GSBS6009 Cross Cultural Management

1. GSBS6009 Cross Cultural Management Lecture 8 Managing Global Teams & Introduction to Negotiation Lecturer: Asif Iqbal Course Coordinator: Dr. Karen Tian

2. Learning Objectives - Understand the meaning of ‘team’, the elements and processes of global teams - Have some insights into how teams composed of people from different cultures operate? - Understand how culture can influence team performance - Discuss how to prepare a negotiation reflective journal-Assessment 3 - Explore what is meant by negotiation and basic type and terms of negotiation

3. Why Have Teams Become So Popular • Teams typically outperform individuals. • Teams use employee talents better. • Teams are more flexible and responsive to changes in the environment. • Teams facilitate employee involvement. • Teams are an effective way to democratize and organization and increase motivation.

4. Teams in organizations Definitions: ‘group’ and ‘team’ • When the members of a team display complementary skills to achieve a certain goal, then we can talk of teamwork. • The term ‘group’ usually refers to two or more individuals who share a collective identity and have a common goal. • The term ‘teamwork’ implies a synergy from working together, which increases the performance of the work being done.

5. Team Versus Group: What’s the Difference Work Group A group that interacts primarily to share information and to make decisions to help each group member perform within his or her area of responsibility. Work Team A group whose individual efforts result in a performance that is greater than the sum of the individual inputs.

6. Comparing Work Groups and Work Teams

7. Types of Teams Problem-Solving Teams Groups of 5 to 12 employees from the same department who meet for a few hours each week to discuss ways of improving quality, efficiency, and the work environment. Self-Managed Work Teams Groups of 10 to 15 people who take on the responsibilities of their former supervisors.

8. Types of Teams (cont’d) Cross-Functional Teams Employees from about the same hierarchical level, but from different work areas, who come together to accomplish a task. • Task forces • Committees

9. Types of Teams (cont’d) Virtual Teams Teams that use computer technology to tie together physically dispersed members in order to achieve a common goal. • Team Characteristics • The absence of paraverbal and nonverbal cues • A limited social context • The ability to overcome time and space constraints

10. A Team-Effectiveness Model

11. Key Roles of Teams

12. Global management teams • Internal interactions at all levels go on at the same time as interactions with the external environment. • Therefore need for a global teamwork AND ‘pockets’ of cross-cultural teamwork and interactions that occur at many boundaries. • Global management team members share a number of national and professional identities.

13. Team tasks and processes • The group itself will develop properties that are more than the average of the properties of the individuals composing it. • Individuals influence group and team life but their behaviour in turn is changed through the dynamics that occur within the group. • Cultural differences in terms of • Expectations? • Operations? • These expectations have to be negotiated in terms of both task and process.

14. Team tasks and processes (2) Adler with Gundersen (2008, 2002) noted differences between task-oriented cultures and relationship-oriented cultures when international team members first meet: • Those from task-oriented cultures spent little time getting to know each other before getting down to business. • Those from relationship-oriented cultures spent much more time establishing a personal relationship. It may be more difficult for such teams to build strong relations than single-culture teams.

15. Strategies for global teams Gluesing and Gibson (2004) classify team strategies in terms of: • task • context • people • time (the amount of time the team work together) • technology (information sharing and collaboration). Global team-members may well work in different contexts (in terms of e.g. climate, nationality, education, political and economic systems. So, cross-cultural competence and ability of team to adapt are as important as professional expertise.

16. Elements essential to team dynamics Davison and Ekelund (2004) describe three aspects: • Task and social processes: • the task process directly influences team performance • the social process is related to the ability of the team to work together over a longer time. • Emergent states through interaction, especially • mutual trust • collective team identity • confidence in the team’s ability to achieve its tasks. • Coordinating mechanisms: face-to-face/on-line meetings.

17. Team dynamics • Team differences • Profession culture • Personality • Style • Role • Organization • These differences can help increase the performance of the team, but can also be the source of conflicts depending on the way the team deals with these differences.

18. The impact of differences in global teams (1) Table 16.2 The effect of differences in global teams (Source: Davison and Ekelund, 2004, pp. 232–234, Table 12.1, adapted)

19. The impact of differences in global teams (2) Table 16.2 The effect of differences in global teams (Source: Davison & Ekelund, 2004, pp. 232- 234, Table 12.1, adapted)

20. The impact of differences in global teams (3) Table 16.2 The effect of differences in global teams (Source: Davison and Ekelund, 2004, pp. 232–234, Table 12.1, adapted)

21. The impact of differences in global teams (4) Table 16.2 The effect of differences in global teams (Source: Davison & Ekelund, 2004, pp. 232- 234, Table 12.1, adapted)

22. Creating Effective Teams

23. Creating Effective Teams (cont’d)

24. Groups processes during international encounters • Trust is a prerequisite for working effectively in a team, but • developing a climate of trust is a challenge • the very concept of trust can vary from culture to culture. • Cultures also have different assumptions as to the purpose of groups and teams: • to spread information and discuss problems, or • to make decisions and take action, or • to enable the creation of social relations.

