CU-MBA-SEM-IV-International HRM

Loose, wide networks, shorter term, compartmentalized relationships, task more important than relationship Main Type of Cultural Knowledge High: More knowledge is below the waterline--implicit, patterns that are not fully conscious, hard to explain even if you are a member of that culture Low: More knowledge is above the waterline--explicit, consciously organized Entering High and Low Context Situations High contexts can be difficult to enter if you are an outsider (because you don't carry the context information internally, and because you can't instantly create close relationships). Low contexts are relatively easy to enter if you are an outsider (because the environment contains much of the information you need to participate, and because can you form relationships fairly soon, and because the important thing is accomplishing a task rather than feeling your way into a relationship). Remember that every culture and every situation has its high and low aspects. Often one situation will contain an inner high context core and an outer low context ring for those who are less involved. For instance, a PTA is usually a low context situation: any parent can join, the dates of the meetings, who is president, what will be discussed, etc. are all explicitly available information, and it is usually fairly clear how to participate in the meetings. However, if this is a small town, perhaps the people who run the PTA all know each other very well and have many overlapping interests. They may \"agree\" on what should be discussed or what should happen without ever really talking about it, they have unconscious, unexpressed values that influence their decisions. Other parents from outside may not understand how decisions are actually being made. So the PTA is still low context, but it has a high context subgroup that is in turn part of a high context small town society. NOTE: When you enter a high context situation, it doesn't immediately become a low context culture just because you came in the door! It is still a high context culture and you are just (alas), ignorant. Also, even low context cultures can be difficult to learn: religious dietary laws, 51 CU IDOL SELF LEARNING MATERIAL (SLM)

medical training, written language all take years to understand. The point is that that information has been made conscious, systematic, and available to those who have the resources to learn it. 2.4.4 ANDRE LAURENT’S STUDY OF MANAGEMENT STYLES: Laurent was directed to bring into focus some of the implicit management and organizational assumptions that managers are known to have, it is not so much to explore national differences. Laurent analysed the values of managers in nine European countries and the US in 1983 and 1989 in China, Indonesia and Japan. Laurent used four parameters: Perception of the organization This aspect deals with the political role played by managers in the society, the managers perception of power motivation within the organization, the assessment of the degree to which organizational structures are clearly defined in the minds of managers. The French and Italian managers have stronger perception of their political role and emphasize the importance of power motivation within the organization. They also report a fairly hazy notion of organization structure. The opposite is true for the Danish and the British. These results may provide some insight into the extent to which managers from different countries tend to interpret their organizational experiences in power terms. Authority systems This aspect deals with the conception of hierarchical structure in the organization. It examines if managers agree to the belief that the reason for having a hierarchical structure is to know who has authority over whom, if there is a perception of authority crisis in the organization, the image of a manager as a negotiator. The study revealed three country clusters; Latin countries such as Belgium, Italy, France, etc. at the upper end of the continuum, the United States, Switzerland, and Germany at the lower end and the rest of the countries in the middle. Organizations are seen more frequently as authority systems by French managers than by American Managers. The French, Italian and Belgian managers reported a more personal and social concept of authority, which is based on personal traits and relationships, that regulates relationships among individuals in organizations. The American, Swiss, and German Managers seem to report a more rational view of authority, which is based on the attributes of the role or function, that regulates interaction among tasks and functions. Role formulation systems- This aspect focuses on the relative importance of defining the functions and roles of organizational members, with emphasis on detailed job descriptions, well defined functions and precisely defined roles. The study found that there is a lower 52 CU IDOL SELF LEARNING MATERIAL (SLM)

insistence on the need for role formalization in Sweden, the United States and the Netherlands than in the remaining seven countries. Hierarchical systems.This deals with manager’s attitudes toward organizational relationships. It was found that there are sharp differences in management attitudes towards organizational relationships as one moves from northern Europe and the United States at the lower end of the continuum to the Latin countries of Europe at the higher end. These differences in attitudes help one to understand manager’s preferences for traditional hierarchical structure, which are primarily characterised by unity of command or matrix structure which involves reporting to more than one boss. Managers who accept organizational relationships as hierarchical are uncomfortable with the matrix structure. In this respect, the score of the Swedish managers is the lowest and Italian managers the highest. Consequently, matrix type organizational structure should have better prospects in Sweden than inItaly. The Phenomenal success of matrix type structures in ABB, a Swedish organization, validates the finding. This research treated management as a process by which managers express their cultural values like how far manager caries his / her status into the wider context outside the workplace. Therefore, the international manager needs cross – cultural competence to manage multiculturalism. Cross cultural competence includes skills, awareness and Knowledge. In order to be culturally competent, an individual need to: • Possess a strong personal identity • Have knowledge of and facility with the beliefs and values of the culture • Display sensitivity to the effective process of the culture. • Communicate clearly in the language of the given culture group. • Perform specially sanctioned behaviour. • Maintain active social relations within the cultural group • Negotiate the institutional structures of that culture. 2.5 SUMMARY  Culture is defined as a complex whole which consists of customs, attitudes, beliefs and values of a society. It is a set of shared attitudes, values, goals and practices that characterizes an institution, organization or group. It is the total way of life of people.  COVERAGE OF CULTURE 53 CU IDOL SELF LEARNING MATERIAL (SLM)

o Creates Identification o Bonds People o Establishes Principles o Stand Apart  Determinants of the Culture - Based on the definition of culture, there are a few basic elements of culture. These elements are universal; meaning that they form the cultural environment of all societies. o Language: o Aesthetics o Education o Religion o Attitude and Values o Customs o Social Organizations o Material Culture  The Seven Dimensions of Culture were identified by management consultants Fons Trompenaars and Charles Hampden-Turner. o Universalism versus Particularism: (Rules versus Relationships) o Individualism versus Communitarianism: (The Individual versus The Group) o Specific Versus Diffuse: (How Far People Get Involved) o Neutral versus Emotional: (How People Express Emotions) o Achievement versus Ascription: (How People View Status) o Sequential Time versus Synchronous Time: (How People Manage Time) o Internal Direction versus Outer Direction: (How People Relate to Their Environment)  HOFSTEDE'S CULTURAL DIMENSIONS o With access to people working for the same organization in over 40 countries of the world, Dr Geert Hofstede has collected cultural data and analysed his findings. He initially identified four distinct cultural dimensions that served to distinguish one culture from another. o Power/Distance (PD) o This refers to the degree of inequality that exists – and is accepted – among people with and without power. o Individualism (IDV): o This refers to the strength of the ties people have to others within the community. 54 CU IDOL SELF LEARNING MATERIAL (SLM)

o Masculinity (MAS): o This refers to how many a society sticks with, and values, traditional male and female roles. o Uncertainty/Avoidance Index (UAI) o This relates to the degree of anxiety that society members feel when in uncertain or unknown situations. o Long Term Orientation (LTO):This refers to how much society values long- standing – as opposed to short-term – traditions and values  HALLS AND HALLS HIGH AND LOW CONTEXT THEORY: High context refers to societies or groups where people have close connections over a long period of time. Low context refers to societies where people tend to have many connections but of shorter duration or for some specific reason  ANDRE LAURENT’S STUDY OF MANAGEMENT STYLES: o Perception of the organization This aspect deals with the political role played by managers in the society, the managers perception of power motivation within the organization, the assessment of the degree to which organizational structures are clearly defined in the minds of managers o Authority systems This aspect deals with the conception of hierarchical structure in the organization. o Role formulation systems - This aspect focuses on the relative importance of defining the functions and roles of organizational members, with emphasis on detailed job descriptions, well defined functions and precisely defined roles. o Hierarchical systems. This deals with manager’s attitudes toward organizational relationships. 2.6 KEYWORDS 1. Self- Actualization - the realization or fulfilment of one's talents and potentialities, especially considered as a drive or need present in everyone. 2. Work ethic is the ability to maintain proper moral values within the workplace. 3. Emotional Response: Your response to an event or to something that is said is your reply or reaction to it. 55 CU IDOL SELF LEARNING MATERIAL (SLM)

4. Intrinsic rewards are psychological rewards that employees get from doing meaningful work and performing it well. 5. Locus of Control refers to an individual's perception about the underlying main causes of events in his/her life. 2.7 LEARNING ACTIVITY 1. What strategies need to be adopted for handling Neutral system? ___________________________________________________________________________ ___________________________________________________________________________ 2. Explain the significance of Hierarchical systems. ___________________________________________________________________________ ___________________________________________________________________________ 2.8 UNIT END QUESTIONS A. Descriptive Questions Short Questions: 1. Define the Culture 2. Explain the coverage of the Culture 3. Explain the role of Education in the culture. 4. Discuss material culture with example. 5. What is long term Orientation? Explain with its application. Long Questions: 56 1. Write a note on Seven Dimension of the Culture 2. Why Hofstede theory is important in understanding the cross-cultural aspect. 3. Discuss the determinant of the culture 4. Explain the High and Low context theory 5. State and explain Andre Laurent’s Study of Management Styles CU IDOL SELF LEARNING MATERIAL (SLM)

