14Motivation in Multinational CompaniesChapter© 2013 C.docx

14
Motivation in Multinational Companies
Chapter
© 2013 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
Learning Objectives (1 of 2)
Recognize how people from different nations perceive the basic
functions of working.
Explain how people from different nations view the importance
of working.
Understand how the national context affects the basic processes
of work motivation.
Apply common theories of work motivation in different national
contexts.

Design jobs for high motivational potential in different national
cultures.
Work Values and
the Meaning of Work
Before we can understand how to motivate or lead people from
different national cultures, we must have some knowledge about
what work means to people from different societies.
Two basic questions must be answered:
How important is work in people’s lives?
What do people value in work?
How Important is Work
in People’s Lives? (1 of 2)
Work Centrality is the degree of importance that work has in the
life of an individual at a given time, as compared to other
activities such as leisure and family.
Higher levels of work centrality are closely correlated with the
average number of hours worked per week.
High levels of work centrality may lead to dedicated workers
and effective organizations.

How Important is Work
in People’s Lives? (2 of 2)
Work Obligation Norms are the degree to which work is seen as
an obligation or duty in a society.
These societies are more likely to have individuals adhering to
this norm by working longer.
Many of the emerging economies show very high levels of work
obligation norms.
Exhibit 14.1:
Levels of Work Obligation Norms in Various Societies
What Do People Value
in Work? (1 of 3)
Two important work values are:
People with Extrinsic Work Values express a preference for the
security aspect of jobs such as income, job security, and less

demanding work.
Those with Intrinsic Work Values express preferences for
openness to change, the pursuit of autonomy, growth, creativity,
and the use of initiative at work.
Exhibit 14.2:
Preference: Extrinsic Work Values
Exhibit 14.3:
Preference: Intrinsic Work Values
Exhibit 14.4:
Importance Rankings of Work Characteristics in Nine Countries

in Work? (2 of 3)
In some societies, work is very central and absorbs much of a
person’s life.
All people hope to receive certain benefits from work.
Societies differ in the degree to which they regard work as an
obligation to society.
Many of the emerging economies that value extrinsic work
values such as income and job security also place high value on
intrinsic work values.
in Work? (3 of 3)
The first key to successful motivational strategies in
multinational companies is understanding the differences
regarding how people view the functions of work, work
centrality, and the priorities given to different job
characteristics.

The Basic
Work-Motivation Process (1 of 2)
Motivation is a psychological process resulting in goal-directed
behavior that satisfies human needs
A Need is a feeling of deficit or lacking that all people
experience at some time.
A Goal-directed Behavior is one that people use with the
intention of satisfying a need.
The Basic
Work-Motivation Process (2 of 2)
Reinforcement means that the consequences that follow a
person’s behavior encourage the person to continue the
behavior.
Example: bonus pay to encourage behavior
Punishment means that the consequences that follow a person’s
behavior discourage the behavior.
Example: docking pay to discourage behavior
Exhibit 14.5:
The Basic Work Motivation Process and the National Context

National Context
and Work Motivation
Cultural values, norms & supporting social institutions
influence the priority that people attach to work.
Example: Early education in collectivist societies encourage
people to develop a need to belong to groups.
The national context influences reactions to goal-directed
behaviors at work.
Example: A Japanese worker who brags about his performance
will be sanctioned by his work group.
Theories of Work Motivation
in the Multinational Context
(1 of 2)
Managers can use work-motivation theories to develop
systematic approaches to motivating employees.
There are two basic types of motivational theories:
The Need Theory assumes that people are motivated to work
because their jobs satisfy basic needs and higher-level needs.
The Process Theory assumes that motivation arises from needs
and values combined with an individual’s beliefs regarding the
work environment.

Theories of Work Motivation
in the Multinational Context
(2 of 2)
The Need Theories of motivation have the most international
application.
There are four need theories of motivation:
Maslow’s Hierarchy of Needs
ERG theory
Motivator-hygiene theory
Achievement motivation theory
Exhibit 14.6:
Need Theories of Motivation
Maslow’s Hierarchy of Needs (1 of 2)
Maslow offered the most famous need theory, ranking five
basic types of needs (lowest to highest):
Physiological (food, water, basic survival)

