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Impact of Culture on Business Negotiations
(Keeping in mind US and Sweden businessmen)
A Minor Project on
Masters of Business Administration (International Business)
By
Jatin Arora
MBA-IB (2010-2012)
Enrollment No. : A1802012157
To
Dr. Veenus Jain
AIBS
Amity University
AMITY INTERNATIONAL BUSINESS SCHOOL, NOIDA
AMITY UNIVERSITYUTTAR PRADESH
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ACKNOWLEDGEMENT
For learning to take place with any kind of efficiency students must be
motivated. To be motivated, they must become interested. And they becomeinterested when they are actively working on projects which they can relate to
their values and goals in life
The research work requires co-operation of many people and this work is no
exception. It is difficult to thank individually all the persons who patronized this
work. The researcher had asked for favors, borrowed ideas, expressions and facts
from so many that it would require one volume to give credit to all. So, the
researcher wants to thank all the patrons of this report
First and foremost, I would like to express my sincere gratitude to all the faculty of
Amity International Business School. I wish to express my profound gratitude to
Dr. Veenus Jainunder whose supervision I completed minor project. Her attitude
towards excellence, her helping nature and her enthusiasm has been source of
constant inspiration
I am also very thankful to all the faculty members, the whole college staff for
providing me with necessary facilities and support, essential for bringing out thiswork in a short time.
Last but not the least, I am thankful to all the previous research scholars. The work
they did helped me a lot to understand my topic and work accordingly.
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Table of content
S No. Topic Page No.
1. Executive Summary 4
2. Review of Literature 6
3. Introduction 7
4. Theoretical Overview Model 12
5. Business Culture in Sweden 13
6. Business Culture in US. 157. Aim 18
8. Analysis 19
9. Findings 26
10. Case Study 29
11. Conclusions 30
12. References 33
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Executive Summary:
The number of companies operating internationally is growing constantly. The
world is opening up for foreign firms and new destinations in the company
business are increasing. Because of high competition the companies operating
abroad are faced with a much larger task then before.
When going international the challenges the company must handle are new and
unfamiliar. Obstacles the firm never faced before are becoming crucial in the
everyday work. Culture is one of these obstacles and can affect the entire co-
operation.
Culture can influence the business in different ways. Language problems, pricing
difficulties and culture collisions are not uncommon, especially in the beginning.
The company must be able to handle these difficulties in a way that is satisfyingalso for the other part. Mistakes can be difficult to correct and disrespect for the
foreign culture can destroy the entire operation.
There are some general advices the company always must have in mind before and
during a co-operation on the international market. It is important, even before
entering the foreign country, to inform the personal about the manners and customs
in that new culture. If the first impression becomes negative, this can be hard to
shake. Foreign cultures have different ways of doing business, for example when itcomes to planning ahead and keeping delivery times. Culture can be both a
positive and negative influence and many companies are struggling in the new and
foreign environment.
The important thing to always have in mind is that the foreign culture is not as we
are used to at home and to be prepared before starting the new foreign operation.
Respecting and understanding the new culture without forcing our own beliefs on
people, are things that can be extremely helpful to consider. By learning the host
countrys language, can respect and trust more easily be won, and competitive
advantages can arise.
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In today's global business environment, cross-cultural negotiation has become a popular
area of study. There are often differences between the negotiating parties ways of
conducting business, language, dress, preferences, and legal and ethical considerations.
Understanding and taking these cultural variables into account in the country where
business transactions are taking place is one of the most important aspects of beingsuccessful in any international business attempt. I in this project have investigated how
cultural differences affect business negotiations between Swedish and American
businessmen. Furthermore, I have tried to find out how the influence of culture on business
negotiations between businessmen from Sweden and the US can be described, as well as
how the cultural problems facing Swedish businessmen when negotiating with
businessmen from the US can be expressed. Finally, international business negotiations can
be discussed from many different dimensions but in this thesis, I have only focused on the
dimension of business negotiations between people from Sweden and people from the US,from the perspective of Swedish businessmen
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Literature Review:
I started off the work by searching for literature that would be relevant for the area of study.
In order to find appropriate literature in the form of books and reports, I went through some
books and journals related to international business and cross cultural management. In
addition to this, as well as search engine Google was used in order to find relevant articles,
reports and other published material. Negotiating, cross-cultural business negotiations and
international negotiations are the search words that were used.
Cross cultural management mainly focuses on the behavior of people from
different culture working together as a group or an organization (Adler,
1983). Most of cross-cultural management study aims at dealing with the issue of
organizational behavior, such as leadership style, motivational approaches,
strategy, organizational structure (Morden, 1995; Elenkov, 1998). Three aspects
are discussed in this study as follows, communication system, management style,
and staff behavior.
As to the cultural concept, culture is a complex issue in some fields such as
sociology, anthropology and now become a hot topic in management. Several
contributions are devoted in this area by some authors, such as Hofstede (1997),
Hall (1976, refered by Richardson and Smith, 2007), Golbe (2004). It is no
exaggeration to say that Hofstedes dimensions of national culture theory is a
dominant theory. Although a lot of people oppugn Hofstedes theory and his data
are out of time (Holden, 2002, p20), however, the data of dimensions of
national culture is not an absolute value but relative values. At least,
Hofstedes dimensions of national culture theory still is a famous and popular
theory, which is engaged by a large number of researches. Project GLOBE is a
recent study, in which culture is linked to behavior in organization (Shore and
Cross, 2005). Globe proposals nine cultural dimensions, some of these are similar
to Hofstedes Dimensions of National Culture (Shore and Cross, 2005). However,
Globes theory is still a new theory without sufficient test; therefore it will not be
considered in this study. Halls high context-communication and low context
communication can perfectly serve for the cross-cultural communication study
and conflict-resolution studies (Kim, Pan and Park, 1998). In this study, both
Hofstedes Dimensions of National Culture theory and Halls high context-
communication and low context communication theory are involved.