B. Multiple Choice Questions 1. Under which dimension of culture people places high importance on rules, laws , values and obligations? a. Communitarianism b. Particularism c. Indiviualism d. Universalism 2. What are the characteristics of Neutral Dimension of the culture? a. People find the ways to express their emotions b. People make great effort to control their emotions c. Power, title and culture matters d. People believe that they can control nature or environment 3. A high PD score indicates that society accepts a ________________of power, and that people understand \"their place\" in the system. a. Equal Distribution b. Low Distribution c. Unequal distribution d. High Distribution 4. Terpstran has highlighted the _______________aspect of culture in his definition. a. software of the mind b. sum total of learned behavioural traits c. Social Programming d. Part of Civilization 5. What reflects the reflects the nature and values of society? 57 a. Rituals CU IDOL SELF LEARNING MATERIAL (SLM)

b. Aesthetics c. Educations d. Language Answers 1-b, 2-b, 3-a, 4-b, 5-d 2.8 REFERENCES Text Book:  Wilhelm Schmeisser, Dieter Krimphove, Rebecca Popp, International Human Resource Management and International Labour Law, De Gruyter Oldenbourg,  Peter J. Dowling, Marion Festing and Allen D. Engle, Sr., International Human Resource Management, Cengage Learning EMEA  By Veronica Velo, Cross-Cultural Management, Business Expert Press  Srinivas R. Kandula International Human Resource Management , SAGE Publications Pvt. Ltd  Pravin Durai, Human Resource Management, Pearson India Reference Book  K Aswathappa , Sadhna Dash, International Human Resource Management, McGraw Hill  Gary Dessler, Fundamentals of Human Resource Management, Pearson  Ekta Sharma, Strategic Human Resource Management and Development, Pearson India  Parissa Haghirian, Successful Cross-Cultural Management, Business Expert Press Open Sources:  https://www.Shrm.org/  https://www.ncbi.nlm.nih.gov/  https://www.futurelearn.com/  International Journal of Human Resource Studies  changingminds.org 58 CU IDOL SELF LEARNING MATERIAL (SLM)

 assignmentpoint.com  interculturalmanagement.fandom.com  diva-portal.org  cvs.edu.in  strategy-business.com  www.mbaknol.com (Integrity-Asia & ispatguru)  publications.anveshanaindia.com  smallbusiness.chron.com  resources.workable.com  whatishumanresource.com  resources.workable.com  jigsawacademy.com  www.personio.com 59 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT - 3: CROSS CULTURAL NEGOTIATION STRUCTURE 3.0 Learning Objective 3.1 Introduction 3.2 Features of Cross Culture Negotiation 3.3 Types of culture 3.3.1 Richard D. Lewis Model 3.3.2 Analysis Of Negotiation Surroundings 3.4 Planning And Preparation Parameter 3.4.1 Factors Influencing Intercultural Negotiation 3.4.2 Intercultural Negotiations Preparation 3.5 Negotiation Process: 3.6 Types And Strategy Of Organisational Culture. 3.7 Summary 3.8 Keywords 3.9 Learning Activity 3. 10 Unit End Questions 3.11 References 3.0 LEARNING ACTIVITY After studying this unit, you will be able to:  Illustrate the features of Cross Cultural Negotiation  Describe different types of culture  Explain the Factors Influencing Intercultural Negotiation  Outline the Negotiation Process  Compare different types of Strategies adopted by the Organization in the Cross Cultural Negotiation 3.1 INTRODUCTION In a conversation between two persons, the talk rarely revolves around the same topic. In order for the debate to be fruitful, each speaker moulds their thoughts around the cognitive and cultural perceptions of the other. This effort translates into culturally anticipating connected topics that are likely to be appreciated by an individual of a given culture during 60 CU IDOL SELF LEARNING MATERIAL (SLM)

international talks. Discussions are frequently hampered because the people involved appear to be following distinct logic tracks. In most cross-cultural situations, the chances of talking past one other or misinterpreting things are considerably increased. Don't go into international discussions assuming that everyone shares your viewpoint. That is obviously not the case, especially because people from other cultures have distinct ways of thinking and adhere to a set of laws and standards. Given the global economy's stabilisation and the relevance of globalisation becoming self-evident to most businesses, it's only inevitable that the number of cross-cultural discussions with foreign agencies will increase. We must admit that whether your organisation is buying, selling, or investing, it cannot escape negotiation. People bargain in a variety of methods on a worldwide scale. To succeed as a manager, business owner, or CEO, you must learn how to cope with cross-cultural negotiations. Intercultural negotiation entails talks of shared and competing interests amongst people of various cultural backgrounds in order to establish a mutually beneficial agreement. 3.2 FEATURES OF CROSS CULTURE NEGOTIATION All communication is cultural — it draws on ways we have learned to speak and give nonverbal messages. We do not always communicate the same way from day to day, since factors like context, individual personality, and mood interact with the variety of cultural influences we have internalized that influence our choices. Communication is interactive, so an important influence on its effectiveness is our relationship with others. Do they hear and understand what we are trying to say? Are they listening well? Are we listening well in response? Do their responses show that they understand the words and the meanings behind the words we have chosen? Is the mood positive and receptive? Is there trust between them and us? Are there differences that relate to ineffective communication, divergent goals or interests, or fundamentally different ways of seeing the world? The answers to these questions will give us some clues about the effectiveness of our communication and the ease with which we may be able to move through conflict. The challenge is that even with all the good will in the world, miscommunication is likely to happen, especially when there are significant cultural differences between communicators. Miscommunication may lead to conflict, or aggravate conflict that already exists. We make — whether it is clear to us or not quite different meaning of the world, our places in it, and our relationships with others. In this module, cross-cultural communication will be outlined and demonstrated by examples of ideas, attitudes, and behaviors involving four variables: 61 CU IDOL SELF LEARNING MATERIAL (SLM)

 Time and Space  Fate and Personal Responsibility  Face and Face-Saving  Nonverbal Communication As our familiarity with these different starting points increases, we are cultivating cultural fluency — awareness of the ways cultures operate in communication and conflict, and the ability to respond effectively to these differences. Time and Space Time is one of the most central differences that separate cultures and cultural ways of doing things. In the West, time tends to be seen as quantitative, measured in units that reflect the march of progress. It is logical, sequential, and present-focused, moving with incremental certainty toward a future the ego cannot touch and a past that is not a part of now. Novinger calls the United States a “chronocracy,” in which there is such reverence for efficiency and the success of economic endeavors that the expression “time is money” is frequently heard. This approach to time is called monochromic — it is an approach that favors linear structure and focus on one event or interaction at a time. Robert’s Rules of Order, observed in many Western meetings, enforce a monochromic idea of time. In the East, time feels like it has unlimited continuity, an unraveling rather than a strict boundary. Birth and death are not such absolute ends since the universe continues and humans, though changing form, continue as part of it. People may attend to many things happening at once in this approach to time, called polychromous. This may mean many conversations in a moment (such as a meeting in which people speak simultaneously, “talking over” each other as they discuss their subjects), or many times and peoples during one process (such as a ceremony in which those family members who have died are felt to be present as well as those yet to be born into the family). A good place to look to understand the Eastern idea of time is India. There, time is seen as moving endlessly through various cycles, becoming and vanishing. Time stretches far beyond the human ego or lifetime. There is a certain timeless quality to time, an aesthetic almost too intricate and vast for the human mind to comprehend. Consider this description of an anon, the unit of time which elapses between the origin and destruction of a world system: “Suppose there is a mountain, of very hard rock, much bigger than the Himalayas; and suppose that a man, with a piece of the very finest cloth of Benares, once every century should touch that mountain ever so slightly — then the time it would take him to wear away the entire mountain would be about the time of an Aeon.” Differences over time can play out in painful and dramatic ways in negotiation or conflict- resolution processes. An example of differences over time comes from a negotiation process related to a land claim that took place in Canada. First Nations people met with 62 CU IDOL SELF LEARNING MATERIAL (SLM)

representatives from local, regional, and national governments to introduce themselves and begin their work. During this first meeting, First Nations people took time to tell the stories of their people and their relationships to the land over the past seven generations. They spoke of the spirit of the land, the kinds of things their people have traditionally done on the land, and their sacred connection to it. They spoke in circular ways, weaving themes, feelings, ideas, and experiences together as they remembered seven generations into the past and projected seven generations forward. When it was the government representatives’ chance to speak, they projected flow charts showing internal processes for decision-making and spoke in present-focused ways about their intentions for entering the negotiation process. The flow charts were linear and spare in their lack of narrative, arising from the bureaucratic culture from which the government representatives came. Two different conceptions of time: in one, time stretches, loops forward and back, past and future are both present in this time. In the other, time begins with the present moment and extends into the horizon in which the matters at hand will be decided. Neither side felt satisfied with this first meeting. No one addressed the differences in how time was seen and held directly, but everyone was aware that they were not “on the same page.” Each side felt some frustration with the other. Their notions of time were embedded in their understandings of the world, and these understandings informed their common sense about how to proceed in negotiations. Because neither side was completely aware of these different notions of time, it was difficult for the negotiations to proceed, and difficult for each side to trust the other. Their different ideas of time made communication challenging. This meeting took place in the early 1990s. Of course, in this modern age of high-speed communication, no group is completely disconnected from another. Each group — government and First Nations representatives — has had some exposure to the other’s ideas of time, space, and ideas about appropriate approaches to negotiation. Each has found ways to adapt. How this adaptation takes place, and whether it takes place without one side feeling they are forced to give in to the other, has a significant impact on the course of the negotiations. It is also true that cultural approaches to time or communication are not always applied in good faith, but may serve a variety of motives. Asserting power, superiority, advantage, or control over the course of the negotiations may be a motive wrapped up in certain cultural behaviors (for example, the government representatives’ detailed emphasis on ratification procedures may have conveyed an implicit message of control, or the First Nations’ attention to the past may have emphasized the advantages of being aware of history). Culture and cultural beliefs may be used as a tactic by negotiators; for this reason, it is important that parties be involved in collaborative-process design when addressing intractable conflicts. As 63 CU IDOL SELF LEARNING MATERIAL (SLM)

people from different cultural backgrounds work together to design a process to address the issues that divide them, they can ask questions about cultural preferences about time and space and how these may affect a negotiation or conflict-resolution process, and thus inoculate against the use of culture as a tactic or an instrument to advance power. Any one example will show us only a glimpse of approaches to time as a confounding variable across cultures. In fact, ideas of time have a great deal of complexity buried within them. Western concepts of time as a straight line emanating from no one in particular obscure the idea that there are purposive forces at work in time, a common idea in indigenous and Eastern ways of thought. From an Eastern or indigenous perspective, Spirit operates within space and time, so time is alive with purpose and specific meanings may be discerned from events. A party to a negotiation who subscribes to this idea of time may also have ideas about fate, destiny, and the importance of uncovering “right relationship” and “right action.” If time is a circle, an unraveling ball of twine, a spiral, an unfolding of stories already written, or a play in which much of the set is invisible, then relationships and meanings can be uncovered to inform current actions. Time, in this polychromic perspective, is connected to other peoples as well as periods of history. This is why a polychromic perspective is often associated with a communitarian starting point. The focus on the collective, or group, stretching forward and back, animates the polychromic view of time. In more monochromic settings, an individualist way of life is more easily accommodated. Individualists can more easily extract moments in time, and individuals themselves, from the networks around them. If time is a straight line stretching forward and not back, then fate or destiny may be less compelling. Fate and Personal Responsibility Another important variable affecting communication across cultures is fate and personal responsibility. This refers to the degree to which we feel ourselves the masters of our lives, versus the degree to which we see ourselves as subject to things outside our control. Another way to look at this is to ask how much we see ourselves able to change and maneuver, to choose the course of our lives and relationships. Some have drawn a parallel between the emphasis on personal responsibility in North American settings and the landscape itself. The North American landscape is vast, with large spaces of unpopulated territory. The frontier mentality of “conquering” the wilderness, and the expansiveness of the land stretching huge distances, may relate to generally high levels of confidence in the ability to shape and choose our destinies. In this expansive landscape, many children grow up with an epic sense of life, where ideas are big, and hope springs eternal. When they experience setbacks, they are encouraged to 64 CU IDOL SELF LEARNING MATERIAL (SLM)

