Countries of the region of Central and Eastern Europe (CEE) are an emerging market, as they are at different stages of development due to historical circumstances in the past decade. Most of the CEE countries were either part of the Soviet Union or allied with it politically and economically, such as Czech Republic, Slovakia, Bulgaria, Hungary, Poland, and Romania. More than a half of the century of communist’s regimes have left mark over these societies, so that the western standards of conducting business could not be fully applied (Ghauri & Usunier, 2003: 364).
The biggest change occurred when the Soviet bloc began dissolving in 1989 and subsequently disintegrated in 1991. After the Soviet Union broke down, the countries had to go through a painful process full of challenges to deal with.
The first common problem to deal with was to adjust to a loss of guaranteed export markets, as the former Soviet Union developed a regional trading bloc in order to integrate their economies. The system of the regional trading bloc functioned by dictating good and services each member country should specialize in. In return, the countries benefited by
having guaranteed markets within the bloc for their exports and by receiving subsidized good from the Soviet Union in turn for their political loyalty.
Another common challenge for those countries of which many are still dealing with, was the process of restructuring their economies from centrally organized communist systems to decentralized capitalist systems; and from totalitarianism to democracy. (Griffin & Pustay, 2013: 58 – 59.)
Czech Republic
Czechoslovakia, at that time, was ranked between one of the most industrialized societies in Europe in the period before the Second World War. However, rapid changes took place after Czechoslovakia allied with the Soviet Union. The loss of guaranteed export after the collapse of Soviet bloc resulted in a split of Czechoslovakia in 1993 into two countries, such as Czech Republic and Slovakia. The dissolution was particularly a consequence of economic and political pressures, and did complicate the process of moving Czech to more open market economy.
In addition, transformation towards capitalism system was conducted by means of privatization program. Thousands of businesses have been privatised, leased out and some have been returned to their original buyers. Nevertheless, the program got off to a fast start and brought neither new capital nor new management to the companies. (Griffin & Pustay, 2013: 59.; Ghauri & Usunier, 2003: 389.) Among the countries of Central and Eastern Europe, Czech Republic as an emerging economy, has overcome the transition period quite quickly and successfully without any political or economic crisis.
Table 8. Nature of negotiation in Eastern Europe (Based on Ghauri & Usunier, 2003:376).
Factor in Negotiation Characteristics
1. Pace of Negotiation Value of time
Slow
Moderate & punctual
2. Negotiation Strategy Offer vs. agreement
High initial demand
Group issues may be presented
3. Atmosphere
Personal relationships Distance
Decision making (overall) Hierarchy
Degree of bureaucracy Need for agenda Emotional aspects
o Degree of rationality
Very low emphasis Personal space shorter Top-down decision-making Group and team work High High Low sensitivity Rather high 4. Communication Personal style Presentations Communication style Necessary Quite formal Argumentative
Rather direct, little small talk
The Association of Southeast Asian Nations (ASEAN) was established in 1967 by the Founding Fathers of ASEAN; namely Indonesia, Malaysia, Philippines, Singapore and Thailand. Later on, other countries joined, making up what is today the ten Member States of ASEAN. Among major purposes of ASEAN are to accelerate an economic growth, social progress and cultural development alongside promoting regional peace and stability. Moreover, members of ASEAN benefit from integrative collaboration and assistance to each other within the region. (Association of Southeast Asian Nations 2013.)
Countries of the Asia-Pacific region became prevalent of ethnicity and multiculturalism due to a global migration in the 20th century (Osman-Gani & Tan 2002: 820). The Southeast Asian countries are emerging markets at a various stage of economic development. Particularly countries such as Thailand, Malaysia, and Indonesia have been significant recipients of foreign direct investments in the last few decades. American, European, and Japanese investors found these destinations an interesting place for their production platforms. Therefore, Thai, Malay, and Indonesian economies have boomed as a consequence of the foreign direct investments. Their growth temporarily slowed due to the 1997 Asian currency crisis. (Griffin & Pustay, 2013: 67.)
In term of business negotiation, Asian cultures are as diverse as they are interrelated. Thailand, Malaysia, and Indonesia incorporate a mixture of Chinese, Islamic, and Indian cultures that may make negotiation process challenging. (Cavusgil et al. 2002: 167.)
Malaysia
From 1971 through the late 1990s, Malaysia has had transformed from a production and export oriented country towards becoming one of the world’s leading trading nations in electronics and information technology. Malaysian culture is defined as a multireligious and multiracial society, since it consists of major ethnic groups such as Malays, Chinese, and Indians, who practice Islam, Buddhism, Christianity, Hinduism, and other religions. However, despite the diversity taking place, Malaysians cope with it very well and live in a harmonious environment. (Ready & Tessema 2009: 495.) Accordingly, Hofstede (1980) considers Malaysians being culturally similar despite the ethnic groups. Nevertheless, he points out on the existence of cultural differences within the ethnic groups that are likely to affect negotiation perceptions and strategies.
3.4. Summary and theoretical framework