THE SIGNIFICANCE OF CULTURE ON BUSINESS NEGOTIATIONS IN THE CONTEXT OF KOREA AND COLOMBIA CASE STUDY OF "EL CAFETAL CO. LTD"

다국어 초록 (Multilingual Abstract)

Cross cultural negotiation becomes a common area of research every day because businesses all over the world are spreading their frontiers beyond domestic markets. Effective international negotiators need to know not only the essentials of trade, but also how culture can impact the dealers’ behavior and general negotiation process.

Culture strongly influences how people think, communicate, behave and negotiate. If languages mistakes and violations of local protocol are not reduced, probably those differences affect the kinds of transactions, benefits, concessions and future agreements between parties.

Korea and Colombia signed a bilateral Free Trade Agreement on 21th February, 2013, but it was declared in effect since 2015. Under this agreement both countries will abolish tariffs on over 96 percent of the other country’s products within ten years after the beginning of this bilateral accord. Korea hopes to increase its exports of automobiles, automotive components, plastics, and steel, while Colombia expects a growth of exports of agricultural products, processed food, textiles and natural resources including crude oil.

Successful business between these two countries requires not only a good study of the geographical, economic, and historical situation of its counterpart, but also understanding how cultural differences affect decision making and negotiation process. This research aimed to determine and explain these differences into a descriptive and qualitative way by analyzing a real case of a coffee company dealing cross-cultural negotiations in Seoul as much as some interviews with Korean and Colombian business people involved in diverse international business areas each other, in order to provide practical comments and recommendations for new negotiators who want to explore new markets and trade goods and services because of this FTA.

The main issues encountered in this thesis relate to reduce language problems, follow the formal protocol with the appropriate meaning of reputation, familiarization, hierarchy, use of time, and decision-making process. In the same way, strategies to avoid undesirable comments or cultural stereotypes, alternatives to time lag between two countries in terms of feedback and support. Finally, dealing with the most challenging matter when trading Koreans and Colombians, which is to demonstrate how they can be good commercial partners and get very lucrative revenues into a win-win negotiation.

Keywords: Culture, Negotiation, Republic of Korea, Republic of Colombia, Coffee Business, FTA.

목차 (Table of Contents)

• CHAPTER I 1
• 1.1 INTRODUCTION 1
• 1.2 PROBLEM DISCUSSION 2
• 1.3 PURPOSE OF THE STUDY 4
• 1.4 RESEARCH SCOPE 5
• 1.5 GENERAL BACKGROUND 5
• 1.5.1 THE REPUBLIC OF KOREA AND THE REPUBLIC OF COLOMBIA 5
• 1.5.2 FREE TRADE AGREEMENT 9
• 1.5.3 EL CAFETAL CO. LTD 9
• 1.6. RESEARCH METHOD: CASE STUDY 10
• CHAPTER II 12
• 2.1 LITERATURE REVIEW 12
• 2.2 CULTURE 12
• 2.3 NEGOTIATION 12
• 2.4 CULTURE AND NEGOTIATION 13
• 2.5 PRICE AND PRICING 18
• 2.6 COMPARING CULTURES 21
• 2.6.1 REPUBLIC OF KOREA 21
• 2.6.2 REPUBLIC OF COLOMBIA 26
• CHAPTER III 32
• 3.1 CASE STUDY 32
• 3.2 EL CAFETAL CO. LTD 32
• 3.3 LESSONS LEARNED 37
• 3.4 IMPLICATIONS (LEARNING IN ACTION) 38
• CHAPTER IV 42
• 4.1 CONCLUSIONS 42
• 4.2 RECOMMENDATIONS 44
• REFERENCES 47
• INTERNET SOURCES 49
• APPENDIX 51
• KOREA 51
• COLOMBIA 52
• PICTURES 53
• RESPONDENTS INFORMATION 54
• MAIN TOPICS OF CONVERSATION 56