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MGB225

Intercultural Communication and Negotiation Skills Semester 1, 2020 Task: Case Study Due: 27th of March 2020 Time: 11:59pm Tutor: Word Count: 1578 words

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1.0 Introduction: The purpose of this report is to identify and develop in-depth understanding of cross-cultural and communication issues and differences between Australia and Japan. These issues will be further explored and analysed through a cultural model, supported by academic resources, to ensure quality recommendations are made on how to overcome these differences. 2.0 Identification of Issues: 2.1 Intercultural Issues: Firstly, Jason not attending the meeting as he is CEO but sending Michael, alone, can be seen as immature and disrespectful. (GlobeSmart, 2019) Secondly, Michael did not have a business card, in English or Japanese, nor did he acknowledge the gesture in an appropriate manor. (Austrade, 2019) In addition, Michael and his partner’s orange polos did not match the formal conservative business attire in Japan. (Asialink, 2019) It was also inappropriate of Michael to bring his wife to the meeting as she is not involved in JM Beans. (Austrade, 2019)

2.2 Intercultural verbal communication Issues: Firstly, Michael spoke for several hours with no interpreter and failed to provide information about the product or company in Japanese to ensure that the CEO and managing team had maximum context. (Austrade, 2020) Secondly, the lack of business history and an offer of instant trading can be considered as too direct. (Warburton, 2017) Thirdly, Michael was unable to address Dr Kato Yuto in the more formal Japanese style of meeting, by acknowledging his status (last name-san). (Asialink, 2019) Lastly, Michael’s comments about the company’s success and remarkable acclaim at dinner, may have been perceived as arrogant and boastful. (GlobeSmart, 2019)

2.3 Intercultural nonverbal communication Issues: Firstly, Michael did not greet all of the managing team, this can show lack of respect towards the company. (GlobeSmart, 2019) Secondly, Michael and his wife did not consider the importance of seating arrangements in the conference rooms. (Austrade, 2020) Thirdly, during the meeting Michael’s body language, gestures and constant eye contact can be received as aggressive. In addition, holding eye contact during the greeting. (Asialink, 2019) Lastly, quickly exiting the restaurant and not participating in the activities at dinner. (Warburton, 2017)

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3.0 Literature Review: 3.1 Description of the model: In 1980, Dutch social psychologist, Mr Geert Hofstede published his well-known cultural model. This consisted of six cultural dimensions, with each dimension assisting in understanding cultural differences. Power distance indicates how “society accepts the fact that power in institutions and organisations is distributed unequally”. (Hofstede, 1980) Individualism-Collectivism focuses on the degree of a state that supports individual or collective accomplishment. Masculinity-Femininity expresses the extent to which the dominant values in society are. Uncertainty avoidance is related to the level of stress in a society in the face of an unknown future. Long/short-term orientation focuses on the choice of people’s efforts; the future or the present and past. (Hofstede, 1980; Hofstede, 2011) Lastly, Indulgence is referring to the degree that people attempt to control their desires. (Hofstede, 1980; Hofstede, 2011)

Figure 1: Geert Hofstede Model 1980 (Lewicki, Barry, Saunders, 2015) 3.2 Weaknesses: It has been critiqued that the original research and data utilised in Hofstede’s study was based on limited results, as the sample size was limited to one corporation (IBM). (McSweeny, 2002) Leading to a limitation of the model, as it is argued that the primary data of Hofstede’s model is skewed towards more general results. (Pop-Flanja, 2015) As critics argue that it heavily focuses on comparing central tendencies rather than on differences within each culture, which is limited as individuals are not compared because not one individual is the exact same. (Steers et al, 2010; Hofstede, 1991) Thirdly, the model’s simplicity causes limitation as critics believe that six dimensions are not sufficient in understanding cultural differences. (Jones, 2007) Lastly, the validity of the model is questioned as society and cultures have developed and changed significantly since the initial study was done. (Alfred, 2018)

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3.3 Strengths: Despite these weaknesses, Hofstede’s model has been widely embraced and cited as a way to understand cultural differences between countries and within business applications. (Lillevik, 2006) Several studies have also tested the model’s relevancy and accuracy, with the results concluding that the model holds accurate and relevant through time. (Jones, 2007) The strength of this model is that it provides clarity and consistency as it assesses various dimensions of each culture and provides numerical scores, thus allowing cultures to be evaluated and compared simply. (Harding, 2016)

3.4 Conclusion: Although the model may have limitations, it has produced accurate results to several cross-cultural situations, allowing management and corporations to gain in-depth understanding of cultural differences. Moreover, this model will be utilised to analyse and gain insight between Japanese and Australian cultures.