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Introduction:
Today, stakeholders of an organization in any country in the world could be from another
culture. Stakeholders include customers, competitors, shareholders and employees. If a companyunderstands its stakeholders, it is easier to serve them and to make the organization more
successful. ) In the past, companies could either operate only in the domestic markets or expand
their business to other countries as well. This is no longer the case because companies are in
addition to the competition on the home market, also forced to face competition from other
countries. Cross-cultural encounters have become ever more frequent in a world where trade,
migration, the media and travel are pushing people and governments to confront and
accommodate cultural and ethnic diversity. In other words, countries can no longer maintain
independence from an ever growing global economy. Due to this, people and organizations are
more easily accessible and the implication for business is that it is imperative that managers
understand culture. Thus, companies of today operate in an era of globalisation of business
activities. This means that managers from one country will often be conducting business and/or
sitting at negotiating tables with managers from other nations and countries. Culture is one of the
most challenging elements of the international marketplace. The influence of cultural diversity
on international business negotiation will continue to increase in importance as a result of the
liberalisation of markets worldwide and cross-border mergers and acquisitions. In today's global
business environment, cross-cultural negotiation has become a popular area of study. The US is
Swedens largest export country, in terms of value of the exports. Therefore it would be
interesting to investigate if and how the differences between the cultural environments of
Sweden and the US affect business negotiations between companies from Sweden and the US.The area we have chosen to investigate is interesting to study also because the findings of this
thesis may prove useful for other organisations who wish to negotiate with people from the US,
and for those who already have their organisation in the US but who seek greater understanding
of the cultural context within which they carry out their international business relations.
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Expanding Business to Other CulturesWhen a company expands its operations to new geographical areas, it will not only acquire new customers,
but new partners as well. These partners include agents, distributors, and other facilitating agents such as law
firms and advertising agencies. The government in the foreign country is another important partner to
consider. It is essential that a company acquire these partners as their work facilitates market developmentand penetration. Along with an expansion into other countries, will also come new employees programs are
carried out. It is thus critical to have an understanding of what these groups value and find motivational as
well as to know what they dislike and/or find offensive.
Cross Cultural Negotiations:
The diverse makeup of many societies and global nature of business today make cross-cultural
negotiation a regular part of life. Unfortunately, many major disputes in need of resolution also
cross ethnic and cultural lines. Communication and negotiation etiquette varies widely acrosscultures. In France, it is rude to talk money over dinner while in Brazil the American A-OK
gesture (thumb and forefinger forming a circle) can be a major insult. Understanding when,
where, how and with whom it is appropriate to negotiate any given issue is extremely important
to working across cultures. Negotiators and mediators should do their best to understand the
cultural norms of other parties, and should be charitable in understanding that others have
different norms from their own. When a company expands its operations to new geographical
areas, it will not only acquire new customers, but new partners as well. These partners include
agents, distributors, and other facilitating agents such as law firms and advertising agencies. The
government in the foreign country is another important partner to consider. It is essential that a
company acquire these partners as their work facilitates market development and penetration.Along with an expansion into other countries, will also come new employees or strategic alliance
partners who have a large impact on how well marketing programs are carried out. It is thus
critical to have an understanding of what these groups value and find motivational as well as to
know what they dislike and/or find offensive.
It is only through interaction with people of a culture, coupled with in-depth study of the history,
traditions, and institutions of this culture that one can begin to understand the behaviors, values,
and overall approach to life that people of this culture have. When companies in different
countries trade and interact, there are many issues that differ from domestic trade. The external
environment may be very different in terms of infrastructure and political climate. A major
consideration for companies is the cultural differences that might cause problems in the
communication between business partners.
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Negotiations occur in all societies, and on all levels between various parties in various situations.
These situations can be of a social, economic or political art. Individuals, companies, ethnic
groups and nations have always used negotiations as a way to try to satisfy their basic needs.
Five important considerations in cross-cultural negotiations.
These are; the players and the situation, styles of decision making, national character, non-verbal
cross-cultural noise and verbal cross-cultural noise. Below these factors with examples are
presented.
1. The players and the situation
- Expectations
- The people present
- Views of the negotiator
2. Styles of decision-making
-Consensual/ Authoritative style
3. National character
- Patriotic / Ethnocentric / Aggressive/
- Listening habits
- Conceptualizations on what is important
4. Non-verbal cross-cultural noise
- Gestures
- Burping
5. Verbal cross-cultural noise
-Language
- Meaning of words
In the below presented model the cultural influence in each country is presented. Culture in each
country is meditated through three factors: cultural forces, cultural messages and consumer
decision process. Family, education and national identity manifest cultural forces. Ethics and
morality, behaviour and roles and design influence cultural messages. Culture is also influenced
from universal needs and wants in the society and consumer trends.
These cultural differences are different in country A and country B. The foreign company must
analyze and cope with these cultural differences and harness the tension to bring about
reconciliation between these countries. With combining and synthesizing cultural differences the
foreign company can integrate different cultural perspectives and seek a dynamic solution to
problems that may arise
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Cultural Forces Cultural messages Cultures decision
-family -ethics and moralityprocess
-education -behavior and roles -needs and wants-national identity -consumer trends
Culture in
Reconciliation
Culture in-reduce conflictCountry A -cope with differences Country B-harness tension
Synthesis of cultures --
integrate differentcultural
perspectives- seek a dynamic solution
The extent to which national culture becomes relevant to a firm can be shown in the following
table. The company own home country culture is of high relevance, though the managers and
other employees may not be aware of its influence. The relevance of other peoples culture
becomes greater for a firm as it spreads its activities and products past its national boundaries to
reach foreigners with different value systems and tastes
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Tayeb, M. 1998. The Management of a Multicultural Workforce, England: John Wiley & Sons.