Security (safety, avoidance of threats)
Affiliation (being loved, having friends, groups)
Esteem (respect, recognition by others, self-worth)
Self-actualization (maximize personal achievement)
Maslow’s Hierarchy of Needs (2 of 2)
People first seek to satisfy lower needs, then higher ones.
Once a lower need is satisfied, it no longer motivates.
Example: If your base pay is adequate for survival, it no longer
has motivational value.
Then other characteristics of the work situation become
motivational, such as working in teams to meet affiliation
needs.
Alderfer’s ERG Theory
Alderfer’s simplified hierarchy of three needs includes
existence needs, relatedness needs, & growth needs.
In ERG theory, frustration of a need motivates behavior to
satisfy the need.
A person who cannot satisfy a higher need will seek to satisfy
lower-level needs.
Example: If the satisfaction of growth needs is impossible on
the job, relational needs become the prime motivator.

Motivator-Hygiene Theory
The Motivator-Hygiene Theory assumes that a job has two
characteristics: motivators and hygiene factors.
Motivating Factors are the characteristics of jobs that allow
people to fulfill higher-level needs.
Example: a challenging job for achievement
Hygiene Factors are characteristics of jobs that allow people to
fulfill lower-level needs.
Example: good benefits and working conditions that satisfy
security needs.
Achievement-Motivation Theory
Achievement-Motivation Theory suggests that only some people
(10% in U.S.)have the need to win in competitive situations or
to exceed a standard of excellence.
High achievement-motivated people set their own goals and
seek challenging situations, but avoid those that are too
difficult.
High achievers desire immediate feedback so that they know
how they are performing at each step.

Needs and the National Context
Work related needs may be “grouped” in ways that match broad
groups proposed by Need theories.
People from different nations do not give the same priorities to
the needs that might be satisfied at work.
Even with similar needs, they may not give the same level of
importance of satisfying these needs.
Multinational managers can use need satisfaction as a
motivational tool if they take into account the particular needs
that people in that nation seek.
Exhibit 14.7: Rankings of the Importance of Job-Related
Sources of Need Satisfaction for Seven Countries
Exhibit 14.8:
Hofstede’s Dimensions of National Culture and Motivators at
Work

Applying Need Theories in Multinational Settings
Identify the basic functions of work in the national or local
culture.
Identify the needs considered most important by workers in the
national or local culture.
Note that sources of need fulfillment may differ for the same
needs.
Understand the limitations of available jobs to satisfy needs.
Process and Reinforcement Theories of Motivation: Expectancy
Theory
Expectancy Theory is a view of motivation that is more complex
than simple need satisfaction:
Work motivation is a function not only of a person’s needs or
values, but also of the person’s beliefs regarding what happens
if you work hard.
Motivation includes a person’s desire to satisfy needs, but the
level of motivation also depends on the person’s belief
regarding how much - or if - his efforts will eventually satisfy
his needs.

Expectancy Theory Equation
Three factors make up Expectancy Theory:
Expectancy: an individual’s belief that his or her effort will
lead to some result
Valence: the value attached to the outcome of efforts
Instrumentality: the links between early and later results of the
work effort
Motivation = Expectancy x Valence x Instrumentality
Applying Expectancy Theory in Multinational Settings
There are two key issues:
Identify which outcomes people value in a particular national or
cultural setting; the multinational manager must find and use
rewards with positive valance for employees.
Find culturally appropriate ways to convince employees that
their efforts will lead to desirable ends.
Equity Theory
Equity Theory focuses on the fairness that people perceive in
the rewards that they receive for their efforts at work.
People have no absolute standards for fairness regarding their

efforts, but also compare themselves to others.
Example: If two people have the same job and experience, but
not the same pay, one is in overpayment equity, and the other in
underpayment.
Applying Equity Theory in Multinational Settings
Three principles of allocating rewards, depending on cultural
settings:
Equity norms prevail in individualistic cultures
Equality norms prevail over equity norms in collectivist
cultures.
The principle of need may prevail over equity in certain
conditions.
Exhibit 14.9:
Rewards from Peers for Contributions to a Student Group
Project

