Saudi Electronic University Euro Disneyland Case Study

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Euro Disneyland

This week you were introduced to several decision-making tools in the course content. Using the Decision Matrix Analysis along with the Decision Matrix Analysis video, make the following decisions relative to the case study about Euro Disneyland (p. 262):

The first section of your paper should be an explanation of this process and how you decided on each of the factors in the matrix.

  • List all of the cultural challenges posed by Disney’s expansion into Europe. (Side of matrix.)
  • Next, list the variables that influenced these challenges. (Top of matrix.)
  • Decide on a score (1-5) for each of these challenges according to the relative importance of the factors. Multiply each of these scores by 2 to find the weighted scores for each option/factor combination.

Next, respond to the following questions in the rest of your essay:

  • Using Hofstede’s four cultural dimensions as a point of reference noted in the case, what are some of the main cultural differences between the United States and France?
  • In managing its Euro Disneyland operations, what are three mistakes that the company made? Explain your response with examples.
  • As a conclusion, reflect on your overall thoughts on this case.

Your well-written paper should meet the following requirements:

  • Be 5-6 pages in length, which does not include the title page, abstract, or required reference page, which are never a part of the content minimum requirements.
  • Use Saudi Electronic University academic writing standards and APA style guidelines.
  • Support your submission with course material concepts, principles, and theories from the textbook and at least two scholarly, peer-reviewed journal articles.