Relevance of
natural culture:
Home culture Foreign cultureCharacter of the firm
Domestic, single-nation firm with no High Nil
foreign interests
Single-nation firm with import/export High Low to moderate
activities
Multi-nation firm with franchising and High Moderate to
licensing activities high
Multi-nation firm with manufacturing High High
and/or service units abroad
Global firm with various business
Highactivities in most parts of the world High
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Theoretical overview model
This model is about the overall areas that we are using in the essay and
describes how these areas are affecting each other. The model shows
how these three elements are tied together and how they all seem to
be influencing one and other.
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Business Culture in Sweden:
Often, Swedish businessmen don't expect businessmen from other countries to differ much from
themselves in management, behavior, clothing etc. Most of them would be surprised if they were
told that their business culture differs greatly from the international norm.
Management Style
Swedish management is based on the idea that the individual is both willing and able to do a
good job. A Swedish manager tends to think of himself as a coach rather than a commander, and
he often delegates tasks and authority to his staff. Swedish organizations, employees on all levels
have the freedom to make decisions and solve unexpected problems without asking superiors for
permission.
A good manager, according to Swedish standards, is a person who takes advantage of the natural
creativity and motivation of his staff. He should lead the emploees not through his power or
formal position, but through the principles of cooperation and agreement. Being a good listener
is considered to be another important quality. In discussions with his staff, a professional
manager should use reason and base his views on facts. Getting emotional when discussing a
problem is considered rather inappropriate.
Power Distance
The power distance in Swedish companies is among the smallest in the world, according to a
study of 40 countries in 1984. 'Power distance' can be defined as "the extent to which people in ahierarchical situation feel they can and should control the behavior of others, and the extent to
which those others are conditioned by reflexes of obedience". In Swedish companies, the concept
of power distance is largely replaced by personal responsibility.
Personal status is of relatively small importance in Swedish business life. Managers only rarely
give signals of their own status and employees normally don't feel inferior to them. An executive
is most of all considered to be a specialist in managing companies and he is therefore not socially
superior to a specialist in any other field. In this respect, Sweden seems to differ from many
other countries. A further sign of the non-hierarchic (or, better, modestly hierarchic) Swedish
company structure is that Swedes normally use their first names at work.
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Organizations
Swedish organizations are probably less rigid than many of their foreign counterparts. Swedes
try to solve problems in an informal and pragmatic way, even if it means bypassing one or more
layers of executives. In most cases, managers do not feel threatened by this practise, the general
idea being that decisions are made in order to achieve a result and not to demonstrate your own
position. The same attitude explains the vivid exchange of information in Swedish companies. If
people know what is going on, the argument goes, they will feel more involved, and therefore
more motivated for work.
Swedish companies usually have a flat and team-oriented structure with few management levels.
The result is a simple and direct decision-making process. Matrix organizations are common,
since Swedish employees often report to more than one manager.
The Approach to Risks
Swedish executives are generally more willing to take risks than their colleagues in other
countries. An international study showed that Sweden had the lowest "uncertainty avoidance
index" by far among the countries compared, while Japan had the highest. To generalize this
result, one could perhaps say that Swedish managers are not so anxious to do the 'right' thing as
long as they do their best.
In countries where managers show a high uncertainty avoidance, employees are often promoted
according to seniority. In Sweden, on the other hand, actual work performance tends to be of
greater importance. As a result, young men and women are frequently seen in leading positions.
Making Decisions
Although Swedish executives are willing to take risks, decisions are often made with great
consideration. This is so, because there is one thing that must not be risked: the feeling of
consensus and agreement in a company. Heated debates are very unusual at business meetings,
and criticism has to be presented in a non-personal and diplomatic way. Unlike the situation in
most other countries, Swedish business culture strongly favors compromising.
Punctuality
Being punctual is not only regarded as a sign of respect but also of efficiency and Swedish
businessmen will have little understanding for cultural variation in this case. The stressing of the
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time factor can also be seen in everyday business contacts; it is generally not considered rude to
set a deadline for a thing to be done or a decision made.
Punctuality is important not only in working life but also when it comes to purely social
gatherings. This means that when a Swede is invited for dinner at eight, he show up at eight!
Business Contacts
Foreign businessmen often find that their Swedish colleagues talk too much business, and too
little about themselves or their interests. They might draw the conclusion that their partners are
simply limited and ignorant. The Swedish businessman, on the other hand, probably wishes his
foreign businesspartner would cut the small talk and come to the point. In Sweden, a direct approach
is seen as a sign of efficiency and a wish not to waste the other person's time.
Business Culture in US:To ensure successful cross cultural management when working in the U.S., it is safest to treat all
people with an equal amount of respect and deference (within the informal framework of
America, in general), focus on schedules and maximizing time, and expect that people will want
to be dealt with as individuals.
In the U.S. there is a sense that all people in the organization have an important role to play and
all are valued for their input. Therefore, managers consult employees to gather background
information and often have them share in the decision-making process.
The American working environment has changed drastically. With one eye on costs and the
other on retention, employers are increasingly offering part-time or shared jobs, or outsourcing toexternal contractors. Change is constant as companies are restructured, work teams become
"virtual," and flexible work arrangements become more common.
The Role of a Manager
Cross cultural communication will be more effective when working in United States when you
remember that the most productive managers in United States recognize and value the
specialized knowledge that employees at all levels bring. Employees expect to be consulted on
decisions that affect them and the greater good of the organization.
Approach to Change
Cross cultural management is more likely to succeed if you understand that businesses in the
U.S. have a high tolerance for risk and a ready acceptance for change. The underlying mindset is
that change, while difficult, usually brings improvements and enhancements with it.