4.0 Case Analysis:

Figure 2: Country Comparison of Australia and Japan (Hofstede Insights, 2019)

4.1 Issue 1: In Japanese culture, hierarchy and relative status are paid close attention to and is reflected in greetings, language & seating arrangements. (GlobeSmart, 2019) Compared to Australia’s more laidback approach. This is reflected in their power distance scores, as Japan has a score of 54, while Australia’s is 38. (Hofstede Insights, 2019) This is apparent during the greeting as Dr Kato Yuto hands over his bilingual business card to Michael. In Japan, business cards represent the “face” of the organisation and establishes the status/rank of the person, influencing how you should address them.

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(GlobeSmart, 2019) Thus, explaining why Michael’s casual approach may have been interpreted as disrespect as he did not have a business card, nor did he know how to appropriately acknowledge receiving one. (Austrade, 2020)

4.2 Issue 2: The second issue was the attire that was worn by Michael and his wife to the meeting. As recorded by Hofstede Insights (2019), Japan’s uncertainty avoidance score was 92, compared to Australia’s 51. Japan culture is highly ritualised and structured, for instance; at important events; what people wear and are to behave are prescribed in great detail in etiquette books. (Hofstede insights, 2019) This could explain why JM Beans was not taken seriously, as Japanese business attire is very conservative and formal – and Michael and his wife came in bright orange polos. (Asialink, 2019)

4.3 Issue 3: The third issue surfaced as Jason sent Michael to the meeting alone. When Michael arrived, he met Dr Kato Yuto and his managing team (of six.) The cultural difference is represented by their individualism/collectivism scores as Australia scores 90 indicating a more individualistic culture while Japan scores 46 reflecting a collectivistic inclined society. (Hofstede Insights, 2019) Moreover, Japan considers the good of the group more important than the individual. Which is evident in the case, as Michael only focused on impressing Dr Kato Yuto and failed to build relationships with the whole management team. (Drucker, 1971)

4.4 Issue 4: The fourth issue occurred when Michael presented the business and offers of trade. This issue is related to long-term vs short-term orientation. In Japan, long-term relationships are a serious commitment and considered the key to success. (GlobalSmart, 2019) This is reflected in their score of 42 for long-term orientation. Compared to Australia’s score of 21, reflecting a more normative culture. (Hofstede Insights, 2019) This is evident when Michael discussed offers of trade, which can be seen as being very direct as it is the first meeting. Michael’s focus was to achieve quick results. Whereas, Dr Kato Yuto’s focus was on building a relationship, hence why he invited them for dinner and drinks. JM beans needed to focus more on building a relationship for a long-term partnership rather than aiming to quickly close a deal.

4.5 Issue 5: According to Hofstede insights, Australia’s score for indulgence was 71 as they pertain a more indulgent culture, that highly emphasises leisure time. While, Japan possess a more restraint culture with a score of 42. This was apparent when Michael and his wife made a quick exit at dinner to rest as they had sightseeing the next day. Instead of staying and maximising on the opportunity of getting to

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know Dr Kato Yuto and his management. Furthermore, Michael should have not taken his wife to the meeting with him as she was in no way involved in the coffee business. Thus, Michael needed to focus on promoting JM Beans as effectively as he could have, instead of being concerned about leisure time (sightseeing.) 5.0 Recommendations:

5.1 Cross-Cultural Training: It is strongly recommended that JM Beans produce cross-cultural sessions for its employees and management. The aim of these sessions is to educate employees of how to greet, communicate and negotiate effectively across cultures. Teaching them the non-verbal and verbal ways of how to communicate to ensure that misunderstandings are prevented. As well as, increase awareness of what is required of them, so that future situations such as Michael’s Japan meeting is avoided. The more knowledge that the employee has about said culture, will allow the business to penetrate international markets successfully as the company continues to grow.

5.2 Partnership: It is recommended that JM Beans build a partnership with Dr Kato Yuto’s franchise, this can be done by re-scheduling another face-to-face meeting with the members. This meeting will focus on getting to know each-other and clear up any previous misunderstandings. JM Beans will then be able to assess what is required of them to ensure that their company and brand is communicated successfully. By making frequent contact such as; courtesy calls, send emails and sharing information this will gradually re-establish credibility with Dr Kato Yuto and demonstrate that JM Beans is ready to commit for the long-run and are willing to build a relationship.