Goal Setting Theory
Goal-Setting Theory assumes that people want to achieve goals;
the existence of a goal is motivating.
To motivate, follow the principles of goal setting:
Set clear and specific goals.
Assign difficult but achievable goals.
Increase employee acceptance of goals.
Provide incentives to achieve goals.
Give feedback on goal attainment.
Applying Goal-Setting Theory in Multinational Settings
Goal-Setting works to some degree, anywhere.
Cultural expectations vary re who sets goals, and it is better to
set goals for groups or individuals.
In individualistic cultures, setting individual goals may be more
effective than group goals.
In collectivist cultures, workers will want to participate in goal-
setting; participation may have a greater chance of enhancing
workers’ commitment to the goal.
Exhibit 14.10:
Cultural Effects on Performance by the Degree of Participation

in Goal Setting
Reinforcement Theory
Reinforcement Theory focuses on operant conditioning, a model
which proposes that behavior is a function of its consequences.
If a pleasurable consequence follows certain behavior, the
behavior continues. (positive reinforcement)
If a negative consequence follows certain behavior, the behavior
stops. (negative reinforcement)
Exhibit 14.11:
Examples of Operant-Conditioning Process and Types of
Consequences
Applying Reinforcement Theory
in Multinational Settings

For observable behaviors, most U.S. studies suggest that
positive reinforcement works.
The difficulty is in identifying appropriate rewards as
reinforcers to a diverse group.
The national context defines acceptable and legitimate rewards.
Germany: pay and benefits not available as rewards
Japan: Public praise may be embarrassing.
Key Points
in Multinational Applications of Process/Reinforcement
Theories
Expectancy Theory: The key is to identify nationally
appropriate rewards that have positive valence.
Equity Theory: Assess the meaning and principle of equity in
the national context.
Goal-setting Theory: Should goals be group/individual? Should
workers/leaders participate in goal setting?
Reinforcement Theory: The institutional environment and what
people value will affect the types of available rewards in a
society.
Motivation and Job Design:
A U.S. Perspective
A U.S. approach: The Job-Characteristics Model

The most popular U.S. approach is the Job Characteristics
Model: Work is more motivating when managers enrich core job
characteristics, as by increasing number of skills a job requires.
The Job-Characteristics Model
Three critical psychological states are motivating:
A person must believe that his or her job is meaningful.
A person must believe that he or she is responsible or
accountable for the outcome of work.
A person must understand how well he or she has performed.
Core Characteristics of Job
The core job characteristics that lead to motivating
psychological states are:
Skill variety
Task identity
Task significance
Autonomy
Feedback

Exhibit 14.12:
A Motivating Job in
the Job-Characteristics Model
Motivation and Job Design:
A European Perspective
The Sociotechnical Systems (STS) approach attempts to mesh
both modern technology and the social needs of workers, but
does not consider them as individuals.
Uses an Autonomous Work Group: A team or unit that has
nearly complete responsibility for a particular task.
The STS approach builds into a job many of the same
motivational job characteristics, but the team’s task, not
individual tasks, become the focus of enrichment.
Choosing Job-Enrichment Techniques
in Multinational Settings (1 of 2)
Experts recommend:
a team focus on job enrichment in collectivist cultures (Japan)
an individual focus in individualistic cultures (US)

In individualistic cultures, performance drops with the use of
teams.
Social Loafing: People expend less effort when they work in
groups.
Choosing Job-Enrichment Techniques
in Multinational Settings (2 of 2)
Why Social Loafing in individualistic cultures?
People do not feel responsible for group outcomes.
They believe the group will take up the slack.
They give their own work and interests priority over those of
the group.
Exhibit 14.13:
Comparing the Performance of Chinese, U.S., and Israeli
Managers Working Alone and in Groups

Summary
Motivating workers in diverse cultural settings is a constant
challenge for multinational managers.
Chapter 14 addresses several motivational issues and examines
the differences in how people view work aspects.
Chapter 14 reviews basic processes and classic theories of
motivation.
Each multinational must find ways to motivate their workers,
appreciating subtleties in applying theories to different nations.
13
International Negotiation and
Cross-Cultural Communication
Chapter
Understand the basics of verbal and nonverbal communication
that may influence cross-cultural management and negotiation.

Describe the basic international negotiation processes from
preparation to closing the deal.
Explain the basic tactics of international negotiations.
Recognize and respond to “dirty tricks” in international
negotiations.
Know the differences between the problem-solving and
competitive approaches to international negotiation.
Identify the personal characteristics of the successful
international negotiator.
International Negotiation
International Negotiation: the process of making business deals
across cultures; it precedes any multinational project
Without successful negotiation and the accompanying cross-
cultural communication, there are seldom successful business
transactions.
As the world becomes increasingly global, companies will need
to become adept at such negotiations.

