In eastern Europe, countries are shifting from subjective faith in a communistic ideology to a reliance on more objective facts and reasoning. Western Europe has traditionally relied heavily on analytical, objective facts as the focus of evidence. The locus of these facts is based in ideologies of democracy in Germany and the social welfare state in Sweden. However, in Switzerland, the segments of the population that are not German or French rely on subjective feelings based on faith in nationalism and Utopian ideas.
Middle Eastern countries tend to value their religious faith as the primary source of evidence and truth. For instance, in Israel, subjective faith in Judaism and the success and security of the nation are prominent influences. Objective facts may supplement these feelings, but the strong sense of fatalism pervading Israel is clear in a proverb that states, "Life is too short to keep arguing; let's make a deal and be done with it." In Egypt and Saudi Arabia, faith in Islamic ideas forms the basis of all truth. Objective facts may support Islamic ideologies for many Egyptians, but for most Saudis, objective facts seldom overrule their faith.
Social Trust.Another variable that confounds cross-cultural business negotiation is the issue of trust. Eventually, negotiators have to trust their counterparts. This trust can be based on written laws of a particular country or it can be based on friendship and mutual respect and esteem. Among the Chinese, for example, trust derives from perceptions of personal character, honesty, sincerity, and being true to your word. We have alluded to the fact that establishing trust before conducting business is very important in several cultures, but it is also necessary to consider the trust level of the society as a whole in determining the potential for successful business negotiations. Fukuyama (1995: 26) labels trust variable social capital and defines it as: a capability that arises from the prevalence of trust in a society or in certain parts of it. It can be embodied in the smallest and most basic social group, the family, as well as the largest of all groups, the nation, and in all the other groups in between. Social capital differs from other forms of capital insofar as it is usually created and transmitted through cultural mechanisms like religion, tradition, or historical habit.
Trust or social capital has a profound impact on business from the transaction itself to the entire culture's economic growth. Cultures can be placed on a continuum of high trust to low trust. For example, cultures such as Germany, Japan, and the United States are high-trust oriented in their business dealings. They have a marked proclivity toward association with other cultures. Their trust in dealing with other cultures has allowed them to create large, private business organizations. It is no accident that the world's best-known brand names – Kodak, Ford, Siemens, Mitsubishi, Hitachi – come from countries that are also good at creating large organizations. In contrast, in low-trust societies like China, Taiwan, Hong Kong, France, and Italy, the reluctance to trust foreigners has resulted in many small family businesses.
As we mentioned earlier, the cultures of the world are becoming increasingly dependent on one another. As a result, the most useful kind of social capital is often not the ability to work under the authority of a traditional community or group, but the capacity to form new associations and to cooperate within the terms of reference they establish. Success in cross-cultural business negotiations requires that you factor social capital or trust intercultural business communication.
The United States is becoming a nation of increasing cultural diversity. With the U.S. minority population now exceeding 75 million, about a quarter of the workforce is now composed of minorities. Demographers predict that by the year 2015, because of the move toward a multiracial, multiethnic society, minorities will make up more than one-third of the U.S. population.
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