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References:

1. Aldred, A. (2018) May 2018: Hofstede’s Cultural Dimensions Model-Uses and Limitations in Fundraising. Retrieved on the 18th of March from

http://www.thephilanthropologist.com/2018/05/10/may-2018-hofstedes-culturaldimensions-model-uses-and-limitations-in-fundraising/ 2. Asialink Business. (2019) Japanese business culture and etiquette. Retrieved on the 16 th of March from https://asialinkbusiness.com.au/japan/conducting-business-in-

japan/japanese-business-culture-and-etiquette 3. Austrade: Australian Trade and Investment Commission. Australian Government. (2019) Retrieved on the 16th of March https://www.austrade.gov.au/Australian/Export/Export-

markets/Countries/Japan/Doing-business 4. Drucker, P. (1971) Harvard Business Review: What can we learn from Japanese Management. Retrieved on the 19th of March from https://hbr.org/1971/03/what-we-can-learn-from-

japanese-management 5. Gao, X. (2017) Strategies of Training Intercultural Communication Competence in Basic Teaching of Business Japanese. Retrieved on the 17th of March from https://www.atlantispress.com/proceedings/icadce-17/25881438 file:///Users/bejounceemalifa/Downloads/25881438.pdf 6. Globe Smart. (2019) Japan: GlobeSmart Culture Guide. Retrieved on the 16 th of March from https://globesmart.aperianglobal.com/culture-guides/jp 7. Harding, C. (2016) Exploring United States and South Korean National Cultures: Improving Alliance Partnerships. Retrieved on the 17th of March from https://scholarworks.waldenu.edu/cgi/viewcontent.cgi?article=3646&context=dissertations 8. Hofstede Insights. (2019) Country Comparison: Japan and Australia. Retrieved on the 16 th of March from https://www.hofstede-insights.com/country-comparison/australia,japan/ 9. Hofstede, G. (1980) Motivation, Leadership and Organization: Do American Theories Apply Aboard?

https://s3.amazonaws.com/academia.edu.documents/42883032/Hofstedearticle.pdf ?response-content-disposition=inline%3B%20filename %3DMotivation_Leadership_and_Organization_D.pdf&X-Amz-Algorithm=AWS4HMAC-SHA256&X-Amz-Credential=ASIATUSBJ6BAJLUPIWWJ%2F20200325%2Fuseast-1%2Fs3%2Faws4_request&X-Amz-Date=20200325T045423Z&X-AmzExpires=3600&X-Amz-SecurityToken=IQoJb3JpZ2luX2VjEHQaCXVzLWVhc3QtMSJHMEUCIHm %2BShgTuw6dxV7CssVLtbzYqruQaC3md68IH %2FsnvaU1AiEA8tYhMocXrAUbMLonHSIaRN9LiGw4etodj4flo99zaBkqtAMIbBAAGgw yNTAzMTg4MTEyMDAiDK28XN6AdLDibA %2Fi6iqRAxuvpqEjJdOs34J6%2BhRwzxJez2ulwao0lVrBTOoxitGfjzcGvXKhKJjqDmpGnA MDqTcR5sM8ugE4jUxJmei3ReCFCLPoaLnSdzw 7

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%2F52T1dUD5%2BL6xykCWsn54yXsnX0qIeoDgfix1KQmJwfRE0ZdpNDR1t9AUEsKclh6 PwWZGPjI9%2F5k3HfMbTlFjlcpQiPVbrrZJ7jwlVdEevtZCzvCZYHyw0C6WRBx6bYkPOm bCAcYi9h05xZiiv9Gto3X4f1rkr9Ab %2FO1zzkjgXoxVMrSjzqUB4CTmPRY3opQMsXTqWuOXSrwDMLnOrhyw2ZvbgY31kXn NfYvMGZ8CYFBQ10WqUUvrqcN3njJXxv7YuGtkAHmnqKbVe39CqIsihQQ3V%2BdV %2BYF2AHk33d5D9SeqNXEORgTAy6lL5P6mm %2FFuskMZJEaeVQNAXtivIKXY5oM7VWIEjt4FsI8n9rYPdaGKPf %2F7qNb2pobvk05Jogq2XwmJBlH5aKqRGAEdCjJ8%2F0vRUSe7IN5rCLR6XG7Vgc1E %2F4thXHByMOqe6%2FMFOusBBGbiLHbSR49alNs8lz %2BpHM0ead5xa7OUkcEDRyHu %2FTs7p1K5f4CTSMRapa5gAOLjUMLPSIGe36WuL10rylKQvE0BVGtUpkFbuL7uJNQY %2BPpow8%2F%2BlA3Wp3qI3Vm%2FYIWsfZi%2BHlzTxBLMhJozc3YyXxP9P %2BQVehoaN9Yorc1uqat27aw3lDvFDbHvckV1I6BnsUKpv5XTSnHrFPdMGjUZMshSnj3 4h%2BPXnTOR7%2FVx9cb2KoHDd6bgmlDpKAj8sXw%2ByE5WITz1bKORFaAL2iLPcF %2FRl%2FMkJZcPDA9M%2BIjbsc7mNYhvrhG0pS1bUQ%3D%3D&X-AmzSignedHeaders=host&X-AmzSignature=263b27f6633b6b742b09a878aecf33774dacc3f0df4b83d5803b763063870 338 10. Hofstede, G. (2011). Dimensionalizing Cultures: The Hofstede Model in Context. Online Readings in Psychology and Culture, 2(1) https://scholarworks.gvsu.edu/cgi/viewcontent.cgi? article=1014&context=orpc 11. Jones, M. (2007) Hofstede – culturally questionable? Retrieved on the 17 th of March from

https://ro.uow.edu.au/cgi/viewcontent.cgi?article=1389&context=commpapers 12. Lewicki, R. Barry, B. & Saunders, D. (2015) Essentials of Negotiation (6th Edition). New York McGraw Hill. 13. Lillevik, W. (2006) Individual differences in group interaction behaviour: Cultural differences in exhibition of organisational citizenships behaviours. Retrieved on the 17th of March from

https://search.proquest.com/docview/305280969/AF3CC1EDCBBD4A28PQ/3? accountid=13380