Decision Matrix Analysis link

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Euro Disneyland This week you were introduced to several decision-making tools in the course content. Using the Decision Matrix Analysis along with the Decision Matrix Analysis video, make the following decisions relative to the case study about Euro Disneyland (p. 262): The first section of your paper should be an explanation of this process and how you decided on each of the factors in the matrix. 1. List all of the cultural challenges posed by Disney’s expansion into Europe. (Side of matrix.) 2. Next, list the variables that influenced these challenges. (Top of matrix.) 3. Decide on a score (1-5) for each of these challenges according to the relative importance of the factors. Multiply each of these scores by 2 to find the weighted scores for each option/factor combination. Next, respond to the following questions in the rest of your essay: 1. Using Hofstede’s four cultural dimensions as a point of reference noted in the case, what are some of the main cultural differences between the United States and France? 2. In managing its Euro Disneyland operations, what are three mistakes that the company made? Explain your response with examples. 3. As a conclusion, reflect on your overall thoughts on this case. Your well-written paper should meet the following requirements: • Be 5-6 pages in length, which does not include the title page, abstract, or required reference page, which are never a part of the content minimum requirements. • Use Saudi Electronic University academic writing standards and APA style guidelines. • Support your submission with course material concepts, principles, and theories from the textbook and at least two scholarly, peer-reviewed journal articles. Decision Matrix Analysis link Video link Chapter 7 Cross-Cultural Communication and Negotiation c­ haracterized by the desire to identify those who are reasonable and those who are not. In contrast to negotiators in many other countries, those in the United States often give little attention to this phase; they want to get down to business immediately, which often is an ineffective approach. Adler notes: Effective negotiators view luncheon, dinner, reception, ceremony, and tour invitations as times for interpersonal relationship building and therefore as key to the negotiating process. When American negotiators, often frustrated by the seemingly endless formalities, ceremonies, and “small talk,” ask how long they must wait before beginning to “do business,” the answer is simple: wait until your counterparts bring up business (and they will). Realize that the work of conducting a successful negotiation has already begun, even if business has yet to be mentioned.67 Exchanging Task-Related Information In this part of the negotiation process, each group sets forth its position on the critical issues. These positions often will change later in the negotiations. At this point, the participants are trying to find out what the other party wants to attain and what it is willing to give up. Persuasion This step of negotiations is considered by many to be the most important. No side wants to give away more than it has to, but each knows that without giving some concessions, it is unlikely to reach a final agreement. The success of the persuasion step often depends on (1) how well the parties understand each other’s position, (2) the ability of each to identify areas of similarity and difference, (3) the ability to create new options, and (4) the willingness to work toward a solution that allows all parties to walk away feeling they have achieved their objectives. Agreement The final phase of negotiations is the granting of concessions and hammer- ing out a final agreement. Sometimes, this phase is carried out piecemeal, and concessions and agreements are made on issues one at a time. This is the way negotiators from the United States like to operate. As each issue is resolved, it is removed from the bargaining table and interest is focused on the next. Asians and Russians, on the other hand, tend to negotiate a final agreement on everything, and few concessions are given until the end. Once again, as in all areas of communication, to negotiate effectively in the international arena, it is necessary to understand how cultural differences between the parties affect the process. Cultural Differences Affecting Negotiations In international negotiations, participants tend to orient their approach and interests around their home culture and their group’s needs and aspirations. This is natural. Yet, to negotiate effectively, it is important to have a sound understanding of the other side’s culture and position to better empathize and understand what they are about.68 The cultural aspects managers should consider include communication patterns, time orientation, and social behaviors.69 A number of useful steps can help in this process of understanding. One negotiation expert recommends the following: 1. Do not identify the counterpart’s home culture too quickly. Common cues (e.g., name, physical appearance, language, accent, location) may be unreliable. The counterpart probably belongs to more than one culture. 2. Beware of the Western bias toward “doing.” In Arab, Asian, and Latin groups, ways of being (e.g., comportment, smell), feeling, thinking, and talking can shape relationships more powerfully than doing. 3. Try to counteract the tendency to formulate simple, consistent, stable images. 4. Do not assume that all aspects of the culture are equally significant. In Japan, consulting all relevant parties to a decision is more important than presenting a gift. 231 232 Part 2 The Role of Culture 5. Recognize that norms for interactions involving outsiders may differ from those for interactions between compatriots. 6. Do not overestimate your familiarity with your counterpart’s culture. An American studying Japanese wrote New Year’s wishes to Japanese contacts in basic Japanese characters but omitted one character. As a result, the message became “Dead man, congratulations.”70 Other useful examples have been offered by Trompenaars and Hampden-Turner, who note that a society’s culture often plays a major role in determining the effectiveness of a negotiating approach. This is particularly true when the negotiating groups come from decidedly different cultures such as an ascription society and an achievement society. As noted in Chapter 4, in an ascription society, status is attributed based on birth, kinship, gender, age, and personal connections. In an achievement society, status is determined by accomplishments. As a result, each side’s cultural perceptions can affect the outcome of the negotiation. Here is an example: Sending whiz-kids to deal with people 10–20 years their senior often insults the ascriptive culture. The reaction may be: “Do these people think that they have reached our own level of experience in half the time? That a 30-year-old American is good enough to negotiate with a 50-year-old Greek or Italian?” Achievement cultures must understand that some ascriptive cultures, the Japanese especially, spend much on training and in-house education to ensure that older people actually are wiser for the years they have spent in the corporation and for the sheer number of subordinates briefing them. It insults an ascriptive culture to do anything which prevents the self-fulfilling nature of its beliefs. Older people are held to be important so that they will be nourished and sustained by others’ respect. A stranger is expected to facilitate this scheme, not challenge it.71 U.S. negotiators have a style that often differs from that of negotiators in many other countries. Americans believe it is important to be factual and objective. In addition, they often make early concessions to show the other party that they are flexible and reasonable. Moreover, U.S. negotiators typically have authority to bind their party to an agreement, so if the right deal is struck, the matter can be resolved quickly. This is why deadlines are so important to Americans. They have come to do business, and they want to get things resolved immediately. A comparative example would be the Arabs, who in contrast to Americans, with their logical approach, tend to use an emotional appeal in their negotiation style. They analyze things subjectively and treat deadlines as only general guidelines for wrapping up negotiations. They tend to open negotiations with an extreme initial position. However, the Arabs believe strongly in making concessions, do so throughout the bargaining process, and almost always reciprocate an opponent’s concessions. They also seek to build a long-term relationship with their bargaining partners. For these reasons, ­Americans typically find it easier to negotiate with Arabs than with representatives from many other regions of the world. Another interesting comparative example is provided by the Chinese. In initial negotiation