Cross CUltural negotiation

1. 16-1
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
CHAPTER SIXTEEN
International and
Cross-Cultural Negotiation

2. 16-2
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
What Makes International
Negotiations Different?
Two overall contexts have an influence on
international negotiations:
• Environmental context
– Includes environmental forces that neither negotiator
controls that influence the negotiation
• Immediate context
– Includes factors over which negotiators appear to have
some control

3. 16-3
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
Environmental Context
Factors that make international negotiations
more challenging than domestic
negotiations include:
• Political and legal pluralism
• International economics
• Foreign governments and bureaucracies
• Instability
• Ideology
• Culture
• External stakeholders

4. 16-4
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
Immediate Context
“Factors over which the negotiators have
influence and some measure of control”:
• Relative bargaining power
• Levels of conflict
• Relationship between negotiators
• Desired outcomes
• Immediate stakeholders

5. 16-5
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
The Contexts of
International Negotiations

6. 16-6
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
How Do We Explain International
Negotiation Outcomes?
International negotiations can be much more
complicated
• Simple arguments cannot explain conflicting
international negotiation outcomes
• The challenge is to:
– Understand the multiple influences of several factors
on the negotiation process
– Update this understanding regularly as circumstances
change

7. 16-7
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
Conceptualizing Culture
and Negotiation
• Culture as learned behavior
– A catalogue of behaviors the foreign negotiator should
expect
• Culture as shared values
– Understanding central values and norms
• Individualism/collectivism
• Power distance
• Career success/quality of life
• Uncertainty avoidance

8. 16-8
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
Hofstede’s Dimensions
of Culture
• Individualism/collectivism
• Power distance
• Masculinity/femininity
• Uncertainty avoidance

9. 16-9
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
Individualism/Collectivism
Definition: the extent to which the society is
organized around individuals or the group
• Individualism/collectivism orientation
influences a broad range of negotiation
processes, outcomes, and preferences
– Individualistic societies may be more likely to swap
negotiators, using whatever short-term criteria seem
appropriate
– Collectivistic societies focus on relationships and
will stay with the same negotiator for years

10. 16-10
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
Power Distance
Definition: “The extent to which the less
powerful members of organizations and
institutions (like the family) accept and
expect that power is distributed
unequally”
• Cultures with stronger power distance will be
more likely to have decision-making
concentrated at the top of the culture.

11. 16-11
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
Masculinity/Femininity
Definition: the extent cultures hold values
that are traditionally perceived as
masculine or feminine
• Influences negotiation by increasing the
competitiveness when negotiators from
masculine cultures meet

12. 16-12
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
Uncertainty Avoidance
Definition: “Indicates to what extent a
culture programs its members to feel
either uncomfortable or comfortable in
unstructured situations”
• Negotiators from high uncertainty avoidance
cultures are less comfortable with ambiguous
situations--want more certainty on details, etc.

13. 16-13
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
Hofstede’s Cultures Ranking in the Top 10

14. 16-14
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
Conceptualizing Culture
and Negotiation
• Culture as dialectic
– All cultures contain dimensions or tensions that are
called dialectics
• Example: Judeo-Christian parables “too many
cooks spoil the broth” and “two heads are better
than one” offer conflicting guidance
• This can explain variations within cultures
• Culture in context
– No human behavior is determined by a single cause
– All behavior may be understood at many different
levels simultaneously

15. 16-15
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
Culture as Values

16. 16-16
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
The Influence of Culture on Negotiation:
Managerial Perspectives
• Definitions of negotiation
• Negotiation opportunity
• Selection of negotiators
• Protocol
• Communication
• Time sensitivity
• Risk propensity
• Groups versus individuals emphasis
• Nature of agreements
• Emotionalism

17. 16-17
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
The Influence of Culture on Negotiation:
Research Perspectives
• Negotiation outcomes
– Research suggests that culture has an effect on
negotiation outcomes, although it may not be
direct and it likely has an influence through
differences in the negotiation process in different
cultures
– Some evidence suggests that cross-cultural
negotiations yield poorer outcomes than
intracultural negotiations

18. 16-18
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
The Influence of Culture on Negotiation:
Research Perspectives

19. 16-19
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
The Influence of Culture on Negotiation:
Research Perspectives
• Negotiation process
– Culture has been found to have significant effects on
the negotiation process, including:
• How negotiators plan
• The offers made during negotiation
• The communication process
• How information is shared during negotiation
• Effects of culture on negotiator cognition
– Accountability to a constituent influenced negotiators
from individualistic and collectivistic cultures
differently

20. 16-20
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
The Influence of Culture on Negotiation:
Research Perspectives
• Effect of culture on negotiator ethics and tactics
– Differences exist in the tolerance of different
negotiation tactics in different cultures
– Negotiators who trusted the other party were less
likely to use questionable negotiation tactics
• Effects of culture on conflict resolution
– Within collectivistic countries, disagreements are
resolved based on rules, whereas in individualistic
countries, conflicts tend to be resolved through
personal experience and training

21. 16-21
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
Culturally Responsive
Negotiation Strategies
• When choosing a strategy, negotiators should:
– Be aware of their own and the other party’s culture
in general
– Understand the specific factors in the current
relationship
– Predict or try to influence the other party’s
approach
• Strategies are arranged based on the level of
familiarity (low, moderate, high) that a
negotiator has with the other party’s culture

22. 16-22
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
Low Familiarity
• Employ agents or advisers (unilateral strategy)
– Useful for negotiators who have little awareness of
the other party’s culture
• Bring in a mediator (joint strategy)
– Encourages one side or the other to adopt one
culture’s approaches or mediator culture approach
• Induce the other party to use your approach
(joint strategy)
– The other party may become irritated or be insulted

23. 16-23
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
Moderate Familiarity
• Adapt to the other negotiator’s approach
(unilateral strategy)
– Involves making conscious changes to your approach
so it is more appealing to the other party
• Coordinate adjustment (joint strategy)
– Involves both parties making mutual adjustments to
find a common process for negotiation

24. 16-24
McGraw-Hill/Irwin ©2006 The McGraw-Hill Companies, Inc., All Rights Reserved
High Familiarity
• Embrace the other negotiator’s approach
(unilateral strategy)
– Adopting completely the approach of the other negotiator
(negotiator needs to completely bilingual and bicultural)
• Improvise an approach (joint strategy)
– Crafts an approach that is specifically tailored to the negotiation
situation, other party, and circumstances
• Effect symphony (joint strategy)
– The parties create a new approach that may include aspects of
either home culture or adopt practices from a third culture