Cross Cultural Management in the 21st century and how it effects Negotiations with an example of HP

Diploma Thesis, 2004

81 Pages, Grade: 1,5 (A)


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?


Internet References



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1. Individual Freedom

2. U-Type

3. G-Type

4. PDI/ UAI Matrix

5. Role of Managers in Society

6. Impact of National Culture on Management Practice

7. Common Dualities in Today’s Global Business

8. HP’s Geographic Revenue Growth Comparison

9. HP’s Way before and after Carly Fiorina’s presence

1 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).

To conclude this dissertation, the author provides the reader with her personal recommendation for HP and that cultural intricacies, may they occur, cannot be solved one-way but two-way which needs a diplomatic and intuitive alerting.

2 What is Cross Cultural Management?

Going overseas or trading with foreigners is becoming more common in the 21st century. Information technology (IT) has allowed companies to sell internationally. Trading internationally has given western and eastern businesses chances to compete at a higher level. Prices shrink to parity and although technology is still proceeding, new competitive advantages are essential to gain sustainability and momentum in the global market.

Therefore, the ability to negotiate with international partners is enormously important, not only to widen the personal cultural horizon but mainly to accomplish a successful negotiation. Trading with foreigners not solely relies on the prospective outcomes for both counterparts, but can also depend on the effects of powerful Cross Cultural Management.

According to Bobst[1], Cross Cultural Management (CCM) is “the capability to manage different attitudes, culture, religion and habits to achieve best business results.” (Questionnaire, 2004). Funakawa approached CCM in a more general way, in a sense of how people and organizations focus on ‘transcending’ cultural differences at a global situation (Funakawa, 1997:190-195). CCM can be seen as a management style that should be imparted in each division of an organization that negotiates internationally. This reveals how imperative it is to realize the behavioral communication differences in languages, mimics and gestures. Mead went deep into the subject and defined CCM as “…working with members of the other culture, tolerating differences as far as possible, and recognizing their priorities when developing shared priorities.” (Mead, 1994:5). CCM is inevitable, as Evans and Doz found that “research on multinational enterprises suggests that their future competitive advantage may not reside in their strategy or structure, nor in their technologies or products, but in their organizational capabilities to cope with the multidimensional and complex demands of a global business.” (Evans and Doz, 1992:87).

3 The Meaning of Diverse Cultures

Culture is an aspect that has to be taken into account. The more managers realize its existence, the more considerate they can relate not only to their own but also to understanding and tolerating others.

Hofstede defined culture as followed, “culture is the collective programming of the mind which distinguishes the member of one human group from another. Culture, in this sense, includes systems of values; and values are among the building blocks of culture.” (Hofstede, 1984:21). Mead elaborated that culture is a sample of different values, attitudes and beliefs. However, values, beliefs and attitudes can differ from each other. A belief is a strong thought of something that ought to be right, for example (e.g.) wisdom comes with experience and therefore with age. An attitude is a more individual way of thinking, influenced and manipulated by the environment. An attitude implies the normative behavior in society. A value is seen differently. Generally, a value is held by a group, organization or hierarchical classes, such as that the older Japanese generations should be respected by younger ones. Again, this leads to a confusion of clashing cultures, where one culture might have a certain reaction to a specific situation, whereas the other culture reacts differently to the same situation (Mead, 1990:14-15). An American, believing that wisdom does not solely come with age and experience but also with personal development and education, clashes with the value held by the majority of Japanese people who believe that the elders gain respect due to their wisdom that has come with age and experience.

Both, Mead and Hofstede, commonly say that cultural beliefs, values and attitudes are distinguished in each country but do not necessarily correspond. Harris and Moran elaborated the meaning of culture and noted that it “…includes a sense of self and space, communication and language, dress and appearance, food and feeding habits, time and time consciousness, relationships, values and norms, beliefs and attitudes, mental process and learning, and work habits and practices.” (Harris and Moran, 1991:206-211).

