lumpur
GDP – purchasing power parity $207.8 billion* (2004 est.)
GDP Per Capita – purchasing power parity $9,000* (2004 est.) Overview
Since the beginning of its history, Malaysia has been a meeting place for a diverse range of external cultures and religions. As a result of these external influences, a new unified but distinguished Malay culture has emerged. Contemporary Malaysia represents a unique fusion of Malay, Chinese, and Indian traditions, creating a pluralistic and multicultural nation that has its character strongly rooted in social harmony, religion and pride in its ancestral background. With such a rich cultural heritage, acquiring the relevant skills and cultural knowledge in order to conduct business in Malaysia is crucial to your success.
Following years of confrontation in search of independence, Malaysia was established in September 1963 through the union of the Independent Federation of Malay, the former British colonies of Singapore and the East Malaysian States of Sabah and Sarawak. Over the last few decades the country has evolved from a successful producer of raw materials to a multisector economy. Today, Malaysia offers a unique blend of old traditional culture and new technological innovations. As the Malaysian market continues to develop and prosper, it is becoming increasingly valuable for those entering into business in Malaysia to be aware of the cultural dimensions that shape the fabric of this country
Face – A vital element of Malaysian culture, as with most Asian cultures, is the concept of face. In Malaysian society to “lose face”, that is to lose control of one’s emotions or to show embarrassment in public, is perceived as a negative display of behavior. Malaysians will use a number of methods in order to “save face”. Laughter, for instance, is often used to mask one’s true feelings and can reveal numerous emotions including nervousness, shyness or disapproval. Saving face is particularly crucial in business contexts as causing your Malaysian counterpart to lose face may influence
the outcome of your future business dealings.
High context culture – In high context cultures such as Malaysia meaning is often more explicit and less direct than in many Western cultures. This means that words are less important and greater attention must be given to additional forms of communication such as voice tone, body language, eye-contact and facial expressions. In Malaysia, because business is personal and based on trust, developing relationships rather than exchanging facts and information is the main objective of communication. This also relates to the Malay cultural values of courtesy, tolerance, harmony and face. Direct answers, particularly negative ones, are avoided in order to prevent disagreement and preserve harmony; two very important aspects of Malaysian culture.
Fatalism – Malaysian culture is centered on the diverse religious values of Hinduism, Buddhism, and Islam and as such relies heavily on the concept of fatalism. Fatalism is the belief that success, failures, opportunities and misfortunes result from fate or the will of God. In a business context, when formulating ideas and making decisions Malays, who are predominantly Muslim, will tend not to rely on empirical evidence or hard facts, but prefer to be guided by subjective feelings combined with the Islamic faith. Your Chinese and Indian colleagues will also take a similar approach since feelings and emotions play a significant part in their business culture. Consequently, negotiations may take longer than expected and your Malaysian counterparts will view decision making in a more personal light.
The Malaysian economy slowed sharply in the first half of 2005, but the outlook for the year as a whole and over the medium-term remains broadly favorable. The slowdown in the pace of economic activity, which began in the third quarter of 2004, continued in 2005.1 Year-on-year growth was sustained at 5.8 percent in Q1 2005, (Q4 2004 5.8 percent) and declined to 4.1 percent in Q2 2005, below market expectations. As a result, real GDP growth declined to 4.9 percent in the first half of 2005. On a year-on-year basis, the decline in economic activity was affected by negative contributions from mining (-1.6 percent) and construction (-2 percent), and a sharply lower positive contribution from manufacturing output (3.2 percent), and growth was driven mostly by the services sector (5.4 percent).
On the expenditure side, the lower contribution to overall growth from external demand was partially offset by buoyant domestic demand, which expanded by 5.8 percent, underpinned by continued strong growth in private consumption (8.7 percent) and gross fixed capital formation (4.5 percent). A recovery in external demand for electronic and electrical (E&E) products is expected in the second half of 2005, and domestic demand will receive a further boost from the mild stimulus measures announced in the 2006 Budget.2 Thus, medium-term prospects remain broadly positive, with the economy expected to grow by 5 percent in 2005, 5_-.5_ percent in 2006, and 5_-6 percent through 2008.
