1

Indonesia and Australia Relations in Indonesia and Australia Relations in Education: Education:

A Study on CrossA Study on Cross--cultural cultural NegotiationsNegotiations

Wahdi S. A. YudhiWahdi S. A. YudhiDeputy Director (Programme and Development)Deputy Director (Programme and Development)

Southeast Asian Ministers of Education Organisation Southeast Asian Ministers of Education Organisation (SEAMEO) Secretariat(SEAMEO) Secretariat

920 920 SukhumvitSukhumvit Road, Bangkok 10110, Thailand, Road, Bangkok 10110, Thailand, wyudhi@gmail.comwyudhi@gmail.com

OutlineOutline

ObjectivesObjectives

BackgroundBackground

MethodologyMethodology

FindingsFindings

ConclusionsConclusions

2

ObjectivesObjectives

Explore cultural differences and their impacts on negotiation Explore cultural differences and their impacts on negotiation styles between education managers in Australia and styles between education managers in Australia and Indonesia,Indonesia,

Investigate negotiation styles between two vastly different Investigate negotiation styles between two vastly different cultures or nationscultures or nations

Seek to provide practical insights to education managers Seek to provide practical insights to education managers and other executives who are dealing with their counterparts and other executives who are dealing with their counterparts in the two and perhaps other countries, and in the two and perhaps other countries, and

Finally, seek to contribute to a better understanding and Finally, seek to contribute to a better understanding and building on similarities and differences in the formation of building on similarities and differences in the formation of partnership or strategic alliances. partnership or strategic alliances.

BackgroundBackground

Great interest in whether the attitudes, behavior, Great interest in whether the attitudes, behavior, management styles and values of managers are management styles and values of managers are different across cultures and nations. different across cultures and nations.

Understanding of crossUnderstanding of cross--cultural differences in the cultural differences in the education sector has practical importance for education sector has practical importance for managers and executive to address and to meet with managers and executive to address and to meet with their counterparts in their foreign and home working their counterparts in their foreign and home working environments. environments.

This knowledge is important to education managers This knowledge is important to education managers because it can be used to predict and design because it can be used to predict and design successful strategic alliances.successful strategic alliances.

3

GeertGeert Hofstede’sHofstede’s PropositionsPropositionsPower DistancePower Distance -- extent to which the less powerful members of extent to which the less powerful members of institutions and organisations within a country relate to the poinstitutions and organisations within a country relate to the powerful werful ones, ones,

Collectivism Vs IndividualismCollectivism Vs Individualism -- a social pattern that describe a social pattern that describe how individuals are linked or relate to each other,how individuals are linked or relate to each other,

Masculinity Vs Femininity, or sometimes referred to as Masculinity Vs Femininity, or sometimes referred to as Quantity Vs Quality of LifeQuantity Vs Quality of Life -- Where Where society values are society values are characterised by assertiveness, materialism, acquisition of monecharacterised by assertiveness, materialism, acquisition of money y (Masculinity/Quantity) as opposed to relationships and concern f(Masculinity/Quantity) as opposed to relationships and concern for the or the others (Femininity/Quality) others (Femininity/Quality)

Uncertainty AvoidanceUncertainty Avoidance -- extent to which society of a country extent to which society of a country (national culture) is socialised to accept ambiguity and tolerat(national culture) is socialised to accept ambiguity and tolerating ing uncertainty about the future. uncertainty about the future.

Low vs. High Power DistanceLow vs. High Power Distance

Cultures with low power distance are Cultures with low power distance are characterisedcharacterisedby an equality of roles, and by an equality of roles, and decentralisationdecentralisation in these in these cultures is popular. cultures is popular.

Therefore, negotiators from low power distance Therefore, negotiators from low power distance require less consultation with central executives, require less consultation with central executives, meaning that there is less time to reach a decision meaning that there is less time to reach a decision before executing it.before executing it.

In contrast, cultures with high power distance have In contrast, cultures with high power distance have the characteristics of an existential inequality the characteristics of an existential inequality between higherbetween higher--ups and lowerups and lower--downs, and downs, and centralisationcentralisation is popular.is popular.

4

Collectivist vs. IndividualistCollectivist vs. IndividualistCollectivist vs. Individualist

Negotiating teams from collectivist societies tend to be large. For collectivist societies, the group is perceived as a harmonious whole. People are considered very important.

All members of the team need to be taken into account and treated with respect.

