Tag: in-group

Building Bonds Across Borders: The Crucial Role of Trust in Cross-Cultural Negotiations

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Who do you trust? And why?

The answer may be partially rooted in your culture.

Through two eye-opening experiments in a study on cross-cultural differences in trust, researchers examined how people from different cultures build trust with strangers. 

They focused on Americans and Japanese, expecting their trust-building methods to differ. 

And they were right.

American vs. Japanese Trust

For Americans, trust was thought to come from shared group memberships, while for Japanese, it was about having direct or indirect connections with others.

The results confirmed these ideas. 

In both experiments – one involving questions and the other a money-sharing game – Americans trusted people from their in-group more. 

But for the Japanese, something interesting happened: when there was a chance of having an indirect connection with someone outside their group, their trust increased even more than for Americans.

These findings show how cultural backgrounds shape the way we trust others. 

For Americans, it’s about being part of the same group, while for Japanese, it’s more about having connections, even if they’re not direct. 

Understanding these differences is crucial for better communication and relationships across cultures.

And for negotiations.

Understanding the Significance of Trust

In cross-cultural negotiations, trust goes beyond mere reliance on promises or assurances; it reflects a deep-seated belief in the integrity, credibility, and goodwill of one’s counterparts. 

Trust fosters open communication, facilitates collaboration, and enhances the likelihood of reaching mutually satisfactory outcomes. 

Without trust, negotiations may stall, misunderstandings may arise, and relationships may falter.

Strategies for Building Trust Across Cultural Divides

Think about what you learned in the earlier study.

Before negotiations commence, you might consider researching how the culture views trust and attempting to adapt to that view. 

For instance, let’s say you’re a businessperson from the United States negotiating a deal with a company based in Japan. 

In American culture, trust might be primarily based on shared goals or business interests. 

However, in Japanese culture, trust is often built through personal connections and relationships.

To adapt to the Japanese cultural sense of trust, you might prioritize building rapport and establishing personal connections before diving into business discussions. 

This could involve taking the time to engage in small talk, showing genuine interest in your Japanese counterparts’ backgrounds and interests, and demonstrating respect for their cultural norms and customs.

By understanding and adapting to the Japanese view of trust, you can lay the foundation for a more productive and harmonious negotiation process, ultimately increasing the likelihood of reaching a mutually beneficial agreement.

We’ll discuss more strategies for building trust next week.

“Fair and Generous” Missteps in Cross-Cultural Business: A Case Study

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An American company was looking to build an assembly plant in Eastern Europe.

In an attempt to be “fair and generous,” the company decided not to pay the average living wage of the area, which was much lower than the average living wage in America; rather, they offered to pay new laborers four times that average.

Sounds pretty generous, right?

Well, what they didn’t consider is the disharmony this would sow in the community.

The new lucrative jobs tore the town’s social fabric apart. Folks were anxious about which families would benefit. Things got cutthroat.

The company was now in a precarious position. What should they do in this situation?

Identify the Culture’s Values

With relationship-based cultures, the family unit is often the most important unit in society. Unlike in rule-based cultures, which are often individualist, the family is more important than the individual. In fact, the two are one.

Many in relationship-based cultures support the family financially. Not just parents taking care of their children, but sons taking care of their parents, older brothers and sisters financially responsible for their younger siblings.

In hearing of such a lucrative wage for labor, who wouldn’t jump at the opportunity? Especially when it meant you could better support your in-group financially.

Moreover, the families of potential workers were also invested in these top-paying jobs. Securing the work would mean more money to go around.

Considering this society’s cultural values, what did the company do?

Did they close up shop in Eastern Europe for fear of the consequences of their offer?

Did they take the initial offer off the table and put forth a more comparable living wage?

Nope, they found a cross-cultural solution.

Work within the Culture’s Values

Rather than cut their losses or go back on their word, the company identified the culture’s values and incorporated them into their own.

In order to preserve social harmony in the town, they hired one person from every family unit. The anxiety of potentially being refused this opportunity was spared, and each family was better supported.

This is just one example of a cross-cultural solution that works.

Identify the culture’s values and work within those values the best you can. If you know what your workers care about, what matters most to them, then you know how best to support them, which is mutually beneficial to you.

Contracts in China: How Relationship-Based Cultures View Contractual Obligations

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When you do business in China, you may come across a common contractual clause.

This clause stipulates that if issues arise, the contracted parties will discuss them and the contract may potentially be redrafted.

China is a relationship-based culture.

Someone from a rule-based culture, like most Western societies, will likely take issue with this clause.

Contracts are supposed to be black-and-white. They are supposed to be unambiguous. They are supposed to regulate specifically every aspect of the business relationship.

Contracts exist to effectively end the negotiation stage and begin working together.

