Cross-Cultural Communication Theory: A Case Study Examination of Face Negotiation. Emily Lepkowski. May 1, Professor Corey Davis

Transcription

1 Cross-Cultural Communication Theory: A Case Study Examination of Face Negotiation Emily Lepkowski May 1, 2018 Professor Corey Davis University of Wisconsin-Whitewater

2 Table of Contents Case Background 1 Analysis of Key Publics 2 Market Development and Tactics 3 Strategic Tactics Employed in Malaysia 3 Effectiveness of Messages to Key Publics 4 Approaches to Solving the Problem 4 An Overview of FNT 5 Application of FNT 6 Suggestions for Success 7 Conclusion 8 References 10

3 1 Cross-Cultural Communication Theory: A Case Study Examination of Face Negotiation Taking business to a new market not only benefits companies from a financial standpoint but from a public relations (PR) and communications standpoint. Expanding to international markets allows companies to have increased attention from the media, attention from key audiences and consumers, and the opportunity to build relationships with publics of other cultures that are difficult to reach. The outcome of whether these benefits will be positive or negative for an organization depends on how well a company executes the task of moving into a new market. Similarly, organizations can face many cross-cultural problems or factors, all of which can be unforeseeable or known. These cross-cultural problems can either be short-lived or have long term effects on the reputation of an organization. This paper will analyze the attempt by Nu Skin International Inc. to expand its market by looking at the tactics and strategies used in the process. Communication theories will also be applied to determine and explain the success, or failure, of professional approaches in the process of entering a new market. Case Background The case study takes place in the mid-1990s featuring Nu Skin International Inc, a growing multinational company that sells personal care and nutrition products. Founded in Utah, Nu Skin operates in 25 countries throughout North America, Europe, Asia, and the Pacific. Nu Skin s reputation is known for the strength of its products as well as dedicated staff and investors. It s important to note that Nu Skin carries out sales through network marketing, a selling method that gained much popularity in the 90s while also being criticized for questions of ethics and legitimate business practice. With success in Asia, Nu Skin wanted to seize the

4 2 opportunity to expand to Malaysia due to an economic growth and rise of the middle class in the country. Nu Skin viewed Malaysia as a great entry point to the rest of Southeast Asia. However, towards the end of Nu Skin s market entry process, product distributors created a cultural conflict. Despite efforts to keep early activities a secret, distributors began selling products before the companies marketing plan and licenses were approved by the Malaysian government. Distributors violated the Malaysian Direct Selling Act of 1993 and as a result, the company was banned from doing business in Malaysia. Nu Skin was forced to shut down operations before officially opening in Malaysia and the violation received a lot of press from local newspapers expressing anger toward Nu Skin. Analysis of Key Publics This case study involves a few different segments of audiences. First, the goal of bringing Nu Skin s products into Malaysia was to target people in Malaysia to buy its line of skin care products and have them gain popularity in the rest of Southeast Asia. Audiences who Nu Skin were hoping to interact with before opening were people who support their products, people anticipated the opening of this market, people who are aware of the products but do not buy them, and people unaware of Nu Skin. However, the two main publics which held all the interactions were the Malaysian government and the employees of Nu Skin. Nu Skin needed to target the Malaysian government to allow them to bring its business into the country. Throughout the process, they needed to foster a relationship with officials to obtain licensing, documentation, and other logistics. Higher level management was involved from Nu Skin while breaking into the market but also trying to heal the relationship after being kicked out of Malaysia. The Nu Skin distributors were also a key public because they were the people representing Nu Skin,

5 3 interacting with the public, making sales, promoting, and educating people on their products. Finally, like all organizations, investors and other stakeholders are a key public. Market Development and Tactics Nu Skin utilizes the same processes and tactics in opening each international market, a process which has given them smooth openings in many other markets. Nu Skin uses a lot research and tactics when opening a new international market. The company works with local law firms in the host country to learn about in country knowledge and guide them through handling the local government. Nu Skin also utilizes local translation resources to make sure translations in communication are appropriate and culturally correct. The company uses local agencies to handle promotion, media attention, outreach, and legal issues. The PR departments are not very involved and have limited responsibilities. As soon as the market is opened, agencies including PR, are called off or scaled down. Moving forward, Nu Skin relies on natives with business experience to staff distribution centers and keep things running. With the perspective of how Nu Skin typically opens international markets, the next section will analyze specific tactics used in Malaysia. Strategic Tactics Employed in Malaysia Nu Skin appointed a representative to Kuala Lumpur that they thought would be able to communicate well on behalf of the company. The representative had lived in Taiwan for several years, spoke English, and Mandarin. With 5 million Chinese people living in Malaysia speaking Mandarin, Nu Skin determined he could perform successfully. However, the representative turned out to be problematic because he had no experience with the Malaysian culture and could not understand locals. Locals also did not take well to the thirty-five-year-old because of the age

