Contemporary business culture

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MINISTRY OF ADUCATION AND SCIENCE,

YOUTH AND SPORTS OF UKRAINE

NAATIONAL UNIVERSITY

“ODESA ACADEMY OF LAW”

K.V. Balabukha

CONTEMPORARY BUSINESS CULTURE

METHODOGICAL MANUAL

On the course of lectures in English

for Law Students and Post-Graduates

of National University "Odesa Academy of Law"

Odesa 2012

INTRODUCTION

As today's businesses are entering a `globalized' world, the interaction between different cultures is bound to happen. Merely learning different languages, won't be enough to reach success as there are many things like culture, economy, politics, etc. that impact the working of international businesses in the modern world. It is necessary to understand the social conditions of different countries to interact successfully on the international arena. Being sensitive to the values and beliefs of different cultures of the world is becoming one of key benefits for intercultural business communication because when different cultures converge at a common point at business platform, the clashes are likely to take place. It is obvious that tomorrow's world will rely more on a symbiotic relationship between international businesses and cultures as a whole.

The international business culture, as a whole, is a congregation of various cultural norms, peculiarities of the thought processes, business practices, protocol and etiquette rules around areas such as personal space, communication, gift giving, business meetings etc. followed in different nations. Consequently the way or view to see a problem might change from country to country, across the globe.

Since businesses rely on legal advice, documentation and advocacy throughout the lifecycle of a business undertaking, lawyers are increasingly being asked to provide consulting relating to transnational business transactions and disputes.

To be effective in international environment, legal counsel must be aware of intercultural issues concerning business culture of different countries and to develop professional support for international negotiations and transactions that is accepted by the counterparty and enforceable in the relevant localities. Otherwise, cultural miscomprehension can result in significant costs and, sometimes, more lasting damage to future prospects.

Actuality - is in the wide awareness of the need to include cultural dimensions in the training of skilled professionals prepared for intercultural business communication created by today's rapid development of international business relationships.

Subject - the international business culture, as a congregation of various business practices, etiquette rules, cultural orientation, that is, negotiating strategies, value system, locus of decision-making etc,

Purpose - to teach students to understand the differences and similarities of world cultures and their impact on international relationships development; to use acquired information about foreign business practices to avoid negative cultural `clashes' within international business communication.

Knowledge - to provide the students with the knowledge of foreign countries background, that is, history, type of government, language; national characteristics of different peoples; business communication peculiarities, that is, negotiating strategies, value system, locus of decision-making, business practices, business entertaining, protocol, that is, greetings, forms of address, gestures, gifts, dress code.

Skills - to make students able to communicate effectively in the international environment, to be competent in dealing with business colleagues from different cultural backgrounds, to prevent social insults caused by ignorance of rules of etiquette and business practices.

PLAN OF SUBJECT

LECTURE 1. INTRODUCTION TO CONTEMPORARY BUSINESS CULTURE. CULTURAL TRADITIONS AND BUSINESS COMMUNICATION STYLE OF THE USA

1. INTRODUCTION TO CONTEMPORARY BUSINESS CULTURE

The American statesman and inventor Benjamin Franklin wrote that the time is money. Globe-trotting businesspeople would add that being aware of culture differences and sensitivities is money too.

Today's globalization requires professionals to deal with their counter-parts in countries with different economic, cultural, legal, and political environments. When negotiators are from diverse cultures, they often rely on quite different assumptions about social interactions, economic interests, and political realities. Consequently, ability to communicate successfully with colleagues from other cultures is necessary for those who negotiate globally: managers, lawyers, government officials, and diplomats.

Since businesses rely on legal advice, documentation and advocacy throughout the lifecycle of a business undertaking, lawyers are increasingly being asked to provide counsel relating to international business transactions and disputes.

To be effective, legal counsel must be able to develop legal support for international negotiations. The absence of such capabilities in counsel can be disastrous. Cultural miscomprehension can result in significant costs and, sometimes, more lasting damage to future prospects. Differences in business culture may represent a greater obstacle to successful outcomes than even language differences.

The failure of business people to comprehend fully these disparities has led to most international business blunders. For example: - An American business person refused an offer of a cup of coffee from a Saudi businessman. Such a rejection is considered very rude and the business negotiations became stalled.

Differences in business culture may represent a greater obstacle to successful outcomes than even language differences. For example: “General Motors” has stated in court briefs that “cross-cultural competence is the most important new attribute for future effective performance in a global marketplace.” “Microsoft” has acknowledged past losses resulting from an inability to identify and bridge international cultural divides. Microsoft's response, in common with large sections of the business community, has been to invest heavily to establish and broaden cross-cultural skills. The amount of attention devoted by the business media to cross-cultural management tools and techniques reflects the international business community's recognition that developing cross-cultural competence internally is essential to international business success.