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Approach to Time and Priorities
The U.S. is a controlled-time culture. Global and intercultural expansion has meant adherence to
schedules is important and expected. Missing a deadline is a sign of poor management and
inefficiency, and will shake peoples confidence.
Successful intercultural management will depend on the individuals ability to meet deadlines.
Decision Making
American managers are viewed as facilitators--people who help employees do their best work--
and not simply decision makers. They empower employees and expect them to take
responsibility.
Employees freely cross management levels and speak directly to senior managers. This freedom
is particularly apparent at meetings, where everyone in attendance is encouraged to participate
openly.
Boss or Team Player?Cross cultural management is more likely to succeed if you understand the mindset behind the
work force. In The United States, groups collaborate well together as teams. Members are
generally chosen to participate based on tangible skills or the knowledge base they bring, and are
equally welcome to contribute to any discussion that may arise. They are encouraged to generate
new ideas that may further the direction of the plan or spawn a new track entirely. In successful,
dynamic teams, all members are valued for their actual and potential contribution, and all are
treated with equal respect.
Communication and Negotiation Styles
The American negotiating style tends to be a "hard sell"sometimes characterized as
sledgehammer subtlety combined with missionary zeal. A strong pitch may sound boastful but is
meant to inspire confidence and trust. It is also consistent with the penchant for logical
reasoning, directness and comfort with self-promotion.
American negotiators may have little familiarity with, or patience for, the formal business
protocol, indirect communication style, or consensual decision-making practices of other
countries (a fact that savvy international negotiators often use to their advantage). Their focus is
on the short term and the "big picture" --securing the best deal in a timely manner.
Their approach is informal, cordial and straightforward. The U.S. team will reveal its position
and expect the other party to engage in a competitive bargaining process. If an impasse is
reached, American tenacity, creativity, and persuasiveness will come to the fore. Despite the
"hard sell" tactics, negotiating partners should not feel pressured into making a decision. The
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Americans expect their counterparts across the table to be similarly pragmatic and single-minded
in trying to secure a favorable deal.
Another significant issue about culture is the levels manifested throughartefacts, values and underlying assumptions:
Visible organizational structures and process
Includes visible products, clothing, manner of address, work practices.
Strategies, goals, philosophies includes for example attributions, avoidance.
Unconscious, takes for granted beliefs, perceptions, thoughts and feelings
Each society has its own elements of culture. These elements of culture are manifested through:
Language Religion
Values and attitudes
Manners and customs
Material elements
Social Institutions
Education
Artefacts
Values
Underlying
assumptions
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The shared values,
traditions, customs,
philosophy, and
policies of a
corporation; also,the professional
atmosphere that
grows from this
and affects
behavior and
performance.
CORPORATE
CULTURE
Aim:
The aim of this study is to gain a better understanding of how
cultural differences affect business negotiations between
Swedish and American businessmen.
How can the influence of culture on business negotiations
between businessmen from Sweden and the US be
described?
How can the cultural problems facing Swedish
businessmen when negotiating with businessmen from the
US be described?
Twelve main variables that affect negotiations:
Basicconception of the negotiation processstrategic
versus synergistic
Negotiatorselection criteria
Significanceof types of issuessubstantive versus
relational
Concernwith protocolformal versus informal
Complexityof the languagehigh context versus low
context
Natureof persuasive argumentationemotional versus
logical
Roleof individuals aspirations
Basesof trustcognitive versus affective
Risk-taking propensityhigh versus low
Valueof timemonochromic versus polychromic
Decision-making systemauthoritative versus consensual
Formof satisfactory agreementwritten versus oral.
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How Can the Influence of Culture on Business Negotiations between
Businessmen from Sweden and the US be described?
Cross-cultural negotiations are influenced mainly by twelve different
variables
Basic conception of the negotiation processstrategic versus synergistic
If a person has strategic conception he/she sees the negotiation as a
Win-lose process, in other words, one side will end up awinner and the other a loser.It claimsthat if one has a synergistic conception one will strive to create a win-win outcome by working
together. The marketing and sales manager for exports says that Americans are seldom willing to
make compromises to the same extent as Swedes are. If one party is strategic and the other is
synergistic, the latter may get the bad end of a deal. If Swedes have a more synergistic
conception of the negotiation process than people from the US, as our data above indicates, then
Swedish negotiators. Theory get the bad end of a deal in negotiations with Americans.
Negotiator selection criteria:
It says that the negotiator selection criteria are about how a party selects its negotiator .A
persons position in the company can be a selection criterion that is used to select a negotiator. It
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extremely important to understand who is in charge of the negotiating team and who will make
the ultimate decision. The decision maker in a negotiation may sometimes be a single person and
sometimes an entire team. The experience of the marketing and sales manager for exports
Sweden is that in the US it is almost exclusively the person responsible for purchases possibly
with assistance from the person responsible for production, who are chosen to negotiate for US
companies. In Swedish companies, more specialists take part in negotiations compared to US
companies, according to the respondent. Position in a company is a criteria used for selecting
negotiators in both Sweden and the US, even though it is not necessarily people in the same
position that are selected to negotiate in the two countries. Also, in companies in the US it is in
general only those responsible for purchases, possibly with assistance from the person
responsible for production, who come into question as far as taking part in business negotiations
with Swedish is concerned.
Significance of types of issuessubstantive versus relational
A person that has a substantive view will focus on issues such as how resources will be if one
has a relational view, he/she will find issues such as how the relationship will develop and
continue, and what the parties can do for each other, important. The marketing and sales manager
for exports says that relationships with customers in the US rarely last for a longer period of time
because many people change positions and move in the US, which make longer relationships
almost impossible. It also says that in the US, suppliers are changed much more often and this is
done in order to achieve the purpose of lowering the prices, or making a point that the supplier
should not take anything for granted. This would suggest to us that businessmen from the US
lean more towards a substantive view than a relational view when they negotiate.
