Introduction: Globalization in the 21st century
Globalization has become one of the most discussed and controversial issues in the beginning of the 21st century. In terms of business, globalization is an opportunity to gain competitive advantage and market growth. Yet, what is associated with globalization? Why do many companies see themselves limited and sometimes even impotent trading globally and what are the critical success factors in global negotiations?
According to the Future Commission of the Friedrich-Ebert-Stiftung globalization is “… a complex set of overlapping and interacting processes at a global level.” The Future Commission continued noting that “… globalization is in connection with the growing international interrelatedness of markets, economies and companies.” (Future Commission of the Friedrich-Ebert-Stiftung, 1998:56). Hence, globalization is a world wide ongoing interhuman relationship process on different levels. They include social, private and business aspects. In the case of business terms, it should not be forgotten that globalization is not merely an increase of imports and exports. It implies the application of the principle of free markets in an international context.
This dissertation contains the sources and explanations of why international negotiation is important to sustain competitive. It shall allow the reader to get an insight of why western and eastern cultures are often clashing together and thus prospecting business deals are cancelled. Moreover, the dissertation provides the reader with a general solution to overcome barriers in negotiating with foreigners and how important it is to gain not only technical and cognitive but also cultural skills. Understanding and accepting the differences in values and beliefs is crucial to be a global player. By getting a precise idea of the theoretical part, the author will endow the reader with a case study of Hewlett Packard (HP) and how the founders William (Bill) Hewlett and David (Dave) Packard have started business in a garage with merely two employees. Gradually after 60 years HP became the world class leader in printing devices. Furthermore, the study is showing the importance of the present Chairman and Chief Executive Officer (CEO) Carly Fiorina who let HP into the 21st century. Carly Fiorina is considered to be the most powerful women in the United States of America (USA) (Hjelt, 2003:40-48)...
Table of Contents
1 INTRODUCTION: GLOBALIZATION IN THE 21ST CENTURY
2 WHAT IS CROSS CULTURAL MANAGEMENT?
3 THE MEANING OF DIVERSE CULTURES
4 WESTERN VALUES
4.1 AMERICAN CULTURAL VALUES
4.2 NEGOTIATING WITH AMERICANS
4.3 THE DIVERSITY OF EUROPEAN CULTURAL VALUES
4.3.1 German
4.3.2 Italian
4.3.3 Swiss
4.3.4 British
4.4 SUMMARY: WESTERN COUNTRIES AND THEIR CULTURAL VALUES
5 EASTERN VALUES
5.1 JAPANESE CULTURAL VALUES
5.2 JAPANESE NONVERBAL MESSAGES
5.3 CHINESE CULTURAL VALUES
5.4 THE EIGHT ESSENTIAL CHINESE ELEMENTS
5.4.1 Guanxi – Personal Contacts
5.4.2 Zhongjian Ren – The Intermediary
5.4.3 Shehui Dengji – Social Status
5.4.4 Renji Hexie – Group Harmony
5.4.5 Zhengti Guannian – Lateral Thinking
5.4.6 Jiejian – Pricing
5.4.7 Mianzi – Reputation and Social Capital
5.4.8 Chiku Nailao – Persistence and Being Tireless
5.5 CHINESE COMPETITION
5.6 SUMMARY: EASTERN COUNTRIES AND THEIR CULTURAL VALUES
6 WESTERN VERSUS EASTERN AND HOW CULTURAL DIFFERENCES INFLUENCE INTERNATIONAL NEGOTIATIONS
7 A PROFILE OF HEWLETT PACKARD COMPANY
7.1 MILESTONES OF HEWLETT PACKARD
7.2 MANAGING GLOBALLY: WHY CCM IS COMPELLING
7.2.1 HP entering the Asian Market
7.2.2 How Packard subconsciously applied Chinese elements
7.2.3 What made the Chinese JV successful
7.2.4 HP’s status quo regarding CCM in the 21st century
7.2.5 Conclusion
7.3 PORTRAIT OF CARLY FIORINA
8 CONCLUSION: AN APPROACH TO SOLVE CROSS CULTURAL CLASHES?
Objectives and Research Scope
This dissertation examines the critical role of Cross Cultural Management (CCM) in international negotiations during the 21st century, focusing specifically on the challenges arising from clashing western and eastern values. The primary objective is to evaluate how multinational corporations, exemplified by the case of Hewlett Packard, can overcome cultural barriers to achieve sustainable global business growth.
- Analysis of fundamental differences between western and eastern cultural values and communication styles.
- Examination of specific cultural frameworks, such as the eight essential Chinese elements for business.
- Evaluation of Hewlett Packard’s global market entry strategies and the impact of the "HP Way" on international ventures.
- Assessment of the role of leadership, specifically Carly Fiorina, in managing cross-cultural integration post-merger.
- Formulation of recommendations for managers to navigate cross-cultural negotiations through improved cultural competency.