Culture, itself, is a set of learned core values, beliefs, standards, knowledge, morals, laws and behaviors shared by individuals and societies that determines how an individual acts, feels, and views oneself and others. These qualities shape the way you act, feel and view people -- including the way you behave in business relationships. The key cultural components include language, religion, attitudes, manners, customs, the arts, education, social organization and humor. While some of these qualities may be expressed openly, such as spoken language, others are not. For instance, non-verbal communication is expressed through gestures, body language and facial expressions.

For instance, Americans think that looking someone in the eye during negotiations shows honesty and sincerity, whereas the British think a direct look is a sign of rudeness, unless you have a close personal relationship. The Japanese use less eye contact to show a higher level of respect.

Business culture, as a whole, is a congregation of various cultural norms, peculiarities of the thought processes, business practices, conducting meetings and negotiations, protocol and etiquette rules around areas such as personal space, communication, gift giving, business entertaining etc. followed in different nations. Every person is acculturated into a particular culture, learning the ``right way'' of doing things. Problems may arise when a person acculturated in one culture has to adjust to another one. The process of acculturation--adjusting and adapting to a specific culture other than one's own--is one of the keys to success in international cooperation.

One way to organize our experience and guide our behavior toward ethnic and national groups is to use stereotyping. Stereotypes never describe individual behavior; rather, they describe the behavioral norm for members of a particular group. Effective stereotyping allows people to understand and act appropriately in new situations. A stereotype can be helpful when it is

* consciously held. The person should be aware that he or she is describing a group norm rather than the characteristics of a specific individual.

* descriptive rather than evaluative. The stereotype should describe what people from this group will probably be like and not evaluate those people as good or bad.

* accurate. The stereotype should accurately describe the norm for the group to which the person belongs.

* modified, based on further observation and experience with the actual people and situations.

In conclusion, some people stereotype effectively and others do not. Stereotypes become counterproductive when we place people in the wrong groups, when we incorrectly describe the group norm, when we inappropriately evaluate the group or category, when we confuse the stereotype with the description of a particular individual, and when we fail to modify the stereotype based on our actual observations and experience.

A number of most valuable studies, which explain the effects of culture on business has been made by Edward T. Hall and Geert Hofstede. In this course of lectures we'll use some dimensions, developed by these researchers, which are the basis for distinctions between world business cultures. The distinctions between cultures are arranged according to the following dimensions.

1. Individualism versus collectivism - societies that value individualism, such as the U.S., encourage independent thinking and personal success, while collectivist cultures, such as Japan and various Arabic societies, encourage group success and conformity.

2. Power - distance - this dimension relates to how individuals view power and perceive their role in decision-making. In a low power-distance culture, like the U.S., individual employees will feel more empowered, accept more responsibility and want a role in decision-making, whereas in a high power-distance culture, like Russia, Japan employees look up to an authoritarian boss, seek direction and discipline, and accept the boss's decisions.

3. Uncertainty-avoidance - this dimension relates to the ability to take chances versus the quest for certainty. For example, the Swiss, Germans and Japanese are high-uncertainty-avoidance cultures and prefer security and structure. On the other hand, those in the U.S., in low-uncertainty-avoidance culture, are much more open to taking risks and living with uncertainty. This even affects meetings, because the Japanese will carefully prepare and even rehearse meetings, while U.S. managers are more responsive to questions and changes in the agenda.

4. Masculinity versus femininity - the distinction here is between societies that value masculine traits, such as aggressiveness, assertiveness and material acquisition, versus those that have more feminine traits, such as a concern with personal relationships. For instance, U.S. culture is high in masculine traits but French and Chinese cultures are higher in feminine traits.

Other cultural distinctions include how individuals relate to time, context, tasks, relationships and the future. One distinction is between high- and low-context cultures.

In high-context cultures, such as Japan and Saudi Arabia, context is at least as important as what is actually said. The speaker and the listener rely on a common understanding of the context and what is not being said can carry more meaning than what is said.

In low-context cultures most of the information is contained explicitly in the words. North American cultures engage in low-context communications. Unless one is aware of this basic difference, messages and intentions can easily be misunderstood.

There are also task-driven cultures which focus on making the sale or deal quickly, whereas in relationship-driven cultures, you need to develop the relationship first. And, some places have a more present-oriented, short-term view, as in the U.S., but others, like Japan, have long-term view with much longer time horizon. Some cultures are monochronic, others are polychronic.

Now we are going to talk about some notions essential for understanding of the influence of intercultural awareness on international relations and business.

