Chinese, Indian and Korean workplaces, with recommendations to facilitate a smooth transition for these immigrants to the Australian workplace.
Businesses all over the world today are extending their frontiers beyond domestic markets. In this global business environment, cross cultural negotiation becomes a common field of research. This is primarily due to the fact that the negotiating parties are often from different countries, with different cultural values and beliefs which they usually bring with them to the negotiating table. What is communicated, how it is communicated, how people think and behave during negotiations can differ across cultures. The purpose of this paper is to examine the effect of culture on negotiation and suggest ways to deal with cross cultural problems in international business negotiations. An analytical approach is applied in this research. The conclusion reached is that effective international negotiators need to know not only the fundamentals of negotiation, but also how culture can influence the negotiator's behaviour and the negotiation agreement. Understanding, accepting and respecting the cultural values of the other parties is very important as it will lead to a more successful outcome.
Introduction
Economic globalization is not a new phenomenon. With the ability to conduct international business emerging after World War II, and the advances in information technology and increased liberalization of trade and capital markets accelerated in the late 1980's, economic globalization flourished (Chaney and Martin 2011). This is supported by Khoo et. al (2007) who claim that maintaining a competitive advantage with highly skilled employees proficient in intercultural business communications is paramount to survival in the current global market. For example, multinational organisations mobilize their skilled employees to franchises abroad in order to meet client needs; provide input into specific projects that require corporate knowledge; and as a professional development strategy.
The majority of those mobilized employees originate from collectivistic cultures that emphasize communal feelings, social usefulness, and acceptance of authority in the workplace. This belief and value system offers better social support than the capitalistic economic system with individualistic culture which emphasizes competitiveness, self-confidence and freedom (Kagitcibasi and Berry 1989).
According to Bochner (1986) mobilized employees frequently experience culture shock once exposed to the unfamiliar cultural environment of their host city and workplace. Corporate culture defined by Rhinesmith (1996, 14) "contains the values, norms of behavior, systems, policies, and procedures through which the organization adapts to the complexity of the global arena".
In this global business environment, cross cultural negotiation becomes a common field of research. This is primarily due to the fact that the negotiating parties are often from different countries, with different cultural values and beliefs which they usually bring with them to the negotiating table. What is communicated, how it is communicated, how people think and behave during negotiations can differ across cultures. The purpose of this paper is to examine the effect of culture on negotiation and suggest ways to deal with cross cultural problems in international business negotiations.
Cross Cultural negotiation is said to take place where the parties are from different backgrounds, and thus have different cultural beliefs and attitudes. It is thus very important to understand the culture of the negotiating parties or else barriers may be created which will impede or even lead to failure of the whole negotiating process.
The importance of preparation in negotiation cannot be overemphasized. This will include rehearsals and a study of the cultural background of the other side. This is very critical because it will show that one has respect for the other side's culture, thereby building credibility and trust right from the onset. This will also help in deciding the right tactics to use so as not to irritate or annoy the members of the other culture. Understanding the nuances and taboos and avoiding them will smoothen out the negotiation process. It is also necessary to leave a long time frame for the negotiation. This is because cross cultural negotiation often lasts between two to six times as long to reach an agreement as it would take domestically.
This report will discuss the emerging world economic systems of China, India and Korea with further analysis on communication, negotiation and value systems in the workplace. In addition limitations and recommendations to overcome transition issues by mobilized employees into an Australian workplace will be presented. Finally, a brief conclusion will be offered.
Chinese
China had early success after "liberation" through stronger organisation after seizing power in 1949. The Chinese Communist Party strained to introduce socialism transformation by conveying peasants under party control (Hou 2011). The economic reform on China seen changes on property rights, macro controls, factor income and global integration (Hou 2011). These substantial changes have seen a significant success for China's economy by sustaining an average of more than 8% growth for the last three decades. The goal for the comprehensive China reform is to create a socialist market economy with "Chinese Characteristics". As the objective of the economic reform was to have a socialistic market this showed for a first time in Chinese Communist Party history a socialistic system that merged with a market economy (Hou 2011). China is becoming an economic superpower with the rest of the world including Australia, which has presented a communication style that differs from the traditional one (Fang and Faure2011).
