Key differences in negotiation and decision making processes used between American and Middle Eastern companies/businesses
Discuss About The Journal Of Personality A Social Psychology.
The Middle East is a diverse cultural environment that offers a unique opportunity for managing across border companies. Doing business within the regions has been difficult owing to the corporate and national cultural differences between American or western business and those of Middle East. Middle East market consists majorly of Arabian countries and North African countries. Some of the characteristics of this business environment include observance of cultures, timing differences, slow decision-making process, social relationships and dynamic business negotiations. This characteristic of the Middle East market make the differences between American business negotiation and Middle East business negotiations. Coca-Cola Company is one of the American companies that has expanded its operation in the middle east. The success of Coca-Cola Company is based the company’s approach to time, social events, communication especially language and social relationship building strategy. In addition, American managers need to change their approach to a time when it comes to business negotiations and meeting, their business communication strategy, view on social events, and their marketing approach for successful business in the Middle East (World Bank Group 2018). The main aim of this paper is to explore the managing across border business with a major focus on Middle East market.
There are many differences that are observed between business people in the Middle East and those in America. This is based on the corporate and national business culture differences (Dong & Keith 2008, pp. 191–205). Some of the factors that highly influence negotiation in the Middle East include an approach to time, communication, and social relations. Therefore, there is need to understand some of the differences in negotiation and decision-making process between American and Middle East companies (Arab Business Review 2018).
Business in America considers commercial agenda important as compared to a business in the Middle East that put trust and knowing other parties first. The business culture of American companies being western countries has a time frame and always considers structuring business ideas as an important aspect of negotiation and decision making. This is different with a business that in the Middle East which builds on trust by knowing the other business parties. Decision making is based on trust and professional relationships are considered separate during a business negotiation. This, therefore, shows that in Middle East business ideas are approached in a more relaxed atmosphere as compared to a business in America (Movius & Susskind 2009).
Building trust is important since personal and professional relationships are not considered separate
In the Middle East, verbal communication is valued that written agreements and contracts as compared to American business. Middle East business consider someone’s own words more important during the negotiation and are used in decision making as compared to American business that value is written commitments and agreements. This implies that in the Middle East, the words that you speak during business negotiation are used in decision making without more emphasis on the written contract you sign. This business culture is different from American culture that is based on a contract signed and written agreements (Johnston 2008).
Businesses in Middle East value face to face communication as compared to business in American and western countries. Since verbal commitments are given priority in the Middle East, appearing in person at the negotiation meetings will assist in decision making in the Middle East. In addition, written communication such as emails is viewed as not personal and hence replying emails are rear in the Middle East. American businesses, therefore, are required in the Middle East to send a team of negotiators to the counterpart in the Middle East for face to face negotiation and decision making. A good American negotiator needs to do face to face follow up after meeting those business people in the Middle East since as much as they regard face to face communication, they do little follow up (Luomala, Kumar, Singh & Jaakkola 2015).
American business negotiations are based on structured business ideas that form the basis of negotiation. This differs in the Middle East where original business negotiation idea can be modified beyond the original scope. The changing business idea in negotiation is based on the creative business negotiations witnessed in the Middle East (Trotschel & Schwartz 2011, pp 771–790). In addition, business in the Middle East arrived at the decision making based on many people proposals. This implies that American business needs to accommodate changing business ideas and proposal that can be different from the original ideas. Despite the risk of changing business ideas especially during negotiations, American business in the Middle East has to approach negotiation with an open flexible mind willing to modify business idea (Hames 2011).
Middle East people have high regard for social gatherings and no business talks are allowed during such gatherings. This is different from those in America where social parties can be sued for discussing business deals. Most business negotiations in the Middle East are built on trust and this makes partners organize social parties for other business partners. Social parties are regarded as special moments and business talks are not accommodated. Instead, the business partner is expected to bring thanksgiving a gift for hospitality (Arab Business Review 2018). This implies that in the course of business negotiation, parties are to attend various social gathering without business discussion during those events. American business needs to understand many different social-cultural aspects as there are some restricted items such as alcohol in Muslim gatherings. Some of the social occasion that is most likely to interference with negotiations in the Middle East includes Ramadan and namaaz (prayers) (World Bank Group 2018).