The clause makes it clear that the contractual agreement may be renegotiated at any time. That means, for instance, when the parties do face a dispute, it might not go to court in the city in which the contract stipulates, but rather in a city court where the established law may work in the other party’s favor.

So, why even negotiate a contract in China? If it’s so ambiguous, what does the contract stand for?

Relationship-based Values vs. Rule-based Values

The relationship-based culture of China values a mutually beneficial and respectful business relationship. The contract is symbolic as such.

The contract signifies that personal relationships exist amongst the parties, therefore future disagreements may be negotiated.

While in Western cultures, a signed contract might mark the end of the negotiation process, in China – and in other relationship-based cultures – it marks the beginning.

You might think you’ve nailed down prices, but even those can be renegotiated days or weeks after signing.

Although those from Western cultures might see such a contract as pointless, its signing is still very important in relationship-based cultures.

In fact, it’s so important, that a contract signed with a Chinese company traditionally involves a luncheon or ceremony when making it official.

As soon as a contract is signed, it signifies that the two parties – especially the leaders – are publicly friends and will be respectful of their business relationship.

Relationships-to-Home Life

Relationship-based societies also view work life and personal life as inseparable to the point that “personal relations” and “business relations” are concepts that don’t exist in these societies.

That’s because company rules are dominated by relationships, particularly if an employee’s in-group is their family or tribe.

This means that if you have a conflict with an employee, it can often extend to a conflict with his/her family, kin, or any other member of his/her in-group.

Next week, we’ll discuss how this situation might manifest, along with other conflicts that crop up in business in relationship-based cultures.

The Employer-Employee Relationship Across Cultures: Concept of Self, In-groups & the Workplace

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How do you view your relationship with your employer?

Do you see the employer-employee relationship as something of a family link?

Or is the relationship strictly professional and contractual?

The way you view this relationship is conditioned by your society’s concept of the in-group. As with many things, this concept is formed according to where your culture lies upon Hofstede’s cultural dimension spectrum of collectivist vs. individualist.

We are Family

Collectivist cultures view the employer-employee relationship as a moral one, a familial one.

Whether or not the company is the in-group, the company is expected to behave according to the in-group’s rules and values.

As we mentioned in last week’s post, the in-group usurps all.

Strictly Professional

On the other hand, individualist cultures see the professional relationship as a contractual one.

The structure and hierarchy of a company/organization are not expected to follow the rules and values of any in-group the individual employees are a party too. Rather, the employees submit to the structure of their company and their company culture.

Why?

It’s pretty simple: because the company is built for the owners/employers and customers, and it’s in the employees’ personal interest to align themselves with this structure. Otherwise, they’re out of work and their self-realization of upward mobility ceases.

Abstract Relationship vs. Social Fabric

Individualist cultures view employee/employer relationships abstractly.

The relationship is built on a contract. Salary in exchange for work…and, hopefully, some employee satisfaction.

Collectivist cultures view companies/organizations as part of the community’s social fabric.

Members are the vehicles of the company’s purpose and meaning.

The companies, themselves, are often run by a family/clan, which can often lead to family hiring and nepotism. As we mentioned last week, this is acceptable – and even expected – in collectivist cultures.

Benefits to senior managers and individual shareholders are not the end-all, be-all of the organization’s development and success in a collectivist society. Instead, the organization serves the society/clan.

Motivational Theories

This is why Maslow’s “hierarchy of needs,” Herzberg’s two-factor theory, and other models for human motivation, created by Western researchers, don’t withstand cross-cultural tests.

They do not account for the fact that human needs and human motivation (particularly, in the workplace) differ greatly across cultures, which means the incentives to motivate teams will too.

Concept of Self

These differences are related to the concept of self.

The individualist vs. collectivist perspective of self is, understandably, a topic well researched.

Markus and Kitayama (1991) wrote:

“People in different cultures have strikingly different construals of the self, of others, and of the interdependence of the two. These construals can determine the very nature of individual experience, including cognition, emotion and motivation.”

concept of self

This chart shows an overview of various nations’ concept of self.

The US falls on the individualist end of the scale, while Asian countries fall on the collectivist end. European countries lean toward individualism, while others – like India, Spain, and Russia – are more central, balancing individualist values and ideals with collectivist ones. The Middle East, African countries, Mexico, and Japan are more collectivist-leaning.

While this chart isn’t too surprising, the way self-concept manifests in cultures in the areas of cognition, emotion, and motivation varies.

We’ll talk more of self-concept next week.

No Absolutes

The bottom line is there are absolutely no absolutes when managing and motivating across cultures. Motivational tactics that work in an individualist culture may not work in a collectivist one.

As a Western manager, don’t become the monkey in your workplace. Know that there are no absolutes. Know that, just as individualism is not the only driver of economic success, individualist motivators are not the only possible drivers for your employees.

You must adapt. In collectivist cultures, manage groups instead of individuals.