The Basics of Cross-Cultural Communication (1 of 2)
Successful international negotiation requires successful cross-
cultural communication.
Negotiators must understand all components of culturally
different communication styles, both verbal and nonverbal,
including:
Subtle gestures of hand and face
The use of silence
What is said or not said
The Basics of Cross-Cultural Communication (2 of 2)
Mistakes often go unnoticed by the communicator, but they can
do damage to international relationships and negotiations.
Avoid attribution errors
Attribution: the process by which we interpret the meaning of
spoken words or nonverbal exchanges

Language and Culture
Language is so essential to culture that many consider linguistic
groups synonymous with cultural groups.
Whorf hypothesis: the theory that a society’s language
determines the nature of its culture
Words provide the concepts of understanding the world;
language structures the way we think about it.
All languages have limited sets of words.
Restricted word sets constrain the ability to conceptualize the
world.
High- and Low-Context Languages
Low-context Language: people state things directly and
explicitly, and you need not understand the context.
Examples: Most northern European languages including
German, English, and the Scandinavian languages
High-context Language: people state things indirectly and
implicitly.
Asian and Arabic languages
Communications may have multiple meanings depending on the
context

Exhibit 13.1:
Country Differences in High-Context and Low-Context
Communication
Basic Communication Styles (1 of 2)
Other cultural differences in communication can influence
cross-cultural interactions & negotiations.
Direct Communication: communication that asks questions,
states opinions, comes to the point and lacks ambiguity
Indirect Communication: people attempt to state their opinions
or ask questions by implied meaning, believing direct
communication is impolite
Basic Communication Styles (2 of 2)
Formal Communication: communication that acknowledges
rank, titles, and ceremony in prescribed social interaction
People in the U.S. are among the least formal in

communication, casually using first names, and dispensing with
titles.
Most other cultures communicate with more formality,
especially in business settings, taking care to acknowledge rank
and titles when addressing others.
Exhibit 13.2:
Cultural Differences in
Communication Styles
Nonverbal Communication
Nonverbal Communication means communicating without
words.
One may communicate without speaking; people gesture, smile,
hug, and engage in other behaviors that supplement or enhance
spoken communication.
Such nonverbal communication includes:
Kinesics, proxemics, haptics, oculesics, and olfactics

Kinesics
Kinesics means communication through body movements.
Every culture uses posture, facial expressions, hand gestures
and movement to communicate non-verbally.
Most Asian cultures use bowing to show respect.
It’s easy to misinterpret the meaning of body movements in
another culture.
The safest strategy is to minimize their use.
Proxemics
Proxemics focuses on how people use space to communicate.
Each culture has an appropriate distance for various levels of
communication; violations of space may be uncomfortable or
even offensive.
The personal bubble of space may range from 9 inches to over
20 inches.
North Americans prefer 20 inches, while Latin and Middle East
cultures prefer less.
Haptics or Touching

Haptics or touching is communication through body contact,
and is related to proxemics.
The type of touching deemed appropriate is deeply rooted in
cultural values. Generally:
No touching cultures are Japan, U.S., England, and many
Northern European countries;
Moderate touching cultures are Australia, China, Ireland, and
India.
Touching cultures are Latin American countries, Italy and
Greece.
Oculesics
Oculesics refers to communication through eye contact or
gazing; the degree of comfort with eye contact varies widely:
U.S. and Canada: People are very comfortable and expect eye
contact to be maintained for a short moment during
conversations.
China and Japan: Eye contact is considered very rude and
disrespectful; respect is shown by avoiding eye contact.
Olfactics
Olfactics is the use of smells as means of nonverbal
communication.
U.S. and U.K: These cultures are uncomfortable with body

odors, and may find it offensive.
Arabs are much more accepting of body odors, and consider
them natural.
Negotiators must be aware of these perspectives and accept and
adapt to them.
Using Interpreters
The role of an Interpreter is to provide a simultaneous
translation of a foreign language.
This requires greater linguistic skills than speaking a language
or translating written documents.
The Interpreter must have the technical knowledge and
vocabulary to deal with technical details common in business
transactions.
Even if a negotiator understands both languages, its best to have
an interpreter to ensure the accuracy and common understanding
of agreements.
Tips for the
Successful Use of Interpreters (1 of 2)
Spend time with the interpreter, so s/he gets to know your
accent and general approach to conversation.