While Harris, Moran, Mead and Hofstede emphasized the cultural beliefs and values, Schaupp pointed out that there are linkages from attitudes to values. He noted that “… values were at a higher level of abstraction than attitudes...” and explained this by reflecting that attitudes form a value. In brief, an attitude indicates an individual’s feelings to a situation, whereas a value, composed of attitudes, evaluates the feelings at a more abstract level (Schaupp, 1978:114). The question rises, why cultural diversity is relevant for global negotiations. Cultures and their values, beliefs or attitudes cannot be changed easily. It is an ongoing process where significant changes can appear after decades. Sometimes they are so deeply rooted and still highly valued that there are hardly any changes at all. Despite globalization, where companies trade beyond their national borders, there is a paradoxically malfunction in getting along with each other. On the one hand, organizations move closer in terms of mergers, acquisitions (M&A) and joint ventures (JV) or simply negotiating a contract and yet on the other hand there are cultural norms that make it difficult for globally trading organizations to come together for the same purpose. In the following, beliefs, values and attitudes emerge in different cultural negotiations and demonstrate how central these beliefs, values and attitudes are.

Yip believed that “culture is the most subtle aspect of an organization, but it can play a formidable role in helping or hindering a global strategy.” (Yip, 1992:207).

4 Western Values

When negotiating with partners from all over the world, cultural differences can seem “… colorful, exotic and appealing.” (Prince and Hoppe, 2000:6). In thesis, the western values are predominantly concentrated on the beliefs and attitudes of Americans and Europeans. Cultures and their beliefs, attitudes and values are different in each western country. Within one country usually more than one subculture is present due to the country’s heritage or religion. Cultures in general represent values and beliefs that can emerge strikingly in negotiations.

Western values are built on the roots of freedom, equality and individualism. They shall inspire modernization, economic liberalism and human rights (Akande, 2002). According to Hofstede’s controversial theories on CCM, he categorized western countries into a general low Power Distance Index (PDI) with an exception of Italy. “A low Power Distance ranking indicates the society de-emphasizes the differences between citizen’s power and wealth. In these societies equality and opportunity for everyone is stressed.” (Hofstede, 1973a). Mazrui claims that western liberal democracy “… has enabled societies to enjoy openness, governmental accountability, popular participation and high economic productivity.” (Mazrui, 1997).

In the next chapter, the author mainly concentrated on the American values and how to do business with Americans in an international context.

4.1 American Cultural Values

American values have developed through various heritages. The population in the USA is over 260 million people. America is predominantly of European descent, and by one vote, English became the official language, or else German would be the dominant language now.

Work ethics, i.e. working hard and getting rewarded for it, is one of the most valued maxims in the USA. Recognition, stock option plans and other incentives are therefore likely, independently from seniority. Working hard includes achieving results in a set time limit. Time is money, money means being punctual and thus time is highly regarded. Besides Americans’ time consciousness, Hofstede emphasized that Americans are overly flexible due to their need of freedom and individual development. This has enabled American citizens not to stay at one place only but to be flexible to react “… quickly to new opportunities.” (Hofstede, 1973b). Being as flexible as American business people are, there is hardly time for nurturing and maintaining long-term business relationships. Once again, time is money and American values rely heavily on quick decisions and fast agreements.

Elashmawi took up the thought of American values and explained their origin in the American Dream which illustrates how a poor man can become a millionaire through brave, disciplined hard word. He furthermore alleged that the American Dream is a maxim that shall inspire every human kind to fulfill their own dream (Elashmawi, 2001:23-24). Elashmawi conducted questionnaires with business people. Therefore, American respondents listed the following values by priority:

1. Equality
2. Freedom
3. Openness
4. Self-Reliance
5. Cooperation

The first 3 values were addressed by now, whereas self-reliance and cooperation seem to contradict each other. Elashmawi explained this with an example of an American baseball team. When asking for a result of a baseball team, whether it won or not and who did the most runs or for the question how the pitcher played, the overall teamwork stands in shadow, yet “… everyone must work together to achieve the common good.” (Elashmawi, 2001:24). This simple theory on a baseball team can easily be seen in American organizations. Everyone tries to achieve his personal goals in order to increase the organization’s benefits.