Teams from individualist societies tend to be smaller where even a single person represents an acceptable negotiating team.

Individualistic society prefers to deal individually in the negotiating table.

Negotiating teams from collectivist societies tend to be Negotiating teams from collectivist societies tend to be large. For collectivist societies, the group is perceived large. For collectivist societies, the group is perceived as a harmonious whole. People are considered very as a harmonious whole. People are considered very important. important.

All members of the team need to be taken into account All members of the team need to be taken into account and treated with respect. and treated with respect.

Teams from individualist societies tend to be smaller Teams from individualist societies tend to be smaller where even a single person represents an acceptable where even a single person represents an acceptable negotiating team. negotiating team.

Individualistic society prefers to deal individually in the Individualistic society prefers to deal individually in the negotiating table.negotiating table.

Masculinity vs FemininityMasculinity Masculinity vsvs FemininityFemininity

Negotiators from a masculine society are ambitious to be the winner. They seem to use a ‘win-lose’ negotiation style.

Ego preservation is important in a masculine society, which therefore avoids compromise, as it is a sign of weakness.

Consequently, this society would face difficulties by taking a rigid position.

This could lead to breakdowns in the negotiations.

Negotiators from a masculine society are ambitious to Negotiators from a masculine society are ambitious to be the winner. They seem to use a ‘winbe the winner. They seem to use a ‘win--lose’ negotiation lose’ negotiation style.style.

Ego preservation is important in a masculine society, Ego preservation is important in a masculine society, which therefore avoids compromise, as it is a sign of which therefore avoids compromise, as it is a sign of weakness. weakness.

Consequently, this society would face difficulties by Consequently, this society would face difficulties by taking a rigid position.taking a rigid position.

This could lead to breakdowns in the negotiations.This could lead to breakdowns in the negotiations.

5

Masculinity vs Femininity, Cont.Masculinity Masculinity vsvs Femininity, Cont.Femininity, Cont.

In a feminine society, the dominant values are caring for others, and warm relationships are important. Solidarity and solving conflicts by compromise are preferred. Feminine societies prefer long-lasting relationships and tend to use a ‘win-win’ negotiation style. Negotiators from a feminine society may not be aware of the importance of the ego of masculine people. Avoiding acknowledging the ego of their contemporaries could slow the negotiation process.

In a feminine society, the dominant values are caring In a feminine society, the dominant values are caring for others, and warm relationships are important. for others, and warm relationships are important. Solidarity and solving conflicts by compromise are Solidarity and solving conflicts by compromise are preferred. preferred.

Feminine societies prefer longFeminine societies prefer long--lasting relationships and lasting relationships and tend to use a ‘wintend to use a ‘win--win’ negotiation style. win’ negotiation style.

Negotiators from a feminine society may not be aware Negotiators from a feminine society may not be aware of the importance of the ego of masculine people. of the importance of the ego of masculine people.

Avoiding acknowledging the ego of their Avoiding acknowledging the ego of their contemporaries could slow the negotiation process.contemporaries could slow the negotiation process.

Uncertainty AvoidanceUncertainty AvoidanceUncertainty Avoidance

Cultures with strong uncertainty avoidance avoid uncertainty, the unknown and the ambiguous.

Security, formal and written rules, structure and ritual in all aspects of life are preferred.

Emphasis is placed on great value on expert advice and dislike taking risks.

In contrast, cultures with weak uncertainty avoidance are more likely to engage in risk-taking behaviour, prefer as few rules as possible, easily accept the unusual and rely on their own common sense before expert advice.

Cultures with strong uncertainty avoidance avoid Cultures with strong uncertainty avoidance avoid uncertainty, the unknown and the ambiguous.uncertainty, the unknown and the ambiguous.

Security, formal and written rules, structure and ritual Security, formal and written rules, structure and ritual in all aspects of life are preferred. in all aspects of life are preferred.

Emphasis is placed on great value on expert advice Emphasis is placed on great value on expert advice and dislike taking risks. and dislike taking risks.

In contrast, cultures with weak uncertainty avoidance In contrast, cultures with weak uncertainty avoidance are more likely to engage in riskare more likely to engage in risk--taking taking behaviourbehaviour, , prefer as few rules as possible, easily accept the prefer as few rules as possible, easily accept the unusual and rely on their own common sense before unusual and rely on their own common sense before expert adviceexpert advice. .