Go over technical and other issues with the interpreter to make
sure they are properly understood.
Insist on frequent interruptions for translations rather than
translations at the end of statements.
Learn about appropriate communication styles and etiquette
from the interpreter.
Tips for the
Successful Use of Interpreters (2 of 2)
Look for feedback and comprehension by watching the
listener’s eyes.
Discuss the message beforehand with the interpreter if it is
complex.
Request that your interpreter apologize for your inability to
speak in the local language.
Confirm through a concluding session with the interpreter that
all key components of the message have been properly
comprehended.
Communication with Nonnative Speakers (1 of 2)
Use the most common words with their most common meanings.
Select words with few alternative meanings.
Strictly follow the rules of grammar.
Speak with clear breaks between words.

Avoid sports words or words borrowed from literature.
Avoid words or expressions that are pictures.
Avoid slang.
Communication with Nonnative Speakers (1 of 2)
Mimic the cultural flavor of the nonnative speaker’s language.
Summarize.
Test your communication success.
Repeat basic ideas using different words when your counterpart
does not understand.
Confirm important aspects in writing.
International Negotiation
International Negotiation is more complex than domestic
negotiation.
Differences in national cultures, & political, legal, and
economic systems can separate business partners.
Steps in international negotiation:
Preparation, building the relationship, exchanging information,
first offer, persuasion, concessions, agreement, and post
agreement.

Exhibit 13.3:
Steps in International Negotiations
Step 1:
Preparation
Determine if the negotiation is possible.
Know exactly what your company wants.
Be aware of what can be compromised.
Know the other side.
Send the proper team.
Understand the agenda.
Prepare for a long negotiation.
Cultural Differences in Negotiating Processes (1 of 2)
What is the Negotiation goal - signing the contract or forming a
relationship?
Should you use a formal or informal personal communication
style?
Should you use a direct or indirect communication style?

Is sensitivity to time low or high?
What form of agreement - specific or general?
Cultural Differences in Negotiating Processes (2 of 2)
What is the team organization - a team or one leader?
What is the attitude towards negotiation - win-lose or win-win?
What is the appropriate emotional display - high or low
emotions?
Latin Americans and the Spanish show their emotions through
negotiations.
Japanese and Germans tend to be more reserved.
Exhibit 13.4:
Cultural Differences in
Preference for Broad Agreements

Exhibit 13.5:
Understanding Negotiators
from Other Countries
Step 2:
Building the Relationship
At this stage, negotiators do not focus on the business issues,
but on social and interpersonal matters.
Negotiation partners get to know one another.
They develop opinions regarding the personalities of the
negotiators, including whether they can be trusted.
The duration, importance of this stage vary by culture.
U.S. negotiators are notorious in their attempts to get down to
business after brief socializing.
Step 3:
Exchanging Information
and the First Offer
Parties exchange task-related information on their needs for the
agreement, which pertains to the actual details of the proposed
agreement.
Typically, both sides make a formal presentation of what they
desire out of the relationship.

Then, both sides usually present their first offer, which is their
first proposal of what they expect from the agreement.
Exhibit 13.6:
Information Exchange
and First-Offer Strategies
Step 4:
Persuasion
In the persuasion stage, each side in the negotiation attempts to
get the other side to agree to its position.
This is the heart of the negotiation process.
Numerous tactics are used, but two general types:
Standard verbal and nonverbal negotiation tactics, and
Some dirty tricks
Verbal and Nonverbal Negotiation Tactics (1 of 2)

Promise
Threat
Recommendation
Warning
Reward
Punishment
Verbal and Nonverbal Negotiation Tactics (2 of 2)
Normative appeal
Commitment
Self disclosure
Question
Command
Refusal
Interruption
Exhibit 13.7:
Comparison of Brazilian, U.S.,
and Japanese Negotiators

Dirty Tricks
All negotiators want to get the best deal for their company, and
they use a range of tactics to do that.
However, people from different cultures consider some
negotiating tactics dirty tricks: negotiation tactics that pressure
opponents to accept unfair or undesirable agreements or
concessions.
Cultures differ on the norms and values that determine
acceptable strategies for negotiation; some examples follow.
Dirty Tricks
and Possible Responses
Deliberate deception or bluffing - Point out what you believe is
happening.
Stalling – Don’t reveal when you plan to leave.
Escalating authority - Clarify decision making authority.
Good-guy, bad-guy routine – Don’t make any concessions.
You are wealthy, we are poor – Ignore the ploy and focus on the
mutual benefits of potential agreement.
Old friends – Keep a psychological distance.