Cross-cultural competence refers to the knowledge, skills that enable individuals to adapt effectively in cross-cultural environments. Hence, cross-cultural competence is becoming an essential part of qualifications for legal professionals able to operate in international environment. The following components are important for cross-cultural competence of international lawyers: 1. country's basic information awareness and understanding of non-native culture (foreign countries' background, that is, history, legal system, religion, national characteristics, etc.); 2. awareness of communication issues (language, nonverbals of particular culture: body language, gestures, etc.); 3. acknowledging and understanding of cultural differences concerning business relationships (meetings, negotiating, business etiquette and protocols, etc.)

Cultural risk - the risk of business blunders, poor customer relations, and wasted negotiations that results when firms fail to understand and adapt to the differences between their own and host countries' cultures. Cultural risk is just as real as commercial or political risk in the international business arena.

Cross-cultural communication occurs when a person from one culture sends a message to a person from another culture. Cross-cultural miscommunication occurs when the person from the second culture does not receive the sender's intended message. The greater the differences between the sender's and the receiver's cultures, the greater the chance for cross-cultural miscommunication.

For example: A Japanese businessman wants to tell his Norwegian client that he is uninterested in a particular sale. To be polite, the Japanese says, "That will be very difficult." The Norwegian interprets the statement to mean that there are still unresolved problems, not that the deal is off. He responds by asking how his company can help solve the problems. The Japanese, believing he has sent the message that there will be no sale, is mystified by the response. The reason for misunderstanding in this case is the lack of knowledge about Japanese style of communication as high-context culture.

There is one more example. A British boss asked a new, young American employee if he would like to have an early lunch at 11 A.M. each day. The employee answered, "Yeah, that would be great!" The boss, hearing the word yeah instead of the word yes, assumed that the employee was rude, ill-mannered, and disrespectful. The boss responded with a curt, "With that kind of attitude, you may as well forget about lunch!" The employee was bewildered. What had gone wrong? In the process of encoding agreement (the meaning) into yeah (a word symbol) and decoding the yeah spoken by a new employee to the boss (a word, behavior, and context symbol), the boss received an entirely different message than the employee had meant to send. Unfortunately, as is the case in most miscommunication, neither the sender nor the receiver was fully aware of what had gone wrong and why.

The ability to appreciate cultural differences is essential to successful international commerce, and to the provision of legal services that support it. For example, in the United States, profit is seen as a main goal. For the Japanese, the focus may not be on the profit alone, but on human efficiency; the group is superior to the individual. In France, there may be more of an emphasis on moderating one's own freedom of action in order to avoid harming the interests of others. This is not to say that a French or Japanese person does not seek to make profit. It simply means that they may not necessarily see true return on investment as measurable solely by bottom-line financial gain, but rather as a combination of profit, long-term market position, and the welfare of all stakeholders in the venture, including the workforce, and even the local community.

As commerce is shaped by culture, so is law. Legal systems that have developed organically over time fundamentally reflect the belief system that spawned and upholds them. Indeed, “the rule of law is the very bedrock of our civilization.” It is not surprising, therefore, that cultural diversity is, more pronounced in law than in commerce.

For example: the Anglo-American lawyer tends to evaluate the importance of code provisions, of decisions of higher courts and underestimate treatises or commentaries. The continental lawyer in contrast will usually find himself at a loss among the innumerable precedents which are binding and will vaguely look for precise concepts among the legal synonyms, loosely phrased decisions and unsystematic text books.

However, the conceptual divide between established European civil and common law systems is far narrower than that between the traditional systems of many major trading nations. Both legal paradigms are primarily the product of Christian Western European peoples. For all the differences between them they have far more in common than regulatory mechanisms developed in other parts of the world. Other distinct legal traditions include Sharia law, Hindu law and various forms of cultural “law,” such as the guanxi system of relationships in China, or in Japan.

One of the most frequently used laws within international transactions and resolving of disputes is Contract Law. Where there is trade, some mechanism will have developed to ensure certainty in transactions and disputes resolution. However, this may not be legalistic. Cultural rules may be unwritten or may operate by changing the meanings of written law in ways that reflect the traditional values of the culture. Sometimes, the mechanism operates in the absence of enforced law, or outside of its structures. Dispute resolution may be based on the application of moral codes or interpretations of religious teachings. In such circumstances, transactional undertakings or litigation conducted on the basis of written law alone are unlikely to produce the desired outcome.

The profound impact of such cultural differences is illustrated by considering the differences in the concept of operation of contract between the closely-related Western European civil and common law traditions. Under common law, a contract is not binding unless consideration of at least nominal value is exchanged. Consideration is “an inducement given to enter into a contract that is sufficient to render the promise enforceable in the courts.” In civil law, the critical element is cause, which does not necessarily require any flow of consideration. Thus, gratuitous promises may form the basis of a binding arrangement, and, as a result, contracts in favor of a third party can be recognized and enforced despite no consideration having been tendered for the benefit. Differing attitudes toward contracts can cause even more confusion in other legal systems. For instance, the custom of `naniwabushi' allows the Japanese to request a change in a contract if the terms become onerous or unfair, which is not acceptable in Western cultures.

