how best can we negotiate across cultures

Cross cultural Negotiations

HOW BEST CAN WE NEGOTIATE ACROSS CULTURES?

Negotiating across cultures

Selecting your negotiating style, tactic and strategy

Term paper: Group Work

Group 5

United States International University.


Abstract

Negotiation is basic human activity. Its process we undertake in everyday activities to manage

our relationships both business and personal. The latter type of negotiations is what we are

interested in this paper. Business negotiations are increasingly recognized as a full part of the

managerial process, highly relevant to the implementation of business strategies. Since

international business is all around us and many thousands of companies are already involved,

being able to negotiate effectively with foreigners has become a critical skill.

This paper first discusses the fundamentals, what is culture, negotiation, intercultural discussions

and then goes on to discuss different negotiating styles, tactics and strategies and draw a

conclusion as to which best suits international and cross cultural negotiations.1


INTRODUCTION

Over the years culture has had different definition from different authors. Each of the authors has

brought out different characteristics of culture that wholesomely make up a comprehensive

definition. Below are some of the definitions of culture:

It’s a technical term used by anthropologists to refer to a system for creating, sending, storing,

and processing information developed by human beings, which differentiates them from other

life forms (Hall 1990).

It’s "to human collectivity while personality is to the individual" (Hofstede 1984, p.21).

It consists of ideals, values, and assumptions about life that are widely shared among people and

that guide specific behaviors. (Brislin 1993)

Negotiation on the other hand is a much abused word. It’s not another term for bargaining or

selling. Both the relevant skills and the appropriate circumstances are quite different for these

three activities. To fully understand the difference note that selling is about satisfying a specific

customers specific needs, usually on a competitive basis against other supplier in exchange for

money, but negotiation is concerned with resolving conflict between two or more parties, usually

by the exchange of concessions (Thorn, 2004, p. 6). Bargaining is more like haggling in a typical

“bazaar” setting (Chauri & Usunier, 2003).Thus negotiation also has different definitions with

different authors;


Chauri and Usunier (2003) define negotiation as a voluntary process of give and take where both

parties modify their offers and expectations in order to come closer to each other. Brett (2007)

also defined negotiation as the process by which people with conflicting interests determine how

they are going to allocate resources or work together in the future. She goes on to say negotiation

is not only for making deals. It is and should be used to resolve disputes and reaching decisions

in teams and other multiparty environments.

Negotiation is a process that involves balancing matters between two parties so that you not only

get what you want, but get what you want in the best possible way. It’s the art of concluding a

deal, and the arrangement of all elements that deal; for instance, the terms and conditions in

some business deals. It’s a form of communication (Forsyth, 2002, p.p 6, 7).

Harris and Moran (2000) state that, negotiation is the process in which two or more entries come

together to discuss common and conflicting interests to reach an agreement of mutual benefit. In

international business negotiations then, the difference in the negotiation from culture to culture

include language , cultural conditioning , negotiating styles , approaches to problem solving,

implicit assumptions, gestures and facial expressions , and the role of ceremony and formality (p.

54).

All in all negotiation is at the heart of every transaction and for the most part it comes down to

interaction between two sides with a common goal but divergent methods.


Negotiating across borders differs markedly from negotiating within the domestic market.

Number of new factors has to be considered, including different languages, cultural sensitivities,

legal systems, tax regimes, labor laws and different business practices. According to Brett (2007

p. 1) the negotiating environment can be further complicated by government-led bureaucracy,

restrictive regulations and, in some cases, direct government interference. All of this can be set

against a background of political and economic instability, with currency fluctuations and

uncertainty stemming from ideological differences.

The process of negotiation requires individuals and groups to adopt a position based on their

interests and needs. Underlying cultural orientations and core values, which may be

nonnegotiable or, at best, marginally negotiable, influence these positions (Acuff, 1997). To

arrive at a mutually beneficial agreement, both sides must conduct “cultural due diligence.”

Cultural due diligence is the process of clarifying the other side’s cultural orientations and the

resultant behavior before entering into the negotiation (Kennedy, 2004, p. 156).

Since we are going to discuss negotiation styles and which style suits the best. First we looked at

the core factors and strategies that will affect cross cultural negotiations. Cultural factors play an

important role in international business negotiations (Chauri & Usunier, 2003). We have chosen

to use the following factors that are most important in this respect:


Negotiation strategies

A negotiation strategy is an integrated set of behaviors chosen because they are thought to be the

means of accomplishing the goal of negotiating.

All the negotiators have interests, priorities and strategies. These are affected by culture. Culture

is the unique character of a social group, including the values and norms shared by members of

the group and the group's social, economic, political and other institutions. Cultural values direct

the attention of the negotiator to the issues that are more important and influence the negotiators'

interests and priorities. Cultural norms define the behaviors that are appropriate and

inappropriate in negotiation and influence the negotiators' strategies.