2.1 Communication in the workplace
There is little research on Chinese communication and its traditional cultural and how it impacts Chinese communication characteristics. Many Chinese delegations are sent abroad to study foreign experience due to a new landscape of international business and intercultural relations (Fang and Faure2011). Educational programs assist immigrants to Australia to obtain employment and adaption in the host country. The Chinese are defined as being a collectivist culture that has a strong urge for independence, social harmony and group interests are prioritised over personal independence. In the age of globalisation change has impacted religious beliefs, life-cultural values and the functions and structures of sociocultural institutions. Globalisation has seen the internet and global education expose China to cultural learning, wireless global knowledge transfer and information sharing (Fang and Faure2011). Chinese communication in the workplace has consisted in the past of five communication styles;
Implicit communication (hanxu) a mode of non-verbal and verbal which is contained, indirect, reserved and implicit. Leaving the un-spoken to the listeners and not spelling out everything.
Listening-centred communication (tinghau) which translates to "listen talks" the Chinese encourages listening to speaking. This does reflect old traditions of only certain people of seniority are to speak and not everyone is entitled to speak.
Polite communication (keqi) this translates to "behaviour of guest". Kegqi is considered an everyday principle observed by the Chinese in their communication. It can be used differently depending on the group of people. It also refers to the values of humbleness and modesty in the Chinese Culture.
Insider communication (zijiren) where Chinese typically speak to insiders, people they know they will rarely speak to outsiders or strangers. A type of relationship is critical and determines how much information is transmitted and what is communicated.
Face-directed communication (mianzi) refers to the respect and reputation of an individual (Fang and Faure2011).
This framework provides an overview of the traditional communication in China, however in today's changing China the communication style has changed due to intercultural relations. Research on Chinese negotiators show the impact and the development of China over recent years.
2.2 Negotiation in the workplace
The impact of globalisation has formed two types of Chinese negotiators one is formal, sincere, reserved and win-win orientated. The other is insincere, open and informal which shows the variation of Chinese communication and its impact on how they negotiate in business (Fang and Faure2011). In today's International business we see that Chinese negotiators may be angry, packing up papers and leaving a room. Trust amongst negotiation parties is high and when this occurs a Chinese negotiator would then be speaking politely and respectful. If trust is low we now see the use of tough tactics and harsh communication tools to favour over a counterpart. In business negotiation Chinese traditionally see detailed contracts as an indication of distrust. Nowadays we see Chinese firms seeking legal experts to secure critical business contracts (Fang and Faure2011) and Chinese executives do not hesitate to say "No" in international business (Fang 1999). It appears the Chinese have a dynamic phenomenon around communication and negotiation processes that depend on the degree of trust established in the business market. Saying "No" to western influences is still considered delicate by Chinese negotiation and has gained some favour in China's development in the recent years.
2.3 Values in the workplace
The development of China over the years has impacted traditional Chinese culture. We now see a more western approach to communication and negotiation; however are traditional values impacted in the workplace? The Chinese culture is highly collectivistic with long-term orientation (Fan 2000). Mainstream Australian culture is highly individualistic with low long-term orientation and low power distance. For Chinese immigrants in Australia, a trend occurs that separates a majority group within a workplace, this group consists of Chinese immigrants who receive less promotional opportunities and performance reviews. China is a traditional society where commitment can be complex, and influenced by sanctions, norms, family and the community (Pines & Zaidman 2003).For employees they have greater weight on traditional values resulting in greater commitment to the organisation and their occupation.
2.4 Recommendations to facilitate a smooth transition for Korean immigrants to the Australian workplace
The analysis on the Chinese culture, communication, negotiation and values in the workplace, raises many implications for immigrants who are transitioning into a new host country. The following are some recommendations;
For Australian organisations they need to understand the sensitivity around cultural importance to Chinese employees. The culture in Australia is very different and a way of preparing a new employee from a Chinese background is to possibly include cultural knowledge in induction. Provide a buddy for the new employee and introduce them to different cultural groups of staff.