Concern with protocolformal versus informal
An informal approach as opposed to a formal approach to protocol means that for example first
names will be used when addressing the other party in a negotiation, and humor can also be used
at the negotiation. Americans lean more toward the informal than formal. They want to get on a
first-name basis quickly which is a positive sign of relationship building. As far as formal
differences in how negotiations are conducted in the US compared to in Sweden are concerned,
the marketing and sales manager for exports says that in the US, titles are not used, instead first
names are used and the atmosphere is open but frank. Thus, the data and literature above agree
on this issue and say that in general negotiators from the US are more informal than formal.
Complexity of the languagehigh context versus low context
If the language of a culture is high context it is indirect and uses a lot of non-verbal language.
People who use low context language are more comfortable with different modes such as
telephone than people who are used to a high context language. Comparing how Swedes and
Americans use non-verbal language/body language in a negotiation situation, the respondent says
that negotiators from the US evidently show when they are not content, and they are willing to
call off negotiations if no progress is made. After having compared the collected data about high
context and low context language, it seems as if businessmen from the US may use body
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language more than Swedish businessmen do and due to that, the US have a language that is
more high context than the language of the Swedes.
Nature of persuasive argumentationemotional versus logical
Persuasion through emotional argumentation means that one side in a negotiation tries to reach
the other side and get it to agree to things by playing on what they expect and on their emotions,and the parties relationship to one another. Logical persuasive argumentation is based on facts
and logical reasoning. Comparing how Swedes and Americans show and use emotions in a
negotiation, the marketing and sales manager for exports negotiators from the US can give of
themselves to a large extent, something that we as Swedes doubt the sincerity of. This doubt is
well-founded according to the respondent. We believe that one reason for why US businessmen
give of themselves in a negotiation, is because they try to use this behavior as a way to
persuade the other side in some way, it suggests that negotiators may do. The behavior of giving
of oneself may be seen as emotional argumentation describes it in the literature.
Role of individuals aspirationsThe individuals that an organization sends to take part in a negotiation may have personal
aspirations, such as doing whatever it takes to win a deal, further, it says that these aspirations
may be very different to the aspirations of the company, and may also be considered
unacceptable by the company. When it comes to the question of if there are any differences
between what negotiators from Sweden and the US respectively, usually do in order to succeed
with the negotiation, the marketing and sales manager for exports we have interviewed says that
in the US suppliers are changed much more often and this is done in order to achieve the purpose
of lowering the prices, or making a point that the supplier should not take anything for granted.
The respondent does not say whether this behavior is driven by personal aspirations or by the
companys aspirations. The discussion above shows that negotiators from the US may act
differently than their Swedish counterparts in order to succeed with the negotiation.
Bases of trustcognitive versus affective
Some cultures establish trust for one another according to what seems reasonable logically,
whereas others establish trust based on feelings for one another. A cultural difference that the
Sweden has experienced when negotiating with Swedes and Americans respectively, is that in
Sweden a hand shake is a guarantee, but in the US one should get everything documented on
paper. This data suggests that Swedish businessmen may have a more affective base of trust in
negotiations than businessmen from the US have.
Risk-taking propensityhigh versus low
People with a low risk-taking propensity are relatively conservative and think that they will reach
their goals eventually, whereas those with a high risk-taking propensity are more adventurous, no
opinion concerning the risk-taking propensity of Swedish and US business people in
negotiations.
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Value of timemonochromic versus polychromic
Time is valued differently in different parts of the world; some think of it as something that can
be divided into many parts and should be monitored closely, whereas others view it as something
that is more relative. After having compared how Swedes and Americans perceive the issue of
time in a negotiation, the result is that both Swedes and Americans put a high value on
punctuality. Based on the data and literature above, one can say that business people from both
Sweden and the US are concerned with being on time and thus view time as something that can
be divided into parts and should be monitored closely, and therefore they have a monochromic
value of time
Decision-making systemauthoritative versus consensual
In a negotiation, one party might expect the other to behave the same way as it does. In some
cultures decisions are made in consensus, which means that everyones opinion is taken into
consideration and the decision is one that everyone supports American negotiators make
decisions extremely fast - at times to their own disadvantage. Some U.S. executives live by the
axiom, "Right or wrong, he who hesitates is lost negotiators from the US have, compared to
Swedish negotiators, a deliberate tendency to not make decisions on a lower organizational level.
Instead the American negotiators forward decisions to a higher level in their organizations in
order to avoid having to make difficult/uncomfortable decisions. This often leads to that
negotiations with people from the US may be prolonged before they can be concluded. The data
shows a difference between the decision-making systems of Swedish and American negotiators.
Furthermore, the data and literature do not agree on how fast negotiators from the US make
decisions.
Form of satisfactory agreementwritten versus oral
In some cultures, written agreements are insisted on as they are thought of as superior to oral
ones, whereas in other cultures people feel offended if a written agreement is insisted on as they
feel it is a sign of a lack of trust between the parties. The experience of the marketing and sales
manager for exports is that a cultural difference between negotiators from the US and Sweden, is
that Swedish negotiators consider a hand shake to be a guarantee, but in the US one should get
everything documented on paper and attested when doing business. The data above indicates that
a cultural difference between negotiators from Sweden and the US, is that Swedish negotiators
use oral agreements to a much greater extent than their American counterparts. From the
respondents recommendation, that when doing business and negotiating in the US one should
get everything documented in written form, one can also gather that in general, oral agreementsdo not seem to be considered as a satisfactory form of agreement in the US.
The National Cultures of Sweden and the US
Swedes communicate with very small gestures and they also immediately apprehend differences
in minimal indications. Their well-developed consideration for each other and the fact that many
Swedes are not very talkative, make it difficult and time-consuming for foreigners to understand
the Swedish culture. The American culture, on the contrary, is much easier to understand and get
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in to for foreigners. However, the American culture is also easier to forget and to spare. Both the
American culture and the Swedish culture are characterized as low context cultures.