Step 5
Concessions
Concession Making requires that each side relax some of its
demands to meet the other party’s needs.
Styles of concession making differ among cultures:
Sequential approach: Each side reciprocates concessions made
by the other side.
Common in North America
Holistic approach: Each side makes very few, if any,
concessions until the end of the negotiation
Common in Asia
Step 6:
Agreement
Successful negotiations result in the Final agreement: the signed
contract, agreeable to all sides.
The agreement must be consistent with the chosen legal system
or systems.
The safest contracts are legally binding in the legal systems of
all the signers.
Most important, people from different national and business
cultures must understand the contract in principle, and have a
true commitment beyond legal.

Basic Negotiating Strategies
There are two basic negotiating strategies:
Competitive Negotiation: Each side tries to give as little as
possible and win the maximum for its side.
Seeks win-lose resolution; uses dirty tricks.
Seldom leads to long-term relationships or trust.
Problem solving: Negotiators seek mutually satisfactory ground
beneficial to both parties.
Search for possible win-win situations; no dirty tricks.
Builds long term relationships; more successful strategy.
Exhibit 13.8:
Competitive and
Problem-Solving Negotiation
Exhibit 13.9:
Cultural Differences in Preference for a Problem-Solving
Negotiation Strategy

Step 7:
Post Agreement
A commonly ignored step by U.S. negotiators is the
postagreement phase, which consists of an evaluation of the
success of a completed negotiation.
Postagreement analysis can be beneficial because it allows the
garnering of insights into the strengths and weaknesses of the
approach used during negotiation.
Postagreement analysis can also enable members of the
negotiating team to develop a closer relationship with their
counterparts.
The
Successful International Negotiator:
Personal Characteristics
Tolerance of ambiguity
Flexibility and creativity
Humor
Stamina
Empathy
Curiosity
Bilingualism

Summary
Chapter 13 examined the negotiating process and other elements
of cross-cultural communication.
International negotiation involves several steps, including
preparation, building the relationship, persuasion, making
concessions and reaching agreement.
Successful negotiators prepare and understand these steps and
adapt them to local host countries.
Management 77
Success in international business environment depends largely,
amongst others, on successful negotiation and skillful cross-
cultural communication. This is of particular relevance, when
we consider the increasing global marketplace. Furthermore, the
sudden increase in mergers and acquisitions, not only in the
promising BRIC (Brazil, Russia, India and China) countries, but
in other countries, where economic development is becoming
more obvious, demand that multinationals hone their skills in
negotiation internationally. In light of the cultural and language
challenges, it may be necessary to modify home country
negotiation styles.
To complement the negotiation skills, it is becoming
increasingly crucial that the international manager not only
possess knowledge of the target country culture, but also
knowledge of the language. As postulated by the Whorf

hypothesis, language determines the nature of the culture. So,
an astute international business manager must be able to
understand the distinction between low-context language (in
which expressions are stated directly and explicitly), examples
of which you will find in most Northern European countries and
the U.S., and high-context language (in which expressions are
stated indirectly and implicitly), whose examples are Asian and
Arab countries. The distinguishing factor is the extent to which
people in these two language classifications use verbal and non-
verbal communication. While, people in low-contest language
culture use more verbal than non-verbal communication, the
reverse is true for high-context language culture. Non-verbal
communication are characterized mostly by: kinesics
(communication through body movements), proxemics
(communication by use of space), haptics (communication by
touch), oculesics (communication by use of eye contact) and
olfasics (communication by use of smells). The importance of
understanding these low- and
high-context cultural variables must be underscored.
Considering the important role communication plays in the
negotiation process, it is recommended that the
international negotiator use official interpreters. Effective
interpretation would entail, at a minimum, knowing
the interpreter and letting him or her understand your accent,
reviewing technical details of the deal, learning
about communication styles, and confirming all key components
of the message being delivered prior to
concluding.
Although, many countries may have similarities in negotiation
styles based on regional and cultural affinity,
there are common differences that the international negotiator
must be knowledgeable of. Such differences
include the goal of negotiation (whether signing the contract
first, or developing a relationship), formal or
informal communication style, direct or indirect
communication, sensitivity to time (low or high), forms of