It is important for Australian companies to show respect and avoid being too aggressive, Westerners need to be aware of Chinese customs and appreciate that reading between the lines is more important than verbal or written cues.
Over time generations have changed and should be noted. Older Chinese workers are perceived to "love to be led" and are reluctant to speak up during strategy meetings. However younger works with exposure to international study and travel are often more outspoken.
Language barriers will always occur. Be mindful of certain language refraining on using funny humouring jokes that may be interpreted differently.
Trust is important this must be established firstly in order to build a relationship with new Chinese employees. A formal contract to begin a negotiation deal is not recommended.
Indian
In a developing countries like India, economic growth has been placed in the spot light (Recent development). Businesses in India try to perform better and improve the economic conditions of the country however, in the recent years India's economic growth has slowed down in the last three years. (Times of India). The reason behind this could be barriers caused for the international market to do business in India. India is viewed as a multi-cultured country with a wide variety of cultures. Thus, it is very likely that Indians might find it difficult to adjust when doing business in other countries. Indians' way of doing business is very different from how business is done in western countries like Australia.
According to Singh, Zhao and Xiaorui 2005, 138, India is classified as a high context culture. High context cultures put a lot of emphasis on harmony and oneness. It is for this reason that The Indian Culture tends to value groups higher over the individuals. Due to the difference between the Indian culture and the Australian Culture, there might be needed to adjust to the culture when doing business with each other.
3.1 Communication in the workplace
Communication plays a major role when entering into contract with Indians. Not only is it important to understand their different languages but also the various body expressions. India is known to be an English speaking country however; there is a high percentage of people in India who do not have access to English education. For this reason, Indians might find it difficult to understand the intense vocabulary when doing business with Australians. To make it successful, Australians should use simple English when having negotiations with Indians.
Time plays a very vital role when entering into contracts with Indians. Different cultures have different attitudes towards time. India is classified as a polychromic country ( Holtbrugge, Schillo, Rogers and Friedmann. 2011, 211). This means that Indians tend to do so many things at once and thus do not have objectives set before they perform the task. Because they fall under the polychromic culture they tend to take time considerations more casual and that is why it is very likely for an Indian to run an hour or two late for a business meeting. This is considered unfavourable in the Australian culture, which tends to adopt the monochromic culture.
Just like the Koreans, Indians also tend not to like the word "no" be it verbally or non-verbally. Indians think it is impolite for one to respond with a no as an answer and this is why they waste a lot of time before refused a contract.
3.2 Negotiation in the workplace
With all the different modes of foreign entry, there is always need for international investors to face negotiations when entering into contracts with Indians. According to Chaney and Martin 2011, 223, Indians tend to have a very formal yet relaxed manner of negotiating. Unlike the Australian culture, Indians consider it very essential to build relationships at the introduction phase of the contract. This is the reason why Indians take longer to negotiate. They believe that it is vital to build trust between two people before signing a final contract. Referring to the Hofstede's model, India is known as a collectivistic culture and thus Indians can be said to be having a strong relation oriented culture. (Requejo and Graham 2008,195).
One essential factor not to forget when having a negotiation with Indians is bribery. It is the most common issue when negotiating with Indians. Compared to America, India, China, Brazil, Mexico and Peru are considered as highly corrupt countries where by bribery has to be used in order get things done faster. Whilst doing businesses with Australians, Indians will have to be careful not to use bribery as a tool to get the contract.
3.3 Values in the workplace
With the cheap labour available in India, foreigners tend to enter more often into contracts with Indians because it cuts down the costs. Like the chinese, the Indian culture tends to be high collectivistic (Sinha 1990, 37). Indians hardly make decisions as individuals and think the wiser decision is made when many people are involved. On the other hand, Australians tend to be more individualistic and thus do not like many people being involved when negotiating. For this reason, Indians need to keep in mind that they should not come with too many people when negotiating with Australians.