25. Trusting other people Degree of trust in other people in other cultures: Figure 16.1 Trusting other people Source: based on Inglehart as quoted by Schneider and Barsoux (2003)

26. The management of multicultural teams • Some managers will appeal to the professional culture of its members to bring an international team together. • Other managers will emphasize the communication between the actors, such as making the unspoken explicit, rules explicit. • Multicultural groups with the most harmonious relations appear to be those whose members: • have the same status • do not have contradictory interests • do not feel that their identity is threatened.

27. Learning Activity • Discuss with your group on the following questions: • 1. To what extent is it necessary for the leader of a multicultural team to be very familiar with the culture of each team member? • 2. Some researchers in team dynamic argue that cultural differences have less influence on the effective functioning of a multicultural team than a good combination of team members. They maintain that the effective distribution of roles within the tem is more likely to ensure its success. Discuss this standpoint.

28. Assessment Item 3 – Individual Negotiation Reflective Journal • Individual Negotiation Reflective Journal – (30%) – Due on Monday week 13, 30th April 2012. • Length of Assignment: The assignment should be 1000-1500 words in length • Correct referencing according to NGSB Student Manual must be used (APA6th). • Submit to Turnitin

29. Part 1: Reflection on Negotiation Practice • Requirement: Part 1 of your journal is your observations of and reflections on, two of the negotiation simulations conducted from week 9 to 11. You need to apply appropriate cultural and negotiation theory/ies to your reflection. • Preparation: Record each week’s negotiation practice and reflect the practice with the appropriate theories. • Resource? Evidence?

30. Part 2: Reflection on Team Work Requirement: Part 2 of your journal is your reflection on the preparation leading up to the Final Group Negotiation Simulation in week 12 . Over the period of your preparation for the Final Group Negotiation Simulation, you are required to record your observations of, and reflection on, the team’s preparation process. This is to include observations of team meetings, decision making processes, the communication and interaction of team members and the team dynamics. You need to apply appropriate cultural, and negotiation theory/ies to your reflection. Preparation: Record the group work process and reflect the practice with the appropriate theories. Team need to divide tasks and roles.

31. Part 3: Individual Negotiation Plan Requirement: Your negotiation plan for final negotiation simulation on week 12. Advice: Please record and reflect on your negotiation planning process and specify your negotiation strategy and tactics. Each group member will be given different roles and responsibility, so each member’s negotiation plan will be different. Please do not copy other team member’s plan. Preparation: • Divide roles and responsibility with group members • Research on your task • Your negotiation plan ( not team plan)

32. Part 4: Reflection on final negotiation Requirement: you are required to critically reflect on the Final Group Negotiation Simulation in week 12 and apply appropriate cultural, communication and negotiation theories to your reflection. Preparation: • Record the negotiation simulation • Reflect on the negotiation and apply the appropriate theories

33. Marking Criteria • Reflective practice review and analysis • Critical analysis and application of communication and negotiation theory and strategies • Negotiation plan • Writing General language and grammar and referencing.

34. Advice • It is your feelings and reflections I am looking for evidence of action learning so please do not take it from other people’s work! • Extra reading materials available on Shortloans online: ‘Cross Cultural Communication and Negotiation’ by Fred Luthans • Textbook on negotiation: Lewicki, R., Barry, B. and Saunders, D.M. (2010) Essentials of Negotiation. 5th Ed. McGraw Hill Irwin: New York.

35. Revisiting Communication (Lecture 1) Negotiation is a special kind of communication… • it differs from other communication by focusing on “perceived incompatibilities and employing strategies and tactics aimed at reaching a mutually acceptable agreement” (Putnam & Roloff, 1992:3)

36. What is Negotiation? • Negotiation is an interpersonal decision-making process necessary whenever we cannot achieve our objectives single-handedly. • Negotiation is increasingly important because of: • Dynamic nature of business • Interdependence • Competition • Information age • Globalisation

37. What is communicated in a negotiation? • Offers, counteroffers and motives • Information about alternatives • Information about outcomes • Social accounts • Mitigating circumstances • Exonerating circumstances (eg honest mistake) • Reframing explanations • Process • But … negotiation involves dilemmas …

38. Most people are not good negotiators! • Fewer than 4% of managers reach win-win outcomes. • Around 20% are outright lose-lose outcomes. • 50% fail to realise that they are in agreement when negotiating • Most people think that negotiating is only about money!