6

MethodologyMethodology

This study explores literatures related to cultural This study explores literatures related to cultural differences and their impacts on crossdifferences and their impacts on cross--cultural cultural negotiation, especially on the negotiation styles of negotiation, especially on the negotiation styles of Indonesians and Australians. Indonesians and Australians.

Using a modified version of the Values Survey Using a modified version of the Values Survey Module 1994 originally created by Module 1994 originally created by HofstedeHofstede to to identify differences between cultures in four identify differences between cultures in four categories, that is, Power Distance Index (PDI), categories, that is, Power Distance Index (PDI), Individualism (IDV), Masculinity (MAS), and Individualism (IDV), Masculinity (MAS), and Uncertainty Avoidance Index (UAI).Uncertainty Avoidance Index (UAI).

Methodology, cont.Methodology, cont.The respondents from Indonesia were middle The respondents from Indonesia were middle managers in the field of education. They came managers in the field of education. They came from almost all the provinces of Indonesia. Of all from almost all the provinces of Indonesia. Of all the 225 participants, the questionnaire was the 225 participants, the questionnaire was completed by as many as 203 (90% response completed by as many as 203 (90% response rate).rate).

The respondents from Australia were from The respondents from Australia were from educational institutions, including administration educational institutions, including administration staff as well as teaching staff. Two hundred staff as well as teaching staff. Two hundred questionnaires were mailed out, and 160 were questionnaires were mailed out, and 160 were completed and returned (80% response rate). completed and returned (80% response rate).

7

Shifts in the Cultural Dimensions of Indonesia and Australia from the 1970s-2003

78

14

46 4853

38

52 54

36

90

61

5149

64

48

39

0

10

20

30

40

50

60

70

80

90

100

PDI IDV MAS UAI

Indonesia 1970 Indonesia 2003 Australia 1970 Australia 2003

IDV 0 Small power distance Large power distanceCollectivist Collectivist

* Indonesia 1970's (PDI 78, IDV 14)

*Indonesia 2003 (PDI 53, IDV 38)

50

*Australia 2003 (PDI 49, IDV 64)

*Australia 1970's (PDI 36, IDV 90)

Small power distance Large power distanceIndividualist Individualist

100 0 50 100

PDI

Relationship between IDV and PDI

8

MAS 0 Small power distance Large power distanceFeminine Feminine

* Indonesia 1970's (PDI 78, MAS 46)

50 *Australia 2003 (PDI 49, MAS 48)

*Indonesia 2003 (PDI 53, MAS 52)*Australia 1970's (PDI 36, MAS 61)

Small power distance Large power distanceMasculine Masculine

100 0 50 100

PDI

Relationship between MAS and PDI

UAI 0 Weak UAI Weak UAIFeminine Masculine

*Australia 2003 (UAI 39, MAS 48)

* Indonesia 1970's (UAI 48, MAS 46)50

*Australia 1970's (UAI 51, MAS 61)*Indonesia 2003 (UAI 54, MAS 52)

Strong UAI Strong UAIFeminine Masculine

100 0 50 100

MAS

Relationship between UAI and MAS

9

IDV 0 Weak UAI Strong UAICollectivist Collectivist

* Indonesia 1970's (UAI 48, IDV 14)

*Indonesia 2003 (UAI 54, IDV 38)

50

*Australia 2003 (UAI 39, IDV 64)

Weak UAI *Australia 1970's Strong UAIIndividualist (UAI 51, IDV 90) Individualist

100 0 50 100

UAI

Relationship between IDV and UAI

High ßà LowRisk TakingOne Leader ßà ConsensusTeam OrganisationBottom Up ßà Top DownAgreement BuildingSpecific ßà GeneralAgreement FormHigh ßà LowEmotionalismHigh ßà LowTime SensitivityDirect ßà IndirectCommunicationsInformal ßà FormalPersonal StylesWin/Lose ßàWin/WinAttitudesContract ßà RelationshipGoal

Range of Cultural ResponsesNegotiation Factors

Source: Salacuse 1998, p. 223

The Impact of Culture on a Negotiation

10

High ßà LowRisk TakingConsensus ßà One Leader Team OrganisationTop Down ßà Bottom UpAgreement Building

Not availableAgreement FormHigh ßà LowEmotionalismLow ßà HighTime Sensitivity

Indirect ßà DirectCommunicationsFormal ßà InformalPersonal StylesTend to be Win/WinAttitudes

