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Cross Cultural communication is the thing which we experience in our day to day life but is not given importance by us. In the following financial report, there is detailed description and discussion about how ethically the Chinese and the Americans negotiate along with discussion about the effects created by inter cultural negotiations and intra cultural negotiations and advantage of one country over another country in negotiation .
Current scenario in the market
In the current market, China and America are the biggest contenders in the global markets. According to the report, the trading relations between them are largely growing and the relation amounted to whopping half-trillion USD in the financial year 2016 and 2017 (Mesman et al. 2016). As the trading relations are flourishing, the amount of negotiations between the trading companies of the countries are also increasing. In the general study, it is seen that the people from China generally uses the misinterpretation strategy to finish the process of negotiation (Yang et al. 2017). The process of misinterpretation is followed by Chinese organisation more and more in inter-cultural trading compared to intra cultural trading.
Figure 1: Showing the growth and declination of America and China in cross cultural participations
(Source: Steel et al. 2018)
Another thing in which China again beats America is the use of ethically questionable tactics. China is the country which is holding high-context culture, where the business relations are done based on presentation and short product films of the present and future growth expansions and expectations clarifying all the doubts of the party/ies. As per Yang et al. (2017), the culture of US is holding a low-context culture, where most of the business relations and tie ups are made based on verbal quotation and verbal representation.
Figure 2: Chart showing the countries with high and low context cultures
(Source: Yang et al. 2017
The main thing which favours America in the negotiation whether it is intra cultural trading or inter-cultural trading is the non-biasness of the members of the trading groups, but in case of China, there in in-group favouritism or biasness ion the cases of both intra and inter cultural trading, which most of the time results in business conflicts between two groups of people.
Hofstede’s cultural dimension theory’s relation with this cultural crossing
Hofstede’s cultural dimension theory constitutes several points and their relationship with this topic are as follows: -
Power Distance index (PDI)
The power distance index can be explained as the extent by which, the members of certain organisations or institutions expect the power to be divided equally among themselves. In this, the higher index degree refers to the hierarchy in the society and lower index degree refers to less distribution of power. In this respect, Beugelsdijk, Maseland and Van Hoorn (2015), states thatChina has higher power distance index compared to America and this gives them the more negotiation power.
Individualism vs. collectivism (IDV)
In this part individualism explains itself as the degree in which people of the society are integrating into specific groups. Whereas collectivism stands for society where extended families along with others are tied to groups with tightly integrated relationship. In this respect, America is far more advanced with respect to china.
Uncertainty avoidance (UAI)
Uncertainty index is explained as the Society’s tolerance for the ambiguity. In this, people generally avert or embrace any event which is unknown to him/her. Aby high degree in the index indicates to the society following strict guidelines about, strict behavioural code and demands only truth from the person in the society. In this respect, American societies has got an advantage over the Chinese societies.
Masculinity vs. femininity (MAS)
In this part, Masculinity is defined as any sort of reward for success, achievement, heroism and so on. Whereas, Tsai and Men (2017), idealises thatFemininity stands for co-operation, caring for others and so on in the society. In this respect, both countries are almost equal with an efficiency of around more than 60% for both.
Long term orientation vs. short term orientation (LTO)
In this, long term orientation refers to problem solving and adaptations as a necessity of the society. Whereas short term orientation refers to the honouring of the traditions. If a society showing short term orientation, then there is less or no economic development (Yang et al. 2017). In this respect, China is categorised as long-term orientation with major economic development in the society compared to the American ones.
Indulgence vs. restraint (IND)
Indulgence refers to the measurements of the society allowing the individuals associated with this, to express themselves freely. On the other side, restraint refers to binding of individuals with strict rules so that they cannot express themselves freely. In this respect, as Adler and Graham (2017), states,USA is ranked among the indulging ones and china is ranked among the restraint ones.
Figure 3: Chart showing parameters for Hofstede’s Cultural Dimension theory in different countries
(Source: Ting-Toomey and Dorjee 2017)
Advantages taken by the countries due to differences
American economy is considered as one of the most developed economy. The Chinese traders can take advantage of their trading, by which they can make trading relations with American traders with the help of their negotiation skills and can make their economy to grow at a massive rate with the income of the foreign money. As per Zhang and Shi (2017),another thing that will give advantage to the Chinese people is that, Americans are partially impatient and will try to make negotiations to consumer behaviour short duration of time, resulting in Chinese people to use their misinterpretation strategy to move the negotiation towards positivity in that short duration of time. As an outcome, Mullen-Rhoads (2018), states thatthe most important advantage that America will enjoy is the benefit of being in trading relation with china is that, china is the country where everything is manufactured and has gained a hierarchy in the field of production.
The cross-cultural management is one of the important thing to cope up with rapid economic growth as well as global development. Here it is seen that both the economies of China and America is depending on each other. Trading relation between both the countries are developing them as one of the top economic powerhouses in the world. It is likely to see that China using ethically questionable tactics and misinterpretation strategy in the negotiations. All these are giving China more advantage over America.
1. Adler, N.J. and Graham, J.L., 2017. Cross-cultural Interaction: The International Comparison Fallacy?. In Language in International Business (pp. 33-58). Palgrave Macmillan, Cham.
2. Beugelsdijk, S., Maseland, R. and Van Hoorn, A., 2015. Are Score
3. Mesman, J., van IJzendoorn, M.H. and Sagi-Schwarz, A., 2016. Cross-cultural patterns of attachment. Handbook of Attachment: Theory, Research, and Clinical Applications, third ed. Guilford, New York, NY, pp.852-877.
4. Mullen-Rhoads, R.E., 2018. E-negotiations between Chinese and US business leaders: a brief review of the literature. International Journal of Teaching and Case Studies, 9(3), pp.221-240.
5. Steel, P., Taras, V., Uggerslev, K. and Bosco, F., 2018. The happy culture: A theoretical, meta-Analytic, and empirical review of the relationship between culture and wealth and subjective well-being. Personality and Social Psychology Review, 22(2), pp.128-169.
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7 Tsai, W.H.S. and Men, L.R., 2017. Consumer engagement with brands on social network sites: A cross-cultural comparison of China and the USA. Journal ofMarketing Communications, 23(1), pp.2-21.
8. Yang, Y., De Cremer, D. and Wang, C., 2017. How ethically would Americans and Chinese negotiate? The effect of intra-cultural versus inter-cultural negotiations. Journal of Business Ethics, 145(3), pp.659-670.
9. Zhang, J. and Shi, Y., 2017. The application of vague language in international business negotiations from a cross-cultural perspective. Theory and Practice in Language Studies, 7(7), pp.585-589