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SOURCE: Modified from Building Cross-Cultural Competence. (2002) by Hampden-Turner and Trompenaars

Hampden-Turner and Trompenaars found that Americans lay a strong value on personal freedom which can be seen in Figure 1 (69 percent). Their findings correspond with those of Elashmawi who found that Americans crucially emphasized the desire on freedom. Hampden-Turner and Trompenaars went further into the material and drafted the question why Americans strikingly favor individualistic values. They cited the origin of self-reliance and individual development, from the Declaration of Independence (1776) to the American Civil War and explained the phenomena due to a vast increase in population and industrialization (Hampden-Turner and Trompenaars, 2000:71-74). Doing business with the American counterpart can be a challenging task. How to negotiate and consider Americans and their values is explained in the following chapter.

4.2 Negotiating With Americans

Working one-on-one with an American can be, on a superficial look, very casual and easy-going. However, certain pitfalls can be overseen, if not knowing American cultural background. Pitfalls can lie in greetings, communications and even while casually talking on the phone. Western countries commonly use same greetings, by firmly shaking hands. Sometimes an embracement, when knowing the business counterpart for longer, is more common. However, the personal space for Americans should be tolerated, as Americans tend to keep two arm lengths of space between themselves and their counterparts. When not tolerating their personal space, Americans can feel intimidated in their privacy. Some business contracts have been negatively affected between Americans and South Americans as South Americans tend to pat their counterparts and get closer to them when talking (Elashmawi, 2001:25-27).

Depending on the priority of the meeting, Americans start the greeting by a casual small talk, introducing themselves by their first name. However, what seems to be easy-going and casual is often just a façade. Small talks and the avoidance of the surname do not exactly offer the counterpart to feel free and act in an informal way. Elashmawi emphasized this rather misleading greeting in a situation between an American and a South American. While the American was introducing himself by his first name and talked informally, the South American took the informal greeting as an invitation of a beginning friendly business relationship and moved closer to the American. The American, however, felt intimidated and moved away from the South American. The South American tried to express his friendliness and openness by slapping the American once in a while on the back and keeping the personal space very close. In the end the American businessman went away and greeted another group (Elashmawi, 2001:25-27).

Hampden-Turner and Trompenaars elaborated the intimacy space of Americans with more specification. For their study they categorized Americans into a U-type (American) culture. To enter the private space of an American is much harder than most people expect it to be.

illustration not visible in this excerpt

SOURCE: op. cit.

For the business life, Americans seem very open which can be seen in Figure 2 on the dotted line. The dotted line expresses permeability and thus the American’s openness. Furthermore, Americans segment their business partners into different categories. With the one partner, the American might talk about a certain subject (e.g. sports) with the partner from Germany he might solely talk about cars but not about other issues such as sports or current affairs. None of them, though, can enter the private circle easily which can be seen in the thick circled line (Hampden-Turner and Trompenaars, 2000:156-158).

When talking in a meeting about a contract’s conditions, Americans prefer to keep it short and simple. Doing business with them is result-orientated and although Americans pay a high value on self-reliance they prefer to see themselves as group-orientated. As time is money, Americans see unpunctuality as disrespectful. To succeed with an American partner, it is important to keep it simple and direct (Elashmawi, 2001:42-44).

Americans, unlike Japanese and Chinese business people, work step-by-step and finish one task before starting the next one. In negotiations, Americans tend to follow a specific guideline. This enables clarification for both partners. Whilst listening or talking to business partners, Americans maintain good eye contact, as it shows “… interest, sincerity and confidence.” (Hofstede, 1973b). Besides, in meetings Americans tend to be open to everyone and speak directly about what they like or dislike. For some cultures, being honest in the American way and sometimes even raising the voice, is perceived rude and arrogant. For Americans nonetheless, it expresses openness and honesty which they expect from each member, in each business meeting. Focusing on immediate results should be prior for both partners and with integrity and tolerance from both counterparts, a negotiation should run smoothly.