How Culture affects Negotiation Strategies

When people negotiate, their behaviors are strategic and their strategies may be culturally biased.

Not only are there differences in strategic behavior between cultures, but also within cultures and

overlap between the cultures. With the result, some members of a culture may negotiate less like

their own cultural prototype and more like the prototype of another culture.

Negotiation Strategies are linked with culture because cultures evolve norms to facilitate social

interaction. Norms are functional because they reduce the number of choices a person has to

make, about how to behave and how others in the culture will behave. Culture may also affect

the strategies that the negotiators bring to the table – for example, the way they go about


negotiating, whether they confront directly or indirectly, their motivations, and the way they use

the information and influence.

* Confrontation

* Motivation

* Influence

* Information

Types of Negotiations Strategies

Communication Strategies

Communication is both a symptom and a cause of organization performance problems. Over the

years, we've heard hundreds of managers use communication as a vague catchall for every type

of organization and team problem imaginable. Generally, the root cause of many

"communication problems" was deeper than that.

Poorly designed organizations, ineffective processes, bureaucratic systems, unaligned rewards,

unclear customer/partner focus, fuzzy visions, values, and purpose, unskilled team leaders and

members, cluttered goals and priorities, low trust levels, and weak measurements and feedback

loops all cause communication problems. Whenever a manager contacts us to solve a

"communication problem," we always know we have some digging to do.


Communication strategies, systems, and practices do play a central role in high-performance.

Information, understanding, and knowledge are the lifeblood of the organizational body. A

thoughtful and comprehensive communication strategy is a vital component to any successful

change and improvement. The education and communication strategy sets the tone and direction

of improvement efforts.

Education and communication strategies influence the energy levels for change and

improvement. Strong communications keep everyone focused on goals and priorities while

providing feedback on progress and the course corrections needed. Effective communication

strategies, systems, and practices have a huge and direct effect on organization learning and

innovation.

Effective communication strategies, systems, and practices:

Deliver clear and consistent messages to all parts of the organization

Are simple, direct, and fast with a minimal number of filters and interpreters

Inspire and energize

Are user-friendly, human, and personal

Move information, experiences, learning, ideas, direction, and feedback equally well in

all directions — up, down, and across the organization

Provide multiple channels

Are only possible in an atmosphere of trust and openness


Despite all their talk about communications, many managers don't appreciate the highly strategic

role communication plays in their improvement efforts. Consequently, they don't spend enough

time thinking through what they want to say and the best ways to say it. But the amount and type

of communicating we do speak volumes about how much we trust people and whether we see

people as partners or "subordinates" who "work for me." Our communication strategies, systems,

and practices set the dimensions of the environment we are putting people in.

The literature on cross-cultural communication suggests that different cultures may have

different information-sharing strategies in negotiation. An Good Example Brett et al. (1998)

found that U.S. and Japanese negotiators had similar norms for information sharing in

negotiation, but subsequent research found that U.S. negotiators embraced direct information-

sharing strategies while Japanese negotiators used indirect information-sharing strategies (Adair,

Okumura, and Brett 2001). Other accounts of U.S. and Japanese negotiation styles also report

different communication styles; for example, Japanese negotiators are less likely to say “no” and

more likely to remain silent than U.S. negotiators (Graham and Sano 1989; March 1990). The

various norms and strategies for information sharing seen in the U.S. and Japan suggest that

culture may account for different communication strategies in the six cultures under

investigation.

Power Strategies

Power in negotiation is the basis of one party’s ability to gain advantage over the other party

through positional, distributive, or influence tactics. Egalitarianism versus hierarchy is a cultural


value with implications for the use of power strategies in negotiation. Hierarchical cultural

values stress the importance of status and power whereas egalitarian cultural values stress

sameness, equal opportunity, and achievement.

Brett et al. (1998) found that hierarchical cultures in comparison to egalitarian cultures were

more likely to espouse norms for distributive tactics. Distributive tactics (i.e. making threats or

using arguments) are power strategies that are focused on individual, not joint, gains.

Distributive tactics are normative in hierarchical cultures because negotiators use positional and

persuasive arguments to make status and power differences clear.

When a clear negotiation strategy has been chosen a style is need to close the deal, a negotiator

will chose a style depending on what the negotiator

Negotiation styles.

Before buyers and sellers can engage in business, they need to negotiate terms of agreement or

contracts. Each party‘s individual culture will determine its way of thinking, values, norms

and behaviors (Simintiras & Thomas, 1998; Hung, 1998; Woo & Pru‘homme, 1999; Chang,

2003). Gulbro & Herbig (1994) indicated that different cultures can generate distinct

negotiation styles. These different styles in business negotiation are the product of differences

in communication, protocols, persuasion strategies, and personal characteristics, including

accommodation, determination, flexibility, and adaptation (Hung, 1998). Those specializing in


negotiation need to understand the negotiation styles of other people who live in different

countries by studying their cultural beliefs and norms (Chang, 2003).