Counsel should be wary of their own - and their colleague's culturally conditioned conceptions and the behavior that springs from these.

Language has been described as the mirror of culture. Language itself is multidimensional by nature. Language capability serves three distinct roles in international business.

1. Language aids in information gathering and evaluation. Rather than rely completely on the opinions of others, the visiting person is able to see and hear personally what is going on.

2. Language provides access to local society. Although English may be widely spoken and may even be the official business language, speaking the local language may make a dramatic advantage.

3. Language provides more than the ability to communicate. It extends beyond mechanics to the interpretation of contexts that may influence business operations.

Consider, for example, how dramatically different English terms can be when used in the United Kingdom or the United States. In negotiations, for U.S. delegates, ``tabling a proposal'' means that they want to delay a decision, while their British counterparts understand the expression to mean that immediate action is to be taken. If the British promise something ``by the end of the day,'' this does not mean within 24 hours, but rather when they have completed the job. Additionally, they may say that negotiations ``bombed,'' meaning that they were a success, which to an American could have exactly the opposite message.

Other languages are not immune to this phenomenon either. An advertising campaign presented by Electrolux highlights the difficulties in transferring advertising campaigns between markets. Electrolux's theme in marketing its vacuum cleaners, ``Nothing Sucks Like an Electrolux,'' is interpreted literally in the United Kingdom, but in the United States, the slang implications (to be repellent or disgusting) would interfere with the intended message.

2. THE USA. COUNTRY BACKGROUND

History. Virtually all the land that is now the United States was previously occupied for thousands of years by Native Americans (or Indians). The first permanent European settlement (by Spaniards) was in St. Augustine, Florida, in 1565.

The United States was formed following its Declaration of Independence from England in 1776. The constitution dates to 1787. The country has been a representative democracy since its founding. General George Washington was elected the first president. Slavery was abolished in 1865, after a horrific civil war resulted in the defeat of the Southern Confederacy.

The U.S. became involved in the First World War during 1917 and the Second World War in 1941. The 1960s was a period of social unrest. The United States became involved in the war in Vietnam, which would eventually cost the lives of untold Vietnamese and nearly 60,000 U.S. soldiers. The subsequent presidents were Gerald Ford, Jimmy Carter, Ronald Reagan, George Bush, Bill Clinton, and George W. Bush, Barakh Abama.

The attacks of September 11, 2001, by terrorists violated the self-confidence and sense of security in the United States. Over 3,000 people were killed.

Type of Government. The government is a federal republic system. Individual states have sovereignty over their own territory. The president is both chief of state and head of the government and is elected for a term of four years. An electoral college of delegates from each state elects the president - an unwieldy system that gives disproportionate power to the most populous states. The legislative branch is elected by universal direct suffrage. It is made up of a bicameral Congress, consisting of the House of Representatives and the Senate. For current government data, check with http://www.whitehouse.gov/our-government

Language and education. English is the official language. Spanish is the most widely used second language. Education is compulsory in most states from age five to age sixteen. It is free up through the secondary school level, although a large number of private schools exist.

Religion. Church and state have always been separate in the United States; however, many citizens belong to a religious group. Most are Christian. Judaism, and Islam each account for about 2 percent of the population. Many Americans express religious feelings and attend church. So visiting person should edit out of his speech the mild religious profanities and the swear words at least until you're sure of usages within the group you're working with.

3. VALUES AND ATTITUDES CHARACTERISTIC OF THE AMERICANS

National characteristics. The national character of America is defined as impudent and materialistic. It is a cowboy culture where individuals are obsessed with time and deadlines. A society plagued by crimes and violence. American culture is task-driven, and place great value on individual achievement and thinking. It is monochronic with a very low risk-avoidance, which allows Americans to speak without thinking - and often act without thinking, sometimes in violent manner. It's very masculine culture, which means that society appreciates assertiveness while respecting the goal of material acquisition. Americans tend to be independently-minded people, ever protective of their civil rights and freedoms. The American character is based on freedom. Americans can be competitive in both work and leisure. Americans can appear too self-confident to many Europeans. They tend to speak louder than Europeans - very much louder, in some cases - use exaggerated body language, and manage to sound almost jarringly optimistic. They also talk in idiomatic phrases that create mini-pictures: `He's right behind the eight ball' (he's on top of his job or project), or `I'm not going down that route' (I'm not going to talk about that, or pursue that course of action). Innovation usually takes precedence over tradition.

Cultural orientation. The United States is generally ethnocentric and closed to most outside information. However, when a deficiency is recognized, outside information and techniques are eagerly accepted--such as Japanese just-in-time techniques. U.S. citizens are very analytical, and concepts are abstracted quickly. Universal rules are preferred, and company policy is normally followed regardless of who is doing the negotiating. There is minimal long-term orientation.