4.3 The Diversity of European Cultural Values

In the Declaration of Rome, European values were adopted as followed, “very often, the roots of European values are hidden behind the imprecise term ‘spiritual and heritage’. There are many historic roots: Greco-Roman and Celtic civilization, the values of Hebraism, Christianity and its evolutions, the contribution of the Arab culture in the Middle Ages, humanism, the Reformation and the Age of Enlightenment, political and social evolutions and revolutions throughout Europe, contemporary social movements for emancipation and participation.” (European Association, 2002).

Europe has suffered wars, dictatorships and barbarism. Throughout the time crucial values evolved. These are liberty, socialism and democracy. European values rely on a based structure of freedom, in an economical and sociological sense. Within the European Union (EU), each value has, correspondingly to the country, a prior status. Democracy can be a country’s first maxim, whereas in another country it may come second as values vary from country to country.

The European market is valued for being highly diversified. Besides a unique cultural background, the EU has a great sense of business. The following chapters demonstrate how different the countries are to one another and that each country has various business techniques. Europeans must further master other languages and in order to do business internationally, they are forced to learn another language to gain competitive advantage. Mead noted that Anglo countries such as the USA, the United Kingdom (UK), Australia or New Zealand were able to depend on internal markets but in times of globalization, the necessity grows to gain competitive advantages by learning more languages besides English (Mead, 1990:213-221). European countries are strong in business and the more one knows about the differences within the EU, the more advantages for a successful negotiation can be expected.

4.3.1 German

Germans, the technical expertise people, are often perceived as “…unfriendly, reserved and unapproachable.” (Elashmawi, 2001:193). However, perceptions are misleading and once a business contract is negotiated, Germans prove to be accurate in all aspects. At first, Germans pay a high value on punctuality. This is, unlike Americans, not because of the time-is-money-factor, but mainly because of their accuracy and correctness for everything. Punctuality shows respect and reverence. Elashmawi analyzed the Germans and listed the respondents’ five most embedded values:

1. Punctuality
2. Privacy
3. Perfection
4. Achievement
5. Compartmentalization

Punctuality, in business meetings or in general, is for the majority a very important aspect that is highly valued in Germany. If the business partner cannot make it to the arranged time, he or she is expected to call and make up a new time arrangement. The second most valued element for German businessmen is privacy. Privacy, in a German context, is for business people from Arabia, South America, Japan and China sometimes hard to understand. Often, Germans split privacy and business life. Whatever concerns private issues, the German will not share it with his business partner, who on the other hand might consider sharing private affairs as nurturing a business relationship (Elashmawi, 2001:194-195).

Hampden-Turner and Trompenaars put the Germans into a G-type for their analysis of cultural differences. The German-type (G-type) shows clearly that the space of privacy is much larger than the space which is open to the public, as illustrated in Figure 3. To get into a German’s private space, i.e. sharing a close friendship in all fields and not segmenting the friendship into categories, is for outsiders enormously difficult. The private sector of a German business partner is a taboo, unless he invites him to his home and offers the guest to call him by his first name. Unless this step has not been taken, Germans divide their business actions and their private ones. Once a partner has entered a German’s private sector, he will still divide private and public affairs. The new friend might call the German by his first name in private. However, at his workplace, the German prefers to keep it formal and call his friend by his title and last name (Hampden-Turner and Trompenaars, 2000:156-168).

illustration not visible in this excerpt

SOURCE: op. cit.

In negotiations, Germans are formal, induce professionalism and like to follow a strict agenda of the well prepared meeting. Decisions are mainly based on facts, numbers, charts and tables. Underlining high quality, hard facts and professionalism is inevitable. Germans are reliable partners and often known as “specialists” (Gibson, 2004:31). Their perfection in business actions shows credibility and expertise. Knowledge is compartmentalized which means that a marketing specialist does not necessarily know anything about finance. The one-track knowledge enables perfection in one field. Challenge and achievement is therefore likely. To facilitate good performance, Germans like to gain high control of information which gives them security and an upper hand of their actions. Typically western, Germans prefer to be called by their titles which express their degree of education and social status. Material status symbols represent power, what they have accomplished and what role in society they embody (Elashmawi, 2001:193).