redouble their efforts, to “try, try again.” Action, efficacy, and achievement are emphasized and expected. Free will is enshrined in laws and enforced by courts. Now consider places in the world with much smaller territory, whose history reflects repeated conquest and harsh struggles: Northern Ireland, Mexico, Israel, Palestine. In these places, there is more emphasis on destiny’s role in human life. In Mexico, there is a legacy of poverty, invasion, and territorial mutilation. Mexicans are more likely to see struggles as inevitable or unavoidable. Their fatalistic attitude is expressed in their way of responding to failure or accident by saying “no modo” (“no way” or “tough luck”), meaning that the setback was destined. This variable is important to understanding cultural conflict. If someone invested in free will crosses paths with someone more fatalistic in orientation, miscommunication is likely. The first person may expect action and accountability. Failing to see it, they may conclude that the second is lazy, obstructionist, or dishonest. The second person will expect respect for the natural order of things. Failing to see it, they may conclude that the first is coercive or irreverent, inflated in his ideas of what can be accomplished or changed. Face and Face-Saving Another important cultural variable relates to face and face-saving. Face is important across cultures, yet the dynamics of face and face-saving play out differently. Face is defined in many different ways in the cross-cultural communication literature. Novinger says it is “the value or standing a person has in the eyes of others…and that it relate to pride or self- respect.” Others have defined it as “the negotiated public image, mutually granted each other by participants in [communication].” In this broader definition, face includes ideas of status, power, courtesy, insider and outsider relations, humor, and respect. In many cultures, maintaining face is of great importance, though ideas of how to do this vary. The starting points of individualism and communitarians are closely related to face. If I see myself as a self-determining individual, then face has to do with preserving my image with others and myself. I can and should exert control in situations to achieve this goal. I may do this by taking a competitive stance in negotiations or confronting someone who I perceive to have wronged me. I may be comfortable in a mediation where the other party and I meet face to face and frankly discuss our differences. If I see my primary identification as a group member, then considerations about face involve my group. Direct confrontation or problem-solving with others may reflect poorly on my group, or disturb overall community harmony. I may prefer to avoid criticism of others, even when the disappointment I have concealed may come out in other, more damaging ways later. When there is conflict that cannot be avoided, I may prefer a third party who acts as a shuttle between me and the other people involved in the conflict. Since no direct confrontation takes 65 CU IDOL SELF LEARNING MATERIAL (SLM)

place, face is preserved and potential damage to the relationships or networks of relationships is minimized. Nonverbal Communication Nonverbal communication is hugely important in any interaction with others; its importance is multiplied across cultures. This is because we tend to look for nonverbal cues when verbal messages are unclear or ambiguous, as they are more likely to be across cultures (especially when different languages are being used). Since nonverbal behavior arises from our cultural common sense — our ideas about what is appropriate, normal, and effective as communication in relationships — we use different systems of understanding gestures, posture, silence, special relations, emotional expression, touch, physical appearance, and other nonverbal cues. Cultures also attribute different degrees of importance to verbal and nonverbal behavior. Low-context cultures like the United States and Canada tend to give relatively less emphasis to nonverbal communication. This does not mean that nonverbal communication does not happen, or that it is unimportant, but that people in these settings tend to place less importance on it than on the literal meanings of words themselves. In high-context settings such as Japan or Colombia, understanding the nonverbal components of communication is relatively more important to receiving the intended meaning of the communication as a whole. Some elements of nonverbal communication are consistent across cultures. For example, research has shown that the emotions of enjoyment, anger, fear, sadness, disgust, and surprise are expressed in similar ways by people around the world. Differences surface with respect to which emotions are acceptable to display in various cultural settings, and by whom. For instance, it may be more social acceptable in some settings in the United States for women to show fear, but not anger, and for men to display anger, but not fear.[8] At the same time, interpretation of facial expressions across cultures is difficult. In China and Japan, for example, a facial expression that would be recognized around the world as conveying happiness may actually express anger or mask sadness, both of which are unacceptable to show overtly. These differences of interpretation may lead to conflict, or escalate existing conflict. Suppose a Japanese person is explaining her absence from negotiations due to a death in her family. She may do so with a smile, based on her cultural belief that it is not appropriate to inflict the pain of grief on others. For a Westerner who understands smiles to mean friendliness and happiness, this smile may seem incongruous and even cold, under the circumstances. Even though some facial expressions may be similar across cultures, their interpretations remain 66 CU IDOL SELF LEARNING MATERIAL (SLM)

culture-specific. It is important to understand something about cultural starting-points and values in order to interpret emotions expressed in cross-cultural interactions. Another variable across cultures has to do with proxemics, or ways of relating to space. Crossing cultures, we encounter very different ideas about polite space for conversations and negotiations. North Americans tend to prefer a large amount of space, perhaps because they are surrounded by it in their homes and countryside. Europeans tend to stand more closely with each other when talking, and are accustomed to smaller personal spaces. In a comparison of North American and French children on a beach, a researcher noticed that the French children tended to stay in a relatively small space near their parents, while U.S. children ranged up and down a large area of the beach. The difficulty with space preferences is not that they exist, but the judgments that get attached to them. If someone is accustomed to standing or sitting very close when they are talking with another, they may see the other’s attempt to create more space as evidence of coldness, condescension, or a lack of interest. Those who are accustomed to more personal space may view attempts to get closer as pushy, disrespectful, or aggressive. Neither is correct — they are simply different. Also related to space is the degree of comfort we feel moving furniture or other objects. It is said that a German executive working in the United States became so upset with visitors to his office moving the guest chair to suit themselves that he had it bolted to the floor. Contrast this with U.S. and Canadian mediators and conflict-resolution trainers, whose first step in preparing for a meeting is not infrequently a complete rearrangement of the furniture. Finally, line-waiting behavior and behavior in group settings like grocery stores or government offices is culturally-influenced. Novinger reports that the English and U.S. Americans are serious about standing in lines, in accordance with their beliefs in democracy and the principle of “first come, first served.” The French, on the other hand, have a practice of resquillage, or line jumping, that irritates many British and U.S. Americans. In another example, immigrants from Armenia report that it is difficult to adjust to a system of waiting in line, when their home context permitted one member of a family to save spots for several others. These examples of differences related to nonverbal communication are only the tip of the iceberg. Careful observation, ongoing study from a variety of sources, and cultivating relationships across cultures will all help develop the cultural fluency to work effectively with nonverbal communication differences. 67 CU IDOL SELF LEARNING MATERIAL (SLM)

3.3 TYPES OF CULTURE One of the great dilemmas in analyzing a person’s cultural profile and deciding where to fit him or her into an existing organisation is how to choose cultural dimensions to create an understandable assessment. 3.3.1 Richard D. Lewis Model Fig 3.3.1: Lewis Model- The Cultural Types Communication across culturesis challenging. The model developed by Richard D. Lewis illustrates how each culture perceives a situation and communicates. This approach is very useful for leaders who have to manage a company/industry across countries with different cultural backgrounds. The Richard D. Lewis model can serve as a guideline to help them understand the situation and use a suitable leadership style. It is also used to improve performance and efficiency in a multinational team. The cultures are divided into three main categories: 68 CU IDOL SELF LEARNING MATERIAL (SLM)

Linear Active – refers to societies where people focus on jobs. They separate their social and professional life. They work on one task at a time but have a detailed plan. They prefer polite and direct conversation with limited body language. The Linear-active group is easily identified. It comprises: the English-speaking world – North America, Britain, Australia and New Zealand, and Northern Europe, including Scandinavia and Germanic countries. Multi Active - refers to societies where people focus on building relationships. Their decisions are based on emotions. They work multi-task and plan their work and life only partially. They prefer to communicate emotionally and talk most of the time with unlimited body language. The Multi-actives are more scattered: Southern Europe, Mediterranean countries, South America, sub-Saharan Africa, Arab and other cultures in the Middle East, India and Pakistan and most of the Slavs. Though these cultures are wildly diverse, geographically and in their religions, beliefs and values, they can be categorised as a group, as behaviorally they follow the same pattern with the following traits and commonalities: emotion, talkativeness, rhetoric, drama, eloquence, persuasion, expressive body language. Reactive – refers to societies where people listen most of the time and react to others’ actions. They prefer being polite and communicating indirectly. They never interrupt a conversation and take decisions as they are. They focus mainly on building close trusting relationships. The Reactive group is located in all major countries in Asia, except the Indian sub-continent, which is hybrid. 3.3.2 ANALYSIS OF NEGOTIATION SURROUNDINGS Linear – active countries The linear-active countries in the Lewis model are mostly allocated in the German-speaking western European business world. Inhabitants and businessmen from these countries are considered direct and mainly straightforward in everything they do. So, the first point to be aware of doing business in these areas is the fact that they tend to try to avoid small talk. Especially Germans are known for their straight working attitude and their efficiency in organization or work. In regard to negotiations in the German-speaking, linear-active business world, it is appreciable to come up with a clear mindset on goals and expectations. Avoid unproductiveness. Be direct. Out clearly what is your goal or overall idea. Then act. 69 CU IDOL SELF LEARNING MATERIAL (SLM)