agreement (specific or general), team organization (team
leadership or solo leader), attitude toward
negotiation (win-lose, zero-sum, or win-win), and high or low
emotions.
At this juncture in the lesson, essential steps to be followed in
international negotiation are important. First is
the preparation step. In the preparation stage, after collecting
country- and company-specific research, the
negotiator must be able to answer in the affirmative a number of
important questions. Is this negotiation
possible? Will my company get what it wants from the
negotiation? Are there any compromises to be made?
Do I have sufficient knowledge of the negotiation styles and
tricks of the other party? Does my company have an
experienced team to handle the negotiation or any special,
technical skills required? Do we have an
agreed-upon agenda? To answer these questions, the
international negotiation in his research may need to
read extensively, visit the country ahead of time, create a mock
negotiation or improvise one. With adequate
preparation, he or she should be able to successfully negotiate.
Since, there is no deal that does have its own
risks, he or she must research into not only country- and
company-specific risks, but also industry-specific
risks that may endanger consummating the deal for which the
negotiation is to take place.
In the second stage, relationship building is important. In high-
context, collectivist societies, there is a lot of
emphasis on building relationship, which is more important than
signing a one-time contract. So, when a
Japanese negotiator picks up his or her U.S. counterpart at the
airport and drives across town, spending half of the day
attending to family obligations and social activities, such time
spent should not be considered a
"waste of resources". The associates costs (travel and lodging)
of negotiating the deal should include the time

spent on building relationship. In the high-context culture, the
legalistic requirement to sign a legally binding
contract will be attended to later.
The third stage is when there is the exchange and perusal of
task-related information. The specific details of
the contract are presented as an official proposal which is
considered the first offer. Discussions are held to
clarify foggy areas of the contract, interpretation and document
translations are conducted, attention is paid to
details, and emotions are addressed.
In the fourth stage, the persuasion stage, each negotiator
presents their own position, engaging in multiple
negotiation tactics, which may be verbal (promise, reward,
recommendation, warning, threat, or punishment), non-verbal
(posture, grimace, or hand gestures) or "dirty" tactics.
In identifying dirty negotiation tricks, the astute international
negotiator must be able to decipher whether there
is deliberate deception or bluffing by the other party, know
whether the other party decides to stall the contract
signing time intentionally to frustrate him or her or escalate
decision making to a higher authority. Other dirty
tricks include a member of the negotiation team playing the role
of the "good guy" and another the "bad guy",
and pretending be "old friends". In general, to address the
foreign negotiator's dirty tricks, a well-informed
negotiator must state directly what he or she feels is happening,
clarify who the key decision-maker is, and
focus on mutual benefits of the agreement.
In stage five, a final agreement is signed in accordance with
chosen legal system. In certain cases, some
unfinished business in third and fourth stages may be addressed.
Concession making takes place in stage
six. Concession making may either be sequential approach (each
side reciprocates a concession made by
the order) or holistic approach (each side makes very few
concessions or none at all). It is important to

remember that concession making runs parallel with negotiation
strategies of competitive negotiation (each side tries to yield
very little in an attempt to win maximum benefits), using dirty
tricks, or problem-solving
(seeking mutually beneficial ground for both negotiators While
not often traditionally considered, the last stage, stage 7, is of
paramount importance. In this stage, the
post-agreement stage, an evaluation of the success of the
negotiation is conducted and doing so can be
beneficial. First, post-agreement evaluation allows the
collection of valuable data that tell us the strengths and
weaknesses of the negotiation. Second, areas in need of
improvements are presented. Lastly, postagreement
analysis can create an opportunity for fostering relationships
with counterparts. U.S. multinationals
intending on engaging in business relationships with high-
context collectivist societies like China, India, and
Japan would appreciate this last benefit. The successful
international negotiator must have certain unique
characteristics viz-a-viz high tolerance for ambiguity,
flexibility, creativity, humor, stamina (physical and
emotional), empathy, and bilingualism.
As we read Chapter 14, we begin to discuss an important aspect
of work: motivation. While financial rewards
are compensations for work done, multinationals continue to
appreciate the importance of motivation in the
work environment, as they embed motivational philosophies in
their management decision making. We
continue to see that work centrality (the overall value of work
in a person's life when compared to other
activities including religion, leisure, family, and community)
and work obligation norms (degree to which work
is considered as an obligation) continue to be the primary focus
of multinational management. However, the
key reasons for why people work can be dichotomized into two
categories: extrinsic values (preference for the security aspects