According to Hofstedes dimension of culture scales, there are differences between Sweden and
the USA, as one can see in the table below.
Hofstedes Dimension of Culture ScalesCountry Power Distance
Individualism
Uncertainty Avoidance Masculinity Long term
Orientation
Sweden 31 71 29 5 33
USA 40 91 46 62 29
Source:
http://spectrum.troyst.edu/~vorism/hofstede.html
Four categories of underlying cultural variables that may drive surface behavior, the
The four categories are
Relationships
Communication,
Time
Space.
0
20
40
60
80
100PDI
Uncertainty
AvoidanceMasculinity
Long term orienation
Chart Title
Sweden USA
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Relationships
Is the culture deal-focused or relationship-focused? In deal-focused cultures, relationships grow
out of deals; in relationship-focused cultures, deals arise from already developed relationships.
Americans tend to move on to the next potential customer rapidly after the check has been
signed. When the respondent is asked whether relationships with negotiators from the US
develop from prior agreements, or whether agreements develop from already existing
relationships, or if these things develop in some other way, he says that it depends on if it is an
old or a new customer. Americans tend to change jobs more often, so the personal business
relation has to be rebuilt more often with negotiators from the US. Minelcos Managing Director
of sales on the US market says that if he compares how much focus negotiators from the US and
Sweden respectively put on relationships and deals respectively, he thinks that negotiators from
the US are more people oriented than their Swedish counterparts. This data suggests that
negotiators from the US are more relationship- focused than negotiators from Sweden.
Communication
Are communications indirect and high context or direct and low context? Do contextual,
non-verbal cues play a significant role in negotiations, or is there little reliance on contextual
cues? Do communications require detailed or concise information? Many North Americans prize
concise, to-the-point communications. Americans are extremely straightforward in their verbal
communication and their message is both frank and clear. Sales on the US market, body
language is individual. Americans train more often in sales/negotiating skills, and that business is
more built on competition in the US. The respondent claims that in a negotiation, the
communication of Americans and Swedes differ in the sense that the Americans speak louder
and more than the Swedes, which can be perceived by the latter as being hostile. The data
shows that both Americans and Swedes use both verbal and non-verbal language, and that theverbal language is more distinct for the respective culture than the non-verbal language.
Furthermore, the data presented in this paragraph concerning how negotiators from the US
communicate, is in conformity with the literature.
Time
Is the culture generally considered to be monochromic or polychromic? In Anglo-Saxon
cultures, punctuality and schedules are often strictly considered. This monochromic orientation
contrasts with a polychromic attitude, in which time is more fluid, deadlines are more flexible,
interruptions are common, and interpersonal relationships take precedence over schedules.. says
that in general, Americans are time conscious than Swedes and also expect their counterparts tobe that. Comparing how Swedes and Americans perceive the issue of time in a negotiation, the
respondent says that his perception is that Americans are more easy going than Swedes. The data
suggests that Americans have a more polychromic attitude to time than Swedes or that Swedes
have a more monochromic attitude to time than Americans.
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Space
Do people prefer a lot of personal space or not much? In many formal cultures, moving too close
to a person can produce extreme discomfort. When it comes to issue of how much personal space
and physical contact/touching negotiators from the US and Sweden respectively prefer, the
respondent is of the opinion that Americans tend to be more open and easy going. This could
suggest that Americans belong to a culture that is less formal than the Swedish culture.
How Can the Cultural Problems Facing Swedish Businessmen when
Negotiating with Businessmen from the US be described?
Cultural differences between business partnersMajor consideration for international companies is the cultural differences that might cause
problems in the communication between business partners. The differences between Americans
themselves are often larger than between Swedes and the general perception of an American.
Finally, the respondent has not experienced any cultural problems in negotiations with people
from the US that he has not experienced in negotiations with people from Sweden and therefore,
the data and literature is not in conformity when it comes to cultural differences between
business partners.
Incompetence concerning the cultural elementsProblems in cross-cultural negotiations may occur if companies lack understanding of the
cultural variables. If any of the cultural elements: language, religion, attitudes and values,
traditions andcustoms, education, laws and regulations, political factors, and technologicalfactors, have caused any problems in negotiations. Americans are non-discriminatory most ofthe time and that Americans are politically more conservative andSwedes should therefore avoidtalks about Iraq war for example when negotiating withpeople from the US. The data shows thatthe respondent has not experienced any culturalproblems due to incompetence concerning thecultural elements when he has negotiatedin the US.Problems in cross-cultural negotiationsderived from the professionalism of thenegotiating team
Cultural clashes are often underlying motivations for failure in many international activities
Problems in cross-cultural negotiations derive from two sources: the professionalism of the
negotiating team, and cross-cultural bias. Usually, negotiating teams of companies do not consistof professional or trained negotiators. How negotiators in companies in the US and Sweden
respectively are selected depends on the size of the company and the importance/amount of
money involved. The experience of the respondent is that a negotiator from Sweden is generally
better prepared than a negotiator from the US. The respondent has not experienced any cultural
problems derived from the professionalism of the negotiating team during his negotiations in the
US.
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Problems in cross-cultural negotiations derived from cross-cultural bias
If the negotiators completely lack foreign experience, they may have large difficulties
understanding the logic, intent and ethical standpoints of the other side. The Managing Director
of sales on the US market. It gives an advice in order to avoid problems when negotiating with
people from the US, explicitly to be open and relaxed. Following the advice from the data fromthe respondent may be one way to avoid problems derived from cross-cultural bias.
How Can the Influence of Culture on Business Negotiations between
Businessmen from Sweden and the US be described?