Hofstede categorized Germany into a low PDI and high Uncertainty Avoidance Index (UAI). The UAI is the extent to which members of a culture feel threatened by uncertain situations. To avoid these uncertainties Germany leads a bureaucratic style that makes each questionable action and decision answered by policies and regulations.

The PDI and UAI are demonstrated below in Figure 4, German’s PDI is low and the UAI is high.

illustration not visible in this excerpt

Source: Modified from Cultures and Organizations. (1990) by Hofstede

Gibson described Germany’s positioning a “… well-oiled machine approach, with a professionally trained staff and a more bureaucratic structure…” (Gibson, 2004:32). The exact percentage rates for PDI, UAI and Individualism can be examined in Appendix B, Hofstede’s Dimension of Cultural Scales.

4.3.2 Italian

As the PDI/ UAI Matrix revealed in the previous chapter, Italians have a high PDI and UAI. Gibson claims that Italians “… favor the ‘pyramid of people’ approach, with a hierarchical bureaucracy and highly standardized work processes.” (Gibson, 2004:32).

The five most important values for Italians are listed as followed:

1. Loyalty
2. Dignity
3. Pragmatism
4. Alliance
5. Charisma

Italians put a high priority on relationships with their family members, to their boss or supervisor and alliances. Being loyal is absolutely necessary for Italians for a healthy business communication. Loyalty is expected not only from business partners but also from family members, friends and staff. Dignity and devotion are often considered as values too which goes along with loyalty (Elashmawi, 2001:200-201).

‘The Godfather’ by Puzo embodies Italians most considered values in an intriguing mafia family headed and guided by the godfather Don Corleone. Puzo wrote about unspoken values, a family code and how important alliances are to compete in a criminal underworld that is signified by the power of the Italian mafia (Puzo, 1969). Focusing solely on the values, there are similarities that can be drawn from Puzo’s novel into the Italian business life. Power is the key that opens many doors in business but also in society. The bar chart on the next page demonstrates how important the role of managers is in society which includes the business and private life. Among the western countries, Italy has with 74 percent the highest percentage rate of respondents who considered the manager’s role in society as important. Mead determined the role of managers in society as such “… the manager carries his status over to general.” He continued noting that “… the manager is very conscious of his/ her social influence.” (Mead, 1994:61).

illustration not visible in this excerpt

SOURCE: Modified from International Management. (1994) by Mead

When meeting an Italian business partner for a negotiation, Italians put a high emphasis on the first impression. The impression includes introduction, appearance and how charismatic the counterpart seems. Italians like to express themselves in contemporary fashion. Their sense for fashion presents their position and power. In negotiations Italians maintain eye contact as it indicates respect and interest. Good business contracts can lead to close friendships. It is not rare that doing business relies on networking. Many business contracts were established due to an alliance. A good deal indicates a good relationship that can be developed and nurtured in future (Elashmawi, 2001:202-204).

4.3.3 Swiss

Switzerland has a great complexity that is shown in languages and on the image of being tough bargainers. The Swiss culture is diversified into Swiss French, Swiss German, Swiss Italian and Rheto-Romans. It should be apparent for foreigners, to gain information of their Swiss partner’s background. Background information of the Swiss business partner can avoid mortifications or embarrassments not knowing from which part of Switzerland the counterpart comes from. Although Switzerland is diversified in its languages, it shares mostly quite similar values throughout the country. The Swiss business people are known to be firm but polite and courteous in introductions. In the PDI/ UAI Matrix, Switzerland is almost equally positioned than Germany.

To recapture, the PDI expresses the degree of the desire of individualism, independence and equality. The higher the PDI, the stronger is the desire for caste systems and the lesser an upward mobility of citizens in society and business occurs. The UAI reflects how much risk can be taken and the level of tolerance for uncertainty and ambiguity in society, i.e. unstructured situations. The lower the UAI, the lesser is the concern for uncertainty and ambiguity. It indicates more openness towards a variety of opinions (Hofstede, 1983:54).

