![]() ![]() On too many occasions we have seen management teams entering a new geographical market through a partnership in order to save time (since the local partner already had the right and necessary understanding of the market) and in order to share the risk with a local key player. It will also enable both parties to better grasp difficulties and restraints that can come up during the decision-making process. This allows both parties to better understand and anticipate the other side’s way of thinking and points of view. during after-work gatherings or lunch breaks. This can take place in an informal setting, e.g. The best way to anticipate such gaps is to go through a learning process of each other’s differences. For example, northern Europeans tend to be linear in their argumentation (“First things first”, including the definition of milestones and a clear action plan) while Chinese tend to negotiate in a more circular manner (going back and forth in their argumentation). Negotiation styles between different cultures can also be a source of frustration during the deal phase and the critical moments of the operating phase. The third cultural element is the existence of different negotiation styles. This difference in management styles requires alignment on both sides to have a good level of execution. ![]() Take Russia: if a Western leadership team is used to a more participative management style - giving greater freedom to employees and expecting a pro-active attitude from them - it might become difficult to establish proper communication if the local Russian employees are accustomed to a more autocratic style of leadership, expecting repeated and detailed instructions. There can be a great difference across geographies between an autocratic and a more participatory management style. The second cultural aspect which needs to be borne in mind is different management styles. This different timeline has a significant impact on the decision-making process when it comes to investments and skill development which have a long pay-back. Many Western companies tend to work on a three- to five-year plan, while enterprises from developing parts of the world usually plan only one year ahead, in view of local economic uncertainty. One of many significant problems arises when the two parent companies of a joint venture (the shareholders) have different expectations about the overall timeline as well as the particular milestones while developing their strategy. ![]() First, is what we label different place, different timing. Three main things should be taken into account. ![]()
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