Dealing with cultural differences
" Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster." Prof. Geert Hofstede, Emeritus Professor, Maastricht University.
The exposure of the importance of cultural differences in the matters of international business, gave us and important wake up, about how fundamental is it to be aware of how different human beings behave in their home town, country or culture, and how much this behavior influences in their style of life, perceptions, and of course their relations with the people that they want to negotiate, the chances of losing a good business because of lack of cultural knowledge are huge. Geert hofstede’s research gives us 5 dimensions in which we can support ourselves to acquire the understanding that requires negotiating with people from another country.
“Power Distance Index (PDI) that is the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally. This represents inequality (more versus less), but defined from below, not from above. It suggests that a society's level of inequality is endorsed by the followers as much as by the leaders. Power and inequality, of course, are extremely fundamental facts of any society and anybody with some international experience will be aware that 'all societies are unequal, but some are more unequal than others”. (Taken from http://www.geert-hofstede.com/)
The Power Distance (PDI) ranking of 67 indicates a level of inequality of power and wealth within the society.
With the power of distance or PDA dimension, we can see as an example our very own, Latin America, that for being and undeveloped region, sets itself in a situation of disadvantage for negotiating treaties, and business in general. We tent to accept more easily the inequality of the contracts, and in that scale, the employees of the Latin America enterprises, accepts more easily bad and unfair work conditions. The employees expect their leaders to be in an example of work and in a high position pretty much important than theirs.
A clear example of this kind of dimension is the TLC of Colombia and US. Colombia tried to win with some articles that benefit the country the most, specially the agricultural ones, they actually didn’t made a lot of progress in that field, but tried to show the country that we had to settle for whatever the negotiation could achieve because US was bigger and had more bargaining power, and in the end, anything would be greater that nothing. (what I personally believe is true.
http://www.youtube.com/watch?v=G9zZfCRIGeo
Images taken from:
http://globersoa.blogspot.com/2009_06_01_archive.html
Videos taken from: Youtube.com, TLC Colombia and USA.
Is really worrying the situation of most of Latin american countries, for being less developed we have been treated unfairly and in terms of concessions lees advantages has been given to us. The example you mentioned of the FTA Col-USA, clearly shows this disadvatageous position, and also reveals the huge influence United States can exercise in imposing conditions to benefit themselves... But... in spite of the unbalance I consider this treaty as a way to start and continue the country's process of integration to the world economy, and I think is the path we should follow in order to achieve a better bargaining position in terms of future treaties
ResponderEliminarIt is a fact that must be considered seriously by the governors of Latin American countries. The question now is what must be done in order to reduce the Power Distance Index until getting to a point that benefits the negotiation behaviour and skills of the regional negotiators. We see also how a cultural fact determines the development of certain countries and this is really worrying because it is very difficult to change.
ResponderEliminarhere power distance shows again that it is the one we feel more attached to of the hofstede dimensions because it is the one that we see more often and because maybe we have lived a situation were power distance is involved.
ResponderEliminarManuela, I actually disagree with anything is better than nothing, but I Think you used good arguments for this position. Good Job. Please remember to REFERENCE!!!!!
ResponderEliminar