39. Negotiators’ Dilemmas • Even in the most cooperative situations, comes a point of distribution – value that is created must be claimed • Competitive or distributive negotiations typically involve some withholding of information, attempts to conceal preferences – purposeful non-communication • Further, cooperative behaviour is vulnerable to competitive tactics • All negotiators are faced with two dilemmas: • Dilemma of honesty – how much do I reveal/communicate? • Dilemma of trust – how much do I believe of what is being communicated to me?

40. Elements of Negotiation: Interdependence • Negotiation occurs through CHOICE: If independent or dependent – why negotiate? • Parties need each other • Interlocking goals • Alternatives shape interdependence – BATNA(Best Alternative To a Negotiated Agreement) • Interdependence leads to mutual adjustment and concession making - ‘Give and Take’ approach

41. Differences in Negotiating Situations • Two or more parties • Monolithic bargainers • More than one issue… • Stand alone or repetitive? • Pattern setting or precedent? • Public or private negotiations? • Time constraints • Is agreement necessary or can parties walk away? • NEED TO THINK ABOUT WHAT THESE MEAN TO THE NEGOTIATING SITUATION AND HOW YOU CAN NEGOTIATE

42. Two broad ‘types’ of negotiation • Distributive or fixed pie or competitive ( win-lose) • Integrative or expansion of the pie or co-operative (win-win) • Reality? Few negotiations are one type or the other but are a mix of both.

43. Distributive negotiation • Distributive negotiation: A negotiation that allocates a fixed set of resources. • In distributive bargaining the goals of one party are usually in fundamental and direct conflict with goals of other party. • Resources are fixed and limited and both parties want to maximise their share of them. • Each party will use a set of strategies that maximise their share of the outcomes to be obtained. • Distributive bargaining is effective when you want to maximise the value of a single deal and when relationship to other party is not important.

44. Integrative Negotiation • Integrative negotiation: Bargaining that involves cooperation between two groups to integrate interests, create values, and invest in the agreement. • What makes integrative negotiation different? Expanding the pie. • Focus on commonalties rather than differences • Attempt to address need and interests, not positions • Commit to meeting the needs of all involved parties • Exchange information and ideas • Invent options for mutual gain

45. Some Important Negotiation Terms • BATNA –Best Alternative To a Negotiated Agreement • Opening/initial asking price/offer • Target point • Reservation price/Resistance point • Settlement point • Bargaining zone: • Positive bargaining zone • Negative bargaining zone • Bargaining mix • Multiple issues and how these are packaged • Mix of strategies (more next week)

46. Closing Tips for Negotiators Preparation Information: seeking and resisting disclosure First offers: should I or shouldn’t I? Which negotiation style? Win-Win: what is it really?

47. What was your knowledge of Tom’s sexual harassment history? Did Tom offer Mary a promotion in return for sex? Yes - No Closed Questions Questioning Effectively:Move From General to Specific Will you please tell me about the incident? Broad Open-ended Questions

48. BATNA and Reservation/Resistance point • Reservation/Resistance Point refers to the minimum conditions for an agreement; • BATNA refers to what the party will do if no agreement; • Reservation/Resistance Point is inside the current negotiation; • BATNA is outside the current negotiation (BAE – Best Alternative Elsewhere) • Reservation/Resistance Point is based on BATNA, plus other considerations: • Reservation/Resistance Point = BATNA +/- Transaction cost to enact BATNA + interpersonal factors • Reservation/Resistance Point determines action in negotiation

49. The importance of BATNA • BATNA determines the point at which the negotiator is prepared to walk away • BATNA determines the bargaining power • The more easily and happily you can walk away from a negotiation, the greater your capacity to affect its result • BATNA is determined by harsh reality and external factors, not by wishes • Improve BATNA is the best means of preparation • Develop BATNA before commencing negotiation • Find or change other party’s (perception of) BATNA • Should one accept a deal better than BATNA?

50. A house buyer’s view of the negotiation Seller’s Resistance Point (Inferred) Buyer’s Initial Offer (Public) Buyer’s Target Point (Private) Seller’s Target Point (Inferred) Seller’s Asking Price (Public) Buyer’s Resistance Point (private) $400,000 $410,000 $425,000 $435,000 $440,000 $445,000 Offers and counter-offers are communicated, but some information is often withheld especially resistance points and BATNAs