At first, linear-active businessmen are always punctual. If there is a meeting set at 2 pm, they will usually appear around 1:45 pm in order to avoid unpunctuality. If there is one thing a businessman tries to avoid, it is for sure unpunctuality. And people really hate to wait for their counterparts. Please make sure to have a time schedule. Unpunctuality will be taken as a serious issue and can also lead to a personal non-understanding in the upcoming negotiations. On the first contact, linear-active culture businessmen are rather rejecting. They are friendly and will welcome you with a smile. But it is also totally normal that they tend to behave a bit dismissive or even cold on the first contact in perspective of a non linear-active person. Nevertheless, they will be really quick in terms on targeting goal and outcomes of the given situation. It may take a time until a non-linear-active person reaches the same level of understanding of the whole situation the linear-active thinking person already has achieved. Usually, on a meeting for negotiation business cards are distributed among the participants of the round. It is necessary to shake hands on the first view. This is mainly the first step towards an interpersonal business relationship. Especially in Germany, the hand shake is also used as an indicator of motivation or willingness to succeed, measuring the strength of the handshake applied by the hand of one of the persons. Be aware of touching the left shoulder of the other person with your other hand while shaking. This can be often observed as a measure to escape from the other’s tough handshake. Nevertheless it can be interpreted as you are willing to put pressure on the other person by doing that. This is often considered impolite or even arrogant. Basically, on the first meeting with your possible business partners, you cannot do much wrong, if you consider to be direct and motivated. Be aware that open criticism is a totally normal thing in German speaking countries. Sometimes your counterpart’s contra arguments can appear more direct that they might let you feel uncomfortable. But, in this special situation, do not worry too much. Do it better and argue back with good and convincing arguments. Nothing else counts. If you are able to “deliver”. So you are able to give proof and profound information, your counterparts will soon get closer to you and once you have gained their attention and reward they will recognize you as a reliable and confidential partner. You can take them always by word. Usually, everything they say is what is really in their mind regarding a point. Business meetings usually start with a round of self-presentation. Be short in that. Clearly state what is your name and position. Then, in case of, mention your educational background and what your focus is on work. The end of any negotiation, if it was successful for both parties, is in a lot of cases concluded by a dinner or having drinks at night. This invitation of your German friends shows you that they liked your presentation and that they agree with the mutual outcome of the negotiation. This is your chance to get closer to them. By having drinks, you might get to know your new 70 CU IDOL SELF LEARNING MATERIAL (SLM)

business partners from a relatively new perspective. Having drinks after –only after – the work is successfully done, Germans tend to be open-minded, funny and relaxed. This is a good point for small talk and further chat. Multi-active countries The multi-active countries in the Lewis model are mostly Spanish speaking countries of Europe and Latin America (e.g. Spain, Mexico, Colombia). When it comes to negotiation processes with counterparts in one of these countries, several cultural specifications are to be considered. First, the meaning of a word that is spoken is by far not that important than for example in the German-speaking countries. In fact, oral agreements on things or issues can have (not always but often) a value close to zero. This implies, always make sure you are asking for a clear confirmation of all given issues. If you are trying to set up a meeting with several counterparts of multi-active countries, you should be aware of verbal confirmations regarding time location and possible efforts invested by that specific person with regard to the project or negotiation. In fact, businessmen from Spanish-speaking countries are open and approach you with a smile in their face. This is cultural related and should let you know that you are a welcome guest and business partner. They also tend to confirm things verbally which they cannot achieve. They do this to establish a conversational harmony within a negotiation conversation. This is in fact a point to be aware of. Have always a clear mind. If you want to succeed in these countries you must be able to scan your partner in regard to his outings. Whether it is a clear confirmation, a “Yes”, or a confirmation, that later on is most likely to be not achievable. The people in the Spanish-speaking world tend to belong to one of the most warm cultures on Earth. They are welcoming guests and they try to avoid uncomfortable and very direct criticism of each other. Meanwhile in Western Europe (Germany, Netherlands) this is common business, a direct criticism, even if it is hundred percent objective, will be felt as impolite and very offending by your business partner. In order to criticize, it is important to have a feeling for the other person. It is important to know when it is appropriate and when it is not. By criticizing in the wrong moment, you can destroy the entire business relationship by provoking an uncomfortable feeling for the other person (e.g. during a presentation). On the other hand, when it comes to bargaining, this can be also used as your weapon. Be aware of this. Reactive countries The reactive countries are mostly countries in the Asian world (e.g. China, Japan, Vietnam). When doing business in these countries and especially when it comes to negotiations, there are a few things that should be considered. 71 CU IDOL SELF LEARNING MATERIAL (SLM)

Especially in terms of hierarchy and power distance, the reactive countries differ a lot from the western business world. The first thing that appears totally different from the most other cultures is the fact of presenting business cards. Meanwhile in the western business culture world business cards are handed out before, during or after the meeting as a simple mean of communication in order to stay in contact. In Asia these business cards exchanges require a highly sophisticated form of etiquette. First, give your card with both hands to the other person and look her in the eyes. You will soon notice that the other person will also take it with both hands and will at first have a look on it in order to accept your card. If you receive a business card in this way make sure to accept it in the same way. In western countries, business cards are just regarded as a paper for a simple reason, to enable interpersonal contact from one to another person. In Asia, the business card etiquette seems to underline that a having received a business card from your counterpart, this person is letting you into his world. And the card is the first entrance. So, show respect. Meanwhile this point applies for most of the Asian culture countries, it can also differ among the several countries in that business area. So, this special etiquette is mainly present in Japan and China. The second point widely differing from western countries is the power distance or – shortly – the interpretation and feeling of hierarchy in Asia. Asian businessmen often tend to be really sticking to the role that they have been given by the person in charge on a higher hierarchy level. This comes together with a different understanding and feeling of discipline. Be aware that people in general tend to be more ahead when it comes to discipline and persistence. Asians tend to be clearly structured and efficiently organized. They need clear structures in order to achieve the most efficient work capacity. This applies especially for Japan. In countries in South East Asia, especially countries like Singapore, another business fact becomes relevant. Be aware, that among these countries, there is a culture of “Non-denying”. People and especially your possible employees will always try to stay in harmony within a conversation with you. They will do everything to keep the structure of hierarchy once applied as stable as possible. This is possible through a non-denial behavior. They will never criticize or offend somebody directly. But, while never saying no, you must be aware of how to manage these situations. You may come to a point after having gained several experiences within these countries, when you get a feeling for these communicational differences; therefore, you need an intercultural antenna. Be careful on the first meeting of partners in Asia. Try to never offend somebody by being direct. Especially as a German or from a state of linear-reactive culture, you should be very aware of not being as direct as when you are negotiating with a fellow citizen of Western 72 CU IDOL SELF LEARNING MATERIAL (SLM)

Europe. Be careful and a bit reserved and very respectful when meeting your fellows in Asia. A too straight approach, direct statements or any kind of personal offending can lead to a lot of misunderstanding and will destroy the business interaction, formally and personally. 3.4 PLANNING AND PREPARATION PARAMETER 3.4.1 FACTORS INFLUENCING INTERCULTURAL NEGOTIATION In the last decades, trading with other countries became more and more important. Due to the fact that goods and people havé been able to be transported in a more efficient way, barriers for companies to trade internationally have come down. One of the side effects of globalization is that companies are facing problems with intercultural negotiations. One of the most obvious challenging factors in cross-cultural negotiation is the language barrier. Many people are not as confident in negotiating in another language as in their own native language. As a result, the atmosphere in the first minutes is usually stressful. To brighten up the atmosphere, it is useful to welcome the other party with some words in their own language. In negotiations with one native speaking party, it is also important to know that native speakers often use phrases that are not found in a dictionary. Therefore, it can be really difficult to understand the other party. The next important factor is the high or low level of context people are talking to each other. As described in the introduction, cultures differ in the level of context. Some cultures are not able to say “no” and therefore they say it in an indirect way which has to be decoded by the other party. In order to adapt specific cultural behaviors, it is also important to be aware of words with sexual connotations. Many words have different meanings and a slightly different pronunciation can lead to an unpleasant communication. The better the skills in the national language, the better the understanding of the culture. In a cross-cultural negotiation, the language with the highest prestige is the one that is the most likely to be used. Nevertheless, non-verbal communication is also very important. Part of our nature is to observe people and to interpret gestures. In a cross-cultural negotiation, these observations will still take place but the gestures might be interpreted differently by different cultures. Eye-contact is not always a way to show the other party respect. This behavior can indicate disrespect in some cultures (e.g. Turkey). 73 CU IDOL SELF LEARNING MATERIAL (SLM)

Fig 3.4.1: Communication Process Other factors which influence an intercultural negotiation are religion, work behaviour and rituals. Many cultures like to start a negotiation with small-talk before getting down to business. Additionally, some cultures do aim to reach a final result during the first negotiation. All these examples are based on a business perspective but intercultural negotiations do not only take place in business. Intercultural negotiations can also take part in a normal conversation with a friend from a different culture. These situations underlie the same principles as intercultural negotiations. A major difference though might be the pre-existing relationship between “friends”. An already existing level of trust might reduce possible misunderstandings because the other party already considers your personal beliefs, behaviors and rituals. 3.4.2 INTERCULTURAL NEGOTIATIONS PREPARATION Preparation is required for all kind of negotiations. Intercultural negotiations though require a special and usually more intensive preparation. Even knowing the Richard D. Lewis model might not be enough to engage in a successful intercultural negotiation. At this point, be aware that an intercultural negotiation can already take place in your “home country”! As we have learned from previous chapters, cultures can differ a lot from each other. Big differences paired with misunderstandings between two parties can lead to small or even huge consequences: While a friend from aboard might be insulted by a gesture or special local humor it is easily possible to clarify the situation by explaining the background the gestures or humor. Still it might take some time to make your friend overcoming the insult. But approaching a friend is due to a given level of trust relatively easy. If it comes to intercultural business negotiation which a potential strategic supplier who believes you show arrogant behavior by nature, this can have a negative impact on for example your company’s terms of payment – or even worse. Those terms of payment might only be renegotiated earliest after one year and harm in this way the company’s’ overall financial performance. In both, the private and business-related situations, the Richard D. Lewis model can be a starting point to analyze and visualize general differences to values, believes and assumption of the counter party – assuming you know the counterpart’s culture. Still only applying the model might not be enough. It’s a big advantage to use empathy too. 74 CU IDOL SELF LEARNING MATERIAL (SLM)