Going back to the Swiss position in the PDI/ UAI Matrix, it reflects parallel indices to Germany. Swiss people do not like ambiguity. They rather follow a strict agenda, to avoid any mortifications or circumstances that have not been taken into consideration. To avoid any circumstances, whether they have good or bad effects on the negotiation, the Swiss are sometimes considered to be rigid. Rigid formality, however, expresses reliability. When Swiss business people plan, it is almost certain that it will happen as organized. The low PDI in contrast to the high UAI shows that there is a strong aspiration for independence and equality. This implies that the upward mobility of citizens in business and society is great. Competition is apparent and hierarchical relationships are perceived as convenient arrangements rather than having existential justification. Such analysis leads to the conclusion that businessmen like to see themselves as orderly or systematical and practical, although decisions are preferably made after consulting subordinates (Mead, 1994:65-67).

Elashmawi remarked the values in prior order:

1. Honesty
2. Hard work
3. Orderly
4. Formality
5. Reliability

The values that have been marked as extremely high by Swiss businessmen and women are corresponding with the theory and the research work of Mead and Hofstede.

Bobst, a Swiss member of the Bobst Group Société Anonyme (S.A.) senior management and Head of Product Line, has noted [to the question what was most essential in negotiating with business partners from other countries] that it is important always to be “… consistent, [demonstrate] good behavior, define a strategy and stick to it, keep business values at any conditions.” (Questionnaire, 2004). Again, the attitude of the senior manager of Bobst S.A. goes in accordance with the research work of Hofstede, Elashmawi and Mead. Bobst’ need for formality and courtesy is evidently underlining the picture of Swiss business people.

4.3.4 British

The values and beliefs are nor typically western or typically eastern. British citizens are as patriotic as Americans but less emotional than Italians. They are open for opinions like the Japanese and as cooperative to subordinates as their Chinese counterparts. It is important to note that Scottish, Welsh and Irish is not English and those who are English, speaking the English language, distinguish Queen’s English from American English (Hofstede, 1973c). The British are proud of their heritage and history. Both have proliferated in modern business. According to Elashmawi, British business people are loyal, traditional, reserved and formal. With their dry sense of humor, British tend to confuse others. Some business people can find it daunting, dealing with the British culture, as they seem to be reserved on the one side and humorous on the other side. Once, a businessman/ woman dealt with the British culture more often, business negotiation runs more smoothly and comfortably. The British do not like to get things derailed. When negotiating with them, a short, polite introduction is expected. Business cards are not necessarily exchanged at first but can be provided in the middle of a meeting (Elashmawi, 2001:186-191).

The decision making process is slower than in most European countries and most western cultures. The PDI/ UAI Matrix positions Britain with a low PDI and UAI. British business people work in teams and Mead elaborated that the British business people, working in a team are “… run like an army…” He went on noting that “the British team works efficiently because the limitations on the two way communication are accepted, and the team refrains from giving feedback to the leader’s instruction unless absolutely necessary.” (Mead, 1990:51). The low PDI indicates a strong need for equality and opportunity. The low UAI implies that the British are willing to accept various opinions and do not panic when a situation or circumstance moves into unknown territory. They are less concerned about ambiguity and uncertainty compared to people in other European and western countries all together, except for Denmark and Sweden. This also reflects that the UK is a less rule-orientated country and explains why the decision making process takes longer (Hofstede, 1983:46-74).


[1] See Appendix A: Questionnaire Switzerland by Nina Müller

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Cross Cultural Management in the 21st century and how it effects Negotiations with an example of HP
International School of Management Dortmund  (Private University)
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Cross, Cultural, Management, Negotiations
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Nina Müller (Author), 2004, Cross Cultural Management in the 21st century and how it effects Negotiations with an example of HP, Munich, GRIN Verlag,


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