Master Thesis Exposé. Submitted at. European Master in Business Studies Master Program

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1 Master Thesis Exposé Submitted at European Master in Business Studies Master Program Submitted at 29 October 2012

2 Title of the thesis: Cultural differences in the non-verbal communication within the cross-cultural negotiations A comparison of German and Turkish business partners cultural differences in the non-verbal communication within a business negotiation Abstract With the globalization of world business, Turkey has become an appealing market for foreign investors. It has resulted in the increasing of the face-to-face negotiation between parties from different cultures. Hence, the cross-cultural management problem arises as the cooperation between Turkey and its culturally different Western partners. This paper presents an understanding of the general cultural differences between Germany and Turkey by applying the GLOBE Study of 62 Societies. Moreover, it discusses the cultural differences in the non-verbal communication between these countries within the negotiation process. Background: After the Second World War, the world has been significantly changed in terms of increased globalization of business. Hence, cross-national business has started to face great challenges in cultural differences. During a negotiation process, many cultural differences can be observed between foreign business partners. It can also be observed that many cross-cultural companies fail within negotiations due to neglecting cultural differences. Therefore, understanding of cultural differences particularly in non-verbal communication is essential for companies, which want to take advantage from the cross-cultural negotiation process and finally succeed it. Consequently, one of the ways to have a successful business negotiation is take advantage of interpreting of the counterparts non-verbal communication within a negotiation process.

3 Purpose: Cultural differences can affect the way people communicate non-verbally. The purpose of this thesis is to investigate the cultural differences in non-verbal communication between German and Turkish business partners within the negotiation process. These differences will be analyzed by implementing an experiment between German and Turkish students. In order to reach this goal, I will mainly identify several influences such as gesture, facial expressions and use of space, relaxed posture that can impact the outcome of the business negotiation. Method: The data will be collected through an experiment. The experiment will be conducted to analyze the differences in non-verbal communications within the negotiation process by focusing several general codes of nonverbal signals such as kinesics, vocalics, proxemisc, haptics, oculesics, chronemics, appearance and artifacts among German and Turkish business partners. Before the negotiation process, completing of the Hofstede's Values Survey Module questionnaire and after the negotiation process completing of a short questionnaire to explore the physical outcomes of the negotiation will conclude the experiment. Conclusion: Nonverbal communication or body language is an important part of how people communicate and it is evident that there are differences from one culture to another. This master thesis suggests that to understand and consider the cultural differences in non-verbal communication of a foreign partner during a negotiation process can help them gain a better result. German and Turkish companies can benefit from seeing the effect of non-verbal communication on the negotiation outcome. I conclude with the theory of Hall s model of high- and low-context culture, which helps us to understand better the powerful effect of culture on business communication that is one of the dominant theoretical frameworks for interpreting intercultural communication. (Cardon, 2008) Based on his theory, I can say that a negotiation partner who is from a high context culture can have more benefit in interpretation of

4 non-verbal communication than a negotiator who is from a low context culture within the negotiation process. Introduction/Background State the research problem (often referred as the purpose of the study) The purpose of this paper is to discuss the importance of non-verbal communication on the cross-cultural negotiation process. One major target of this master thesis is to identify the link between the cross-cultural negotiation and non-verbal communication. Examining the literature regarding cross-cultural negotiation and non-verbal communication. This paper will attempt to link the findings to cultural background. Additionally, the purpose of this paper will be as follows: 1. Firstly, an overview about culture, cultural differences and negotiation, nonverbal communication will be provided. 2. Increase of globalization in business and its results will be described. German- Turkish business relationship in recent years will be explained. 3. An overview of GLOBE Research findings will be described with an emphasis on German-Turkish cultural differences. 4. The non-verbal communication process in detail nonverbal signals such as kinesics, vocalics, proxemisc, haptics, oculesics, chronemics, appearance and artifacts will be explained. 5. Finally, the experiment results will be discussed and compared. Provide the context in such a way as to show its necessity and importance Decision-making is an important part of the negotiation process and culture affects the decision-making process. Culture is defined as the shared patterns of behaviors and interactions. No cultural group is composed of individuals. It goes without saying that each culture has its own standards. Therefore behaviors of negotiators differ from one country to another. These behaviors have a certain meaning in a