6 4 respected culture. The other key tactic employed was notifying Nu Skin s corporate employees to keep activities a secret and be discreet so that distributors do not find out, thus acting before allowed. The next section will analyze the messages given to the involved audiences. Effectiveness of Messages to Key Publics The key messages given to distributors and other internal publics involved in the project were simply to keep everything a secret. As a company who has successfully integrated into many overseas markets, the message to employees and distributers was very informal. Granted, it is a large company and it is difficult to control so many people, the situation should have been taken with more seriousness and formal procedures. As for the representative communicating with the government and Malaysian locals, messages were ineffective. He did not understand the culture and those he needed to communicate with did not accept him well. In addition, there was little communication between Nu Skin and the government. Nu Skin waited for the approval of their licenses even when both parties were unaware of where the other was at. Approaches to Solving the Problem Nu Skin used a few different approaches once they found out they were being kicked out of Malaysia and banned from operating there. First, Nu Skin tried to repair relations with consumers who had bought products early by setting up a program to refund people s money. However, this approach caused more problems later after Malaysian government officials stated they had not heard of their attempts to offer refunds. Nu Skin also launched its own investigation to try and take responsibility and catch the distributors who violated the law. Nu Skin s agencies tried to negotiate with the Malaysian government and held multiple meetings together. The Malaysian government ultimately denied working with Nu Skin. Not only did Nu Skin s goal to

7 5 open a new market in Malaysia fail, but its strategies to resolve the situation failed as well. The communication theory of Face Negotiation (FNT) can be used to explain how each side managed this conflict and why it was not solved. An Overview of FNT FNT explains how cultural differences influence individuals when managing conflicts. The term face refers to one s sense of positive image or worth in social settings. FNT was developed by California State University professor Stella Ting-Toomey in 1985 (Stella Ting- Toomey). Ting-Toomey also used work developed by sociologist Erving Goffman as well as scholars Stephen Levinson and Penelope Brown, the two who originally developed the theory (Stella Ting-Toomey). FNT uses the concept of face and facework, which are communication strategies used to uphold, support or challenge another person s face (Fletcher et al.,2014). Using these concepts, FNT assumes people of different cultures try to maintain face in all communication encounters, face is especially difficult in uncertain situations like conflict, and that there are cultural, individual, and situational variables that influence communication (Fletcher et al.,2014). Cultural dimensions like individualism vs. collectivism and power distance are applied to the culture and how the values directly influence their conflict style in a situation. For example, because individualistic cultures have a high value of independence and self, they tend to use dominating conflict strategies that are more outcome focused (Oetzel & Ting- Toomey, 2003). Someone from an individualistic culture might use passive aggressiveness as a dominating strategy to show their emotion and get a favorable outcome for themselves. Collectivistic cultures prioritize others before themselves and are more likely to use avoiding conflict styles (Oetzel & Ting-Toomey, 2003). Since defining FNT and various concepts in the

8 6 theory, the next section will apply FNT to the communication conflict between Nu Skin and the Malaysian government. Application of FNT Nu Skin s strategies to open market in Malaysia were not very effective. I think one of the biggest problems for Nu Skin is that they used agencies and law firms for all their work and information. The American business style focuses on reaching a deal or completing a task as soon as possible whereas Asian countries like to build a trustworthy relationship. Using firms for the majority of project work rather than in house-staff was not a good approach to fostering a relationship with the Malaysians because it is impersonal. In addition, representatives who were appointed to communicate with locals were not equipped to do so. Asian cultures are also very reluctant to show displeasure or disapproval (Schermerhorn & Bond, 1997). Government officials never expressed their issues with Nu Skin to spare creating conflict until articles about the company were printed in The Malay Mail. Since these articles showed many people s negative feelings toward Nu Skin s early distribution mistake, Malaysian officials finally reacted by banning Nu Skin in order to save themselves social embarrassment. It s important to note that Nu Skin s attempt to show responsibility by offering refunds was refuted by Malaysian officials who said they did not hear of their attempts to give refunds. While this could have been a miscommunication, based on FNT, this could have been a facework strategy to try and challenge Nu Skin s face by making it seem like they did not follow through with offering refunds. FNT also explains why there was lack of communication between the two organizations in the sense that the Malaysian government is a direct reflection of their local culture. They did not want to publicly criticize a multi-national company like Nu Skin for both parties sake. Such a mistake could also cause image problems and pushback for a local government. Furthermore, even