Cross-Cultural Management: Understanding Motivating Factors for Different In-groups

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As we discussed in a previous post, individualist motivational management is obviously very much centered around the individual.

Praise for outstanding work, recognition, both material and immaterial. “Employee of the Month” springs to mind.

For individualist cultures, being recognized for individual achievement means you are succeeding in your career – and at life.

But these same tactics do not always work in other cultures.

So, what does work?

Translating Cultural Dimensions into Workplace Management

In order to discover what works in managerially motivating across cultures, you must identify the in-group.

Last week, we talked about how economic success does not depend wholly on whether a culture is individualistic or collectivistic.

Rather, the in-group is what matters.

Whether company or country, in-groups are the primary drivers of workplace motivation.

Loyalty to groups is key to economic growth, and identifying the culture’s in-group can help you adapt your management style to the culture’s values.

In many collectivist cultures, the in-group is the family or the clan. The fact that it isn’t the company or oneself creates motivational differences from individualist cultures.

Learn Some Cultural Motivations

Diplomas – Diplomas are a way to climb the status ladder in collectivist cultures. Rather than seeing diplomas as paving the way toward the career ladder of better opportunities, diplomas are a door opening to a higher status group.

Because of this cultural perspective, diplomas are not sought to increase self-confidence in one’s abilities, but rather primarily to gain status.

Mobility – There are various types of mobility – occupational, geographical, hierarchical, etc. – and they are viewed differently across cultures.

In collectivist cultures, where the in-group is incredibly important, mobility across all types is lower, because it results in a change in one’s in-group.

Why?

If you have geographical mobility, you might leave your family. If you have hierarchical mobility, your in-group must approve of any upward change in position within your company, or this new position must be consistent with the role they’ve bestowed upon you.

An example: becoming the company boss of a clan elder is likely out of the question. The in-group’s hierarchy (which, in this case, is the clan) will always supersede that of a company’s organizational formalities.

Nepotism – Hiring or promoting family members/friends is seen as morally wrong in Western cultures, particularly if that family member has no qualifications for the role.

This is because individualist cultures view employees as “economic persons” who are motivated to pursue the employer’s interests if it aligns with their own self-interest.

Not so much in collectivist cultures.

One’s self-interest – and/or that of one’s employer – is always usurped by that of the in-group.

Therefore, nepotism in a collectivist culture would not only be acceptable, it would be expected.

One example of this in a collectivist culture: Burkina Faso’s former President Blaise Compoare not only hired family members to fill positions in government, but he also built a zoo and an airport in his village and supplied it with electricity (the only village with light for years, at the time).

While this action may have caused an uproar in a Western country, the culture saw Compoare’s actions as morally just. He was caring for his in-group, his people, which is seen as a positive thing in Burkina Faso.

Next week, we’ll talk more about the employer-employee relationship across cultures.

Society Over Self: Collectivist Cultural Management

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The core group in collectivist cultures is family.

And the definition of family differs across cultures, as we’ve previously discussed.

The West often considers the two-generational core to be “family,” while other cultures include extended relations – or even an entire village – under the umbrella.

Other “groups” in collectivist cultures include in-groups, like the company one works for, or society as a whole.

A group’s success and survival – whether the group is family, the village, the company, or society – ensures individual success and survival.

Because of this, harmony is valued in collectivist cultures, as is interdependence of individual members.

Children are socialized in groups early on in order to become interdependent.

Everyone depends on everyone else, because the group only survives as one.

Being recognized for individual achievement is almost unheard of; rather, collectivists work in tandem and share with group members – both their successes and their failures.

Group Loyalty = Self-Loyalty

In a collectivist culture, group loyalty is self-loyalty.

Think of it this way: society, a company, or a family is like a human body. Each member is a limb or an organ; each member is vital to the body’s function.

So, if one organ fails, the body fails.

If one limb is neglected, then the body isn’t functioning at its most optimal.

It’s with this mentality that collectivist cultures place a higher value on the group than the individual.

An individual’s personal goals and ambitions come second to the group’s overall success and well-being.

To return to our analogy, if a body’s personal goal or ambition was to win an arm-wrestling contest, so it pumped iron every day, focusing only on building up the biceps, but forgot about its legs or its core, then the arms might be able to succeed in meeting their ambition, but the rest of the body would suffer.

This is how collectivist societies view personal goals and ambitions.

Your arm (you, the individual) does not work alone.

A collectivist would sacrifice his own career goals for the sake of the group’s.

Society, First

When society comes first, self comes second.

This is one of the main reasons that in collectivist societies, management differs from individualist cultures.

Last week, we talked about how these differences clash through workplace incentives. “Employee of the Month” is one way in which management in individualist societies incentivize hard work.

But would this work in collectivist cultures? Not so much.

What would then?

We’ll talk about that more next week.