meetings, it is common for Chinese negotiators to seek agreement on the general focus of the meetings. The hammering out of specific details is postponed for later gettogethers. By achieving agreement on the general framework within which the negotiations will be conducted, the Chinese seek to limit and focus the discussions. Many Westerners misunderstand what is happening during these initial meetings and believe the dialogue consists mostly of rhetoric and general conversation. They are wrong and quite often are surprised later on when the Chinese negotiators use the agreement on the framework and principles as a basis for getting agreement on goals—and then insist that all discussions on concrete arrangements be in accord with these agreed-upon goals. Simply put, what is viewed as general conversation by many Western negotiators is regarded by the Chinese as a formulation of the rules of the game that must be adhered to throughout the negotiations. So in negotiating with the Chinese, it is important to come prepared to ensure that one’s own agenda, framework, and principles are accepted by both parties. Chapter 7 Cross-Cultural Communication and Negotiation 233 Table 7–9 Negotiation Styles from a Cross-Cultural Perspective Element United States Japanese Arabians Mexicans Group composition Marketing oriented Function oriented Committee of specialists Friendship oriented Number involved 2–3 4–7 4–6 2–3 Space orientation Confrontational; competitive Display harmonious relationship Status Close, friendly Establishing rapport Short period; direct to task Longer period; until harmony Long period; until trusted Longer period; discuss family Exchange of information Documented; step by step; multimedia Extensive; concentrate on receiving side Less emphasis on technology, more on relationship Less emphasis on technology, more on relationship Persuasion tools Time pressure; loss of saving/making money Maintain relationship references; intergroup connections Go-between; hospitality Emphasis on family and on social concerns; goodwill measured in generations Use of language Open, direct, sense of urgency Indirect, appreciative, cooperative Flattery, emotional, religious Respectful, gracious First offer Fair ±5 to 10% ±10 to 20% ±20 to 50% Fair Second offer Add to package; sweeten the deal −5% −10% Add an incentive Final offer package Total package Makes no further concessions −25% Total Decision-making process Top management team Collective Team makes recommendation Senior manager and secretary Decision maker Top management team Middle line with team consensus Senior manager Senior manager Risk taking Calculated personal responsibility Low group responsibility Religion based Personally responsible Source: Lillian H. Chaney and Jeanette S. Martin, International Business Communication, 3rd Edition © 2004. Electronically reproduced by permission of Pearson Education, Inc., Upper Saddle River, New Jersey. Before beginning any negotiations, negotiators should review the negotiating style of the other parties. (Table 7–9 provides some insights regarding negotiation styles of the United States, Japanese, Arabians, and Mexicans.) This review should help to answer certain questions: What can we expect the other side to say and do? How are they likely to respond to certain offers? When should the most important matters be introduced? How quickly should concessions be made, and what type of reciprocity should be expected? These types of questions help effectively prepare the negotiators. In addition, the team will work on formulating negotiation tactics. The International Management in Action “Negotiating with the Japanese” demonstrates such tactics, and the following discussion gets into some of the specifics. Sometimes, simply being familiar with the culture is still falling short of being aptly informed. We discussed in Chapter 2 how the political and legal environment of a country can have an influence over an MNC’s decision to open operations, and those external factors are good to bear in mind when coming to an agreement. Both parties may believe that the goals have been made clear, and on the surface a settlement may deliver positive results. However, the subsequent actions taken by either company could prove to exhibit even more barriers. Take Pirelli, an Italian tire maker that acquired Continental Gummiwerke, its German competitor. Pirelli purchased the majority holdings of Continental’s stock, a transaction that would translate into Pirelli having control of the company if it occurred in the United States. When Pirelli attempted to make key managerial decisions for its Continental unit, it discovered that in Germany, the corporate governance in place allows German companies to block such actions, regardless of the shareholder position. Furthermore, the labor force has quite a bit of leverage with its International Management in Action Negotiating with the Japanese Some people believe that the most effective way of getting the Japanese to open up their markets to the United States is to use a form of strong-arm tactics, such as putting the country on a list of those to be targeted for retaliatory action. Others believe that this approach will not be effective because the interests of the United States and Japan are intertwined and we would be hurting ourselves as much as them. Regardless of which group is right, one thing is certain: U.S. MNCs must learn how to negotiate more effectively with the Japanese. What can they do? Researchers have found that besides patience and a little table pounding, a number of ­important steps warrant consideration. First, business firms need to prepare for their negotiations by learning more about Japanese culture and the “right” ways to conduct discussions. Those companies with experience in these matters report that the two best ways of doing this are to read books on Japanese business practices and social customs and to hire experts to train the negotiators. Other steps that are helpful include putting the team through simulated negotiations and ­hiring Japanese to assist in the ­negotiations. Second, U.S. MNCs must learn patience and sincerity. Negotiations are a two-way street that require the mutual cooperation and efforts of both parties. The U.S. negotiators must understand that many times, Japanese negotiators do not have full authority to make on-the-spot decisions. Authority must be given by someone at the home office, and this failure to act quickly should not be interpreted as a lack of sincerity on the part of the Japanese negotiators. Third, the MNC must have a unique good or service. So many things are offered for sale in Japan that unless the company has something that is truly different, persuading the other party to buy it is difficult. Fourth, technical expertise often is viewed as a very important contribution, and this often helps to win concessions with the Japanese. The Japanese know that the Americans, for example, still dominate the world when it comes to certain types of technology and that Japan is unable to compete effectively in these areas. When such technical expertise is evident, it is very influential in persuading the Japanese to do business with the company. These four criteria are critical to effective negotiations with the Japanese. MNCs that use them report more successful experiences than those that do not. ability to elect members of the supervisory board, which in turn chooses the management board.72 Pirelli essentially lost on an investment; that is, unless Continental can be profitable under its current management. If Pirelli had known that this was going to happen, it probably would have reconsidered. One solution could be for Pirelli’s management to begin some positive rapport with the labor force to try to sway viewpoints internally. The better option, though, would be for international managers to be as informed as possible and avoid trouble before it occurs. Negotiation Tactics A number of specific tactics are used in international negotiation. The following discussion examines some of the most common. Location Where should negotiations take place? If the matter is very important, most businesses will choose a neutral site. For example, U.S. firms negotiating with companies from the Far East will meet in Hawaii, and South American companies negotiating with European firms will meet halfway, in New York City. A number of benefits derive from using a neutral site. One is that each party has limited access to its home office for receiving a great deal of negotiating information and advice and thus gaining an advantage on the other. A second is that the cost of staying at the site often is quite high, so both sides have an incentive to conclude their negotiations as quickly as possible. (Of course, if one side enjoys the facilities and would like to stay as long as possible, the negotiations could drag on.) A third is that most negotiators do not like to return home with nothing to show for their