Synthesis of three Harvard Business Review articles

International Business Dealings

Communication is the key to any successful international venture. Managers of multinational companies who have to deal with negotiations in third world countries might face considerable challenges by virtues of the differing needs and expectations experienced in the region. Ethical issues arise in organizations due to different social, cultural and economic factors. What may be acceptable and legal in one society may not hold true for another. Multinational organizations are faced with the task of understanding the cultures in which they operate and ensure that these foreign cultures do not offend the sensibilities of the society they are incorporated in.

Negotiating styles differ considerably. It is vital that manager understand the different aspects of the contacts being negotiated. Managers responsible for negotiations can benefit tremendously by taking the time to understand the cultures, political climate and the economy of the region. (Wells_Jr, 1977) Political and economic considerations can pose different problems based on the nature of the business and the negotiator. Economics drives most international negotiation. and, nations hope to gain the best advantage of allowing the company to operate within their borders.

Agreements are not set in stone. They are liable to change based on the inferences and the understanding of the negotiator. Managers have to be not only flexible to notions that are introduced to them, but also rapidly understand the changes and identify unmentioned and unseen factors forcing the change. Change is inevitable in most such contacts. This is due to the fact that the country might be vying to attract the investor and/or hold on to the investor. As the risks involved with the project increase, the conditions of negotiation can also fluctuate. What might appear to be highly risky in a certain business environment period could be completely unfounded and even ignored in another business environment. The nature of the product being negotiated and its importance is often the crux of any negotiating deal.

Managers who are able to deal with these constant changes are better able to look behind the superficial issues to the real concerns or potentials that the venture offers.

Self-evaluation of the opportunities that the investment offers the host country and the ability of the investor to constantly provide the needed benefits can help ensure that the inventor is welcome at all times. As industries mature, the infrastructure and the economic of the business operation become established and routine as such many host countries feel that they are quite capable of running the operations and are not dependent on the investor.

One of the habits to avoid is self-praise or the impression that the investor is bailing out on the host country in an arena that it has failed in the past. Wounded egos from the negotiators of the host country negotiators can cause more harm to the project and the investment over the long run. The wording of contracts and agreements can also pose a problem based on local customs and laws. What might be perfectly acceptable in western business law, might be perceived to be a threat in other culture or even subjugation. Working with local agents to 'sanitize' the wording to make it acceptable to local business can help.

Most failures and difficulties that arise in operating abroad especially in developing countries arise by virtue of the managers not realizing the negotiating practices and the customs of the host country. The attitude that we are doing these developing countries a favor can cause resentment of the proposal during the incipient planning stages and antipathy towards the investor as time goes by. This could result in poor profitability of the company and lower return on investment. "Negotiators are people" and people have opinions that they might express formally and informally. Negotiations can experience delays and setbacks that might be beyond the power of the host countries negotiators and as such rather than place blame investors should approach these hurdles with patience and curtsey.

In France, management is not a task. It is a state of mind." Becoming a manager implies that the individual has the intelligence and the capability to handle the demands he or she faces. The rise to power of the U.S. In the past century has encouraged many countries around the world to emulate the styles and methods of management that proved successful. French businesses have also attempted to change their styles of management with varying degrees of success. Traditionally, French businesses are very much isolated from the world at large and are slow to implement changes and improvements. This isolation has cost the country dearly and there are serious attempts made to help encourage the next generation manager to define their own paths.

Becoming a manager in France is a prestige. (Barboux & Lawrence, 1991) at this level, individuals are expected to perform at levels way above those of the other workers. French corporations still follow the traditional more centralized, authoritarian management style. Control and power rest in the hands of the individual at the top of the pyramid. Decisions are all top down and managers are held responsible for all levels of operation within organizations. High levels of control by management are the norm. Managers expect the respect of the position and often are too enamored by their "status" within the company. This status is always linked to the intelligence and knowledge that the manager posses. Manager's decisions are generally final and while meetings to discuss the options might be undertaken, the final decision is always the managers.