The different states of the Federation of Malaysia became independent from the United Kingdom and Singapore at different times; the 11 Malay peninsular states in 1957 and the Borneo states of Sabah and Sarawak in 1963. The predominantly Chinese island-city of Singapore split off from Malaysia in 1965. Malaysia is an independent member of the Commonwealth. The supreme head of state or king, the Yang di-Pertuan Agong, is elected every five years by the nine hereditary Malay rulers of Western Malaysia. At election time, each state ruler is asked whether or not he wishes to run for the kingship.
If there is only one candidate, he becomes king if he receives at least five affirmative votes from the other rulers; otherwise, a new candidate is sought. When there is more than one candidate, the ballots are taken in the order of a rotation system. The ruler of the last of the nine states to be represented in the kingship since independence, Sultan Azlan Shah, was elected in March 1989. As in most parliamentary systems, political power resides in the cabinet, headed by the prime minister.
The king appoints the cabinet from the 177-member House of Representatives, or Dewan Rakyat, whose representatives are elected by universal adult suffrage every five years. The other half of the Malaysian bicameral legislature is the 69-member Senate, or Dewan Negara, comprising two members elected by the legislatures of each of the states, and the remaining 43 senators appointed by the king, all for six-year terms. Political parties have mainly been formed along ethnic and religious divisions. Since independence, the Malaysian government has been controlled by a multiracial coalition of political parties called the National Front, or Barisan Nasional, of which Prime Minister Mahathir’s party, the United Malays National Organization (UNMO), is the largest partner.
Malaysia experiences a rapid growth and its remarkably quick and strong recovery from the 1997 Asian financial crisis. Members of the trade policy review body attributed this impressive economic performance to sound macroeconomic policies, structural reforms, especially in the corporate and financial sectors, and fast growth in exports.
Some Members wondered about the timing and effectiveness of Malaysia’s capital and exchange control measures implemented in the wake of the Asian crisis and the pegging of the ringitt to the U.S. dollar, measures that Malaysia saw as appropriate for stabilizing markets and building confidence. Members expressed the hope that “temporary” liberalization measures introduced during the review period would be made “permanent”. Members also sought Malaysia’s views on the need to diversify its exports, nearly half of which involve electronics. Members commended Malaysia for its strong support for and commitment to the multilateral trading system, and expressed their hope that it would actively participate in the Doha Development Agenda.
As regards Malaysia’s pursuit of trade liberalization in regional fora, particularly ASEAN, some Members noted that the gap between MFN and preferential tariff rates applied to imports from ASEAN countries constituted a potential source of trade diversion, although Malaysia did not believe that this has actually happened. Members expressed their appreciation of Malaysia’s relative openness to trade and foreign direct investment and its continued liberalization efforts in these areas. In particular, Members commended Malaysia for its efforts to reduce tariffs, simplify the tariff structure, and abolish all local-content requirements (except those for the automotive sector).
At the same time, concerns were raised over the fact that about one-third of Malaysia’s tariff lines were unbound and the widening gap between bound rates and applied MFN rates, which had permitted Malaysia to increase tariff protection for certain products, thereby raising the simple average of MFN tariffs during the review period. Malaysia noted that this widening gap between bound and applied MFN tariff rates was the consequence of unilateral tariff reductions and that the import-weighted tariff average had declined; some other Members felt that such a gap provided developing nations with a degree of flexibility in undertaking trade liberalization and other economic reforms. Members also urged Malaysia to reduce the scope of its non-automatic licensing system. It was noted that state-owned enterprises continued to play an important role in Malaysia’s economy and that the authorities might need measures to assure a pro-competitive climate in the sectors where such enterprises were prevalent.