efforts, so they are motivated to reach some type of agreement. Time Limits Time limits are an important negotiation tactic when one party is under a time constraint. This is particularly true when this party has agreed to meet at the home 234 Chapter 7 Cross-Cultural Communication and Negotiation site of the other party. For example, U.S. negotiators who go to London to discuss a joint venture with a British firm often will have a scheduled return flight. Once their hosts find out how long these individuals intend to stay, the British can plan their strategy accordingly. The “real” negotiations are unlikely to begin until close to the time that the Americans must leave. The British know that their guests will be anxious to strike some type of deal before returning home, so the Americans are at a disadvantage. Time limits can be used tactically even if the negotiators meet at a neutral site. For example, most Americans like to be home with their families for Thanksgiving, Christmas, and the New Year holiday. Negotiations held right before these dates put Americans at a disadvantage because the other party knows when the Americans would like to leave. Buyer-Seller Relations How should buyers and sellers act? As noted earlier, A ­ mericans believe in being objective and trading favors. When the negotiations are over, Americans walk away with what they have received from the other party, and they expect the other party to do the same. This is not the way negotiators in many other countries think, however. The Japanese, for example, believe that the buyers should get most of what they want. On the other hand, they also believe that the seller should be taken care of through reciprocal favors. The buyer must ensure that the seller has not been “picked clean.” For example, when many Japanese firms first started doing business with large U.S. firms, they were unaware of U.S. negotiating tactics. As a result, the Japanese thought the Americans were taking advantage of them, whereas the Americans believed they were driving a good, hard bargain. The Brazilians are quite different from both the Americans and Japanese. Researchers have found that Brazilians do better when they are more deceptive and self-interested and their opponents more open and honest than they are.73,74 Brazilians also tend to make fewer promises and commitments than their opponents, and they are much more prone to say no. However, Brazilians are more likely to make initial concessions. Overall, ­Brazilians are more like Americans than Japanese in that they try to maximize their advantage, but they are unlike Americans in that they do not feel obligated to be open and forthright in their approach. Whether they are buyer or seller, they want to come out on top. Negotiating for Mutual Benefit When managers enter a negotiation with the intent to win and are not open to flexible compromises, it can result in a stalemate. Ongoing discussion with little progress can increase tensions between the two groups and create an impasse where groups become more frustrated and aggressive, and no agreement can be reached.75 Ultimately, too much focus on the plan with little concern for the viewpoint of the other group can lead to missed opportunities. It is important to keep objectives in mind and at the forefront, but it should not be a substitute for constructive discussions. Fisher and Ury, authors of the book Getting to Yes, present five general principles to help avoid such disasters: (1) separate the people from the problem, (2) focus on interests rather than positions, (3) generate a variety of options before settling on an agreement (as mentioned earlier in this section), (4) insist that the agreement be based on objective criteria, and (5) stand your ground.76 Separating the People from the Problem Often, when managers spend so much time getting to know the issue, many become personally involved. Therefore, responses to a particular position can be interpreted as a personal affront. In order to preserve the personal relationship and gain a clear perspective on the issue, it is important to distinguish the problem from the individual. When dealing with people, one barrier to complete understanding is the negotiating parties’ perspectives. Negotiators should try to put themselves in the other’s shoes. Avoid blame, and keep the atmosphere positive by attempting to alter proposals to better 235 236 Part 2 The Role of Culture t­ranslate the objectives. The more inclusive the process, the more willing everyone will be to find a solution that is mutually beneficial. Emotional factors arise as well. Negotiators often experience some level of an emotional reaction during the process, but it is not seen by the other side. Recognize your own emotions and be open to hearing and accepting emotional concerns of the other party. Do not respond in a defensive manner or give in to intense impulses. Ignoring the intangible tension is not recommended; try to alleviate the situation through sympathetic gestures such as apologies. As mentioned earlier, good communication is imperative to reaching an agreement. Talk to each other, instead of just rehashing grandiose aspects of the proposal. Listen to responses and avoid passively sitting there while formulating a response. When appropriate, summarize the key points by vocalizing your interpretation to the other side to ensure correct evaluation of intentions. Overall, don’t wait for issues to arise and react to them. Instead, go into discussion with these guidelines already in play. Focusing on Interests over Positions The position one side takes can be expressed through a simple outline, but still does not provide the most useful information. Focusing on interests gives one insight into the motivation behind why a particular position was chosen. Digging deeper into the situation by both recognizing your own interests and becoming more familiar with others’ interests will put all active partners in a better position to defend their proposal. Simply stating, “This model works, and it is the best option,” may not have much leverage. Discussing your motivation, such as, “I believe our collaboration will enhance customer satisfaction, which is why I took on this project,” will help others see the why, not just the what. Hearing the incentive behind the project will make both sides more sympathetic, and may keep things consistent. Be sure to consider the other side, but maintain focus on your own concerns. Generating Options Managers may feel pressured to come to an agreement quickly for many reasons, especially if they hail from a country that puts a value on time. If negotiations are with a group that does not consider time constraints, there may be temptation to have only a few choices to narrow the focus and expedite decisions. It turns out, though, that it is better for everyone to have a large number of options in case some proposals prove to be unsatisfactory. How do groups go about forming these proposals? First, they can meet to brainstorm and formulate creative solutions through a sort of invention process. This includes shifting thought focus among stating the problem, analyzing the issue, pondering general approaches, and strategizing the actions. After creating the proposals, the groups can begin evaluating the options and discuss improvements where necessary. Try to avoid the win-lose approach by accentuating the points of parity. When groups do not see eye to eye, find options that can work with both viewpoints by “look[ing] for items that are of low cost to you and high benefit to them, and vice versa.”77 By offering proposals that the other side will agree to, you can pinpoint the decision makers and tailor future suggestions toward them. Be sure to support the validity of your proposal, but not to the point of being overbearing. Using Objective Criteria In cases where there are no common interests, avoid tension by looking for objective options. Legitimate, practical criteria could be formed by using reliable third-party data, such as legal precedent. If both parties would accept being bound to certain terms, then chances are the suggestions were derived from objective criteria. The key is to emphasize the communal nature of the process. Inquire about why the other group chose its particular ideas. It will help you both see the other side and give you a springboard from which you can argue your views, which can be very persuasive. Overall, effective negotiations will result from international managers being flexible but not folding to external pressures. Chapter 7 Cross-Cultural Communication and Negotiation These are just general guidelines to abide by to try and reach a mutual agreement. The approaches will be more effective if the group adhering to the outline was the one with more power. Fisher and Ury also looked at what managers should do if the other party has the power. Standing Ground Every discussion will have some imbalance of power, but there is something