Esame Cross Cultural management

Exam: Cross cultural management case study: Nora & Sakari or Raysun

Culture dimensions in the Nora & Sakari case

Based on the Nora & Sakari case, which culture dimensions can best describe the different behaviors, expectations, and communication patterns of the two parties? Explain the link between behaviors and cultural dimensions in the case study.

At first sight, we can clearly identify the contraposition between a collectivistic culture like Malaysia (Nora) in opposition to a more individualistic one like Finland (Sakari). Malaysian managers put more emphasis on the relationship between employees that should be honest and consistent. The establishment of good working conditions is crucial in a country like Malaysia in order to face a multicultural environment in which coexist citizens coming from all over the world, especially from Asia (China and India). The creation of a peaceful environment increases the acceptance of the different cultures, in terms of traditions and religions. This process of integration will even reinforce in the future thanks to second-generation immigrants.

Finnish people instead are deeply different; they look surly and in some way even impolite. In fact, the CEO of Nora was in difficulty to deal with people with such a different culture. One time he even quit the negotiation. Finnish managers replied saying that they are not impolite, but they are simply serious, silent, and they don’t love to have long speeches with strangers, moreover during a negotiation. Finnish are generally considered more focused on individual achievement and independence instead of thinking as part of a real team with “superior” and more generalistic (Individualistic Dimension) even if it is not clearly mentioned in the text.

Neutrality vs affectivity

We shall start from this point in order to describe another cultural dimension, theorized by Trompenaars, which is: Neutrality vs affectivity, representing the extent to which people are free to express their emotions in public. As we have already mentioned, Finnish people look reserved, serious, and obstinate. We may even hypothesize that, at least during the negotiation, they refrain from showing emotions. Malaysian managers dislike the Finnish way of dealing, regretting the US negotiation style.

In fact, Zainal Hashim stated, "Negotiators for the United States tend to be very open and often state their positions early and definitely. They are highly verbal and usually prepare well-planned presentations. They also often engage in small talk and 'joke around' with us at the end of the negotiation. In contrast, Sakari negotiators tend to be very serious, reserved, and 'cold.' They are also relatively less verbal and do not convey much through their facial expressions. As a result, it was difficult for us to determine whether they were really interested in the deal or not."

Even if it is not explicitly said, we can assume that Malaysian managers prefer a more “affective” way of dealing where emotional expressions are acceptable and sometimes even encouraged, like happened while negotiating with counterparts from companies based in North America or the United Kingdom.

Diffuse oriented society

Notable is even the speech by the Vice-chairman of Nora where it is evident his will of instilling and promoting Islamic values among the Malay employees. He explained, "Islam is a way of life and there is no such thing as Islamic management. The Islamic values, which must be reflected in the daily life of Muslims, would influence their behaviors as employers and employees. Our Malay managers, however, were often influenced by their western counterparts, who tend to stress knowledge and mental capability and often forget the effectiveness of the softer side of management, which emphasizes relationships, sincerity, and consistency. I believe that one must always be sincere to be able to develop good working relationships."

This speech is evidence of another specific dimension by Trompenaars: Diffuse oriented society. Members see the individual elements of their life as interrelated and thus there is no clear distinction between personal life and work, and the hierarchy of authority at work can reflect into social areas outside of work hours. He talked about sincerity in order to develop good relationships and he focused even on the religious point of view that for him is fundamental even if it is not strictly related to work.

Finland instead represents a more specific oriented society in which people generally tend to separate their personal and working life and have a completely different relation of authority in each social group. Ossi Kuusisto, Sakari’s vice president explicitly said: "We do not engage easily in small talk with strangers," it means that they do not want to play around with words and they want to get immediately to the point (low context) without “wasting” time in a relationship, not absolutely necessary for the negotiation.

Communication context

The context is the extent to which the context of a message is as important as the message itself, like the Finnish managers who adopted very direct and frank communication (cultural dimension by Hall). Probably instead the Nora’s team is more high context, which means that much of the meaning in communication is conveyed indirectly through the context surrounding a message. They seem more loquacious, but they are not so direct in declaring what is their final aim that is to get their technology in order to develop its own digital switching exchanges and related high-tech products. Instead, Finnish people are more transparent and direct.

A Finnish peculiarity is their particular connection with nature. They really aspire to feel in harmony with nature as is even explicitly said in the article: "We have a strong love for nature and we have a tendency to be silent as we observe our surroundings." This represents another dimension by Trompenaars, the relationship with the environment: the extent to which people believe they control the environment or it controls them. It emerged that Finnish people are outer-directed, but we do not have clear evidence of an opposite dimension for Malaysia.

Power distance

Malaysia is a country with high power distance: beliefs about the appropriate distribution of power in society. We have some little evidence about it, for example, it is mentioned that even if Zainal Hashim was not present at the 6th negotiation, he followed it closely and was briefed regularly by his negotiators who, without their boss, were in difficulty in dealing with different issues like equity ownership, technology transfer, royalty payment, etcetera.

We can’t say the same thing for Finnish negotiators who seem more autonomous and used to make deals even without the presence of their boss, denoting a much lower power distance connotation. We can even notice that Nora’s proponent is the Vice-Chairman of the firm who represents a much higher hierarchical level (inside the company) than the proponent of Sakari who is simply a Vice President.

Evaluation of negotiation elements

Based on the Nora & Sakari case, provide an evaluation of the following negotiation elements:

• Which are the interests of Nora?

Their principal interest is to buy and learn new capabilities and knowhow in technology from the Finnish company with the future aim of developing its own digital switching exchanges and related high-tech products. They want to get sources of information from a firm that works in a more complex and competitive environment. From this expansion process, they expect to improve their position in their market. After having obtained this knowledge, they may grow faster and expand internationally with an advantage over competitors.

• Which are the interests of Sakari?

They want the possibility to enter a new market; Asia would be perfect due to its very high expected growth of mobile telecommunication (1990-94) and even for the very low percentage of mobiles/people (from 1 to 11). They hope that Malaysian workers would be efficient in manufacturing, maintaining, ensuring quality, products, and prompt delivery. They don’t want Nora to be able to “steal their” technological competences and know-how.

• Which are the alternatives to a negotiated agreement that Nora has? (more than one.)

Both the firms have bargaining power, because they have alternatives. Nora has the possibility to deal with other firms interested in this joint venture, like the ones that participated in the bid (Siemens, Samsung, AT&T), maybe with a potential partner that will fit more with their conditions and moreover with their organizational, cultural, and structural characteristics (they don’t abandon the possibility of a renegotiation with Sakari). Another possible alternative would be to “steal” knowledge, professional, competencies, and high-tech materials from some Western competitors in order to develop their own best technology, which indeed is their real final aim.

• Which are the alternatives to a negotiated agreement that Sakari has? (more than one.)

Sakari's alternatives are related to the research of another partner or maybe to acquire a strategic small firm, geographically well-placed, that fits better in terms of culture, capabilities, and resources, and then that can lead them to apply their idea.