International and CrossCultural Negotiation

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International andCross-Cultural Negotiation

• MGT 5374 Negotiation Conflict Management
• Section 002
• December 1, 2005
• John D. Blair, PhD
• Georgie G. William B. Snyder Professor in
  Management

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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

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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

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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

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The Contexts ofInternational Negotiations
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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

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Conceptualizing Culture and Negotiation

• Culture as learned behavior
• A catalogue of behaviors the foreign negotiator
  should expect
• Patterns of personality exist for groups sharing
  a common culture
• During socialization, individuals pick-up
  knowledge, ideas, values, beliefs, phobias, and
  anxieties of their society
• Most cultural norms are absorbed subconsciously
• Cross-cultural negotiations require extensive
  intelligence gathering and flexibility

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Hofstedes Dimensionsof Culture

• Cultural dimensions may impinge on the decision
  processes of negotiators
• Individualism/collectivism
• Power distance
• Masculinity/femininity
• Uncertainty avoidance

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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

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Collectivist vs. Individualist

• Collectivism group solidarity, loyalty and
  interdependence among members (e.g. Asian Latin
  American cultures)
• Individualism independence is valued along with
  attention to detail and control (e.g. US, UK)

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Individualistic Cultures

• Value independence of thinking and focus on task
  issues over relationship
• Goals of self-actualization and self-motivation
  are valued
• People speak for themselves
• Collectivist cultures value saving face,
  protecting their groups

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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.

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Power Distance

• Acceptance of authority differences among people
• High power distance cultures are status conscious
  and respectful of age and seniority
• Lower power-distance orientations greater
  tendency to make decisions in a consultative style

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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

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Masculinity - Femininity

• Masculine cultures value assertiveness,
  independence, task orientation and
  self-achievement
• Feminine cultures value cooperation, nurturing,
  relationships and quality of life
• More masculine cultures (e.g. Japan, Latin
  America, Austria) may pursue a win-lose
  negotiating approach

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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.

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Uncertainty Avoidance

• Level of discomfort felt in the face of risk and
  ambiguous, uncertain situations
• Cultures who are comfortable with risk require
  less information, have fewer people involved in
  decision making and act more quickly (e.g. US)

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Hofstedes Cultures Ranking in the Top 10
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Conceptualizing Cultureand 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

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Culture as Values
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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

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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

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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

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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

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Culturally Responsive Negotiation Strategies

• When choosing a strategy, negotiators should
• Be aware of their own and the other partys
  culture in general
• Understand the specific factors in the current
  relationship
• Predict or try to influence the other partys
  approach
• Strategies are arranged based on the level of
  familiarity (low, moderate, high) that a
  negotiator has with the other partys culture

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Familiarity of Culture-Low

• Employ agents or advisers (unilateral strategy)
• Useful for negotiators who have little awareness
  of the other partys culture
• Bring in a mediator (joint strategy)
• Encourages one side or the other to adopt one
  cultures approaches or mediator culture approach
  
• Induce the other party to use your approach
  (joint strategy)
• The other party may become irritated or be
  insulted

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Moderate Familiarity

• Adapt to the other negotiators 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

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High Familiarity

• Embrace the other negotiators 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

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Role of Emotion

• Emotional states affect how we interpret actions
  of others and how we process information
• Non-verbal cues or responses may not be
  interpreted similarly in all cultures

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Importance of Manners - Etiquette

• Engage in intelligence gathering to uncover the
  required or expected etiquette of your
  negotiation counterpart as dictated by social
  norms or culture
• Gift giving
• Presenting business cards
• Learn phrases or words in their language

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Rules for Cross-Cultural Negotiation

• Gather intelligence learn as much as possible
• Prepare for differences about time, punctuality,
  and logical process
• Relationships are important
• Dont seek compromise as the answer to impasse
  automatically
• Hire a skilled interpreter and practice with them

• Establish credibility but do not boast
• Be patient
• Prepare, prepare, prepare
• If misunderstandings occur, slow down. Seek to
  find common ground and utilize framing
• Utilize the various negotiation strategies to
  achieve win-win outcomes

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Establishing Trust

• Negotiation Processes

Non-task Sounding (rapport)
Task-related Information Exchange
Persuasion, compromise
Concession Agreement