To further illustrate the best possible ways of negotiations we look at a case study below:

Jan graduated from a leading Polish business school. He had learned a lot about economics,

finance, marketing, and strategy and his grades were excellent. Everything indicated that he

was well prepared for his starting career. Very soon he found a job he was dreaming of and

started applying what he had learned in real business environment. He has been advancing his

career rather quickly and taking over new areas of responsibility. Recently, his boss has asked

him to identify a company potentially interested in cooperation especially in the area of research

and development. Since his company was operating in a niche market manufacturing very

specialized products, very early Jan realized that for a potential partner he would have to look in

Southeast Asia, particularly in Japan, Taiwan, and possibly in China.

Not without difficulty he came up with a short list of potential partners and scheduled the first

meetings with them. Today, his secretary gave him the tickets. Next week, Jan and his boss are

flying to Asia. Suddenly, he realized that all he knows about Asian culture actually comes from

TV and movies. The same was true for his boss. A hundred questions went through his mind.

How is he supposed to behave there? What can he say and what not? Will they understand what

he has to tell them? How should Jan negotiate with these guys?

Mwarome, 03/21/12,

I need more explanations about this case. Show the point of the case and why we have it in our work. (Christian and mauree)


Within the last few decades the number of international negotiations has been increasing rapidly.

This trend is especially evident in Poland. Intensification of trading relationships, political and

economic integration with the European Union and progressing globalization have caused that

international negotiations have become relatively common both in the diplomatic as well as in

the business environment. Similar processes occurring worldwide were most likely also the

reason for increased interest in this topic among the scholars. Amid all issues connected with the

international negotiations the one that has been attracting the most attention has been the

influence of culture on negotiation. (Cohen, 2004)

According to the negotiation literature, the measurement of Assertiveness and Cooperativeness

requires the consideration of five distinct negotiation styles the five negotiation styles are:

1. Competing - Negotiators that exhibit this style are results-oriented, self-confident, assertive,

are focused primarily on the bottom line, have a tendency to impose their views upon the other

party, and in the extreme can become aggressive/psychotic and domineering. . They often use

whatever power and tactics they can muster, including their personality, position, economic

threats, brand strength or size or market share. This style is most suitable in the American setting

since they are known to be naturally aggressive and assertive hence used when results are needed

quickly. This style is high in Assertiveness and low in Cooperativeness as show in the diagram

above.

2.Avoiding - Negotiators that exhibit this style are passive, prefer to avoid conflict, make

attempts to withdraw from the situation or pass responsibility onto another party, and fail to


show adequate concern or make an honest attempt to get to a solution. This style is both low in

Assertiveness and low in Cooperativeness.

3Collaborating - Negotiators that exhibit this style use open and honest communication, focus

on finding creative solutions that mutually satisfy both parties, are open to exploring new and

novel solutions, and suggest many alternatives for consideration. This style is both high in

Assertiveness and high in Cooperativeness.

4.Accommodating – Negotiators that exhibit this style make attempts to maintain relationships

with the other party, smooth over conflicts, downplay differences, and are most concerned with

satisfying the needs of the other party. This style is low in Assertiveness but high in

Cooperativeness.

5.Compromising – Negotiators that exhibit this style aim to find the middle ground, often split

the difference between positions, frequently engage in give and take tradeoffs, and accept

moderate satisfaction of both parties’ needs. This style is both moderate in Assertiveness and

moderate in Cooperativeness.

Graph displays the relationship between these five negotiating styles and the competing

dimensions of Assertiveness versus Cooperativeness.


LIST OF REFERENCES

Acuff, L. F., (1997). How to negotiate anything with anyone anywhere around the world (2nd

ed.). New York: American management association publishers.

Brett, M. J. (ed.). (2007). Negotiating globally (2nd ed.). San Francisco: Jossey bass publishers.

Chauri, N. P., & Usunier C. J., (Eds.). (2003). International business negotiations (2nd ed.)

Amsterdam: Elsevier Ltd.

Forsyth, P. (2002). Business Essentials: Successful Negotiating. Oxford: How to books ltd.

Harris, R. P., & Moran, T. R., (Ed.). (2000). Managing cultural differences (5th ed.) Houston TX:

Gulf publishing company.

Thorn, G. J., (2004). How to negotiate better deals. Mumbai: Jaico publishing house.

Cohen, R. 2004. Negotiating Across Cultures. Washington, DC: United States Institute of

Peace Press.

how best can we negotiate across cultures

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