3.4 Recommendations to facilitate a smooth transition for Indian immigrants to the Australian workplace
After analysing the Indian culture in terms of communication, negotiation and values at work place, it can be noted that the both Indians and Australians need to go through a bit of change to make negotiations smoother. The following recommendations could be considered;
Australian companies need to keep considerate of that fact the English is not their first language and therefore they should not use severe English when writing up some official documents. This is usually ignored and thus leads to miscommunications.
Indians need to adopt to the Australian time whereby things are done at the time they are supposed to be done. It should be made sure that Indians are not running late for a business meeting because this could lead them to losing a contract.
While doing business with Indians, Australian firms should make an effort to build a strong relationship in order to get hold of the contract more easily. Indians tend to become soft hearted after building a relationship.
One essential thing that Indians must let go of is that habit of bribery. Bribing could not get contract in Australia and therefore should not try giving out a few notes to get hold of the contract
Korean
For the last three decades of 20th century, the Korean economy has grown with remarkable speed and many western economists have described this success as a miracle (Kwon and Shepherd 2001, 39). The Korean economy was best portrayed as a socialist economy with most of the economic activity state owned. Furthermore, there was evidence of a strong state intervention, a salient feature of the socialist economy and found in every field of economic activities and classified in terms of domestic market protection or incentive schemes (Kwon 1999; Cha 2001, as quoted in Kwon and Shepherd 2001, 246). However, after the 1997 economic crisis the Korean economy has developed towards a capitalist economy (Kim 2006).
The Korean culture is type casted as a high-context culture. According to Kwon and Shepherd (2001), Koreans place more emphasizes on personal relationships in daily life and treat each individual based on whether that person is inside or outside of the group. This is a key feature of high context culture, which aims at establishing a strong social trust before any business venture is undertaken.
4.1 Communication in the workplace
It is very difficult to fully understand the Korean culture without being relatively fluent in the Korean language. According to De Mente (2004), Koreans are "slaves to the demands of language etiquette." Nevertheless, the Korean language was designed to be vague and a great deal of communication between them is "intuition reading of the other speaker's mind and verbal cues" (De Mente 2004, 19). Furthermore, De Mente suggests that the choice of vocabulary a speaker uses while making conversation virtually covers all aspects of society - gender, age, position, class, circumstances. The Korean language is indirect, vague and evasive, in contrast to the frank, direct nature of the English language, which is sometimes considered as impolite and unkind by their Korean counterparts (Coyner and Jang 2007, 101).
De Mente (2004, 103) reports that Korean people rarely use first names amongst business colleagues and adults in general. Throughout Korean history first names were kept secret and saying them out loud was forbidden. Furthermore, to extend this gesture of respect they stand up when a higher ranking official walks into the room, and a common stereotypical practice is that women take the back seats allowing the men to sit at the front.
It is imperative that Korean people make appointments prior to any meetings. Closing a business deal with the Korean people is time consuming because they are reluctant to say "no" and during the process and therefore waste excessive amounts of time. Koreans use a polychromic time system which is much less focused on preciseness of accounting for each and every moment. According to De Mente (2004, 107), one of the key aspects of maintaining business relationships with Koreans is "insa (een-sah)" which means "round of greetings". The business of 'insa' usually takes place towards the end of the year, and contains a token of appreciation for their support; such greetings are sent to the clients, customers or business partners.
4.2 Negotiation in the workplace
"Koreans are clever and forceful negotiators" (De Mente 2004, 133). Chaney and Martin (2011) report that age and status are respected by Koreans and it is therefore advisable to include in all negotiating teams an older, senior executive. The traditional process of negotiating business in Korea is identified as Kyosop (K'yoh-sop). The Koreans are culturally conditioned to make their negotiation strategies very vague which can upset the person on the receiving end. According to De Mente (2004, 132), one of the key tactics in negotiation is to alternate between "confrontational and compromising" which can upset westerners who are accustomed to direct process of negotiation. Furthermore, Korean negotiations are known to throw in some form of surprise to catch the other side off guard.