negotiators can do to defend themselves. It may be tempting to create a “bottom line,” or lowest possible set of options that one will accept, but it does not necessarily accomplish the objective. When negotiators make a definitive decision before engaging in discussion, they may soon find out that the terms never even surface. That is not to say that their bottom line is below even the lowest offer, but instead that without working with the other negotiators, they cannot accurately predict the proposals that will be devised. So what should the “weaker” opponent do? The reason two parties are involved in a negotiation is because they both want a situation that will leave them better off than before. Therefore, no matter how long negotiations drag on, neither side should agree to terms that will leave it worse off than its best alternative to a negotiated agreement, or BATNA. Clearly defining and understanding the BATNA will make it easier to know when it is time to leave a negotiation and empower that side. An even better scenario would be if the negotiator learns of the other side’s BATNA. As Fisher and Ury say: “Developing your BATNA thus not only enables you to determine what is a minimally acceptable agreement, it will probably raise that minimum.”78 Even the most prepared manager can walk into a battle zone. At times, negotiators will encounter rigid, irritable, caustic, and selfish opponents. A positional approach to bargaining can cause tension, but the other side can opt for a principled angle. This entails a calm demeanor and a focus on the issues. Instead of counterattacking, redirect the conversation to the problem and do not take any outbursts as personal attacks. Inquire about their reasoning and try to take any negative statements as constructive. If no common ground is reached, a neutral third party can come in to assess the desires of each side and compose an initial proposal. Each group has the right to suggest alternative approaches, but the third-party person has the last word in what the true “final draft” is. If the parties decide it is still unacceptable, then it is time to walk away from negotiations. Fisher and Ury compiled a comprehensive guide as to how to approach negotiations. While no guideline has a 100 percent effective rate, their method helps gain a position where both sides win. Bargaining Behaviors Closely related to the discussion of negotiation tactics are the different types of bargaining behaviors, including both verbal and nonverbal behaviors. Verbal behaviors are an important part of the negotiating process because they can improve the final outcome. Research shows that the profits of the negotiators increase when they make high initial offers, ask a lot of questions, and do not make many verbal commitments until the end of the negotiating process. In short, verbal behaviors are critical to the success of negotiations. Use of Extreme Behaviors Some negotiators begin by making extreme offers or requests. The Chinese and Arabs are examples. Some negotiators, however, begin with an initial position that is close to the one they are seeking. The Americans and Swedes are examples here. Is one approach any more effective than the other? Research shows that extreme positions tend to produce better results. Some of the reasons relate to the fact that an extreme bargaining position (1) shows the other party that the bargainer will not be exploited, (2) extends the negotiation and gives the bargainer a better opportunity to gain information on the opponent, (3) allows more room for concessions, (4) modifies the opponent’s beliefs about the bargainer’s preferences, (5) shows the opponent that the bargainer is willing to play the game according to the usual norms, and (6) lets the bargainer gain more than would probably be possible if a less extreme initial position had been taken. 237 238 Part 2 The Role of Culture Although the use of extreme position bargaining is considered to be “un-American,” many U.S. firms have used it successfully against foreign competitors. When Peter Ueberroth managed the Olympic Games in the United States in 1984, he turned a profit of well over $100 million—and that was without the participation of Soviet-bloc countries, which would have further increased the market potential of the games. In most other Olympiads, sponsoring countries have lost hundreds of millions of dollars. How did Ueberroth do it? One way was by using extreme position bargaining. For example, the Olympic Committee felt that the Japanese should pay $10 million for the right to televise the games in the country, so when the Japanese offered $6 million for the rights, the Olympic Committee countered with $90 million. Eventually, the two sides agreed on $18.5 million. Through the effective use of extreme position bargaining, Ueberroth got the Japanese to pay over three times their original offer, an amount well in excess of the committee’s budget. Promises, Threats, and Other Behaviors Another approach to bargaining is the use of promises, threats, rewards, self-disclosures, and other behaviors that are designed to influence the other party. These behaviors often are greatly influenced by the culture. Graham conducted research using Japanese, U.S., and Brazilian businesspeople and found that they employed a variety of different behaviors during a buyer-seller negotiation simulation.79 Table 7–10 presents the results. Table 7–10 Cross-Cultural Differences in Verbal Behavior of Japanese, U.S., and Brazilian Negotiators Number of Times Tactic Was Used in a Half-Hour Bargaining Session Behavior and Definition Japanese United States Brazilian Promise. A statement in which the source indicated an intention to provide the target with a reinforcing consequence that the source anticipates the target will evaluate as pleasant, positive, or rewarding. 7 8 3 Threat. Same as promise, except that the reinforcing consequences are thought to be noxious, unpleasant, or punishing. 4 4 2 Recommendation. A statement in which the source predicts that a pleasant environmental consequence will occur to the target. Its occurrence is not under the source’s control. 7 4 5 Warning. Same as recommendation except that the consequences are thought to be unpleasant. 2 1 1 Reward. A statement by the source that is thought to create pleasant consequences for the target. 1 2 2 Punishment. Same as reward, except that the consequences are thought to be unpleasant. 1 3 3 Positive normative appeal. A statement in which the source indicates that the target’s past, present, or future behavior was or will be in conformity with social norms. 1 1 0 Negative normative appeal. Same as positive normative appeal, except that the target’s behavior is in violation of social norms. 3 1 1 Commitment. A statement by the source to the effect that its future bids will not go below or above a certain level. 15 13 8 Self-disclosure. A statement in which the source reveals information about itself. 34 36 39 Question. A statement in which the source asks the target to reveal information about itself. 20 20 22 Command. A statement in which the source suggests that the target perform a certain behavior. 8 6 14 First offer. The profit level associated with each participant’s first offer. 61.5 57.3 75.2 Initial concession. The differences in profit between the first and second offer. 6.5 7.1 9.4 Number of no’s. Number of times the word “no” was used by bargainers per half-hour. 5.7 9.0 83.4 Source: Adapted from John L. Graham, “The Influence of Culture on the Process of Business Negotiations in an Exploratory Study,” Journal of International Business Studies, Spring 1983, p. 88. Reprinted by permission from Macmillan Publishers Ltd., Journal of International Business Studies, March 1, 1985. Published by Palgrave Macmillan. Chapter 7 Cross-Cultural Communication and Negotiation 239 The table shows that Americans and Japanese make greater use of promises than do Brazilians. The Japanese also rely heavily on recommendations and commitment. The Brazilians use a discussion of rewards, commands, and self-disclosure more than Americans and Japanese. The Brazilians also say no a great deal more and make first offers that have higher-level profits than those of the others. Americans tend to operate between these two groups, although they do make less use of commands than either of their opponents and make first offers that have lower profit levels than their opponents’. Nonverbal Behaviors Nonverbal behaviors also are very common during negotiations. These behaviors refer to what people do rather than what they say. Nonverbal behaviors sometimes are called the “silent language.” Typical examples include silent periods, facial gazing, touching, and conversational overlaps. As seen in Figure 7–3, the Japanese tend to use silent periods much more often than either Americans or Brazilians during negotiations. In fact, in this study, the Brazilians did not use them at all. The Brazilians did, however, make