5 certain culture that could be interpreted differently in another. So I use cross-cultural studies to understand the cultural factors. The study Cultural Differences in the Non-Verbal Communication within the Cross-Cultural Negotiations has many benefits both for German and Turkish business partners but the most important one is the both parts can take advantage from the ability to explore and interpret the cultural differences in non-verbal communication. This then gives them the opportunity to develop strategies within a negotiation process that might impact the negotiation outcomes. My thesis can be used as a reference when the both business partners have an interaction for doing business. Germany is the most important commercial partner of Turkey. The trade between these two countries displays a high growth rate each year and Turkey presents a promising export market for Germany as well as a destination for investment. Germany is Turkey s largest trading partner in the European Union and the relations between Turkey and Germany have never been as close as they are today but there are still limited studies about a comparison of German-Turkish business partners cultural differences in non-verbal communication within the negotiation process. Identify variables of your experiment Two key variables will be used in the experiment: the independent variable and the dependent variable. The "dependent variable" represents the output or effect, and the "independent variables" represent the inputs or causes. So independent variable during the experiment will be non-verbal language/ body language and dependent variable will be the outcome of an experiment. State your hypothesis or theory H1: Non verbal communication affects negotiation outcomes positively. H0: Non-verbal communication doesn t affect negotiation outcomes. H2: Turkish people take advantage from the non-verbal communication within the negotiation in comparison to German people. H3: Turkish negotiators will engage in more dominant non-verbal behaviors than German negotiators. H4: Turkish negotiators will display more emotion on their faces than German negotiators.

6 Set the limitation or boundries of your proposed research to provide a clear focus There is a literature gap that links cross-cultural negotiation to non-verbal communication. This thesis in this issue contributes to understand cultural differences in non-verbal communication and the impact of non-verbal communication on the cross-cultural negotiation among German and Turkish business partners. One of the limitations of the experiment is that the participants will be grouped randomly without measuring age, cultural background and the level of knowledge about each other that affect negotiation outcomes. There will be two variables for selecting participants. First one is nationality of participants (German and Turkish) and second one is the integration level of the Turkish participants into the German culture. It means that Turkish people who were born in Germany and have also Turkish nationality are fully integrated into the German culture. Therefore they have more German habits and culture than Turkish habits and culture. Hence, we include Turkish Erasmus students in our experiment. Another limitation of the experiment is the sample size. It is relatively small with 15 negotiating teams (in pairs). Sample size is extremely important in order to determine whether there is a significant difference between the two groups. If the sample size is increased, the means tend to be more stable and more representative. In our experiment, 15 Turkish and 15 German participants are expected to attend which makes data not reliable. As I mentioned above, the reason of having limited Turkish participants is the second variable that is integration level of Turkish participants. Currently, there are only 23 Turkish Erasmus students in Kassel and 15 of them are available to participate the experiment, which is not enough to achieve reliable data. Statement of the Problem I believe that the impact of non-verbal communication within cross-border negotiation is an important subject to study, since it involves all international companies and it is an aspect that all managers should consider carefully. Furthermore, effective and good communication is important issue between foreign business partners because it reduces risk and cost. Both parts can have benefit and save time by understanding and interpretation of non-verbal communication.

7 The purpose of this paper is to discuss the importance of national culture and nonverbal communication within cross-cultural negotiation process and outcomes. I conduct a comprehensive literature search concerning cross-cultural negotiation and non-verbal communication. After having done this literature search, I have decided to create a link between this study and nine cultural dimensions developed by GLOBE (Global Leadership and Organizational Behavior Effectiveness) study that offers the recent theories in this field. In this research paper, primary data will be collected by a case study that will be conducted between German and Turkish students to observe German and Turkish business partners cultural differences in non-verbal communication within the cross-cultural negotiation. Secondary data will be collected from books, online resources and articles. Review of Literature: 1. Concept of Culture It is possible to find numerous definitions of culture. Jandt defined culture in the late 1900s as Sum of total ways of living including behavioral norms, linguistic expression, styles of communication, patterns of thinking, and beliefs and values of a group large enough to be self sustaining transmitted over the course of generations (Intercultural Communication, 1995, p. 404). More recently, GLOBE s definition includes shared motives, values, beliefs, identities, and interpretations or meanings of significant events that result from common experiences of members of collectives and that are transmitted across generations (House et al., 2004, p. 15). Furthermore, De Long & Fahey (2000) describe culture more general, as a system of values, norms, and practices that are shared among a group of people and that form a model for living. To define the meaning of culture helps to identify what the causes and effects are and how culture can influence negotiation outcomes. Therefore, I have started my literature review as an initial process of the related study in a particular field, which will lead us to explore and gain better understanding of the main objective of our thesis topic, which is Cultural differences in the non-verbal communication within the cross-cultural negotiation