Locus of decision-making. Although the United States is the most individualistic of all cultures (followed by Australia and the United Kingdom), people are considered replaceable in their organizations. There is a high self-orientation emphasizing individual initiative and achievement. The individual has a life of his or her own that is generally private and normally not discussed in business negotiations. Friendships are few and specific to needs, but each person generally has loose ties with multitudes of acquaintances. In general, people from the United States do not find it difficult to say "no".

Sources of anxiety reduction. There is low anxiety about life, as external structures, religion, and science provide answers to important questions. Anxiety is developed over deadlines and results because recognition of one's work is a great reward. The work ethic is very strong, so that it appears that one lives to work. There are established rules for everything, and experts are relied upon at all levels. U.S. citizens are generally comfortable with risk.

Issues of equality/inequality. There is structured inequality in the roles people take, but personal equality is guaranteed by law. There is considerable ethnic and social bias against some minorities. Material progress is more important than humanistic progress. The society is still male dominated, but traditional sex roles are changing rapidly. Women have become more assertive and fight for equality in pay and power. There are many women executives, especially in fashion, cosmetics, arts and the media.

4. BUSINESS PRACTICE IN THE USA

So, to do business with Americans it's a case of: “chest out, shoulders back, head up and stand tall”. That means: be proud of who you are and what you do; think positive and optimistically; say what you mean plainly and clearly.

Never underestimate the speed at which business can be done in the United States. Purchasing decisions are often accomplished in one visit. Be aware that because the United States is the most litigious society on earth, corporations are extremely familiar with employment, health and safety, copyright, and every other type of law. There are lawyers who specialize in every industry and segment of society, from corporate tax attorneys to "ambulance chasers" (personal injury lawyers).

In the United States, differences in social and economic classes exist, but are not emphasized. Because equality is highly valued in the United States, formal situations that emphasize class differences are avoided. Social events are usually informal and relaxed. The Boss has authority but should not abuse it. As much as possible, the Boss should just be one of the workers. For this reason American executives are usually casual and informal with their employees. Because it is believed that good social relationships build a good work environment, bosses often throw parties to build a sense of unity among the employees and to strengthen employee identity with company.

It is important to remember that people in the United States write the month first, then the day, then the year; e.g., December 3, 2010, is written 12/3/10. This is very different from many Europeans and South Americans, who write the day first, then the month, then the year (e.g., December 3, 2010, is written 3.12.10 or 3/12/10).

The standard vacation policy is two weeks per year, in addition to some official holidays. The designated National Holiday is July 4. Punctuality is regarded as crucial in the USA, because time is equal to money. Start and complete tasks quickly and respond to emails and voicemail messages promptly - certainly within 24 hours. Office hours in the USA are from around 8am-5pm, although this varies according to the industry you're dealing with. Eating lunch at the desk is a common practice.

Meetings. Meetings in America are for making decisions, rather than for gathering views or simply sounding out people. The pace is brisk - `Time is money' - and you should be open about your aims from the start. People are not always well prepared for meetings, and papers are not always read beforehand, but this won't stop them from commenting on your proposals. The seating is usually informal, and the discussion will follow the agenda.

As the Americans tend to speak rather loudly a visiting person should project his or her voice confidently, address all the people in a meeting or group instead of mumbling to the chairperson, and sound positive about what he or she is proposing. There should always the focus on the bottom line - American business is very much systems-oriented, and always wants to see how much money can be made, and when. You will often hear the phrase, “Are you hitting your numbers?” - that means “are you achieving budget?” The numbers are sacred in the USA, and those who don't hit them might experience a rapid farewell - still with that confident eye contact and the use of your first name as you are given that final handshake. Allow for a moderate attention span of 30-45 minutes in a presentation, and build in plenty of time for debate. Americans appreciate an informal style and humour. Relevance is very important - use simple, direct expressions, conveyed quickly with short pauses. If your pitch is going down well, expect categorical responses: `Absolutely! 'Definitely!', `Fantastic!', all of which reflect their can-do, achievement-focused attitude. Although Americans can often seem very direct, to the point of appearing rude, remember that their use of language is just different to that of British English. When an American says, `Pass that file!' it's just the way of saying, `Could I trouble you to just pass me that file, please?' They're not being discourteous. In the United States people are rarely silent in conversation. Silence is considered to be a negative response to an offer.

Negotiating. In negotiations, points are made by the accumulation of objective facts. These are sometimes biased by faith in the ideologies of democracy, capitalism, and consumerism, but seldom by the subjective feelings of the participants.