frequent use of other nonverbal behaviors. They employed facial gazing almost four times more often than the Japanese and almost twice as often as the Americans. In addition, although the Americans and Japanese did not touch their opponents, the Brazilians made wide use of this nonverbal tactic. They also relied heavily on conversational overlaps, employing them more than twice as often as the Japanese and almost three times as often as Americans. The number of times (per 10 minutes) that both parties to the negotiation would talk at the same time The number of minutes negotiators spend looking at their opponent’s face per 10-minute period 28.6 5.2 3.3 12.6 10.3 1.3 Japanese United States Brazilian Number of 10-second gaps per 30 minutes of conversation Japanese United States Brazilian Incidents of negotiators’ touching one another per half-hour 4.7 5.5 3.5 Japanese United States 0 0 0 Brazilian Japanese United States Brazilian Source: Original graphic by Ben Littell under supervision of Professor Jonathan Doh based on data from John L. Graham, “The Influence of Culture on the Process of Business Negotiations in an Exploratory Study,” Journal of International Business Studies, Spring 1983, p. 88. Reprinted by permission from Macmillan Publishers Ltd., Journal of International Business Studies, March 1, 1985. Published by Palgrave Macmillan. Figure 7–3 Cross-Cultural Differences in Nonverbal Behavior of Japanese, U.S., and Brazilian Negotiators 240 Part 2 The Role of Culture Table 7–11 Culture-Specific Characteristics Needed by International Managers for Effective Negotiations U.S. managers • Preparation and planning skill Ability to think under pressure ­Judgment and intelligence Verbal expressiveness Product ­knowledge Ability to perceive and exploit power Integrity Japanese managers • Dedication to job Ability to perceive and exploit power Ability to win respect and confidence Integrity Listening skill Broad ­perspective Verbal expressiveness Chinese managers (Taiwan) • Persistence and determination Ability to win respect and confidence Preparation and planning skill Product knowledge Interesting ­Judgment and intelligence Brazilian managers • Preparation and planning skill Ability to think under pressure Judgment and intelligence Verbal expressiveness Product knowledge Ability to perceive and exploit power Competitiveness Source: Adapted from Nancy J. Adler, International Dimensions of Organizational Behavior, 2nd ed. (Boston: PWS-Kent Publishing, 1991), p. 187; and from material provided by Professor John Graham, School of Business Administration, University of Southern California, 1983. Quite obviously, the Brazilians rely very heavily on nonverbal behaviors in their ­negotiating. The important thing to remember is that in international negotiations, people use a wide variety of tactics, and the other side must be prepared to counter or find a way of dealing with them. The response will depend on the situation. Managers from different cultures will employ different tactics. Table 7–11 suggests some characteristics needed in effective negotiators, as exemplified by various cultures. To the extent that international managers have these characteristics, their success as negotiators should increase. The World of International Management—Revisited The chapter’s opening World of International Management explored some of the international communication and negotiation challenges that Netflix has faced when expanding into Russia and attempting to enter China. Despite an entry strategy that proved successful in markets in Europe and the Americas, Netflix encountered a longer and more complex negotiation process in China than expected. And in Russia, Netflix’s lack of communication and its failure to recognize the necessary involvement of government officials in its expansion plans resulted in a political backlash. As this chapter revealed, understanding the communication styles of different cultures is a critical variable in entering foreign markets, managing relationships among employees and customers, managers and subordinates, and in all business relationships. A key to success in today’s global economy is being able to communicate effectively within and across national boundaries and to engage in effective negotiations across cultures. Considering the communication challenges faced by offshoring firms, along with what you have read in this chapter, answer the following questions: (1) How is communication in India similar to that of Europe and North America? How is it different? (2) What kind of managerial relationships could you assume exist between an American financial services firm and its employees in India? (3) What kind of negotiations could help engage Indian employees and overcome some of the cultural problems encountered? How might culture play a role in the approach the Indian employees take in their negotiation with the financial firm? Chapter 7 Cross-Cultural Communication and Negotiation 241 SUMMARY OF KEY POINTS 1. Communication is the transfer of meaning from sender to receiver. The key to the effectiveness of communication is how accurately the receiver interprets the intended meaning. 2. Communicating in the international business context involves both downward and upward flows. Downward flows convey information from superior to subordinate; these flows vary considerably from country to country. For example, the downward system of organizational communication is much more prevalent in France than in Japan. Upward communication conveys information from subordinate to superior. In the United States and Japan, the upward system is more common than in South America or some European countries. 3. The international arena is characterized by a number of communication barriers. Some of the most important are intrinsic to language, perception, culture, and nonverbal communication. Language, particularly in written communications, often loses considerable meaning during interpretation. Perception and culture can result in people’s seeing and interpreting things differently, and as a result, communication can break down. Nonverbal communication such as body language, facial expressions, and use of physical space, time, and even color often varies from country to country and, if improper, often results in communication problems. 4. A number of steps can be taken to improve communication effectiveness. Some of the most important include improving feedback, providing language and cultural training, and encouraging flexibility and cooperation. These steps can be particularly helpful in overcoming communication barriers in the international context and can lead to more effective international management. 5. Negotiation is the process of bargaining with one or more parties to arrive at a solution that is acceptable to all. There are two basic types of negotiation: distributive negotiation involves bargaining over opposing goals while integrative negotiation involves cooperation aimed at integrating interests. The negotiation process involves five basic steps: planning, interpersonal relationship building, exchanging task-related information, persuasion, and agreement. The way in which the process is carried out often will vary because of cultural differences, and it is important to understand them. 6. There are a wide variety of tactics used in international negotiating. These include location, time limits, buyer-seller relations, verbal behaviors, and nonverbal behaviors. 7. Negotiating for mutual benefit is enhanced by separating the people from the problem, focusing on interests rather than positions, generating a variety of options, insisting that the agreement be based on objective criteria, and standing one’s ground. KEY TERMS chromatics, 225 chronemics, 225 communication, 210 context, 210 distributive negotiations, 229 downward communication, 214 haptics, 224 integrative negotiation, 230 intimate distance, 224 kinesics, 224 monochronic time schedule, 225 negotiation, 229 nonverbal communication, 223 oculesics, 224 perception, 219 personal distance, 224 polychronic time schedule, 225 proxemics, 224 public distance, 224 social distance, 224 upward communication, 215 REVIEW AND DISCUSSION QUESTIONS 1. How does explicit communication differ from implicit communication? Which is one culture that makes wide use of explicit communication? Implicit communication? Describe how one would go about conveying the following message in each of the two cultures you identified: “You are trying very hard, but you are still making too many mistakes.” 2. One of the major reasons that foreign expatriates have difficulty doing business in the United States is that they do not understand American slang. A business executive recently gave the authors the following three examples of statements that had no direct meaning for her because she was unfamiliar with slang: “He was laughing like hell.” “Don’t
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Euro Disneyland Case Study

