Tag: Cross Cultural Negotiations

It’s Never Too Late to Apologize: How Apologies are Viewed in Cross-Cultural Business

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Is it best to apologize?

Or is it better to not accept blame?

When Apple CEO Tim Cook issued an apology to Chinese customers over warranty policy issues, he committed to addressing and rectifying the problem.

He wrote:

“Dear Chinese consumers:

Over the past two weeks, we have received a lot of feedback about Apple’s repair and warranty policy in China. We have made a profound reflection on these opinions…We are aware that insufficient communication during this process has led to the perception that Apple is arrogant and disregards, or pays little attention to, consumer feedback. We express our sincere apologies for any concern or misunderstanding arising therefrom.”

This gesture underscores the importance of understanding cultural nuances in international business.

Research by Professor William W. Maddux of INSEAD and colleagues highlights how apologies play a crucial role in different cultural contexts. 

In “collectivist cultures” such as China and Japan, apologies are particularly effective in restoring trust, even if the individual apologizing isn’t directly responsible. 

Here’s why.

How Apologies are Viewed

Recent studies have shed light on how apologies function in individual-agency cultures, like the United States, versus collective-agency cultures, such as Japan.

In the United States, apologies are often seen as mechanisms for assigning blame and re-establishing personal credibility. 

This perspective aligns with the American tendency to attribute events to individual actions. 

Conversely, in Japan, apologies are viewed more as general expressions of remorse and are not necessarily linked to assigning blame. 

This reflects the collective nature of Japanese culture, where people tend to attribute events to contextual and group-level factors rather than individual actions.

Consider the case of Akio Toyoda, the Japanese manager who apologized for Toyota’s quality control problems in 2010. 

While Americans might interpret such an apology as an acknowledgment of either competency or integrity issues, Japanese audiences may see it as a normative social gesture, less diagnostic of blame-taking. 

This cultural nuance highlights the importance of understanding the different meanings and implications of apologies in various cultural contexts to navigate negotiations and disputes effectively.

How Often Do We Apologize

Considering how apologies are viewed by each culture, it comes as no surprise that Japanese individuals tend to apologize more.

A study comparing American and Japanese participants revealed that not only do Japanese individuals apologize more frequently, but they were also more likely to apologize for actions they were not directly involved in. 

On the other hand, Americans were more likely to equate apologizing with accepting personal blame. 

This cultural difference has significant implications for trust repair in disputes.

For instance, apologies for integrity violations (such as dishonesty) were more effective in restoring trust among Japanese participants than American ones. 

This is because Japanese individuals are less likely to associate an apology with an acceptance of blame, thus allowing apologies to carry less negative connotations. 

In contrast, apologies for competence violations (such as mistakes in performance) were somewhat more effective for Americans than for the Japanese.

Diffusing Conflicts

As with Tim Cook and his apology to Chinese consumers, these findings highlight the complexity of using apologies as a strategy for trust repair in cross-cultural negotiations. 

In cultures like Japan, where apologies do not necessarily convey blame, individuals can effectively apologize to diffuse conflicts, even if the transgression involves personal integrity and the apologizer is not explicitly at fault. 

However, this approach may not work as well in cultures like the United States, where apologies are closely tied to blame and acknowledgment of low integrity.

By recognizing these cultural differences, negotiators can tailor their apology strategies to fit the cultural expectations of their counterparts, thereby enhancing the effectiveness of trust repair and conflict resolution.

East Meets West: Lessons from Geely’s Acquisition of Volvo

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With so many cross-cultural minefields, international business negotiations often flounder.

But that wasn’t the case with the 2010 acquisition of Volvo by China’s Zhejiang Geely Holding Group Co.

This case study stands out as a masterclass in cross-cultural negotiation. 

The landmark deal not only marked a significant milestone in the automotive industry but also showcased the cultural intelligence (CQ) necessary for successful global business transactions.

Here’s where it all began…

Geely Meet Volvo

In 2010, Geely, a relatively unknown Chinese automaker, acquired Volvo Cars from Ford Motor Company for $1.8 billion. 

This acquisition was a bold move by Geely, aiming to elevate its status on the global stage. 

For Volvo, a prestigious Swedish brand known for safety, quality, and environmental sustainability, the acquisition posed both opportunities and challenges.

Cultural Dynamics

Chinese business culture often emphasizes hierarchical relationships, indirect communication, and long-term relationships. 

Geely, a young and ambitious company, sought to expand its global footprint and saw Volvo as a perfect partner.

Swedish business culture values flat organizational structures, direct communication, and consensus-driven decision-making. 

Volvo, with its strong heritage, was concerned about preserving its core values and operational independence.

Negotiation Approach

Geely’s Strategy 

Geely approached the negotiation with a deep understanding of cultural differences. 