The negotiation process can be divided into four phases: 1) building a good relationship; 2) talking about the business deal; 3) persuasion, bargaining, and making concessions; and 4) making a final agreement. In the United States, the first two phases are not emphasized, because personal relationships do not play a large role in business life and because making a quick deal is important. The negotiation process soon moves to the last two phases as bargaining and making a final agreement are the focus of negotiations. Concessions are made during most of the negotiation process. At the beginning, while the two parties are talking about the proposed deal, small concessions are given to show cooperation. As the two parties continue to talk about each issue of business, they bargain and make concessions. The bargaining continues issue by issue until the final agreement is signed. Each concession is met with a concession from the other party. In this way, the two parties treat each other as equals and demonstrate a cooperative attitude and a commitment to the negotiations. In the United States, sending a person with great technical competence and knowledge to negotiate is most important. It shows seriousness about negotiations because an employee who is ready to answer any product questions is being sent. Power and authority are important but are more the result of your talent and work record than of your age or seniority in the company. The sex of the negotiator is not important since many women occupy professional and managerial positions. North Americans are accustomed to sending only one person. Sometimes this is called “John Wayne approach.” This means that the individual thinks he or she can handle the negotiation on his or her own; it reflects the strong individualism found among North Americans.

Argument and debate are considered constructive and are highly valued. A tough negotiating style is often used, which can appear rude to non-Americans. Americans are willing to express disagreement frankly - `You must be kidding!' - but it's part of what can be a rough atmosphere. Show humour, say what you think (even in front of seniors), and be ready to forget everything and start again if you lose the debate. Try not to appear old-fashioned or slow, or get into too much detail. Concessions may be agreed when time is running out, whereas in other cultures there would be a break for reflection and a subsequent meeting to try and reach a conclusion. Equally, decisions may initially be made on principles, with everyone happy to settle the details later.

Executives should keep up to date with new electronic gadgets and means of communications in the United States. The use of cell phones, and associated devices are common in business meetings. Taking calls while others are in the room can be highly irritating to international visitors--but be aware that it is common practice.

Many Americans pride themselves with being consistent, so they will likely keep their commitments, at least if they are sufficiently documented. While you should not consider interim agreements final, avoid the impression that you are not willing to hold up your commitments. Nevertheless, only a contract signed by both parties constitutes a binding agreement. Negotiators sometimes request to document the progress of a negotiation by both parties signing a Letter of Intent (LOI) or Memorandum of Understanding (MOU). While much weaker than signed contracts, these documents may have legal implications. Contracts are almost always dependable, and strict adherence to the agreed terms and conditions is expected. American companies may prefer to resolve disputes in court, which can become very costly. It is highly advisable to fulfill your contractual obligations.

The "bottom line" (financial issues), new technology, and short-term rewards are the normal focus in negotiations. U.S. executives begin talking about business after a very brief exchange of small talk, whether in the office, at a restaurant, or even at home. The standard U.S. conversation starter is "What do you do?"--meaning "What kind of work do you do, and for whom?" This is not considered at all rude or boring. Actually, to many U.S. citizens, you are what you do.

5. BUSINESS ETIQUETTE IN THE USA

Business card. While businesspeople always have business cards, they are not exchanged unless you want to contact the person later. Be sure to include your e-mail address, Web site, etc., on your card. Your card will probably be put into a purse, wallet, or back pocket. People may write on your card as well. This is not meant to show disrespect.

Business entertaining. Business breakfasts are common and can start as early as 7:00 a.m. Business meetings are very often held over lunch. This usually begins around 12:00 noon and ends by 1:30 or 2:00 p.m. Lunch is usually relatively light, as work continues directly afterward. An alcoholic drink (usually wine or beer) may be ordered. Dinner is the main meal; it starts between 5:30 and 8:00 p.m., unless preceded by a cocktail party. Like many other aspects of American life, business entertaining and socializing is often informal. Heavy or enthusiastic drinking is frowned on amongst Americans. Before smoking, ask if anyone minds, or wait to see if others smoke. Smoking is generally prohibited in public places: in airplanes, office buildings, in stadiums, and even in bars. Large restaurants in some states usually have a section where smoking is permitted.

When eating out, the cost can be shared with friends. This is called "splitting the bill," "getting separate checks," or "going Dutch." If you are invited out for business, your host will usually pay. If you are invited out socially, but your host does not offer to pay, you should be prepared to pay for your own meal. If you invite a U.S. counterpart out socially, you must make it clear whether you wish to pay.

Americans are quick to invite you to their homes. Arrive on time, as you should for all appointments in the US, and have the host's phone number in case you're running late or get lost. Think about leaving by 10pm: many Americans go to bed early and rise early. In the U.S., there is not a big difference between how people socialize with colleagues and with friends. Both kinds of socializing are informal and relaxed. The party is a popular way of entertaining. Instead of a formal dinner at a table, often Americans entertain with an informal buffet or just cocktails and a snack. In addition to parties, common social activities include playing sports, going out for drinks after work, and going to sports or cultural events.