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Euro Disneyland Case Study
Disneyland is among the most extensive successful amusement facilities in the United
States and globally, generating significant revenue all year round and particularly during the
summer. When the Corporation began growing, it established profitable operations in Florida
and Tokyo before launching Euro Disney. Both officially and unofficially, culture is critical in
decision-making and economic expansion. Culture shapes how individuals perceive the universe
and comprehend the consequences of their activities and decisions. Corporatism, ambiguity
minimization, masculinity or feminism, and authority distance are crucial elements of culture
that businesses may perceive along the decision-making cycle. Euro Disneyland’s scenario
demonstrates the industry’s significance of heritage. The research will examine Euro Disneyland,
a company that enjoyed considerable popularity in Japan but faltered horribly in its foreign
expansion endeavor known as “Disneyland.” As per the case analysis, the enterprise failed due to
the administrators’ failure to comprehend the critical nature of their everyday operations.
The Corporation neglected to consider its clients’ emotional dispositions and the
importance of responding to their wishes. Euro Disneyland ignored two sensitive characteristics:
cross-cultural understanding and customized customer encounters. Consequently, the company
lost touch with its targeted client base, which resulted in an effective turnover rate. This article
will outline the five processes necessary to examine Disneyland’s entrance into the European
industry (Botone & Grama, 2018). There are significant cultural distinctions among the
American and France when Hofstede’s initial four cultural elements of dominance isolation,
ambiguity avoidance, autonomy, and masculinity are used. Using “Disneyland” as a case study,
this article will analyze how cultural differences and decision-making affect business success.