A conclusion to the different possible consequences of a negotiation is the following: Even if a small misunderstanding happens the effects from it can last long and therefore have a high impact on a relationship – a friend or even a business partner. Here we can conclude that in case the negotiated result has an important impact, the intensity of preparation in advance increases to a high degree. Whereas the negotiated result has only a low impact, the preparation effort usually decreases with a decreasing importance. 3.5 NEGOTIATION PROCESS The approach of fragmenting the negotiation process into different stages has been adopted by several researchers. For instance, Graham (1985) divides the negotiation process into four stages to illustrate how parties use different strategies and tactics in each stage, and how it can affect the outcome of the negotiation. Furthermore, Ghauri (2003) divides international business negotiations into three stages: pre-negotiation, face-to-face negotiation and post- negotiation, where each stage refers to actions and types of communication made by a party during each specific phase. Fig 3.5.1: Negotiation Process Pre-Negotiation: The pre-negotiation stage begins when a party contacts another with the intention of doing business with one another (Ghauri 2003; Reynolds & Simintiras 2000). Perdue (1992), Salacuse (1999) and Ghauri (2003) argues that negotiation is a problem- solving process which is why an identification of the problem to be solved is necessary and can be extracted from the combined needs and preferred result of the process. The identified problem is vital since it reflects the expectations of the negotiation and generates commitment from both parties which furthers cooperation to secure a favourable outcome. The contact during the pre-negotiation stage is rather informal and evaluative; before entering the face-to-face stage, it is important to identify the decision-maker in the other party as well as how they make their decisions. How a delegation is organized to negotiate a deal is generally based on culture, especially in regard to individualistic and collectivistic preferences (Ghauri 2003; Salacuse 1999). When conducting international business, building a strong foundation for social relationships can be of great help in generating trust and 75 CU IDOL SELF LEARNING MATERIAL (SLM)

confidence which in turn increases the chances of reaching an agreement (Salacuse 1999). That is why this informal and social stage of the negotiation often is more important when it comes to international business than the more formal face-to-face stage (Ghauri 2003). These relationships can for instance grow stronger by inviting the counterpart to the other’s country and office. By doing so, they can start to understand each other’s interests and fears, in addition to their priorities. During these encounters, keeping it informal and avoiding topics connected to the negotiation itself can be beneficial for the relationship building process (Ghauri 2003). Additionally, when it comes to building trust, an understanding of how culture affects communication style, business ethics when it comes to illegal payments, and the level of informality is vital (Graham & Adler 1989). To avoid enabling a culture clash, misunderstandings and conflicts, it is important not to over-adapt to a culture nor fail to adapt over all (Semnani-Azad & Adair 2011). For the negotiation to be successful, it is important to try and anticipate the other party’s reactions, behaviour and arguments which can be done through cultural knowledge and an understanding of the party’s position. The predictions allow the party to formulate new arguments, alternatives and to adjust the strategy to better fit the negotiation style of the counterpart (Ghauri 2003; Bülow & Kumar 2011). It is crucial to remember that arguments need to be tailored to a specific culture and that one standard argument will not work throughout the world. It is also necessary to try and look at the situation from the other’s point of view to demonstrate understanding which provides a positive atmosphere of cooperation and sympathy. Being an attentive listener is always an essential trait, but international negotiations especially requires you to hear the implicits and to be able to read between the lines (Ghauri 2003; Manrai & Manrai 2010; Salacuse 1999). Face-to-Face Negotiation: In this stage, all parties involved need to be aware of the fact that each side views the situation in its own way, with their own perceptions of the process and expectations for the outcome (Salacuse 1999). The main concern here is to reach a satisfactory outcome for both parties by exploring the differences in preferences and expectations (Ghauri 2003). Knowing how your opponent presumably will respond is vital for your strategic planning and allows you to adjust expectations and tactical moves. This process is described as a part of the information-processing model which implies having assumptions about the opponent (Druckman & Harris 1990). Some negotiators prefer to structure the negotiation in a cooperative manner, where the initial focus is on discussing issues of common interest to create an atmosphere of cooperation. The choice of strategy can vary depending on who is involved in the negotiation (Ghauri 2003). Due to the fact that international negotiations inherently involve a discussion of differences, parties must be aware and adapt to each other’s cultures and traditions in order to enable a satisfactory 76 CU IDOL SELF LEARNING MATERIAL (SLM)

outcome for both (Ghauri 2003; Reynolds & Simintiras 2000). In some cultures, creating social bonds between parties is considered being far more important than solely focus on the potential economic gains of the negotiation. People from these countries take their time to build personal relationships before they consider any form of agreement or deal (Ghauri 2003). However, all researchers do not support the notion that culture has a significant impact on international negotiations (Zartman 1993). Another problem raised within the research of cultures’ impact on international negotiation is the issue of generalizing large cultural groups. Since negotiations in international settings usually involves multi-national organizations, it is not uncommon that the staff of these organizations are international as well. This creates a problem when generalizing a group of people to a certain cultural consensus (Bülow & Kumar 2011). Post-Negotiation: In the post-negotiation stage, the emphasis should be on aligning the outcome of the negotiation with the parties’ objectives. If they manage to reach a point where the objectives have been met, then it is considered a satisfactory outcome (Ghauri 2003). Negotiating successfully is not a question of reaching a “win- lose” scenario, but a problem- solving approach aimed to reach a “win-win” outcome (Salacuse 1999; Ghauri 2003). Thus, negotiators must be willing to make concessions in order to reach an agreement that is considered satisfactory for both parties (Graham 1985). However, not all cultures have the mindset of a problem-solving and collaborative outcome, which is why it is important to know which type of negotiator that you are about to face (Salacuse 2004). 3.6 TYPES AND STRATEGY OF ORGANISATIONAL CULTURE Culture Matsumoto (1996, p. 16) describes culture as: “... the set of attitudes, values, beliefs, and behaviours shared by a group of people, but different for each individual, communicated from one generation to the next.”. Cultural Adaptation: Considering the increase in the number of multicultural instances and international negotiations, the need to adapt to the cultural environment has grown significantly (Beaton et al. 2000). Cultural adaptation refers to the process and time it takes to integrate into a new culture, as well as having an expanded worldview to include relevant constructs from other cultures. The two fundamental experiences of the cross-cultural adaptation process are deculturation of original cultural habits and acculturation of new ones. The essential parts of the adaptation process are one’s ability to communicate in accordance to practices and norms of the culture (Kim 2017). Despite the fact that individual circumstances will be unique and varied, all people in a new and unfamiliar environment will 77 CU IDOL SELF LEARNING MATERIAL (SLM)

embark on the project of cross-cultural adaptation. Individuals engaging in intercultural situations must learn to identify differences and similarities between the new environment and their home culture (Kim 2017). Cultural IntelligenceCultural intelligence, or cultural quotient, is described by Van Dyne et al. (2017) as the capability to function effectively in intercultural contexts. The concept has become increasingly important for individuals and organizations in order to cope with our current multicultural and diverse world. Contemporary organizations are starting to recognize the value of cultural intelligence and bridging cultures for both organizational and personal success (Van Dyne et al. 2017). Cultural intelligence consists of four factors: 1) metacognitive cultural intelligence (the capability to obtain and comprehend cultural knowledge), 2) cognitive cultural intelligence (the knowledge about cultures, their differences and similarities), 3) motivational cultural intelligence (confidence and interest in functioning effectively in intercultural contexts), and 4) behavioural cultural intelligence (the capability to be fluent in behaviour in intercultural interactions) (Van Dyne et al. 2017; Ang et al. 2007). Some researchers are critiquing cultural intelligence, stating that the concept can be problematic and urge that it should be treated as a hypothesis rather than a well-proven construct until more solid research evidence emerges (Blasco et al. 2012). However, most of the research recognize the value and focuses on refining the concept rather than abandoning it. Individual versus Collective Behaviour: Hofstede (2011) presents individualism as a society that allows a strong degree of independence among its citizens where individuals only take care of themselves and their immediate family. Collectivism on the other hand represent a society where individuals can expect their ‘clan’ to take care of them in exchange of an unquestioned loyalty; the self-concept is ‘we’ instead of the individualistic ‘I’. In addition to this, collective societies value group decisions rather than individual decision making, and individual initiative is considered frowned upon (Bochner & Hesketh 1994). 1. Task versus Relationship Orientation : In the task oriented individualistic culture, neither friendship nor bad blood should affect a business deal. Contradictory, the collectivistic culture benefits friends and ‘tribesmen’ which get better deals than strangers; the collectivistic culture values relationships over tasks and vice versa in 78 CU IDOL SELF LEARNING MATERIAL (SLM)

individualistic cultures (Hofstede 2011). However, an individualistic society also indicates signs of ingroup favouritism, and it being of favour to have friends in high places and general connections (Bülow & Kumar 2011). In collectivistic cultures, a part of investing in relationships and trust can be through the act of gift giving. This act can complicate business deals with individualistic cultures which considers this act to be a type of bribery; something that is not too frowned upon in collectivism (Hofstede 1984). If a culture is considered relationship oriented, the relationship is the main focus and the business and the business opportunity springs from it, and not the other way around (Bülow & Kumar 2011). 2. The Importance of Face and Harmony: In individualistic cultures, openness and directness is considered important which is also why it is preferred to resolve conflict immediately instead of suppressing it. This is in contrary to the collectivistic society where there is custom how people should behave towards each other, and where a violation of these could threaten the social framework. Following customs and harmony is more important than openness which in turn could lead to disharmony (de Mooij & Hofstede 2010). In Confucian cultures, the concept of face can be defined as an individual’s self-esteem. Losing face is related to feelings of guilt, embarrassment and shame; shame being a very important emotion in Confucian societies (Ng 2001; Ho et al. 2004). The biggest concern within the Confucian culture is to avoid losing face rather than gaining it, which can be seen in the social dynamics where the social motive is to avoid disapproval and rejection. This can be seen as contrary to the American society where the objective is to seek approval, popularity and acceptance (Ho 1994; Ho et al. 2004). Hierarchy in the form of Power Distance: Hofstede’s cultural dimension ’power distance’ measures a culture’s acceptance and expectation of the fact that power is distributed unequally in a society. Furthermore, a high power distance indicates an important emotional distance between superiors and subordinates (Basabe & Ros 2005). Acceptance of hierarchical inequality also extends to the distribution of social status, wealth, prestige and the class system. There are two themes of work related power distance: 1) people from high power distance countries tend to act submissively in the presence of a superior and are afraid or unwilling to disagree with people of a higher hierarchical status, and 2) a high score in the dimension of power distance indicates that subordinates preferred that a manager’s decision-making process and supervision should be 79 CU IDOL SELF LEARNING MATERIAL (SLM)