Excerpt from the Book
5.4.1 Guanxi – Personal Contacts
Personal contacts should not be mixed up and taken literally. Americans pay high value on alumni, network of institutions and information, whereas Chinese emphasize social competences that can be shared within the social network of friends, relatives and colleagues. If, for instance person X has an inquiry and needs the help of person Y, person Y will complement the task of person X. In the future person X will owe person Y a favor. The fulfillment of a favor can be timeless and forever. Guanxi is all about reciprocal relationships. To ignore reciprocity is considered as rude, as the Chinese man would say “wang’ en fuyi” which means rudeness. Once a Chinese has spoken these words, business has been poisoned and will never be done again. The person will be excluded from Guanxi.
To put it simple, ignoring the reciprocity is morally incorrect and the person, who has ignored it, behaves morally wrong and is regarded as unsophisticated. Whenever a business person has done a favor for someone else, it will be remembered forever. Zhou put it very straightforward “the Chinese way of making decisions begins with socialization and initiation of personal Guanxi rather than business discussion. The focus is not market research, statistical analysis, facts, power-point presentation, or to-the-point business discussion. My focus must be on fostering Guanxi.” (Zhou, 2000:31).
Once Guanxi has been established and respected, it can open doors to the Chinese business market. Guanxi should be taken serious and thus be nurtured. In the end, both sides will gain mutual benefits. Appendix C lists some of Chinese biggest networks. Strong businesses were established due to networking, i.e. whole provinces came together and helped each other. A whole province is stronger than one family business or a single proprietor. Tung and Yeung found that over 80 percent of the companies indicated that trust was crucial to building and maintaining Guanxi relationships (Tung and Yeung, 1998:201).
Summary of Chapters
1 INTRODUCTION: GLOBALIZATION IN THE 21ST CENTURY: Discusses the necessity of global business growth and the critical success factors in international negotiations within the 21st century.
2 WHAT IS CROSS CULTURAL MANAGEMENT?: Defines Cross Cultural Management (CCM) as the capability to handle diverse cultural and religious attitudes to optimize business results.
3 THE MEANING OF DIVERSE CULTURES: Explores cultural beliefs, values, and attitudes, highlighting the potential for conflict when these differ between societies.
4 WESTERN VALUES: Provides an overview of values in American and European contexts, emphasizing themes like individualism, freedom, and time consciousness.
5 EASTERN VALUES: Examines communitarian values in Japan and China, focusing on group harmony, consensus, and interpersonal relationship building.
6 WESTERN VERSUS EASTERN AND HOW CULTURAL DIFFERENCES INFLUENCE INTERNATIONAL NEGOTIATIONS: Analyzes the dichotomy between low-context and high-context cultures and how these discrepancies lead to cross-cultural clashes.
7 A PROFILE OF HEWLETT PACKARD COMPANY: Details the history of Hewlett Packard and evaluates how its internal culture and specific management strategies enabled successful international joint ventures.
8 CONCLUSION: AN APPROACH TO SOLVE CROSS CULTURAL CLASHES?: Offers a final assessment on the importance of cultural intuition and experience over rigid adherence to theoretical guidelines.
Keywords
Cross Cultural Management, International Negotiation, Globalization, Hewlett Packard, Guanxi, Western Values, Eastern Values, Cultural Clashes, Joint Venture, Carly Fiorina, Business Culture, Intercultural Competency, Power Distance Index, Uncertainty Avoidance, HP Way.
Frequently Asked Questions
What is the core focus of this dissertation?
This work fundamentally explores the impact of Cross Cultural Management on international business negotiations and how cultural nuances can dictate the success or failure of global operations.
What are the primary themes discussed?
The core themes include the contrast between western individualistic values and eastern communitarian principles, the importance of cultural sensitivity, and the practical application of these concepts in corporate strategy.
What is the central research question?
The study investigates why companies face limitations in global trade and identifies the critical success factors required to navigate negotiations between western and eastern business partners effectively.
Which methodology is employed?
The author utilizes a comprehensive literature review combined with a qualitative case study analysis of Hewlett Packard to illustrate the practical implementation of cultural management strategies.
What does the main body cover?
The main body systematically breaks down cultural values across different western countries and eastern nations, provides a detailed case study of HP, and analyzes specific elements like Guanxi and the role of leadership in global business.
Which keywords best characterize the work?
Key terms include Cross Cultural Management, Globalization, Guanxi, HP Way, Cultural Clashes, and Intercultural Competency.
How did Packard apply Chinese elements to HP's strategy?
Packard instinctively incorporated Chinese business elements such as fostering long-term relationships (Guanxi) and maintaining high-level social contacts to navigate the Chinese market successfully.
What is the author's final conclusion regarding theoretical cultural models?
The author argues that while cultural literature provides helpful insights, rigid adherence to generalized guidelines can be counterproductive, advocating instead for a reliance on personal intuition, professional experience, and diplomatic adaptability.
- Quote paper
- Nina Müller (Author), 2004, Cross Cultural Management in the 21st century and how it effects Negotiations with an example of HP, Munich, GRIN Verlag, https://www.grin.com/document/28506