Contract and RelationshipGoalIndonesia ßà Australia

Cultural ResponsesNegotiation Factors

The Impact of Culture on Negotiation: Indonesia and Australia

Key FindingsKey FindingsCultural DifferencesCultural Differences

The study demonstrates and identifies cultural The study demonstrates and identifies cultural differences between Indonesia and Australia, and differences between Indonesia and Australia, and through a comparison with the findings of through a comparison with the findings of HofstedeHofstede in the in the 1970s, 1970s, indentifiesindentifies significant changes over this period of significant changes over this period of thirty years. thirty years. It is interesting to observe a tendency for reduced It is interesting to observe a tendency for reduced differences in all four indices: differences in all four indices: PDI, IDVPDI, IDV, MAS, and UAI. , MAS, and UAI. By this, it can be understood that while there are By this, it can be understood that while there are differences between Indonesia and Australia, there is a differences between Indonesia and Australia, there is a tendency for these differences to be reduced. Indonesia tendency for these differences to be reduced. Indonesia tends to have characteristics like Australia, while tends to have characteristics like Australia, while Australia has a tendency to adopt Indonesian Australia has a tendency to adopt Indonesian characteristics. characteristics.

11

Key Findings Cont.Key Findings Cont.Indonesians, as members of a large PDI, Collectivist, Indonesians, as members of a large PDI, Collectivist, strong UAI, and a more Masculine country, tend to take strong UAI, and a more Masculine country, tend to take longer to reach an agreement, work in larger groups, and longer to reach an agreement, work in larger groups, and establish friendships before doing business. They tend to establish friendships before doing business. They tend to have a lower tolerance for uncertainty and ambiguity, are have a lower tolerance for uncertainty and ambiguity, are more bureaucratic in decisionmore bureaucratic in decision--making, and aim to making, and aim to achieve a big deal which is often of a lesser quality.achieve a big deal which is often of a lesser quality.Australian negotiators, who have a Small Power Australian negotiators, who have a Small Power Distance Index, Individualism, weak UAI and are more Distance Index, Individualism, weak UAI and are more Feminine tend to be quicker in reaching a result, prefer Feminine tend to be quicker in reaching a result, prefer to be in smaller teams, pay less attention to creating to be in smaller teams, pay less attention to creating friendships, exhibit more tolerance for uncertainty and friendships, exhibit more tolerance for uncertainty and ambiguity, are less bureaucratic in making decisions, ambiguity, are less bureaucratic in making decisions, and try to achieve a smaller deal but often of high and try to achieve a smaller deal but often of high quality.quality.

Key Findings Cont.Key Findings Cont.Impacts of Cultural Differences on Negotiation StylesImpacts of Cultural Differences on Negotiation Styles

As observed previously, Indonesian and Australian As observed previously, Indonesian and Australian cultures are different, hence the styles of negotiation are cultures are different, hence the styles of negotiation are different. The two nations are seen as differing culturally, different. The two nations are seen as differing culturally, although they are tending to converge. Therefore, for a although they are tending to converge. Therefore, for a negotiator, in addition to being aware of the negotiator, in addition to being aware of the characteristics of the two countries, it is important to also characteristics of the two countries, it is important to also be aware of the changes that are tending to bring them be aware of the changes that are tending to bring them closer together.closer together.

12

ConclusionsConclusionsIndonesian and Australian cultures are different. Thus, Indonesian and Australian cultures are different. Thus, their negotiation styles differ. Although both cultures their negotiation styles differ. Although both cultures have certainly been proven to be different, after the have certainly been proven to be different, after the research carried out by research carried out by HofstedeHofstede in the 1970s and by in the 1970s and by the Researcher, it is clear that there is a shift which the Researcher, it is clear that there is a shift which points to similarities in the cultures of both Indonesia and points to similarities in the cultures of both Indonesia and Australia.Australia.

The insights gained from this study can be used to The insights gained from this study can be used to promote an understanding of the characteristics of the promote an understanding of the characteristics of the two nations. These insights are important for both two nations. These insights are important for both negotiating parties because they can assist them in negotiating parties because they can assist them in learning their counterpartslearning their counterparts’’ characteristics even before characteristics even before they face each other. With these insights, each party can they face each other. With these insights, each party can make efforts to avoid undesirable make efforts to avoid undesirable behaviourbehaviour and expect and expect successful negotiations. The findings from this study can successful negotiations. The findings from this study can also be used by a third party who wishes to have also be used by a third party who wishes to have successful communications with the two nations. successful communications with the two nations.

Thank you.Thank you.