It is not considered rude to eat while walking; many people also eat in their cars (even while driving). However, it is usually illegal to eat on public transportation systems.

Compliments are exchanged very often. They are often used as conversation starters. If you wish to chat with someone, you can compliment something that person has (e.g., clothing) or has done (a work or sports-related achievement). Until you know a person well, avoid discussing religion, money, politics, or other controversial subjects (e.g., abortion, race, or sex discrimination).

Some common topics of conversation are a person's job, travel, foods (and dieting), exercise, sports, music, movies, and books. Certain behaviors are prohibited in work situations, like making sexual hints, touching other employees, offering special benefits in exchange for a personal relationship (quid pro quo, harassment), etc. Guidelines on U.S. sexual harassment law are available at www. americanbar.org/groups/public_e.

6. PROTOCOL

Greetings. The standard greeting is a smile, often accompanied by a nod, wave, and/or verbal greeting. In business situations, (and some social situations) a handshake is used. It is very firm and generally lasts for a few seconds. Gentle grips are taken as a sign of weakness. Too long of a hand clasp may make businesspeople uncomfortable.

Good friends and family members usually embrace, finishing the embrace with a pat or two on the back. Executives from the United States are well-known for telling acquaintances to use their first names almost immediately. This should not be interpreted as a request for intimacy, but rather as a cultural norm. Even people in positions of great authority cultivate down-to-earth, accessible images by promoting the use of their first names, or nicknames.

In casual situations, a smile and a verbal greeting are adequate. If you see an acquaintance at a distance, a wave is appropriate. The greeting "How are you?" is not an inquiry about your health. The best response is a short one, such as "Fine, thanks."

Titles/forms of address. The order of most names is first name, middle name, last name. To show respect, use a title such as "Dr.," "Ms.," "Miss," "Mrs.," or "Mr." with the last name. If you are not sure of a woman's marital status, use "Ms." (pronounced "Miz"). When you meet someone for the first time, use a title and their last name until you are told to do otherwise (this may happen immediately). Sometimes you will not be told the last name; in this case just use the first name or the nickname. Nicknames may be formal names that have been shortened in surprising ways (e.g., Alex for Alexandra, or Nica for Monica). Be sure your U.S. acquaintances know what you wish to be called. The letters "Jr." stand for Junior and are sometimes found after a man's first name or surname.

Gestures. The standard space between you and your conversation partner should be about two feet. Most U.S. executives will be uncomfortable standing closer than that.

To point, you can use the index finger, although it is not polite to point at a person. To beckon someone, wave either all the fingers or just the index finger in a scooping motion with the palm facing up. To show approval, there are two typical gestures. One is the "okay" sign, done by making a circle of the thumb and index finger. The other is the "thumbs-up" sign, done by making a fist and pointing the thumb upward. The "V-for-victory" sign is done by extending the forefinger and index finger upward and apart. The palm may face in or out. A backslap is a sign of friendship. To wave goodbye, move your entire hand, palm facing outward.

When sitting, U.S. citizens often look very relaxed. They may sit with the ankle of one leg on their knee or prop their feet up on chairs or desks. In business situations, maintain good posture and a less casual pose.

Gifts. In the United States, gift giving at work is less commonplace than in other countries. U.S. gift giving often symbolizes an emotional attachment. It is generally done only at Christmas or at retirement parties. It is not usually a normal part of business.

Business gifts can be given only after you close a deal. Gifts are usually unwrapped immediately and shown to all assembled. You may not receive a gift in return right away; your U.S. friend might wait awhile to reciprocate. Taking someone out for a meal or other entertainment is a common gift. Business gifts are discouraged by the law, which allows only a modest tax deduction on gifts.

Dress. In certain firms, conservative business attire may still be expected; however, many companies have adopted a "business casual" policy. Firms generally have guidelines about specific garments that are not appropriate (i.e., ripped or see-through clothing). However, many items that were not condoned a decade ago are now commonly worn everywhere from networking to manufacturing firms (i.e., khaki shorts, sportswear, etc.).

LECTURE 2. CULTURAL TRADITIONS AND BUSINESS COMMUNICATION STYLE OF THE UNINED KINGDOM OF GREAT BRITAIN AND NOTHERN IRELAND

1. COUNTRY BACKGROUND

England is only one part of the entity known as “The United Kingdom of Great Britain and Northern Ireland”. Most of the United Kingdom's international business is conducted through England. Britain refers to the island on which England, Wales, and Scotland are located. Although the English are in the habit of referring to all natives of Britain as `Brits', this term is not appreciated by many Welsh, Irish, and Scots. Northern Ireland shares the island of Eire with the Republic of Ireland. It is both incorrect and insulting to call someone from Eire a "Brit."