As far as formal differences in how negotiations are conducted in the US compared to in
Sweden are concerned, both respondents say that names are used instead of titles. In the US, first
names are used. US negotiators quickly learn the other persons names and uses them often. Both
the Swedish and the US cultures have a relaxed atmosphere and use humor during the
negotiations. The atmosphere during negotiations in the US is open but frank. An informalapproach as opposed to a formal approach, to protocol means that for example first names will
be used when addressing the other party, and humor can also be used at the negotiation. When
comparing the data with the literature, one can see that the data and literature above agree on this
issue and say that in general negotiators from the US are more informal than formal in
negotiations. Relationships with customers in the US rarely last for a longer period of time
because many people change positions and move in the US, which make longer relationships
almost impossible. Americans tend to change jobs more often than Swedes, so the personal
business relations in the US has to be rebuilt more often than in Sweden. Americans are more
people orientedthan Swedes. In deal-focused cultures, relationships grow out of deals and in
relationship-focused cultures, deals arise from already developed relationships. The data from
both respondents is in conformity with each other when it comes to relationships. However,
when comparing the data with the literature, it is not possible to say if the American and the
Swedish business cultures are more deal-focused or if they are more relationship-focused.
When the respondents is asked if there are any differences in what agreements generally made
with negotiators from the US look like compared to agreements generally made with negotiators
from Sweden, both respondents have the same opinion and say that they use written agreements
when negotiating in the US. One should make sure that everything is stated in written documents
some cultures written agreements are insisted on as they are thought of as superior to oral ones,
whereas in other cultures people feel offended if a written agreement is insisted on as they feel it
is a sign of a lack of trust between the parties. Here, the data from the respondents is in
conformity with each other and when comparing the data with the literature one can see that
when Swedes negotiate with Americans, written agreements are thought of as superior to oral
ones.
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The individual(s) that an organization sends to take part in a negotiation may have personal
aspirations, such as doing whatever it takes to win a deal, the data does not say something
concerning personal aspirations of the negotiators. However, when it comes to the question of if
there are any differences between what negotiators from Sweden and the US respectively,
usually do in order to succeed with the negotiation, the two respondents have different opinions.
Experience is that a negotiator from Sweden is generally better prepared than a negotiator from
the US. But some says that suppliers are changed much more often in the US and this is done in
order to achieve the purpose of lowering the prices, or making a point that the supplier should
not take anything for granted. Comparing how Swedes and Americans communicate in a
negotiation, the respondents have somewhat different opinions further, he says that Americans
are seldom willing to make compromises to the same extent as Swedes are. The Managing
Director of sales on the US market at Minelco says that Americans speak louder and more than
Swedes. He also says that this can be perceived asbeing hostile by people from Sweden.
According to Vora (2001), a culture that uses a lot of non-verbal language has a language that is
high context. Comparing the data in this paragraph with the literature, one may say that the USlanguage is higher context than the language of the Swedes. Comparing how Swedes and
Americans use non-verbal language/body language in a negotiation situation, the respondent at
SSAB Tunnplt says that negotiators from the US evidently show when they are not
content/pleased, and they are willing to call off negotiations if no progress is made. The
respondent at Minelco has somewhat different opinions. He says that body language is
individual. He also says that compared to Swedes, Americans train more often in sales or in
negotiating skills. Vora (2001) writes about the complexity of a language and if a language is
high or low context. She says that if the language of a culture is high context it is indirect and
uses a lot of non-verbal language. Due to the discussion above, it is not possible to decide how
complex the American and the Swedish languages are. When it comes to the matter concerningpersonal space, the data from the respondents is in conformity with each other. The opinion of
how much personal space and physical contact/touching negotiators from the US and Sweden
respectively prefer. Americans tend to be more open and easy going than Swedes and that
individuality is encouraged in the American culture. According to the literature moving too close
to a person can in many formal cultures produce extreme discomfort. Time are valued differently
in different parts of the world. Some think of time as something that can be divided into many
parts and should be monitored closely, whereas others view it something that is more relative.
Comparing how Swedes and Americans perceive the issue of time in a negotiation, the two
respondents have different perceptions. His perception is that both Swedes and Americans put a
high value on punctuality. The perception is that Americans are more easy going than Swedes.
However, this analysis may indicate that both American and Swedish negotiators have a
monochromic value of time, It says that in some cultures, written agreements are insisted on as
they are thought of as superior to oral ones, whereas in other cultures people feel offended if a
written agreement is insisted on as they feel it is a sign of a lack of trust between the parties. The
respondents we have interviewed have experienced diverse cultural differences between
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negotiators from Sweden and from the US. One cultural when negotiating with Swedes and
Americans respectively is that in Sweden, a hand shake is a guarantee, but in the US one should
get everything documented on paper. This shows that Americans tend to use written agreements
more than Swedes do. The negotiators from Sweden and the US that he has experienced when
negotiating with Swedes and Americans respectively is that Swedes are looking for consensus
while an American is looking for a good deal, which means that everyones opinion is taken into
consideration and the decision is one that everyone supports. When it comes to the matter
concerning personal space, the data from the respondents is in conformity with each on the US
market at having opinion of how much personal space and physical contact/touching negotiators
from the US and Sweden respectively prefer. Americans tend to be more open and easy going
than Swedes and that individuality is encouraged in the American culture. According to the
literature by Sebenius (2002), moving too close to a person can in many formal cultures produce
extreme discomfort. The analysis in this paragraph shows that negotiators from Sweden may be
more interested in making decisions in consensus compared to American negotiators. When the
respondents are asked if there is anything that characterizes negotiators from the US, negotiatorsare very price conscious and that price is very important in the US compared to Europe where
quality and certainty of delivery are considered more important. The businessmen are in opinion
that Americans generally have a stronger attitude but that they not necessarily are better
prepared. He also thinks that US negotiators are more willing to negotiate and quick to come to a
deal. If the negotiators completely lack foreign experience, they may have large difficulties
understanding the logic, intent and ethical standpoints of the other side. The respondents gave a
couple of advises for negotiators from Sweden in order to avoid problems when negotiating with
people from the US. Their advises are; be open and relaxed, read about the other company before
the visit in order to try to have something positive to convey, be well prepared, know what you
want, avoid the subjects of politics and religion, and listen and ask many questions.