Some Members encouraged Malaysia to accede to the Agreement on Government Procurement. On sectoral issues, Members noted the contrast between the openness and economic performance of the electronics and automotive industries; the much more open electronics industry had performed much better than the automotive industry, which was protected by high tariffs and non-tariff measures, including import licensing. Members urged Malaysia to bring forward the abolition of local-content requirements for motor vehicles. Moreover, Members encouraged Malaysia to continue its liberalization of the services sector, particularly financial services and telecommunications. In addition, Members also sought further clarification on, inter alia: the possibility of an ASEAN — China free trade agreement; effectiveness of investment guarantee agreements;
greater use of ad valorem import duties;
measures affecting exports;
further progress in competition policy;
transparency in government procurement;
enforcement of intellectual property rights;
standards and licensing concerning various agricultural products; and recognition of qualifications in education and legal services. Members expressed their appreciation of the responses provided by the delegation of Malaysia during the meeting, and looked forward to later replies to some questions. In conclusion, this Review has provided Members with a much better understanding of Malaysia’s trade and trade-related policies and of their role in fostering Malaysia’s economic development and helping it to cope with shocks, such as the Asian financial crisis.
Malaysia’s recovery has apparently been greatly facilitated by Members’ adherence to the principles of the multilateral trading system and thus their willingness to keep their economies open to Malaysia’s exports. Members encouraged Malaysia to further liberalize and diversify its economy. In this context, I, along with Members, look forward to Malaysia’s continued support for future efforts to liberalize the multilateral trading system.
The legal system of Malaysia was modeled after the English legal system which practices parliamentary democracy and is ruled by a Constitutional Monarchy, with His Majesty the Yang di-Pertuan Agong (the King) ceremonially as the Head of the country. The Yang di-Pertuan Agong is elected by the Conference of Rulers for a five-year term from amongst the hereditary Rulers of the nine states in the Federation which are ruled by Sultans. The states are Perlis, Kedah, Perak, Selangor, Negeri Sembilan, Johor, Pahang, Terengganu and Kelantan.
In the other states, namely Melaka, Pulau Pinang, Sabah and Sarawak, the Head of State is the Yang di-Pertua Negeri or Governor of the State. The Yang di-Pertua Negeri is appointed by the Yang di-Pertuan Agong for a four-year term. The Federal Constitution of Malaysia clearly divides the law-making authority of the Federation into its legislative authority, judicial authority and executive authority. The separation of power also occurs both at federal and state levels. The federal laws enacted by the federal assembly or better known as the Parliament of Malaysia applies throughout the country. There are also state laws governing local governments and Islamic law enacted by the state legislative assembly which applies in the particular state.
Malaysian Business Culture
Working practices in Malaysia
When scheduling business meetings in Malaysia one must take into consideration the importance of prayer times in this predominantly Muslim country. Fridays are a particularly religious day of the week and if possible meetings should not be scheduled for this time. Attitude to punctuality varies according to which nationality you are doing business
with. The Chinese for example expect punctuality, whereas both ethnic Malays and Indian business people have a more relaxed attitude towards time. As a general rule, you will be expected to be punctual; therefore it is advised to arrive to business appointments on time. If your business in Malaysia requires interaction with Malaysian government officials, ensure that all communication takes place in the language of Bahasa Malaysia. The majority of transactions and correspondence with Malaysian companies however, will generally be conducted in English.
Structure and Hierarchy in Malaysian Companies.
Regardless of the size or nature of the company, hierarchy is an integral part of Malaysian business culture. Malaysian companies generally follow a vertical hierarchical structure where authority is directed from the top. In keeping with Malaysian culture, titles and job descriptions play a significant part in many Malaysian companies. They are important for employees in order to emphasize the line of authority within the business.
Working Relationships in Malaysia
Malaysians’ respect for authority is evident in most business dealings. The relationship between subordinates and their superiors for example is distinct and highly official. Malaysians do not address their bosses by their first name, but use titles such as “Mr” and “Madam” followed by their honorific form of address. Relationships between Malaysian business colleagues are based on mutual respect and, as such, the same procedure used when addressing their superiors is also applied with their Malaysian business colleagues. Malaysia Business Part 2 – Doing Business in Malaysia
Business Practices in Malaysia
When meeting your Malaysian counterparts for the first time, a firm handshake is the standard form of greeting. However, you should only shake hands with a Malaysian businesswoman if she initiates the gesture. Otherwise a nod or a single bow is appropriate. With such an array of cultures in Malaysia addressing Malaysians properly can be difficult. It is advised to find out in advance how you should address the person you are to meet. Generally speaking, a Malay’s first name is individually given, while the second and
third name indicate those of the father and the grandfather. In some cases the words “bin” (son) or “binti” (daughter) can be added after the given name.