of jobs, such as money and job security) and intrinsic values
(preferences for openness to
change, pursuit of autonomy, growth, creativity and use of
initiative). Knowledge of such differences in
peoples' preferences will always help multinationals design
effective strategies appropriate for local hiring.
We now turn to the theories of motivation categorized as the
need theory of motivation and process and
reinforcement theories. Let's briefly discuss them. There are
four types of need theory of motivation. First,
according to Thomas Maslow's hierarchy of needs, individuals
have five basic types of needs: psychological,
security, affiliation, esteem, and self-actualization. According
to Maslow, these needs are fulfilled according to
a hierarchy from the lowest to the highest levels. Second,
Alderfer’s ERG Theory presents a simplified
hierarchy of needs similar to Maslow's: growth needs,
relatedness needs and existence needs. Third, we
have the motivator-hygiene theory, which states that the two
characteristics of job are motivators (factors that
allow the fulfillment of higher-level needs (e.g., having a
challenging task which leads to greater levels of
achievement) and hygiene (factors that allow the fulfillment of
lower-level needs, e.g., good benefits and
better working conditions). Finally, the achievement-motivation
theory states that only a given percentage of
people have the need to win in a competitive environment or
exceed a standard of excellence.
But what are the implications of the needs theories for
multinational management? In adapting the needs
theory, multinational managers should be able to (a) identify
basic functions of work in the national or local
culture (b) identify the most important needs and focus on
providing jobs that meet those needs (c)
understand that jobs available to satisfy workers' needs have
limitations that cannot be addressed given cultural, political or

socio-economic economic environment.
There are three process and reinforcement theories of
motivation: expectancy theory, equity theory and goalsetting
theory. Basically, the process theories assert that motivation is
a function of needs and values
combined with individuals' beliefs regarding work environment.
According to Victor Vroom, the expectancy
theory assumes that people are motivated to work, if there is a
connection between their needs and values for
work and the results of their hard work. Equity theory states
that people perceive the fairness of rewards on
work efforts mainly as pay, benefits, recognition, job
perquisites, and prestige, when their age, educational
qualifications, seniority, and social status are also considered.
Simplistically, goal-setting theory states that
the mere setting of a goal is the motivating force for work.
Finally, the reinforcement theory, focusing on
operant conditioning, advanced by B.F. Skinner, proposes that
if a pleasurable consequence follows a
behavior, the behavior will continue. However, if an unpleasant
consequence follows a behavior, the behavior
will not.
What are the implications for multinationals based on
knowledge of the expectancy theory? Multinationals
armed with knowledge of the expectancy theory should be able
to identify specific outcomes people value and
reward them positively accordingly. Moreover, the former
should also be able to find essential cultural ways to
assure employees that their work efforts will generate expected
results. With regards to the equity theory,
multinationals must assess basic principles of equity, and
provide motivational factors accordingly.
Concerning goal-setting, multinationals must be able to set clear
and specific goals, assign difficult, but attainable goals,
increase employee acceptance of goals, and provide effective
feedbacks. Finally, for the

reinforcement theory, a slew of research in this areas shows that
positive reinforcement improves employee productivity. The
challenge multinationals have is whether certain punishments
should be introduced and
what kinds would be appropriate for certain undesirable work
behavior or performances, especially when we
consider different national cultures and social institutions.
We have been able to see how important it is that multinationals
develop essential negotiation skills and how
those skills can be helpful in not only successfully negotiating
across borders, but also in developing
relationships with their international counterparts. An exposure
of the different skills and pitfalls has been
presented to illuminate us in understanding the different
cultural challenges that we might experience. Our
reviews and discussions on motivational theories have helped to
educate us about the importance of
motivation and the related challenges we might face when
dealing with foreign multinationals and their
employees. Our knowledge of motivational tools should help in
preparing us for challenges we might
experience in motivating the multi-cultural work base for the
ultimate goal of productivity improvement.
Management 77 Questions
1.) Dirty tricks might be unavoidable in cross-cultural
negotiation. What are examples of dirty tricks? How are they
inappropriate in international negotiation, and how should
negotiators avoid them?
2.) Discuss the major principles of reward allocation. Which
one(s) is (are) preferred by the collectivist culture?
Individualistic culture? Why?
3.) What do you think Vroom’s expectancy theory of motivation

stands for? In a multicultural environment, what are the
multinational management implications for this expectancy
model?
4.) A slew of research points to the fact that performance is
significantly reduced in an individualistic culture in work team
assignments. What is responsible for this? How should
multinational managers address this phenomenon?

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