| Example 1
Americans tend to be legalistic and
adversarial. They defend
themselves with legally binding contracts which is not only tolerated by
Americans, but they consider it an essential business practice.
However, the Japanese do not follow this practice.
In Japan, they do business with people the Japanese know and
trust rarely using the law to handle conflicts between the two parties.
One American firm arrived in Japan to negotiate a joint venture
with a contract in their hands. In
the first meeting, the Americans put the 50-page contract in front of
the twelve Japanese negotiators. The
meeting took the entire afternoon and none of the Japanese negotiators
opened the contracts and they only talked about general business
conditions in both countries. After
the meeting, the Americans could not get the Japanese to the negotiating
table again and had to leave the country empty-handed.
The Japanese saw having the contract at the first meeting rude
and decided not to do business with such an inept firm.
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Example 2
Another example is of an American firm trying to get an acceptable
price for their product from a Japanese buyer.
The Americans presented a very detailed presentation and offered
what they felt was a reasonable price.
After a few moments of silence, the Americans thought the
Japanese were going to reject the offer so they lowered the price. There was more silence by the Japanese.
The Americans then said they would lower their price one last
time and that this was the lowest they could go.
The Japanese accepted this offer after a brief silence.
The Japanese later said the first price was within an acceptable
range, but it was their custom to consider the proposal silently before
giving their decision. The
Americans lost a lot of profit by jumping the gun and believing the
Japanese respond just like other Americans.
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Example 3
Frederick W. Smith, who is the founder of Federal Express, had an
aggressive, take-charge, and confrontational interaction with others.
He liked competition and enjoyed seeing who would blink when
standing neck and neck with his adversaries.
Smith tried to combine several independent European companies
into one company under the Fed Ex culture, but he ran into several
problems. Many executives
quit and several customers took their business elsewhere.
Many of his colleagues took him aside and told him that his
confrontational style went against the tradition-steeped European
business culture and he was going to ruin the market for any other
American companies. He
could not build his hub. The
company admitted that they believed doing business in Europe would be
like doing business in the U.S.
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Example 4
An American manager in Korea knew a little bit about the culture and
spoke the language fluently. He
was assigned to Seoul to be in charge of his company’s office in
Korea. The manager was
uncomfortable with the deference his Korean subordinates gave him since
he was used to a democratic and egalitarian leadership style. He asked his subordinate to treat him as an equal just
as he would with his subordinates in America.
In Korea, deference in the office setting was part of
professionalism of office conduct.
By removing the obligatory deference, he in essence removed the
required office professionalism. The
office became an environment of relaxed familiarity with a lot of
non-business conversations. Many
deadlines were missed and the office’s work contained a tremendous
amount of mistakes. The
American system can have its employees use a first name basis and
maintain professionalism, but this is not the case with the Korean
culture. The manager was
never able to regain the same efficiency of the office.
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Example 5
American makes mistakes with their products.
One American company tried to sell 29-inch tables in Japan when
the average table height is 21 inches due to fact that the Japanese sit
on the floor at the table and do not use chairs.
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Example 6
Parker Pens had a decentralized marketing department with ad agencies
in more than 40 countries developing ads for them. A new team of executives were hired and wanted to
centralize all their marketing decisions in the company’s headquarters
in Janesville, Wisconsin. They
wanted to standardize the promotion, packaging, pricing, promotional
materials, and advertising. They
believed the difference in the cultures were less important than the
similarities. They wanted
to use one ad agency to develop one ad to be used around the world. They did not want the ad too long so it would be easier
to translate. Subsidiaries
complained that the pens may be similar, but the markets were not.
They wanted flexibility in the local markets.
The company centralized everything against these complaints.
The same ad was used in all countries. The ads tried to say something to everyone but ended up
saying nothing to no one. The
company’s campaign floundered. They
were developing a second campaign when the CEO was forced to resign and
the rest of the team either quit or were fired.
The company then returned to a decentralized marketing system.
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Example 7
General Motors introduced the Nova in Latin America. Nova means, “it doesn’t go” in Spanish.
The car had terrible sales.
G.M. finally figured out the problem, renamed the car Caribe, and
the sales increased to the company’s expectations.
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Example 8
McDonnell Douglas wanted to produce an aircraft brochure for its
products to be distributed in India.
The artist selected photos from an article in National
Geographic. After the
brochures were distributed, the company found out that the turbans worn
by the people in the brochures were Pakistani Moslem whom the Indians do
not get along with.
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Example 9
U.S. firms have to abide by the Foreign Corrupt Practices Act of
1977. This spells out acts
that are not only unethical but also illegal.
If states that firms cannot give payments to foreign candidates,
officials, or political parties who are in decision making positions
that the payments may induce a favorable outcome for the firm.
Grease money is used in several cultures to get business dealings
rolling. An example is of an American who was working in
Africa’s tourist industry when he concluded a business deal in East
Africa. He was asked very
respectfully to give a significant amount of money and a radio to the
individual he was working with. The
American stated that this was morally wrong and that he did not pay
bribes. He left the meeting
never to return. After he
became more aware of the East African culture, he found out that he had
insulted the East African businessman.
The money was to be used to provide a feast in his honor and he
would be introduced to everyone in the community of importance.
The radio was to be used for background music and entertainment.
It was to be the beginning of an ongoing profitable business and
social relationship where he would have been part of an inner circle of
business associates. He
acted as if he was doing business in America and offended his colleagues
in the process.
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