paternalistic and autocratic (Bochner & Hesketh 1994). This in contrast to subordinates from countries of low power distance who prefer a more participative and consulting manager. By analyzing Hofstede’s descriptions, it can be predicted that people of high power distance prefer close supervision, have formal superior- subordinate relationships and are more task oriented (Bochner & Hesketh 1994). Pattern of Communication: Communication patterns can differ significantly depending on culture, and these can be categorized into the more explicit and direct communication style low context and the implicit and contextual high context culture (Hall 1976; de Mooij & Hofstede 2010). Explicit communication declares a speaker’s true intentions which are communicated through verbal messages, in contradiction to indirect communication where the speaker’s true intentions are hidden from the recipient in shared experiences and assumptions transmitted through verbal and non-verbal codes (Hall 1960; 1976). High context communication takes personal needs into consideration and requires more trust and focus on relationships, whilst a low context culture rarely take time out of business dealings to build trust and establish relationships (Hall 1976; de Mooij & Hofstede 2010). Ghauri (2003) argues that in the context of negotiating in an international setting, the personality of the negotiator can, in some cultures, be more important that the organization he is representing. Collectivistic societies are high context cultures in regard of communication whilst individualistic societies are considered low context who gets to the point quickly (de Mooij & Hofstede 2010). Negotiator’s communication skills, such as foreign language proficiency, can be used as a tool to close the language gap and mitigate potential misunderstandings. In addition to this, non-verbal communication in the form of body language, gestures, silence and tone of voice is equally, if not more important to take into consideration (Ghauri 2003; Reynolds et al. 2003) Moreover, ways of greeting each other, personal space, handshakes, etc. vary amongst different cultures and are all aspects of communication patterns. A knowledge of these can vastly improve the negotiation process and its effectiveness (Ghauri 2003) Negotiation Strategies The chosen strategy can be used throughout the whole bargaining process, or it may be altered along the way; the strategy might not specify every single response for all conceivable events (Odell 2002). The three main strategies presented by Ghauri (2003) are: 1) tough, 2) soft, and 3) intermediate strategy. 80 CU IDOL SELF LEARNING MATERIAL (SLM)

1. When utilizing a tough strategy, a party starts with a high initial offer with no sign of budging. In addition to this, there is no expectation of the other party to comply. 2. The soft strategy is in many ways the opposite, where a party makes the first concessions and avoids making a high initial offer in hopes of the other party reciprocating. 3. In intermediate strategy, the initial offer is often set in some kind of middle ground and if a realistic offer is made, it is accepted. 3.7 SUMMARY  Intercultural negotiation entails talk of shared and competing interests amongst people of various cultural backgrounds in order to establish a mutually beneficial agreement.  Features of International Communication are: o Time and Space o Fate and Personal Responsibility o Face and Face-Saving o Nonverbal Communication  Richard D. Lewis Model: The cultures are divided into three main categories o Linear Active – refers to societies where people focus on jobs. o Multi Active - refers to societies where people focus on building relationships. o Reactive – refers to societies where people listen most of the time and react to others’ actions.  Factors Influencing Intercultural Negotiation: o Language barrier. o The high or low level of context people are talking to each other. o Awareness of words with sexual connotations o Non-verbal communication and Eye Contact o Other factors which influence an intercultural negotiation are religion, work behaviour and rituals. o Intercultural negotiations though require a special and usually more intensive preparation.  The International business negotiations is divided into three stages: pre-negotiation, face-to-face negotiation and post-negotiation, where each stage refers to actions and types of communication made by a party during each specific phase.  Types and Strategy of Organisational Culture. 81 CU IDOL SELF LEARNING MATERIAL (SLM)

o Cultural adaptation refers to the process and time it takes to integrate into a new culture, as well as having an expanded worldview to include relevant constructs from other cultures. o Cultural intelligence, or cultural quotient, is described by Van Dyne et al. (2017) as the capability to function effectively in intercultural contexts. o Individual versus Collective Behaviour: Hofstede (2011) presents individualism as a society that allows a strong degree of independence among its citizens where individuals only take care of themselves and their immediate family. Collectivism on the other hand represent a society where individuals can expect their ‘clan’ to take care of them in exchange of an unquestioned loyalty; the self-concept is ‘we’ instead of the individualistic ‘I’. o Hierarchy in the form of Power Distance: Hofstede’s cultural dimension ’power distance’ measures a culture’s acceptance and expectation of the fact that power is distributed unequally in a society. o Pattern of Communication: Communication patterns can differ significantly depending on culture, and these can be categorized into the more explicit and direct communication style low context and the implicit and contextual high context culture. o The three main negotiation strategies are o tough, o soft, and o intermediate strategy. 3.8 KEYWORDS 1. Cultural Intelligence refers to the skill to relate and work effectively in culturally diverse situations. 2. Deculturation is to bring about the neglect or loss of particular cultural characteristics, either deliberately or incidentally 3. Tough Strategy: When utilizing a tough strategy, a party starts with a high initial offer with no sign of budging. In addition to this, there is no expectation of the other party to comply. 82 CU IDOL SELF LEARNING MATERIAL (SLM)

4. Soft Strategy: The soft strategy is in many ways the opposite, where a party makes the first concessions and avoids making a high initial offer in hopes of the other party reciprocating. 5. Intermediate strategy: In intermediate strategy, the initial offer is often set in some kind of middle ground and if a realistic offer is made, it is accepted. 3.9 LEARNING ACTIVITY 1. Present the analysis for Linear Active type of Culture. ___________________________________________________________________________ ___________________________________________________________________________ 2. Why preparations are must for Intercultural Negotiations? ___________________________________________________________________________ ___________________________________________________________________________ 3.10 UNIT END QUESTIONS A. Descriptive Questions: Short Answers: 1. State the concept of Cross-Cultural Negotiation and its significance for International Business. 2. What are the characteristics of Reactive type of Culture? 3. Discuss the Factors Influencing Intercultural Negotiation. 4. Explain the Face-to-Face Negotiation step. 5. Write a note on Cultural Significance. Long Answers 1. Discuss the features of Cross Cultural Negotiation. 2. Describe the Richard D. Lewis Model 3. Explain the Negotiation Process 4. Write a note on Individual versus Collective Behaviour 5. State the different organizational strategy to deal successfully in the negotiation process. B. Multiple Choice Questions 1. Indian sub-continent is a ___________ a. Hybrid b. Reactive c. Multi-Actives d. Linear Actives 83 CU IDOL SELF LEARNING MATERIAL (SLM)

2. Select the characteristics of Linear Actives a. refers to societies where people focus on building relationships b. refers to societies where people listen most of the time c. refers to societies where people react to others’ actions d. refers to societies where people focus on jobs 3. The contact during the ____________is rather informal and evaluative. a. Face to Face Negotiation stage b. Pre-negotiation stage c. Post Negotiation stage d. Agreed Negotiation Stage 4. The capability to obtain and comprehend cultural knowledge is known as ___________________ a. Cognitive cultural intelligence b. Behavioural cultural intelligence c. Metacognitive cultural intelligence. d. Motivational cultural intelligence 5. What is considered as important in individualistic cultures? a. Relationships and trust b. Openness and directness c. Self-Esteem d. Basic Needs Answers 1 – a; 2 – d; 3 – b; 4 – c; 5 – b; 3.11 REFERENCE Text Book: 84  Wilhelm Schmeisser, Dieter Krimphove, Rebecca Popp, International Human Resource Management and International Labour Law, De Gruyter Oldenbourg,  Peter J. Dowling, Marion Festing and Allen D. Engle, Sr., International Human Resource Management, Cengage Learning EMEA  By Veronica Velo, Cross-Cultural Management, Business Expert Press  Srinivas R. Kandula International Human Resource Management , SAGE Publications Pvt. Ltd  Pravin Durai, Human Resource Management, Pearson India Reference Book CU IDOL SELF LEARNING MATERIAL (SLM)

 K Aswathappa , Sadhna Dash, International Human Resource Management, McGraw Hill  Gary Dessler, Fundamentals of Human Resource Management, Pearson  Ekta Sharma, Strategic Human Resource Management and Development, Pearson India  Parissa Haghirian, Successful Cross-Cultural Management, Business Expert Press Open Sources:  https://www.Shrm.org/  https://www.ncbi.nlm.nih.gov/  https://www.futurelearn.com/  International Journal of Human Resource Studies  changingminds.org  assignmentpoint.com  interculturalmanagement.fandom.com  diva-portal.org  cvs.edu.in  strategy-business.com  www.mbaknol.com (Integrity-Asia & ispatguru)  publications.anveshanaindia.com  smallbusiness.chron.com  resources.workable.com  whatishumanresource.com  resources.workable.com  jigsawacademy.com  www.personio.com 85 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT - 4: INTERNATIONAL BUSINESS AND IHRM STRUCTURE 4.0 Learning Objective 4.1 Introduction 4.2 Workforce Diversity 4.2.1 Definition 4.2.2 Features Of Diversity 4.2.3 Dimensions Of Diversity 4.2.4: Importance Of Diversity 4.3 Diversity Management 4.3.1 Definition 4.3.2 Approaches To Diversity Management 4.3.3 Process Of Cultural Diversity Management 4.3.4 Strategies For Managing Cultural Diversity 4.3.5: Responses To Diversity 4.4 Summary 4.5 Keywords 4.6 Learning Activity 4.7 Unit End Questions 4.8 References 4.0 LEARNING OBJECTIVE After studying this unit, you will be able to:  Describe the importance of Workforce Diversity in context to Culture  Illustrate the process of Diversity Management  Explain the strategies required for Diversity Management 4.1 INTRODUCTION Organizations must now trade internationally to survive in a globally competitive economy. However, it is important mentioning that if firms wish to succeed in international trading, they must map their culture. An organisation is produced not only by the four sided walls, but also by the people who work there, such as workers, and the people with whom they interact, 86 CU IDOL SELF LEARNING MATERIAL (SLM)