8 1.1. Project Globe and Cultural Dimensions Javidan & House (2002) described the aim of Globe study as improvement of an experimental theory for better description, understanding, prediction of the impact on specific cultural variables on leadership and organizational processes and the effectiveness of these processes. According to Javidan & House (2002) a useful way of exploring cultural differences and similarities to study cultural clusters. In the cultural clusters, the countries are divided into clusters that share many similarities. As Javidan & House explained, by focusing on clusters we can find out the extent, nature and dynamics of cultural similarities and differences across GLOBE. As I mentioned above, to know the cultural differences play a significant role in business negotiation in terms of having a successful negotiation. To understand the cultural similarities and dissimilarities by applying GLOBE study will help the negotiators or managers to achieve better results within the cross-cultural negotiation. GLOBE study will help me to investigate the cultural dimensions of the different cultural patterns of Germany and Turkey. Further it provides a better understanding of how Germany and Turkey differ in terms of GLOBE s nine cultural dimensions. 2. Cross Cultural Negotiation Research and Non-Verbal Communication In this chapter, my literature review will illustrate, what cultural differences in nonverbal communication will have impact on negotiation outcomes. Business partners have to take into account their partners different way of doing business as a result of cultural differences in the communication style of different cultures. It is useful to be aware of the potential messages of the counterpart s non-verbal behaviors. It is surprising how little research has been conducted so far on the impact of non-verbal behavior on cross-cultural negotiations. A few studies linking these two fields can be found that linked these two fields together. Some authors (e.g Zhou & Zhang, 2008;Azad & Adair, 2011) how cultural differences in non-verbal communication may impact negotiation. As a result, there is a research gap that links non-verbal communication to cross-cultural negotiation.

9 Methodology: The literature in the non-verbal communication, cross-cultural and intercultural negotiation studies rely heavily on the use of experimental methods. Methodological part will be designed by a quantitative research. Since the study requires the measurement of the variables that affect the outcome of negotiations, experimental method has been considered and chosen as the most appropriate one among other methods of quantitative research design. The empirical finding will be obtained through an experiment that includes the comparisons of the groups and the determination of the relationship between the variables will be reached after approving or disapproving the hypotheses. The target of the experiment is to understand non-verbal communication differences between German and Turkish negotiators and the impact of the non-verbal communication on the negotiation outcome by observing the non-verbal signals and cues and exploring cross-cultural differences in that sense through an experiment. Furthermore, I will analyze that Turkish negotiators can take advantage from non-verbal communication due to high context dimension during the experiment. This experiment splits into two parts. First part of the experiment is the intra-cultural part that is a negotiation between the participants from the same nationalities. But before doing that, the participations will be asked to complete Hofstede's Values Survey Module as a pre-negotiation questionnaire. Afterwards, a case study the used car (Lewicki, Saunders, 2010, p. 409) will be given to the participants from the both countries. The participants from the same countries will negotiate without a time limit. In this part of the experiment I will analyze how native language and national culture affect the non-verbal communication way within the negotiation. It will be shown that the influences of culture and language will cause that the negotiators will engage in more dominant non-verbal behaviors in their native languages. Afterwards the participants will be asked to complete a short questionnaire as a post-negotiation questionnaire. This questionnaire will help to investigate the psychological outcomes of the negotiation including satisfaction, trust, rapport and self-impressions. Soon after the second part of the experiment -the intercultural part -will be conducted between the participants from Germany and Turkey in English. In this part of the experiment, a case study the new house negotiation (Lewicki, Saunders, 2010, p542) will be given to the participants. Right after, completing the same post-negotiation questionnaire will conclude the experiment.

