Nora and Sakari are considering a joint venture to build digital switching exchanges for the telecom industry in Malaysia, Indonesia, and Thailand. Nora is a Malaysian telecom company that is looking to become a technology leader in South-east Asia. Sakari on the other hand is a Finish company that is considering expanding its operations in south-east Asian market and is looking for partners for this reason. They are a high Technology company and the Joint venture between these two companies seems like a perfect fit. The problem which arises is that these two very different cultures go about negotiation in very different ways. These cultural differences have the potential to make a joint venture between these two companies impossible which would be a shame as they both have a lot to gain from working together for a common goal.
Negotiations between businesses in different cultures need to be done with a mind to the fact that these cultures have different ways of doing business. In this section I will compare Eastern (Finish) values and business practices vs. Eastern (Malaysian) values and business practices. It is also important to note that the Malaysian culture is also dominated by the Islamic religion which also has aspects that need to be understood in order to successfully do business.
Difference in thinking pattern:
Every person carries within himself or herself patterns of thinking, feeling and potential acting which were learned throughout their lifetime. Much of it has been acquired in early childhood, because at that time a person is most susceptible to learning and assimilating. As soon as certain patterns of thinking, feeling and acting have established themselves within a person’s mind, (s)he must unlearn these before being able to learn something different, and unlearning is more difficult than learning for the first time (Hofstede, 2010).
A persons culture is an example of this and something not easily set aside. These differences may be so deep that there is evidence that there are differences in the brain activity between Western and Eastern Cultures. The following are examples of tests done along with the results based on culture.
• Researchers offered people a choice among five pens: four red and one green. Easterners are more likely to choose a red pen, while Westerner more often chooses the green.
• In an experiment measuring how well 8-year-olds could solve puzzles, American children performed best when solving puzzles they had chosen themselves, while Asian children performed best when solving puzzles they were told their mothers had chosen for them. American children brought up in an independence-minded culture felt best when they were exercising free choice, while the Asian children assumed that their mothers had their best interests at heart.
• When they are tested on details of an underwater scene they recently viewed, Westerners tend to remember more about the biggest fish, while Easterners remember more about the scene’s background.
Western culture conditions people to think of themselves as highly independent entities. When looking at scenes, Westerners tend to focus on central objects more than on their surroundings.
In contrast, East Asian cultures stress interdependence. When Easterners take in a scene, they tend to focus more on the context as well as the object: the whole block rather than the BMW parked in the foreground. (Goldberg, 2008)
The figure to the left (Chang, 2009) illistrates the general differences between eastern and western cultures. These differences influence the priorities of a company and need to be understood and a plan of attack needs to be devoloped that does not tread on these differences when negotiating. For example understanding that an eastern company will tend to favor a long mutually beneficial relationship with another company based on trust...