such as customers, suppliers, and others. And it's the same with the employees, who differ not only in physical appearance but also in their backgrounds, gender, age, qualification, taste, preference, experience, origin, caste, religion, designation, culture, etc. All this is nothing, but what is called as ―diversity.” In today's world, a business can only be successful if it has a diversified workforce to match the varying needs of its consumers. But, at the same time, one cannot overlook the fact that in an organisation with a multinational workforce, misunderstandings, ego clashes, prejudice, and miscommunication are all too often. As a result, the organization's management must learn how to effectively manage or address these difficulties. As a result, managers must be trained in multicultural viewpoints not only to deal effectively with cross-border clients and suppliers, but also with their own personnel. This is because, at the end of the day, they are the ones who must serve a wide range of customers. There is an urgent need to learn more about workforce diversity, which goes beyond what is visible on the surface. This can help managers understand what can go wrong when working with a diverse group. Because of market liberalisation and globalisation, the 1990s saw the emergence of a new trend in the shape of labour diversity (Jain and Verma, 1996). Today's managers must be well-versed in a variety of cultural views, values, and customs in order to be successful. As the awareness of the culture can greatly ease the problem of managing a diverse workforce in today’s organizations, which are now represented by people from different cultures. 4.2 WORKFORCE DIVERSITY 4.2.1 DEFINITION: Wentling and Palma Rivas (2000) define diversity as, ―the co-existence of employees from various socio-cultural backgrounds within the company. Diversity includes cultural factors such as race, gender, age, colour, physical ability, ethnicity, etc. The broader view of diversity may include age, national origin, religion, disability, sexual orientation, values, ethnic culture, education, language, life style, beliefs, physical appearance and economic status. Kundu and Turan (1999), ―Diverse workforce or diversity refers to the coexistence of people from various socio-cultural backgrounds within the company. Diversity includes cultural factors such as race, gender, age, colour, physical ability, ethnicity, etc. Griggs (1995), ―Diversity includes all the ways in which people differ, and it encompasses all the different characteristics that make one individual or group different from another. It is 87 CU IDOL SELF LEARNING MATERIAL (SLM)

all-inclusive and recognizes everyone and every group as part of the diversity that should be valued. Diversity includes all those visible and non-visible factors that cause differences among people, e.g. gender, religion, physical disability, family status, age, race, hierarchical status, language, education, profession and life style etc. The term diversity and workforce diversity have been used interchangeably/synonymously. 4.2.2 FEATURES OF DIVERSITY: The features of workforce diversity are as follows:  Multidimensional: Diversity is multidimensional; as it includes both visible and invisible dimensions of human being.  Inclusion: Diversity not only includes differences but also similarities among people.  Pros and Cons: Diversity if handled properly can prove to be a competitive advantage for an organization and if mismanaged, then it may result in the destruction of the organization as well 4.2.3 DIMENSIONS OF DIVERSITY: Different authors have different viewpoints in regard to the dimensions of diversity. Some of which have been described below:- Loden explained the dimensions of diversity in the form of a concentric circle. Nine primary dimensions of diversity viz., class, gender, age, race, ethnicity, income, spiritual beliefs, sexuality and physical abilities and characteristics have been displayed in the innermost circle. These dimensions play a significant role in shaping an individual‘s values, self image and identity, opportunities and perceptions of others. On the other hand, Secondary dimensions have been shown in the outer circle which includes eleven variables like work experience, communication style, cognitive style, political beliefs, education, geographic location, organization role and level, military experience, work style, first language, and family status. 88 CU IDOL SELF LEARNING MATERIAL (SLM)

Fig 4.2.1: Primary and Secondary Dimension of the Diversity Griggs (1995) classified diversity into two dimensions namely Primary dimensions and Secondary dimensions. Primary dimensions of diversity indicate those human differences that are inborn and have an ongoing influence throughout the life of a person along with the impact on the early socialization. These six primary dimensions include (i) age, (ii) ethnicity, (iii) gender, (iv) physical abilities/qualities, (v) race, and (vi) sexual- orientation. These can‘t be changed. On the contrary, the secondary dimensions of diversity are the ones that can be changed and thereby include , but are not restricted to educational background, geographical location, marital status, parental status, religious beliefs and work-experience etc. John Hopkins explained the concept of diversity in the form of a wheel. The centre of the wheel indicates internal dimensions which are generally most permanent or visible. The outermost part of the wheel represents the dimensions which are acquired and undergo a change with the passage of time. The combination of all of these dimensions has an influence over the values, behaviours, beliefs, experience and expectations of a person. 89 CU IDOL SELF LEARNING MATERIAL (SLM)

Fig 4.2.2: Diversity Wheel 4.2.4: IMPORTANCE OF DIVERSITY: It has now become important for today‘s organizations to recruit, train, and promote culturally diverse employees. The Human Resource Management approach now recognizes the relationship between culturally diverse people and the organization. The basic foundation for this approach can be drawn in conformity with the observations of Bolman and Deal (2003):  Organizations exist to fulfill human needs.  Organizations and people need each other.  When the fit between the individual and the organization is poor, either one of them or both of them will suffer.  When the fit between the individual and the organization is good, both will gain. Hence, cultural diversity is now more a need than a compulsion. When managers appreciate the cultural beliefs and values of employees, a supportive environment is created. Through this, the organization gets successful in creating the right climate of mutual trust and co-operation 90 CU IDOL SELF LEARNING MATERIAL (SLM)

4.3 DIVERSITY MANAGEMENT 4.3.1 DEFINITION: Various authors have defined diversity management in several ways. Some of those are listed below: - Wentling (2001) defines, ―Diversity management initiatives are efforts to create an environment that works naturally for the total diversity mixture, but not just for women and minorities. Torres and Bruxelles (1992) ―Managing diversity mean enabling the diverse workforce to perform its full potential in an equitable environment, where no one group has an advantage or disadvantage. Diversity management refers to all those efforts which are made to manage and respect the cultural differences among the people. Managing diversity is going ahead of affirmative action. 4.3.2 APPROACHES TO DIVERSITY MANAGEMENT: Thomas and Ely (1998) identified three paradigms for managing diversity. These approaches help to identify the stage of development of the firm’s diversity culture. The brief description about the approaches is as follows: - Fig 4.3.1: Approaches to Diversity Management 1. Discrimination and Fairness Approach: This approach focuses on making proactive programmes for ensuring equal opportunity, fair treatment, recruitment and observance of Equal Employment Opportunity conditions for everyone. Companies following this approach normally introduce mentoring and career 91 CU IDOL SELF LEARNING MATERIAL (SLM)

development programmes explicitly for the women and people of minority caste and train other employees as well to respect cultural differences. The essential driving force of this approach is to eliminate prejudice from the workplace and to promote an understanding of cultural differences. Under this concept, the success of this paradigm is determined on the basis of the extent to which the organization is able to attain its recruitment and retention goals instead of the extent to which the work environment of the organization encourage the employees to bring into play their capabilities and viewpoints to carry out their work more efficiently. Though as per this paradigm, the staff gets diversified, but the work does not. The diversification of workforce does not influence the work culture of the organization and leadership could not exploit the potential benefits of diversity (Thomas and Ely, 1998). 2. Access and Legitimacy Approach: The approach focuses on the acceptance and utilization of the differences among employees to cater the diverse customer groups. Organizations applying this approach, believe that the marketplace is culturally diverse and hence can present an opportunity or a threat for them. Thus, the organizations or the companies work on improving the diversity of its workforce as they understand the need of having the employees who possess multi-skills and that too in more than one language so that the customers can be understood and served in a better way and thus gain legitimacy with them. Diversity is not just fair; it makes business sense. Celebration of differences concept basically categorizes the employees into jobs that suit their niche or cultural background. However, the diverse employees often feel exploited as the opportunities in the other parts of the organization are not open to them. Further, in adverse business scenario or downsizing, the special department ‘employees are the most vulnerable to lose their job. 3. Learning and Effectiveness Approach: This learning and effectiveness approach aims at integrating employees by recognizing that cultural differences are an important source of organizational learning. The differences are valued and are made a part of the core business processes. The organization following this approach believes in an open discussion and ensures respect for differences. The approach aims at developing positive diversity climate and thereby promoting a culture of integration. The organization internalizes differences among employees by putting itself in the shoes of the employees to understand their different perspectives and thus finding the ways of increasing the effectiveness. This learning contributes to the growth of the organization and thus, the team spirit is inculcated among the employees from different cultural backgrounds. They feel valued and respected. To facilitate this approach needs bureaucratic, egalitarian structure. Further, organizational culture needs to encourage openness and set high standards of performance for employees. (Thomas and Ely, 1998). 4.3.3 PROCESS OF CULTURAL DIVERSITY MANAGEMENT: 92 CU IDOL SELF LEARNING MATERIAL (SLM)

According to Ross and Schneider (1992), the strategic process of diversity management consists of the following steps: - 1.Diagnosis: Every organization needs to identify the current situation in terms of policy, statistics and culture by looking both at the issues and the causes. 2. Aims Setting: The next step is setting of aims that normally include the important concerns such as the business case for avoiding discrimination, identifying the vital role of commitment from the top management of the organization, and a vision of what the organization would look like, after successful diversity management. 3. Awareness raising: This is a very important stage in which the awareness needs to be raised. The awareness about diversity needs to be raised among the employees at all the levels, especially the managers. 4. Policy development: The new systems are implemented through the involvement of all the employees. These should not be imposed. 5. Managing the transition:It involves a variety of training initiatives. These may include programmes which are specifically designed for minority groups in order to make them understand the culture of the organization and acquire essential skills. Specific diversity management policies and programmes needs to be developed , particularly focusing on selection, appraisal and coaching, training sessions for further awareness and to identify cultural diversity and to manage different cultures. 6. To sustain momentum:This requires involvement of a senior management functionary, not necessarily from HR department, but anyone who continues the process together with the trade union. 7. To assess achievements in terms of business benefits: The last step is to manage the success or achievements of diversity management policies, in terms of business benefits such as better or improved relations with the customers, improvements in the productivity and profitability 4.3.4 STRATEGIES FOR MANAGING CULTURAL DIVERSITY: Adler (1997) has identified the three strategies for managing Cultural diversity in the organization. Fig 4.3.2: Strategies for Managing Cultural or Workforce Diversity 93 CU IDOL SELF LEARNING MATERIAL (SLM)