History. Britain was first brought into contact with the world when it was invaded by Rome in the first century B.C. Rome ruled much of the region until the fifth century A.D. Various tribes from Europe and Scandinavia - the Angles, Saxons, and Jutes - invaded after the Romans departed. In 1066, the Normans invaded from France. The Normans transformed the region, making it a feudal kingdom.

Britain was frequently at war with continental powers over the next several centuries. Because it is an island, Britain had a tremendous defensive advantage. They realized they needed a strong navy to protect themselves, and this navy made the British Empire possible. Great Britain was the strongest of the European powers in the nineteenth century, with many territories abroad. The Industrial Revolution first arose on British soil. In 1926, the United Kingdom granted autonomy to New Zealand, Australia, and Canada; later in this century, it granted independence to India, Egypt, and its African colonies.

The First World War marked the end of the Victorian way of life. The Second World War ushered in the dismantling of the British Empire. After the war, many sectors of the British economy were nationalized. Britain did not fully recover from the destruction of World War II until the 1960s.

During the 1980s, Conservative Prime Minister - Margaret Thatcher privatized many services, undoing some of the postwar nationalization policies. In 1997, Tony Blair was elected prime minister, and the Labour Party assumed power in government once again. He was re-elected in 2001, and strongly supported the U.S. campaign against terrorism. Great Britain's devolution of powers has continued over the last decade. The Scottish Parliament in Edinburgh opened in 1999, as did the National Assembly for Wales in Cardiff.

Type of Government. England has unwritten constitution which consists partly of statutes and partly of common law and practice. The monarch is the chief of state, while the prime minister is the head of government. In practice, it is the Cabinet (selected from Parliament by the prime minister) that has power, rather than the monarch. The prime minister is the leader of the majority party in the House of Commons. The Parliament consists of the House of Commons and the House of Lords, with the Commons having more real power. The Commons is elected by universal suffrage every five years, although the prime minister may ask the monarch to dissolve Parliament and call for new elections at any time. Unlike the U.S. Supreme Court, the English judiciary cannot review the constitutionality of legislation. For current government data, check at http://www.parliament.uk.

Language and education. English is spoken in 104 countries besides the United Kingdom. Some of these are: Australia, the Bahamas, Barbados, Botswana, British Indian Ocean Territory, the British Virgin Islands, Brunei, Cameroon, Canada. While there is a "Standard Oxbridge" or "BBC English accent" that most foreigners recognize, there are a multitude of dialects as well: Cockney, West Country, East Anglia and others. In the United Kingdom overall, Welsh is spoken by about 26 percent of the population of Wales, and a Scottish form of Gaelic is used by approximately 60,000 people in Scotland.

Britain boasts some of the finest educational institutions in the world. A large portion of tax revenue is spent on the educational system. Schooling is free and compulsory from age five to age sixteen. Literacy is 99 percent, and school attendance is almost 100 percent. There are over forty universities in the United Kingdom, and many professional schools.

Religion. England has an official religion - the Anglican Church, or Church of England. Most English belong to this church, which was founded when King Henry VIII decided to split from the Roman Catholic Church during his reign. The Church no longer has political power. Other religions represented in England are Roman Catholicism, Islam, Hinduism, and Judaism. Scotland also has an official religion, the Church of Scotland. However, Wales and Northern Ireland do not have official religions.

2. VALUES AND ATTITUDES

National characteristics. The British are stereotyped as stuffy, prim and proper. Business is done through the `old boy's network'. British culture is characterized as low-context, low risk-avoidance and monochronic. It is a mixture of relation-driven and task-driven cultures. Just like any other culture, Britain is full of paradoxes. On the one hand, the British continue to believe in the values of tradition, caution, restraint and fair play. They support the underdog, tolerate eccentricity (often by ignoring it) and think that taking part is more important than winning. Modesty and politeness are also important to them. This, combined with their zeal for personal privacy, can produce bizarre effects such as a reluctance to say what they actually do in their working life. If asked at a party what his job is, a Briton might say, `I'm in advertising,' when in fact he's the high-performing CEO of a major advertising agency. The British are also famous for their legendary ironic and self-deprecating humour. The British sense of humour is very varied but it depends ultimately on irony and sarcasm, which can make it hard for foreigners to enjoy, even if they have the language levels to understand it. Worse still, the British use jokes in business meetings to lighten the atmosphere, get through difficult moments and to prick pomposity and self-importance. In communities where meetings are taken fairly seriously, the British sense of humour may be seen as inappropriate and suggest a lack of commitment or interest. Old hands in international business will say, “leave the jokes for the bar and replace them with charm until you really know those you are dealing with”.