Matrix Table
The table below depicts the cultural difficulties created by the expansion of Disney into
Europe vis-a-vis the factors that instigated these challenges.
Cultural difficulties instigated by Disney’s

Factors that impact these Problems

entry into Europe
Power reserve

i. Politics
ii. administrators
iii. personnel

Insecurity prevention

i. Inventive products
ii. New systems
iii. Forecasting and arrangement


i. The predisposition of individuals to tend for
ii. Instantaneous household members


i. Accomplishment
ii. Finances
iii. Things

Weighted tallies for every possibility or element grouping grounded on the assessment 15 is premeditated as specified below.


Weighted tallies for every preference or
influence grouping.

Power reserve

5*2 = 10

Insecurity prevention

4*2 = 8


1*2 = 2


2*2 = 4

Hofstede’s four Primary Cultural Distinctions between the U.S. and France
When it pertains to using Hofstede’s intercultural component hypothesis, the U.S. and
France share a notable cultural distinction. The four cultural aspects identified by Hofstede are
Power or distance, masculine vs. feminine, autonomy, and rejection of weakness (Newel, 2013).
In terms of Machismo, the United States is motivated by accomplishment, which is characterized
as “winning,” “the greatest,” or even “Outstanding.” This is instilled from a young age and might
carry over into a member’s job as they mature, and their masculine attributes are demonstrated
more independently than as a unit or team (Country Comparison, 2019.) When Machismo is used
to assess France to the United States, the French score much worse. They are also less
independent than Americans, but they must be shaped into that Disney-themed mindset
(Raynode, 2019). In terms of autonomy, they seem to be more likely to look after themselves and
their immediate relatives. This is exceptionally comparable when America and France are
On the other hand, the French were angered when implementing the Strict Presentation
Code since it would violate their traditions. This policy would prohibit males from wearing facial
hair, goatees, or shaved sides at Euro Disney, something the French despised (Luthans, 2019).

As stated in Global Management: Civilization, Policy, and Conduct, “Stephane Baudette, a 28year-old trumpeter from Paris, rejected to apply for a position in a Disney metal band after
learning he would be required to trim his ponytail.” “Certain individuals will transform into
pumpkins to operate at Euro Disneyland,” he explained. “However, not me.” This demonstrates
that the French regard their sovereignty seriously and are incredibly proud of their traditions and
One other cultural factor highlighted before was Avoidance of Weakness. Euro Disney is
not mainly European, as it is heavily American. When compared to the French, the U.S. score is
significantly lower. When contrasting the number of visitors to the parks, the French seem far
unsure. Finally, there is Power, which Hofstede refers to as the fourth cultural component.
Compared to France, the rating in the United States is significantly lesser. Once Euro Disney
opened in France, the French inhabitants felt like foreigners owing to the English job
advertisements by small and medium-sized businesses sent around the nation. Not just to do the
advertising portrays the French as foreigners, but many of the producers were Americans who
could not communicate good French (Botone & Grama, 2018).
The U.S. and France have parallels and contrasts in their political institutions, ideologies,
governance administrations, and judicial mechanisms. The U.S. and French populations are
hybrid. France is internationally recognized for its agricultural, engineering, and service
industries. The French administration exerts enormous financial clout due to its investments in
two of the nation’s major businesses (Luthans & Doh, 2012). While several institutions in the
United States have begun to manage the social sector, the current regime also regulates products
and services such as travel, jails, highways, healthcare, and postal services.

Additionally, Disney’s cultural norms have produced a distinct impact since the company
has developed laws and restrictions around what the customer must consume. It hence limits
what must be acquired, trying to enforce labor standards that directly impact the operation of the
business. These fears stymied extension, and as a consequence, the firm lagged in terms of
investment and revenue. The nation’s people’s adherence to the convention was one of the
factors that contributed to these issues. These societal conventions have set limits on what should
be altered and how it should be changed, resulting in a significant problem. In regards to labor,
several legislations have been enacted to provide direction on what must be followed in the
general representation of compliance with labor requirements (Kotler et al.,2019). People with
conventional values frequented the company’s website and disregarded the regulations and
restrictions mentioned in the Corporation’s service.
Errors that the Corporation made in Running its Euro Disneyland Processes
When operating the Euro Disney business, the Corporation committed three faults: a
shortage of administration, an inability to hire the appropriate people, and social blunders due to
the setting in which Euro Disney is situated. Their approach of not offering alcohol astounded
and contradicted the French tradition (Luthans, 2019). Liquor is frequently provided in France,
particularly around lunch, ...

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