10 Overview of Chapters 1. Globalization 1.1. Increased Globalization Of Business 1.2. The increased Importance of Sensitivity to Cultural Differences 1.3. EU-Turkey Relations 1.4. Turkish-German Trade and Negotiation 1.5. Turkish population in Germany and their business activities 2. Culture and Negotiation 2.1. Definition of Culture 2.2. Definition of Negotiation 2.3. International and Cross Cultural Negotiation 2.4. The Influence of Culture on Negotiation 2.5. Effects Of Culture On Negotiation Outcomes 3. Cultural Dimensions and Culture Clusters 3.1. Power Distance 3.2. Uncertainty Avoidance 3.3. Humane Orientation 3.4. Collectivism I 3.5. Collectivism II 3.6. Assertiveness Gender Egalitarianism Future Orientation Performance Orientation Cultural Divergence Germany and Turkey 4. Non-verbal communication Process 4.1. Non-verbal Communication Relevant to Intercultural Contexts Kinesics Vocalics Proxemics Haptics Oculesics Chronemics Appearance and artifacts

11 5. Cross Cultural Negotiation 5.1. Non-verbal Communication Differences 5.2. Methodology 5.3. Non Verbal Communication Differences among German and Turkish business negotiators 6. Conclusion 6.1. Limitations 6.2. Theoretical implications 6.3. Managerial implications 6.4. Further research

12 Timeline/Plan of Work ACTIVITY Sep Oct Nov Dec Jan Feb March May Hand in Master Thesis Exposé Approval of Master Thesis Exposé Reading literature and collecting Information Construct the simulation cases and the questionnaires Field research (conduct the experiment) Writing the first chapters (introduction, definition and an overview of the Globe Study) Evaluation of results (Simulation game and questionnaires) Discussing results with the Professor and hand in the intermediate report Writing the last chapters of the thesis presenting the results of the field work Writing a conclusion of the thesis + giving further recommendations Final approval of the master thesis Final presentation of the master thesis

13 Bibliography Bülow A.,&Rajesh Kumar (2011). Culture and Negotiation. International Negotiation 16 (2011) Brian J. Hurn, (2007),"The influence of culture on international business negotiations", Industrial and Commercial Training, Vol. 39 Iss: 7 pp Cardon P. (2008) A Critique of Hall s Contexting Model, Journal of Business and Technical Communication,Vol.22 De Long D. W. & Fahey L. (2000), Diagnosing Cultural Barriers to Knowledge Management, Academy of Management Executive, Vol. 14, No. 4, pp Philippidis G.&Karaca O.(2009) The Economic Impacts of Turkish Accession to the European Union. The World Economy(2009). doi: /j x Hui Zhou & Tingqin Zhang.(2008 ). Body Language in Business Negotiation. International Journal of Business and Management. Vol. 3, No. 2 Jandt, F. (1995). Intercultural Communication., California USA, Sage Publications Jeanne M. Brett (2000). Culture and Negotiation. International Journal Of Psychology, 2000, 35 (2), 97± 104 Javidan M. & House R.J. (2002) Leadership and Cultures around the World : Findings from GLOBE An Introduction to the Special Issue,Journal of World Business 37,pp.1-2 Lieh-Ching Chang. (2006) Differences in Business Negotiations between

14 Different Cultures. The Journal of Human Resource and Adult Learning Michele J. Gelfand,Jeanne M. Brett. The Handbook of Negotiation and Culture (2004).Stanford California, Stanford University Press isbn Robert J.House,Paul J.Hanges,Mansour Javidan,Peter W.Dorfman,Vipin Gupta. GLOBE of Study of 62 Societies (2004), California USA, Sage Publications Victor DANCIU(2010).The Impact of the Culture on the International Negociations:An Analysis Based on Contextual Comparaisons. Theoretical and Applied EconomicsVolume VII (2010), No. 8(549), pp Zhaleh Semnani-Azad, Wendi L. Adair (2011) The Display of Dominant Nonverbal Cues in Negotiation: The,Role of Culture and Gender. International Negotiation 16 (2011) Zhaleh Semnani-Azad, Wendi L. Adair (2011). Non Verbal Cues Associated With Negotiation Styles Across Cultures. 24th Annual International Association of Conflict Management Conference Istanbul, Turkey Electronic copy available at: u Huang, Evert Van De Vliert, (2004) A Multilevel Approach to Investigating Cross-National Differences in Negotiation Processes. International Negotiation 9: , 2004.

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