Gifts are not usually exchanged as they may be perceived as a bribe. However, in the event that you are presented with a gift, it is customary to accept it with both hands and wait until you have left your Malaysian colleagues before opening it. Be sure to reciprocate with a gift of equal value in order to avoid loss of face.
Business cards are customarily exchanged after an initial introduction in Malaysia. Since a large proportion of Malaysian business people are Chinese, it will be useful if your card is printed in both English and Chinese and that details of your education, professional qualifications, and business title are included. Cards should be presented and received with both hands, and time should always be spent examining the information before placing it on the table or in a briefcase.
Malaysian Business Etiquette (Do’s and Don’ts)
_ DO be patient with your Malaysian counterparts during business negotiations. The process is often a long and detailed one that should not be hastened. _ DO remain polite and demonstrate good etiquette at all times. Elderly Malaysian business people for example should be treated with respect and always acknowledged before younger members of the organization. This is an essential part of achieving successful business dealings in Malaysia. _ DO take time to establish productive business relationships with your Malaysian colleagues. Initial meetings are generally orientated towards developing such relationships and will be maintained throughout and beyond the negotiations.
Without them, your business plans may be fruitless. X DON’T assume that a signed contract signifies a final agreement. It is common for negotiations to continue after a contract has been signed. X DON’T be surprised if your Malaysian counterparts ask what you may consider to be personal questions. In Malaysia, asking people about their weight, income and marital status for example, is not uncommon and is viewed as an acceptable approach to initial conversations. X DON’T enter into business
with a Malaysian company without a letter of introduction from a bank or mutual acquaintance. This will help your request for a future meeting, as Malaysians prefer to conduct business with those they are familiar with.
Geert Hofstede™ Cultural Dimensions
There is a high correlation between the Muslim religion and the Hofstede Dimensions of Power Distance (PDI) and Uncertainty Avoidance (UAI) scores. The combination of these two high scores (UAI) and (PDI) create societies that are highly rule-oriented with laws, rules, regulations, and controls in order to reduce the amount of uncertainty, while inequalities of power and wealth have been allowed to grow within the society. These cultures are more likely to follow a caste system that does not allow significant upward mobility of its citizens. When these two Dimensions are combined, it creates a situation where leaders have virtually ultimate power and authority, and the rules, laws and regulations developed by those in power, reinforce their own leadership and control. It is not unusual for new leadership to arise from armed insurrection – the ultimate power, rather than from diplomatic or democratic change.
Analysis Using Hofstede’s Cultural Dimensions
Power Distance Index (PDI), High – Suggests that the degree to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unevenly. This represents high inequality. It implies that a society’s level of inequality is allowed by the followers as much as by the leaders. Individualism (IDV), Low – Collectivism, that is the degree to which individuals are inte-grated into groups. Given that the IDV index of Malaysia is low, it is implied that collectivism is more manifested than individualism in its culture. On the individualist side we find societies in which the ties between individuals are loose: everyone is expected to look after him/herself and his/her immediate family. On the collectivist side, we find societies in which people from birth onwards are integrated into strong, cohesive in-groups, often extended families (with uncles, aunts and grandparents) which continue protecting them in exchange for unquestioning loyalty. The word ‘collectivism’ in this sense has no political meaning: it refers to the
group, not to the state.
Masculinity (MAS), Average – There is no eminent distinction of how roles are distributed in Malaysia as according to gender. The index shows moderately-low to average in terms of masculinity. The gap between the two gender roles is not that great which may signify equality between the roles.
Uncertainty Avoidance Index (UAI), Moderately-Low – Uncertainty avoiding cultures try to reduce the chance of such situations by strict laws and rules, safety and security measures, and on the philosophical and religious level by a belief in absolute Truth. Malaysia exhibits a moderately-low index, which suggests that the society has a tolerance for uncertainty and ambiguity. The society might be relatively comfortable in unstructured situations which are novel, unknown, surprising, and different from usual.