4.3 Values in the workplace
Coyner and Jang (2007) states that profit alone is not the main criterion for doing business in Korea, sustained growth with good personal relations is considered equally as important.
Koreans prefer to do business with likeminded people. Therefore, personal relations are valued in the workplace. Under the influence of Confucianism, Korean society has group orientations of a closed nature. Korean firms are encouraged to network and buy from each other using closed-door bidding on many contracts (Kwon and Shepherd 2001, 251).
Korean management can be described as clan management, with top down decision-making, lifetime employment, a system of seniority, autocratic and paternalistic leadership, and hierarchical structure (Lee and Yoo 1987, as quoted in Kwon and Shepherd 2001, 251). Women contribute towards the pool of potential workers in foreign companies because Korean companies are male dominated. For example, a stereotypical practice in a Korean workplace is, females are not considered for managerial positions and male workers are imbued with a male superiority complex and not prepared to work for female managers (Kwon and Shepherd 2001, 252). Furthermore, this seniority system and lifetime employment has made it almost impossible to promote Korean workplaces to a merit based system.
4.4 Recommendations to facilitate a smooth transition for Korean immigrants to the Australian workplace
There are many levels of cultural difference that may cause problems for Korean immigrants transitioning to the Australian workplace, Requejo and Graham (2008, 72) believed the most important to be language and non-verbal behaviors; values and thinking; and decision making processes. The following are some recommendations;
Australian organisations need to educate their employees about cultural diversity. When cultural differences are allowed, accepted and understood, employees can work better, more constructively, and in greater cooperation. With a partnership based on this acceptance, Korean employees will work well in Australian workplaces, improving their own work efficiency.
Australia does not have such strict rules regarding politeness, and emotional authority between positions and ages. Australians use first names, or Mr., Mrs., or Ms., plus family names for respect. Position titles are used to indicate the persons-in-charge, and are not used when addressing that person. This will be difficult for Korean employees who believe addressing someone by their title or job position as important.
If Koreans know you, then they're extremely kind and helpful but if they don't know you they ignore you like you don't exist. In Australian culture people are relatively friendly even if they don't know each other: for example they'll greet and start a conversation.
Also in Australian culture, the use of "thank you" is much more common than in Korean culture. It is quite common for friends, spouses, and family members in Korea not to say thank you to each other for little gifts, for giving someone something they requested, whereas this would be quite rude in Western culture.
Koreans are accustom to oral agreements over written ones. Australian organisations are able to overcome this with employment contracts by breaking clauses into smaller sentences and possibly hiring an interpreter to explain the contract to the employee.
5.0 Conclusion
For the Chinese, my research supports that they maintain their traditional heritage and communication and negotiation are linked to traditional values and beliefs. Adjustment is little as they tend to stick to their own people and still maintain their culture within Australia. As Australia is a multicultural country should we maybe consider how organisations should approach international business with these countries?
The cultural differences between Korea and the West are very wide, go very deep, and reach into a huge variety of situations. If employees are unable to come to a cultural understanding of these differences, even in this global era, then Koreans and expatriates working together will have to settle for a relationship of "close in proximity, but distant in relationship."
When cultural differences are allowed, accepted and understood, employees can work better, more constructively, and in greater cooperation. With a partnership based on this acceptance, Korean employees can work well with foreign expatriates, improve their own work efficiency and help the company increase its competitiveness with leading companies from around the world.
Preparation, understanding and success are strongly linked.
Preparation by researching the cultural background of the other party is very important in cross cultural negotiation. A negotiator who has effectively prepared will understand the negotiation style of those on the other side of the table, accept and respect their cultural beliefs and norms.
He is conscious of personal mannerisms and how they are viewed by the other party. These efforts will be greatly appreciated by the counterpart negotiator. It will result in greater respect, greater success and a long lasting business relationship.
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