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Case Study:
You have probably heard the phrase, "it loses something in the translation". Sometimes the
translation carries an entirely different meaning. Before a company goes global, they need to
make sure they have a great translator that understands word and how they are interpreted
cognitively in the other country. Delivering the right message to the right audience is paramountin todaysfragmented marketing world, where brands compete for consumersshare of wallet
against both global and local competitors. One critical element of this is to ensure that all
elements of the marketing mixproduct features, brand name, communications message,
packaging, etc. are sensitive to the cultural environment in which they are competing for
business. Cultural blunders can damage not only a companyssales, but also its broader image
and reputation among consumers, so brand owners have to be very careful when they expand
beyond the comfort zone of their own country, language or culture.
Serious mistakes do occur and have significant negative impacts of their companysbusiness,
sometimes leading not just too lost sales and wasted costs, but to the need to completely
withdraw the affected product, brand or communications, and in one reported case even tocompany bankruptcy!
However, one positive side effect of such blunders is that they do make amusing reading for the
rest of us, so here a few examples, starting with linguistic blunders, which have been reported
over the years. Many of these examples relate to brand names, which have proved to be
disastrously inappropriate (often straying into obscenities) in some of the languages of the
countries where the products were launched.
The cereal "Bran Buds", made by Kellogg's, was introduced to Sweden and soon
underwent a name change. "Bran Buds" in translation is about the same as "burned
farmer".
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ConclusionsThe aim of this study was to gain a better understanding of how cultural differences affect
business negotiations between Swedish and American businessmen. In this I have found relevant
details that have improved our understanding of this topic. Below, I also present the conclusions
connected to the two research questions. The conclusions are based on the analysis I have made
on the literature and the empirical data. Some of the findings presented may be applicable on
more than only one of the research questions.
How can the influence of culture on business negotiations between
businessmen from Sweden and the US be described?
Below, are the conclusions and findings connected to research question one are presented:
The findings show that Americans may have a more strategic conception of the negotiation
process while Swedes may have a more synergistic conception of this process.
Negotiators from the US tend to forward decisions to a higher organisational level compared to
negotiators from Sweden.
Businessmen from the US lean more towards a substantive view than a relational view when
they negotiate, since suppliers are changed much more often in the US compared to Sweden.
The difference in behavior between negotiators from Sweden and the US is mainly not
depending on the personal aspirations of the negotiators, but rather on the respective companys
aspirations which in turn may be attributed to the culture in the country.
US negotiators are seldom willing to make compromises to the same extent as
Swedish negotiators are.
With reference to this investigation, businessmen from the US have a more informal than
formal approach to protocol when they negotiate with Swedish businessmen.
In negotiations between businessmen from the US and Sweden respectively, it seems as if
emotional argumentation is used more by businessmen from the US than by their Swedish
counterparts.
Businessmen from the US may use body language more than Swedish businessmen do, and this
could be an indication of that people from the US have a language that is higher context than the
language of the Swedes.
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Negotiators from the US are more straightforward than negotiators from Sweden in their verbal
communication, and the communication of US and Swedish businessmen differs in the sense that
businessmen from the US speak louder and more than the Swedes.
The findings suggest that Swedish businessmen may have a more affective base of trust in
negotiations than businessmen from the US have.
Written agreements are thought of as superior to oral ones in the US. In Sweden, on the other
hand, oral agreements seem to be widely accepted and deals are often sealed with a hand shake.
The findings indicate that a cultural difference between negotiators from Sweden and the US is
that Swedish negotiators use oral agreements to a much greater extent than their American
counterparts.
Our findings show that negotiators from Sweden and the US have similarities in their ways to
reach agreements and communicate in negotiations, and that both the Swedish and the US
culture have a monochromic orientation to time.
The fact that negotiators from the US tend to forward the decisions to a higher organizational
level is an indication of that the decision-making systems are more authoritative in the US
compared to what they are in Sweden.
Finally, to conclude the discussion regarding the influence of culture on business negotiations
between businessmen from Sweden and the US, our findings show that culture has a low impact
on negotiations between businessmen from Sweden and from US, and that the cultural
differences between Americans themselves are often larger than the cultural differences between
Swedes and the general perception of an American are.
Actually, some of the differences between negotiators from Sweden and the US might have moreto do with the individuals personal characteristics than with the culture they come from.
How can the cultural problems facing Swedish businessmen when negotiating with
businessmen from the US be described?
The conclusions and findings connected to research question two are presented:
Culture is one of the most challenging elements of the international marketplace and problems in
cross-cultural negotiations can derive from two sources:
The professionalism of the negotiating team, and cross-cultural bias.
The cultural problems in negotiations between businessmen from different countries,
described in the literature, are not thoroughly in conformity with our own findings.
problems connected to cross-cultural business
The findings show that negotiators from the US do not learn foreign languages well
enough to be able to handle negotiations in these languages and therefore conduct all
negotiations with business people from Sweden in English. This means that Swedish
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negotiators always have to be well prepared to negotiate in the English language when
doing business with people from the US.
Finally, to avoid possible problems when negotiating with people from the US, Swedes
should not discuss politics or other certain subjects. Swedes should neither express their
opinions of how the US carries out its foreign policy. The findings also show that to avoidproblems in negotiations, Swedish businessmen should be well prepared, know what they
want, and listen and ask many questions when they negotiate in the US.
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