Created BY Badar e Alam

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CHAPTER SIXTEEN
International and
Cross-Cultural Negotiation
McGraw-
©2006 The McGraw-Hill

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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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©2006 The McGraw-Hill

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Environmental Context
Factors that make international negotiations
more challenging than domestic
negotiations include:
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Political and legal pluralism
International economics
Foreign governments and bureaucracies
Instability
Ideology
Culture
External stakeholders
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©2006 The McGraw-Hill

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Immediate Context
“Factors over which the negotiators have
influence and some measure of control”:
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Relative bargaining power
Levels of conflict
Relationship between negotiators
Desired outcomes
Immediate stakeholders
McGraw-
©2006 The McGraw-Hill

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The Contexts of
International Negotiations
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©2006 The McGraw-Hill

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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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©2006 The McGraw-Hill

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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
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©2006 The McGraw-Hill

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Hofstede’s Dimensions
of Culture
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Individualism/collectivism
Power distance
Masculinity/femininity
Uncertainty avoidance
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©2006 The McGraw-Hill

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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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©2006 The McGraw-Hill

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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.
McGraw-
©2006 The McGraw-Hill

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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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©2006 The McGraw-Hill

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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.
McGraw-
©2006 The McGraw-Hill

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Hofstede’s Cultures Ranking in the Top 10
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©2006 The McGraw-Hill

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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
McGraw-
©2006 The McGraw-Hill

15. Culture as Values
McGraw-
16-15
©2006 The McGraw-Hill

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The Influence of Culture on Negotiation:
Managerial Perspectives
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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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©2006 The McGraw-Hill

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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
McGraw-
©2006 The McGraw-Hill

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The Influence of Culture on Negotiation:
Research Perspectives
McGraw-
©2006 The McGraw-Hill

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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:
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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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©2006 The McGraw-Hill

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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
McGraw-
©2006 The McGraw-Hill

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Culturally Responsive
Negotiation Strategies
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When choosing a strategy, negotiators should:
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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
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Strategies are arranged based on the level of
familiarity (low, moderate, high) that a
negotiator has with the other party’s culture
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©2006 The McGraw-Hill

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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
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©2006 The McGraw-Hill

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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
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©2006 The McGraw-Hill

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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
McGraw-
©2006 The McGraw-Hill