They respected Volvo’s heritage, assuring that Volvo would retain its brand identity, operational independence, and continue production in Sweden. 

This strategy was crucial in gaining trust and reducing resistance from Volvo’s management and employees.

Volvo’s Concerns

Volvo’s team was apprehensive about potential changes in corporate culture, job security, and maintaining high-quality standards. 

Geely addressed these concerns by committing to uphold Volvo’s core values and investing in innovation and technology.

Challenges and Strategies

Trust Building 

Geely invested significantly in building trust with Volvo’s management and workforce. 

They engaged in extensive dialogues to understand Volvo’s concerns and communicate their intentions transparently. 

Geely’s chairman, Li Shufu, emphasized Volvo’s autonomy and promised to invest in enhancing its competitiveness.

Integration and Adaptation

Post-acquisition, integrating different management styles and corporate cultures was challenging. 

Geely allowed Volvo to maintain its Swedish management team and decision-making processes, ensuring a smooth integration. 

They established a collaborative framework for sharing technology and expertise while respecting cultural differences.

Outcomes

Positive Synergy

The acquisition resulted in positive synergy between Geely and Volvo. 

Volvo leveraged Geely’s financial strength to expand its product line and enter new markets, especially in China. 

Geely benefited from Volvo’s advanced technology and strong brand reputation.

Cultural Respect

The success of this cross-cultural negotiation was largely due to Geely’s respect for Volvo’s corporate culture and commitment to maintaining its brand values. 

This respect helped overcome cultural barriers and fostered a cooperative relationship.

The Geely-Volvo case study underscores the importance of cultural intelligence in cross-cultural negotiations.

It demonstrates that cultural diversity can be leveraged to create mutually beneficial outcomes and foster long-term success in international business.

How to Deal with Body Contact & Personal Space in Foreign Cultures

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Do you bow, shake hands, or hug when you greet someone? Do you kiss on both cheeks?

How much space do you need to feel comfortable on the metro?

What is appropriate touching in your culture?

We’ve been talking about visual frameworks and the way different cultures perceive the world. Aside from vision, all four of our other senses have cultural sensitivities as well.

And touching is one of them.

Cross-Cultural Business Etiquette

When you live and work in a foreign culture, you might find your colleagues are comfortable with a different level of body contact and personal space.

One example: I was relocated to Madrid, Spain when I was a young manager. In Spain, you often find yourself negotiating over long lunches that wind down toward late afternoon.

I’d always know when the “real deal” was going down, because if my arm was resting on the table, my negotiating partner would place his hand on my arm. That gesture typically meant we were getting down to business.

To one who is accustomed to such a level of body contact, this action would be perceived as ordinary.

But for those from a culture with a different perception of touch, the body contact would probably be exceedingly uncomfortable and might even be viewed as inappropriate. Especially in a business meeting.

To Hug or Not to Hug

At around the same time I was being made uncomfortable in my meeting, my wife was taking a Spanish course alongside the wife of a Japanese diplomat.

Japanese culture views body contact of any kind with strangers or colleagues as intimate – even forbidden.

So, imagine her discomfort with the Spanish greeting of a kiss on both cheeks.

Not only do the Spanish kiss; they greet with effusive familiarity. And this woman had not only grown with the primary socialization of her culture, but was also raised in an aristocratic family, who reinforced those strict values and norms.

She explained to my wife how difficult it was to adapt. And it’s easy to understand why.

Do You Adapt?

Imagine you traveled to Zuma (a made-up country), where people – men and women – greeted you by rubbing their chest on you.

Remember, breasts are not viewed as a sexual part of the body in many cultures.

Knowing that, would you be comfortable with this greeting? And the real question: would you adapt to it?

The alternative is to stubbornly abide by your own cultural norms, awkwardly refusing to greet in this manner the rest of your days in this foreign country. But in doing so, you are saying to the locals: “I am the Monkey! I refuse to embrace your ways.”

And in making this choice, your new culture will not fully embrace you in return.

What Makes a ‘Face’: Losing Face, East vs. West

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When you hear the term “losing face,” more often than not, you associate it with Eastern cultures. But people of every culture have “face” that they can either lose or save.

Basically, “face” is pride, esteem, and reputation, which is interpreted and determined in different ways, depending on the culture in which you live. Face is, in short, the idea that you must behave or achieve in a certain manner to preserve your image. What makes up your “face” and how to “save” it depends on what your culture values.

Face: East

Tradition is greatly emphasized in Eastern cultures, and face can be had by birth (i.e. if you were born into a family of status or wealth).

Last week, we talked about how collectivist societies tend to value group harmony over individualism. Personal ambition or success is much less important than improving the whole.