1. Ignore cultural differences:The managers following this approach in the organization does not recognize cultural differences and its impact on the organization. This strategy is mainly adopted by parochial type of organizations. In such type of organizations, managers and employees believe that our way is the only way to manage and organize. In their view, diversity is just an irrelevant concept. Thus, the efforts for effective diversity management, minimizing the negative impact of cultural differences or increasing the positive impacts of diversity do not find any place here. 2. Minimize cultural differences: This strategy is mainly adopted by ethnocentric organizations. Here the managers do recognize the cultural diversity but only as a source of problems. The approach of the managers in an ethnocentric organization is that ―our way is the best way to organised and manage. They think other ‘s ways of doing as inferior ways of managing. The managers believe in reducing diversity by reducing the problems of differences. They don ‘t consider the benefits of diversity. Such an organization therefore prefers to choose/have a homogenous workforce. Thus, the ethnocentric organizations remain deprive or untouched from the benefits of diverse workforce by minimizing the scope of having cultural diverse workforce in the organization. 3. Manage cultural differences:The organizations which use the strategy of managing differences are synergetic organizations. These types of organizations recognize or acknowledge the effects of cultural diversity that results in both advantages and disadvantages. Managers following this approach believe that ―our way and their way of managing and behaviour differ, but neither is superior to other. Rather, the creative combinations of our way and their way can be the best approach to managing and organizing. Synergetic organizations manage the cultural diversity by training the managers and employees to recognize cultural differences and to use those cultural differences to create advantages for the organization. 4.3.5: RESPONSES TO DIVERSITY: The responses of managers and employees to diversity can take a number of forms which could be suitable in different situations. The eight responses identified by Thomas (1995) are exclusion, denial, suppression, segregation, assimilation, tolerance, building relationships and fostering mutual adaptation. He described these eight diversity responses in the following way: - 1. Exclusion: This involves keeping the members of the diverse groups out or pushing out diverse groups, once they are in. 2. Denial: According to this response, the individuals believe in ignoring the cultural differences in the organization. 3. Suppression: The individuals are encouraged to restrain their differences. 94 CU IDOL SELF LEARNING MATERIAL (SLM)

4. Segregation: This refers to putting members of particular groups in certain work or departments. 5. Assimilation: It attempts to transform members of a diverse group into replicas of the dominant group. Affirmative action programs are mainly adopted by the organization for this type of response. 6. Tolerance: In this situation, the differences among the individuals are acknowledged but the steps are taken to minimize the interaction between the groups. 7. Building Relationships: It is believed that, building a good relationship will overcome differences. 8. Fostering mutual adaptation: This approach believes in accepting and understanding the differences and diversity. Thus, it can be concluded that nobody can deny the fact that in today‘s era there exists culturally diverse workforce in almost every organization. And, the managers and the organizations as a whole need to leave no stone unturned to make sure that the culturally diverse workforce are given a topmost priority. That is, if some issues crop in amongst the diverse employees, then it becomes the prime duty of the manager in charge of the same to deal with it very carefully. Because, diversity if handled properly, can prove to be a competitive edge for the organization. And if ignored, can bring the organization to the road. The managers thus have to be prepared well in advance about which strategies they would opt for, if something goes wrong while dealing with the culturally diverse workforce. 4.4 SUMMARY  Diversity includes all those visible and non-visible factors that cause differences among people, e.g. gender, religion, physical disability, family status, age, race, hierarchical status, language, education, profession and life style etc.  Primary dimensions of diversity indicate those human differences that are inborn and have an ongoing influence throughout the life of a person along with the impact on the early socialization.  On the contrary, the secondary dimensions of diversity are the ones that can be changed and thereby include, but are not restricted to educational background, geographical location, marital status, parental status, religious beliefs and work- experience etc.  John Hopkins explained the concept of diversity in the form of a wheel. The centre of the wheel indicates internal dimensions which are generally most permanent or visible. The outermost part of the wheel represents the dimensions which are acquired and undergo a change with the passage of time. 95 CU IDOL SELF LEARNING MATERIAL (SLM)

 Diversity management refers to all those efforts which are made to manage and respect the cultural differences among the people.  Different approaches to Diversity management are o Discrimination and Fairness Approach: o Access and Legitimacy Approach: o Learning and Effectiveness Approach:  The strategic process of diversity management consists of the following steps: o Diagnosis: o Aims Setting: o Awareness raising: o Policy development: o Managing the transition: o To sustain momentum: o To assess achievements in terms of business benefits:  Strategies for Managing Cultural or Workforce Diversity: o Ignore cultural differences: o Minimize cultural differences: o Manage cultural differences:  The responses of managers and employees to diversity can take a number of forms which could be suitable in different situations. o Exclusion o Denial o Suppression o Segregation o Assimilation o Tolerance o Building Relationships: o Fostering mutual adaptation 4.5 KEYWORDS 1. First Language - A first language is the language a person has learned from birth or within the critical period, or that a person speaks the best and so is often the basis for sociolinguistic identity. 2. Cultural differences are the various beliefs, behaviors, languages, practices and expressions considered unique to members of a specific ethnicity, race or national origin. 96 CU IDOL SELF LEARNING MATERIAL (SLM)

3. Transition - is the process in which something changes from one state to another. 4. Cultural Differences - The cultural differences reflect differences in personal values and in the assumption, people make about how business is organized. 5. Synergy is an interaction or cooperation giving rise to a whole that is greater than the simple sum of its parts 4.6 LEARNING ACTIVITY 1. Why it is important to consider the cultural diversity? _________________________________________________________________________ _________________________________________________________________________ 2. What would be the characteristics of the organization that are adopting _________________________________________________________________________ _________________________________________________________________________ 4.7 UNIT END QUESTIONS A. Descriptive Questions: Short Answers 1. State and explain Workforce Diversity. 2. Discuss the various dimension of the Diversity. 3. Highlight the difference between Minimizing and Managing the Culture Difference Approach. 4. Compare the Access and Legitimacy Approach and Learning and Effectiveness Approach. 5. Write a note on Diversity Management. Long Answers 1. Explain the different approaches to the Diversity Management. 2. State and discuss the Process of Cultural Diversity Management. 3. Describe the different strategies for managing Cultural Diversity. 4. Discuss different Responses to Diversity. 5. Enumerate the steps of Diversity Management Process and state its importance. B. Multiple Choice Questions: 1. Who has proposed the 9 different dimension of the Cultural Diversity? a. John Hopkins b. Loden c. Griggs d. Turan 97 CU IDOL SELF LEARNING MATERIAL (SLM)

2. The essential driving force of _________________approach is to eliminate prejudice from the workplace and to promote an understanding of cultural differences. a. Discrimination and Fairness Approach b. Secondary Approach c. Primary Approach d. Legitimacy Approach 3. What is assumed as an important source of organizational learning? a. Diverse Educational Background b. Different Levels of Management c. Participation in Training Programs d. Cultural Differences 4. Which step of Cultural Diversity Management process involves variety of training initiatives? a. Managing the transition: b. Policy Development c. Aim setting d. To sustain momentum 5. Which type of strategy is adopted by the parochial type of organizations. a. Manage Cultural Differences b. Minimize cultural differences c. Ignore cultural differences d. Maximize Cultural Differences Answers 1 – b; 2 – a; 3 – d; 4 – a; 5 – c ; 4.8 REFERENCE Text Book:  Wilhelm Schmeisser, Dieter Krimphove, Rebecca Popp, International Human Resource Management and International Labour Law, De Gruyter Oldenbourg,  Peter J. Dowling, Marion Festing and Allen D. Engle, Sr., International Human Resource Management, Cengage Learning EMEA  By Veronica Velo, Cross-Cultural Management, Business Expert Press  Srinivas R. Kandula International Human Resource Management , SAGE Publications Pvt. Ltd  Pravin Durai, Human Resource Management, Pearson India Reference Book 98 CU IDOL SELF LEARNING MATERIAL (SLM)

 K Aswathappa , Sadhna Dash, International Human Resource Management, McGraw Hill  Gary Dessler, Fundamentals of Human Resource Management, Pearson  Ekta Sharma, Strategic Human Resource Management and Development, Pearson India  Parissa Haghirian, Successful Cross-Cultural Management, Business Expert Press Open Sources:  https://www.Shrm.org/  https://www.ncbi.nlm.nih.gov/  https://www.futurelearn.com/  International Journal of Human Resource Studies  changingminds.org  assignmentpoint.com  interculturalmanagement.fandom.com  diva-portal.org  cvs.edu.in  strategy-business.com  www.mbaknol.com (Integrity-Asia & ispatguru)  publications.anveshanaindia.com  smallbusiness.chron.com  resources.workable.com  whatishumanresource.com  resources.workable.com  jigsawacademy.com  www.personio.com 99 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT - 5: GLOBALIZATION AND HR STRATEGY STRUCTURE: 5.0 Learning Objective 5.1 Introduction 5.2 HR Strategy 5.2.1 Concept 5.2.2 HR Strategy Dimensions 5.2.3 Importance Of HR Strategy: 5.3 Relationship between HR Strategy and Employee Performance 5.4 Global Human Resources Strategy 5.5 The Competency Required for International Managers. 5.6 Summary 5.7 Keywords 5.8 Learning Activity 5.9 Unit End Questions 5.10 References 5.0 LEARNING ACTIVITY After studying this unit, you will be able to:  Describe the significance of HR Strategy  Illustrate the relationship between Performance and HR Strategy  Explain the competency essential for International manager 100 CU IDOL SELF LEARNING MATERIAL (SLM)