Value of the verbal communication
Business negotiation in the Middle East takes a long time as compared to those businesses in America and western countries. Middle East business community especially those wealthy Middle East business peoples that has little value for deals. This implies that American business negotiators will need to do the follow up to ensures that the business deal is successful though it usually takes a long period of time (World Bank Group 2018). Moreover, business in the Middle East has a different approach to the time of the negotiation and this makes the negotiation time to take a long duration as compared to those businesses from America. This also implies that business Middle East does not require an immediate result from few meeting and patience is highly regarded when dealing with business in the Middle East. Suppose the duration seems frustration for American business people in the Middle East, the overall result of the negotiation will also be frustrating (Messner & Schäfer 2012, p. 41).
Middle East business has business culture that put little emphasis on the time and schedule as compared to American business. Middle East business has a flexible schedule that affects business meeting and negotiations. This implies that being American that has high adherence to time schedule can be problematic in Middle East since in Middle East cancelling meeting or lateness is not an issue to business. Moreover, having negotiation meeting in Middle East strict adherence to meeting timetable will interference with the decision making process as business in the region had no regard to time. For a successful business negotiation, patience during meeting will help American business achieve the negotiation goals in Middle East (Business Know How 2018).
Coca-Cola Company is one of the American companies that have expanded in the Middle East. Coca-Cola Company has realized some business strategies that are used to do business in the Middle East. The company has been in business within the region for some time and sells many different brands such as Coca-Cola light, Fanta, Sprite, Coca-Cola Zero, and Rani. Coca-Cola Company has expanded its business in the Middle East to cover more than 12 countries within this region (Coca-Cola Company 2018).
Coca-cola business strategy is built on some key strategies and these include social relationships, culture, and sustainable business operations. Firstly, under the social relationship initiative the company has fronted many social initiatives that include sustainable community, healthy living, create a safe environment and economic development of a community that the company operates in. in addition, under social relationship, the company has come up with many different campaigns and advertisements that emphasize on social relationships. The business understands the social relationship culture that is used in business within the Middle East market. This is evidence in its rebranded Taste the Feeling adverts and ‘Etganen’ campaigns in Egypt. For instance, the ‘Etganen’ campaign carries along very many different cultural aspects and social relationship culture to penetrate the market (World Bank Group 2018; Coca-Cola Company 2018).
Best way to communicate is face-to-face
Culture is another strategy that has enables the company to expand within this Middle East market. Managers of Coca-Cola have mastered some culture in the Middle East and some that include language or communication, business timing, social events, and hospitality. Firstly, the company uses communication and language of the Middle East people to design its advertisements and campaigns as this hold special position in the Arab world (Moha 2012, pp.19-23). Secondly, the company generally changed its approach to timing and embraces the timing of the people in the region to do business. Thirdly, Coca-Cola has high regard for social events as this also forms the basis of the Middle East market culture. This the company does through the organization of social events such as sports events that draw together youths and adults combined. Lastly, the hospitality culture is also used by the company to approach the potential market in the Middle East. This is also part of the cultural practice that was used to design ‘Etganen’ advertisement that is doing around the media in Middle East (Campaign Middle East 2018).
The sustainable business operation is another strategy that issued by the company to penetrate Middle East market. The company has various sustainable business practices that it uses to build trust among Arabs within this region. The company has community approach, healthy living, and environmental sustainability. The overall reason for this approach is based on building trust and creates a friendly environment that is conducive to business operation in the Middle East (Deresky 2010). Another culture that is used middle east is a friendly culture that requires businesses to act friendly to the community to ensure good business environment. These come along with corporate social responsibility that the company uses to market its products in this culturally diverse environment. For instance, the company put community forward in its advertisements and campaigns and this is evident through various community events organized by the company in the Middle East (James 2015, pp 174–195).
There are some changes that American managers need to make for successful business in the Middle East market. Firstly, the approach to time is important for the success of the Middle East market as many customers in this market different approach to time. Coca-Cola Company middle east president indicates that their approach to time in the Middle East has changed. Doing business in middle east require American managers to understand the culture time differences in the region since time limits are little regarded in the region (Zhang 2009). This is also important when dealing with other businesses that require negotiations. Coca-Cola Company, for instance, highlights that their approach to time has been different since they started their operation in American. They currently consider time difference between America and the Middle East and have adopted a time-based strategy to ensure there is high expansion by 2020 (Coca-Cola Company 2018; World Bank Group 2018).