Even the communication between managers is always maintained at a very formal level. Titles are important both on and off the job. Management in France is often defined as "elitism in action" by those outside the management circles. Selection of 'distinguished individuals' as managers and grooming of these managers for higher level positions is at the heart of the management culture in France. The 1997 book titled "French Management: Elitism in Action" by the authors of the article reviewed, discusses also some of the issues that foreign businesses could face when operating within France as a result of this manager mentality. The rituals and formalities can be very intimidating and daunting for the labor force as well as foreigners interacting with the organization.

Managers in France are expected to have formal education and generally are selected for positions based on their education. Rising through the rank and file towards managerial positions is an unheard off concept. Making the cadre signifies high levels of perseverance and dedication. Managers tend to distance themselves and work hard at maintaining an aura of sophistication and knowledge.

Examples of this are instances of humor and relationships in the workplace. Humor is based more on 'finesse'. Appearances matter. As such, French managers almost appear cold and distant to all the people around them. They believe that their role is one where respect is earned by virtue of possessing a title. Personal space within the work environment is considered normal for managers and removal of this space is considered the worst insult possible.

Managers also tend to avoid personal interactions and strive to distance their work lives and their personal lives. There is a very low level of social interaction. Making small talk is frowned upon and while they endeavor to emulate the characteristics of a good manager, they frown upon the trend of cohesiveness that most U.S. managers attempt. The belief that the role of manager is more important than the self is radically different from that of U.S. managers. Therefore, new concepts such as worker empowerment and job satisfaction rather than monetary compensations are frowned upon. More responsibilities without compensation are considered a mockery of the position. Positions of managers in France are also linked with the perks and the benefits that these individuals feel they are entitled to.

In the third article review, Hall discusses the impact that culture, value and society has on foreign businesses. (Hall, 1960) Different cultures place different emphasis on the value of time, material possessions, friendship and negotiation between individuals. There are both formal as well as informal methods of dealing with negotiations. Cultures can differ significantly between the West and the Far-East, for example. Relationships between individuals and businesses are often determined by the interactions that take place at every level within the company. This article gives numerous example of the nature of interaction and the cultural context of the interactions as viewed though different people. Acceptance of varying ideals and values can only be achieved if individuals work at understanding these issues.

Time is a commodity that has limited "shelf" life. The significance of the fact that it cannot be recovered is the main characteristic that has made people place a lot of importance and value on the measure of time. However, time is also the metric by which the significance or the value of the task is evaluated. For instance, "time required for a decision is directly proportional to its importance," in some cultures time schedules have no significance and a-job-will-get-done- when-it-gets-done attitude is fairly common. In the U.S., the concept of a dead line is standard; in societies of the Middle East this is not even a concept to recon with. Time is also a strategy that is used by different cultures to signify different conditions. In Latin America, waiting for an appointment with a senior is normal and not to be considered an insult. In the U.S., the amount of time spent waiting for an appointment is often correlated to the respect and the value that is given to the individual waiting. Conflict management also posses a significant challenge in the international arena. Individuals from countries like the U.S. might deal with many of the issues head on, while citizens of Japan might tend to avoid unpleasant situations, not because they do not like the challenge, but simply because it is not culturally acceptable to do so.

Space is also defined differently. New concepts of managements are constantly being introduced. While they are often defined for Americans many attempts to use them universally in all regions around the world are being observed. The concept of personal space is also dependent on how individuals view each other. In some cultures, casual physical contact of hands is common, whereas hugs are often frowned upon. Arabs for instance, will offer hugs to their business partners who are in general males and if this hug is not returned it would be constituted as rude behavior. Indians, for example, will offer a visitor entry to their homes and lives and will consider it a personal insult if this offer is refused. Germans and Scandinavian citizens will however, work hard at distancing their work and private lives and also maintain some level of formality in every situation.