9 7 though Nu Skin wanted to go into Malaysia because of their economic growth, they were still a developing country in the mid 90 s and needed to preserve their favorable image because of this. A study in the leadership and organizational development journal identified the importance of attitudes like respect, friendship, interest in the host culture, sincerity, honesty and patience as essential for business relationships in Asia (Grosse, 2007). Nu Skin relied on impersonal tactics and others to pass down cultural information, which seemed to bypass establishing these characteristics. I think because of this; the Malaysian government was even more unwilling to resolve the problem with Nu Skin despite many meetings to try and regain authority to operate. Once the problem escalated to the point of bad press, it was in the best interest for Malaysia to act before things worsened thus severing ties with the company. Suggestions for Success There are a few things I would have suggested that Nu Skin would have done or improved in order to have succeeded in Malaysia. I think relying on law firms so heavily to navigate the culture and government functions hurt Nu Skin. In-house staff would have had a much better opportunity to build some of the key attitudes like trust and sincerity while showing an interest in Malaysia s culture. If the relationship between Nu Skin representatives and Malaysian officials was developed genuinely, they might not have cut ties with Nu Skin for good or been open to working with them to fix the problem. The Malaysian government may have felt differently about their perceived face if they felt confident about their relationship with Nu Skin, which would have helped the conflict as well. In addition, Nu Skin should have utilized PR professionals as equally as they used legal professionals. The two worked in similar ways but both have different perspectives. PR professionals might have been able to catch on to communication issues or at least be on alert and monitoring the relations. Nu Skin was on the

10 8 right track with hiring a representative for communication. However, they failed in doing thorough cultural research to make sure he could be effective. They should have made sure he was age appropriate, equipped with the language skills, and even called in a third-party expertise to further train him. Communicating with Nu Skin employees who were well-educated would have saved Malaysian officials embarrassment. Lastly, Nu Skin needs to use community relations to address distributors and make sure consequences and policies are set. Preventative measures should be taken so the crisis does not happen again in other countries. Conclusion Cross-cultural communication is vital to any kind of campaign or overseas market. There can be very fine lines in cultural interactions that can have make or break consequences depending on how they re handled. Nu Skin has shown they can be successful in international markets based on their operations around the world. However, they should not assume they can use the same process for entering every market. Nu Skin should be constantly evaluating, researching, and adjusting their strategies and tactics to each culture. This case exhibits how companies must be aware of cultural differences. They should not assume communication will occur the same in each environment. When PR practitioners, marketers, and advertisers are aware of FNT it can help them to anticipate the other parties behaviors or reactions. Especially when conflict arises. By simply being prepared and doing research, organizations can use cultural dimensions to their advantage to manage the concept of face for each party involved. In this case history, it was too late to pick up on the impending crisis and try and repair relations. However, companies can be proactive with FNT in knowing how to act appropriately. Understanding how to handle different cultures enables professionals to build transparent

11 9 relationships that will even help foster the concept of face. Without the foundation and knowledge of the host culture, new markets or cross-cultural campaigns will not be successful.

12 10 References Fletcher, C. V., Nakazawa, M., Chen, Y., Oetzel, J. G., Ting-Toomey, S., Chang, S., & Zhang, Q. (2014). Establishing Cross-Cultural Measurement Equivalence of Scales Associated with Face-Negotiation Theory: A Critical Issue in Cross-Cultural Comparisons. Journal of International & Intercultural Communication, 7(2), doi: / Grosse, C. (2007). US-Asian Communication Strategies to Develop Trust in Business Relationships. Global Business Languages, 10(1). Retrieved April 27, John R. Schermerhorn, Michael H. Bond, (1997) "Cross cultural leadership dynamics in collectivism and high-power distance settings", Leadership & Organization Development Journal, Vol. 18 Issue: 4, pp , Oetzel, J., & Ting-Toomey, S. (2003). Face Concerns in Interpersonal Conflict A Cross- Cultural Empirical Test of the Face Negotiation Theory. Sage Journals, 30(6). doi:doi.org/ / Stella Ting-Toomey on Face-Negotiation Theory [Interview by E. Griffin]. (n.d.). Retrieved April 27, 2018, from youtube.com/watch?time_continue=7&v=bqjcmas_dnw

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