Due to cultural differences, many theorists have begun to use frameworks to analyse and 8

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understand cultural differences. This research report prefers the Hofstede model. The Hofstede model is one of the most comprehensive studies conducted by Professor Geert Hofstede to study how values in the workplace are influenced by culture (Hofstede Insights, 2019). He analysed a large database of 9

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10,000 employee value scores collected inside IBM from 1967 to 1973, while surveying and extracting cultural attribute data from more than 66 countries (McSweeney, 2002). Professor Geert Hofstede published the most famous model in 1980, which includes 6 different cultural dimensions 10

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(Hofstede Insights, 2019), Power distance, and how society deals with inequality between people; UncertaintyAvoidance, how society deals with facts that can never be known; IndividualismCollectivism, the social connection of individuals and collectives; Masculinity-Femininity, 11

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the degree to which society attaches importance to the cultivation of sense of achievement; Shortterm vs Long-term, current and future choices and positioning; Indulgence, society’s impetus for people’s freedom (Hofstede Insights, 2019 Due to cultural differences, many theorists have begun 12

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to use frameworks to analyse and understand cultural differences. This research report prefers the Hofstede model. The Hofstede model is one of the most comprehensive studies conducted by Professor Geert Hofstede to study how values in the workplace are influenced by culture (Hofstede Insights, 13

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2019). He analysed a large database of 10,000 employee value scores collected inside IBM from 1967 to 1973, while surveying and extracting cultural attribute data from more than 66 countries (McSweeney, 2002). Professor Geert Hofstede published the most famous model in 1980, which includes 6 different 14

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cultural dimensions (Hofstede Insights, 2019), Power distance, and how society deals with inequality between people; UncertaintyAvoidance, how society deals with facts that can never be known; IndividualismCollectivism, the social connection of individuals and collectives; Masculinity-Femininity, 15

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the degree to which society attaches importance to the cultivation of sense of achievement; Shortterm vs Long-term, current and future choices and positioning; Indulgence, society’s impetus for people’s freedom (Hofstede Insights, 2019 14. McSweeny, B. (2002) Hofstede’s Model of National Cultural Differences and their

Consequences: A Triumph of Faith – a Failure of Analysis. Retrieved on the 18th of March from https://search.proquest.com/docview/231516132/fulltext/1ECDEAB48E8542F7PQ/1 ?accountid=13380 3.0 Literature Review 3.1 Description of the Model/Framework Figure 1 (Hofstede, 1980)

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Due to cultural differences, many theorists have begun to use frameworks to analyse and understand cultural differences. This research report prefers the Hofstede model. The Hofstede model is one of the most comprehensive studies conducted by Professor Geert Hofstede to study how values in the workplace are influenced by culture (Hofstede Insights, 2019). He analysed a large database of 10,000 employee value scores collected inside IBM from 1967 to 1973, while surveying and extracting cultural attribute data from more than 66 countries (McSweeney, 2002). Professor Geert Hofstede published the most famous model in 1980, which includes 6 different cultural dimensions (Hofstede Insights, 2019), Power distance, and how society deals with inequality between people; Uncertainty-Avoidance, how society deals with facts that can never be known; Individualism-Collectivism, the social connection of individuals and collectives; Masculinity-Femininity, the degree to which society attaches importance to the cultivation of sense of achievement; Short-term vs Long-term, current and future choices and positioning; Indulgence, society’s impetus for people’s freedom (Hofstede Insights, 2019). 15. Pop-Flanja, D. (2015). CHALLENGES IN INTERNATIONAL NEGOTIATIONS: CULTURAL BACKGROUND AND CONTEXT. Review of the Air Force Academy, (3), 173-178. doi:http://dx.doi.org/10.19062/1842-9238.2015.13.3.30 16. Steers, R. Sanchez-Runde, L. Nardon, L. (2010) Management across Cultures: Challenges and strategies. Retrieved on the 18th of March from https://books.google.com.au/books?

id=Qr12zT0syf4C&pg=PA57&lpg=PA57&dq=As+critics+argue+that+it+heavily+focuses +on+comparing+central+tendencies+rather+than+on+difference...