Changing of negotiation business idea
American managers need to change their approach to business deals since in Middle East business is based trust building and relationship. Coca-Cola Company has exhibited building of trust in the Middle East through collaborations and social relationship with businesses or governments (Echavarria 2015; Coca-Cola Company 2018). The second strategy that is currently used by the company is based on collaboration with other organizations or government of countries within the region. One of the business cultures that is dominant in the middle east market is building trust and is preferred that professional deals (Bartlett 2011). This implies that American managers willing to succeed in Middle East market has to ensure that their relationship. The business has expanded in the market through its social adverts and campaigns aimed at building a customer-brand relationship. The famous taste the feeling campaigns has been expanded to ensure that customers within the Middle East market with high regard to relationships are connected to the company (Adam 2013).
Approach to social events needs to change as Middle East market value social events. One of the success strategies of Coca-Cola Company in the Middle East has been grounded in their adherence to social events in the region. The company has a social strategy that involves organizing social events such as sports that are used for brand campaigns in the region. In addition, the company has a strong approach to economic empowerment of communities through these social events (Modaff, DeWine & Butler 2011). For instance, the company has used some of the notable social gatherings to access those communities living in the Middle East. This has an impact on the market expansion in the region that is dominated by Muslims. The company also has observed various cultural practices in the Middle East and uses these cultural practices to design its adverts in the regions. The marketing approach is grounded on the social and cultural approach of the people living in this region (Maali & Al-Attar 2017, pp 251-265).
Marketing approach for American managers needs to change since Middle East market has high regard for business communication culture. Marketing in Middle East market is very dynamic with much emphasis need to be on building a relationship with customers as oppose to norm marketing strategy (Marquis & Tilcsik 2013). This implies that marketing approach in the Middle East need to consider social relationship marketing as this is one of the criteria that has been used by Coca-Cola Company to market its products in the Middle East. For instance, Coca-Cola Company launched a marketing campaign in Egypt called ‘Etganen’ that focuses on kindness towards others making them feel happiness and satisfaction towards business. This is based on the act of kindness and hospitality that forms part of the culture within the Middle East market. Therefore, marketing business in the Middle East must put social relationship forward especially kindness and hospitality (Campaign Middle East 2018).
Avoid business talk at social gatherings
American managers need to change communication approach as most Middle East market has diversified communication perspective. The Middle East market is a cultural diversified region that requires a different aspect of communication that is totaling different from those managers from the western countries. Firstly, one aspect of communication that needs strict observance is language as many Arabian nations consider their language as the main aspect of communication that is used in business (Holliday 2010, pp 177). The Arabic nations regard their language as superior and holy since it is derived from holy Quran and this makes this language have a special position in the Middle East market. Secondly, some common communication aspects such as greeting have importance in the Middle East market as this defines the cultural practices in this region (Deardorff 2009; Hall & Ghazoul 2012). This communication aspect defines the basis for establishing trust and friendly relations which is key for this market. For instance, Coca-Cola Company has mastered these communication aspects and currently using them to develop its brand campaigns. Evidence of Coca-Cola Company adverts shows language aspects such as ‘Etganen’ campaign that combine these elements of communication. Thirdly, face to face communication is always the communication method in the Middle East. American managers need to change their communication and major in direct face to face communication (Islam & Zyphur 2009).
American managers need to change their decision timing as the most business in Middle East market requires slow decision-making process. Patience is an important aspect of the business decision-making process and always come first. This implies that while doing business in the Middle East region, managers have to changes their decision-making timing (Curtis 2018). Decision making in Arabic world is always characterized by longer duration as compared to American or western countries (Logan, King & Fischer-Wright 2009). Flexibility in Middle East market is a recipe for success as it shows a strong character for non-Arabs. In addition, successful business in the Middle East has always considered time and decision making process duration all the flexibility needed. For instance, at the start of Coca-Cola Company operates in the Middle East market, a stronger emphasis was placed on time and faster decision making and this affected Coca-Cola Company operation is some countries leading to bans. Some countries totally ban the Coca-Cola Company products due to the quick decision-making process is done by the then Coca-Cola Company Middle East president (Sparrow 2014, pp. 393–414).
Negotiations will be tough and sales cycles will be long
Conclusion
In conclusion, Middle East is viewed as one of the most difficult markets to penetrate due to its cultural diversity characteristic of this market. Some of the differences between American business and the Middle East are timing differences, language differences, approach to the social relationship, approach to social events and slow decision-making process. Coca-Cola Company is an American company that has expanded its business in the Middle East. American managers need to consider changing their perception to social events as these are important in the Middle East, flexible timing is required, communication characterized with local language, verbal or face to face communication and building a social relationship or trust with business is important in the Middle East for a successful business. Middle East business generally regards hospitality and kindness as important drivers for trust and good business building foundation.
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