This prevents individualist characteristics from being fostered from youth. For instance, I’ve been told by Chinese students that they receive lower marks or fails on essays or exams if they contradict the teacher’s opinion or the culturally accepted sentiment on any given topic, no matter how well argued. For this reason and for similar standards set during primary socialization, you find fewer who will “rock the boat,” so to speak, in collectivist countries than you might in their capitalist counterparts.

Individualism is considered much more radical in places like China. It is not embraced, and those who are unconventional and break the mold are thought to be aggressive. Due to the fact that harmony is of the utmost importance to collectivist cultures, anyone considered disharmonious would lose face under this set of cultural values.

Face: West

Western cultural values lie in individualism and independence. They’re also geared toward innovation and so embrace change more readily over tradition.

And in the West, you must earn your face. It isn’t given to you. Even if you’re born into a wealthy family or a family of status, more often than not, you must prove yourself to establish a face.

To make your face, you must make yourself. And to do so in an individualist culture, you must stand out from the crowd. You can do this through professional/personal success or achievement, status, wealth, etc. And once you obtain a certain level of recognition, whether in your town or nationwide, whether in your company or your industry, you must reassert your voice regularly to maintain face.

What can make a Western person of stature lose face?

Disgrace can. Disgrace paramount to much of what is going on in America right now, with sexual assault and harassment scandals knocking down titans of entertainment, politics, and industry. This is just one of the things that can make a Westerner lose face.

Can Face Be Restored?

Face can be restored only through drastic measures in collectivist cultures. In the East, once one’s reputation has been damaged, it’s nearly impossible to recover. As put by sociologist Marcel Mauss, in such cultures, “to lose one’s face is to lose one’s spirit.” It’s better to avoid such face-destroying conflict, altogether.

In Western cultures, if face is lost, it can be more readily restored. In fact, many cheer comebacks, and the restoration of a good reputation might even be considered inspirational by some.

Whether face is restored or not, the loss of it cuts deep in any culture.

Next week, we’ll continue contrasting Eastern and the Western values by discussing the differences in social power structures and business culture. Stay tuned.

How Cultural Values Inform Communication

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You are an individualist. Your goal in life is to succeed on your own. To seek out your fortune, using your own talents, your own mind. Individual achievement is paramount to your self-actualization and identity. You believe you have your own voice. You use it. You speak out, directly and without hesitation.

You are a collectivist. Your goal in life is to succeed as a group. To seek out the fair share for all, utilizing everyone’s talents, with a group mindset. Collective achievement is paramount to the group’s well-being. You believe in group think. You speak when expected to, indirectly and with caution.

There are outliers in any culture but, in general, these are the differences between Eastern and Western communication. And it all comes back to the values that inform our behaviors.

What Drives Western Cultures?

“If freedom of speech is taken away, then dumb and silent we may be led, like sheep to the slaughter.” – George Washington

Capitalism and freedom are often the driving factors behind Western cultures. Democracy, free speech, individualism – these values inform the West’s cultural behaviors.

Western communication is direct, clear, and concrete. There’s nothing ambiguous about it; no beating around the bush or mincing of words. The meaning of speech isn’t often lost in a sea of vague undertones or unspoken “understandings.” Nothing is implied or inferred when it comes to business communication. Both parties are taken at their word.

To put it simply, the cards are on the table.

What Drives Eastern Cultures?

“If what one has to say is not better than silence, then one should keep silent.” – Confucius

Collectivism (and in some cases, communism) and harmony are often the driving factors behind Eastern cultures. These values inform the East’s cultural behaviors.

There’s a don’t-rock-the-boat mentality in some Eastern cultures. So, when it comes to communication, they find the straight-shooting of Western cultures ill-mannered.

Nonverbal and indirect communication is favored by many Eastern societies. This is because the group’s entire harmony, as opposed to individualism, is valued.

But this harmony may only play out in words, not necessarily in actions.

For instance, in Chinese culture, a colleague may tell you he’ll have his work in by a certain deadline, but then fail to do so. He may not even have intended to meet this deadline when he claimed he would.

While this might seem to Westerners a form of deceit, it’s more often done to maintain a surface level of harmony than to lie. Others in the culture would understand that their colleagues’ actions wouldn’t necessarily align with their words. This is accepted.

The fact is, the culture knows itself. A direct “no, I can’t get you that by deadline” upsets the balance – an unharmonious response that would make one “lose face.” And so, whether the colleague will keep his word isn’t the issue; the surface harmony is. Therefore, inconsistency is anticipated and accepted by all, so that the relationship may be preserved.

East vs. West Communication

If communication was a body of water, then the Eastern sea would be a glassy surface with plenty of disturbances below, whereas thousands, millions of raindrops would make their mark on the surface of the Western sea, with some waves, and even maybe a hurricane or two.

Either way, when the two seas meet, both sides can be frustrated with the differences in communication styles. Some may even “lose face,” which we’ll talk about next week.