1. INTRODUCTION

1.1 Background

When two people communicate, they rarely talk about precisely the same subject, for effective

meaning is flavored by each person’s own cognitive world and cultural conditioning. When

negotiating internationally, this translates into anticipating culturally related ideas that are

most likely to be understood by a person of a given culture. Discussions are frequently impeded

because the two sides seem to be pursuing different paths of logic; in any cross-cultural

context, the potential for misunderstanding and talking past each other is great.

When one takes the seemingly simple process of negotiations into a cross-cultural context, it

becomes even more complex and complications tend to grow exponentially. Negotiation style

we use so effectively domestically can be inappropriate and when dealing with people from

another cultural background; in fact its use can often result in more harm than gain.

Heightened sensitivity, more attention to detail, and perhaps even changes in basic behavioral

patterns are required when working in another culture.

No one can usually avoid bringing along his cultural assumptions, images, and prejudices or

other attitudinal baggage into any negotiating situation. The way one succeeds in cross-cultural

negotiations is by fully understanding others, using that understanding to one’s own advantage

to realize what each party wants from the negotiations, and to turn the negotiations into a win-

win situation for both sides. In cross-cultural negotiations, many of the strategies and tactics

used domestically may not apply—especially when they may not be culturally acceptable to the

other party.

This assignment paper focuses on the impact of culture on negotiations. It begins by defining

culture, and then breaks out the four dimensions of culture identified by Geert Hofstede. It

includes definition of negotiations, cross cultural negotiation, factors influencing cross cultural

negotiation, cross cultural negotiation behavior, and coping with cross cultural negotiation.

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2. CULTURE

2.1 Concept of Culture

The word ‘Culture’ came from the Latin cultura stemming from colere, meaning "to cultivate" is

a term that has various meanings. For example, in 1952, Alfred Kroeber and Clyde

Kluckhohn compiled a list of 164 definitions of "culture" in Culture: A Critical Review of Concepts

and Definitions. However, the word "culture" is most commonly used in three basic senses:

Excellence of taste in the fine arts and humanities, also known as high culture

An integrated pattern of human knowledge, belief, and behavior that depends upon the

capacity for symbolic thought and social learning

The set of shared attitudes, values, goals, and practices that characterizes an institution,

organization or group.

Culture consists of learned ways of acting, feeling and thinking, rather than biologically

determined ways. The British anthropologist Sir Edward Burnett Tylor defined culture as "that

complex whole which includes knowledge, belief, art, morals, law, custom and any other

capabilities and habits acquired by man as a member of society." Tylor's definition includes

three of the most important characteristics of culture: (1) Culture is acquired by people. (2) A

person acquires culture as a member of society. (3) Culture is a complex whole.

Culture is a term used by social scientists for a people's whole way of life. In everyday

conversation the word 'culture' may refer to activities in such fields as art, literature, and music.

But to social scientists, a people's culture consists of all the ideas, objects, and ways of doing

things created by the group. Culture includes arts, beliefs, customs, inventions, language,

technology and traditions. The term 'civilization' is similar, but it refers mostly to scientifically

more advanced ways of life. A culture is any way of life, simple or complex.

2.2 Dimensions of Culture

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Hofstede devised four cultural dimensions which could explain much of the differences between cultures: Power distance, individualism, masculinity and uncertainty avoidance.

2.2.1 Power Distance

Power distance is the extent to which the less powerful members of institutions and

organizations within a country expect and accept (emphasis added) that power is

distributed unequally. The power distance dimension is a measure of the relationships

between individuals of different status within a culture. Following Table illustrates the

salient characteristics of the PDI.

Low PD (Collectivist) High PD (Individualist)

Inequalities among people should be

minimized

Inequalities among people are both

expected and desired

Interdependence between less and more

powerful people

Less powerful people should be dependent

on the more powerful

Hierarchy means an inequality of roles Hierarchy reflects existential inequality

Decentralization preferred Centralization preferred

Students treat teachers as equals Students treat teachers with respect

Children treat parents as equals Children treat parents with respect

2.2.2 Individualism

Individualism is the degree to which people in a country or region learn to interact with

each other. The majority of the people of the world live in societies where they are

taught from birth that the interest of the group, starting with the extended family, is

paramount to the interest of the individual. These are described as collectivist societies.

The reverse is the case for the individualist societies.

Low IDV (Collectivist) High IDV (Individualist)

People are born into extended families People grow up to look after him/herself

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and the immediate family

Identity is based on your social network Identity based on the individual

High context communications Low context communication

Diplomas provide entry to higher status

groups

Diplomas increase economic worth/self-

respect

Employer-employee relationship perceived

in moral terms; like a family link

Employer-employee relationship is a

contract based on mutual advantage

Management of groups Management of people

2.2.3 Masculinity

The masculinity-femininity dimension identifies what are considered appropriate gender

roles for that culture.

Low MAS (Feminine) High MAS (Masculine)

Dominate values in society are caring for

others and preservation

Dominate values in society are material

success and progress

People and relationships are important Money and things are important

Failing in school is a minor accident Failing in school is a disaster

Managers use intuition & strive for

consensus

Managers expected to be decisive &

assertive

Work to live Live to work

2.2.4 Uncertainty Avoidance

Extreme uncertainty creates intolerable anxiety. Every human society has developed

ways to alleviate this anxiety. These ways belong to the domains of technology, law and

religion. In the context that Hofstede uses, uncertainty avoidance is not the same as risk

avoidance. Ambiguity is the root cause of uncertainty avoidance, with risk-taking a by-

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product of attempts to mitigate ambiguity. As such, cultures scoring high on the

uncertainty avoidance index (low tolerance for ambiguity) look for structure in their

organizations, institutions and relationships in order to reduce the ambiguity and thus

risk.

Low UA (High tolerance for Ambiguity) High UA (Low tolerance for Ambiguity)

Uncertainty is a normal feature of life Uncertainty inherent in life is felt as a

continuous threat that must be fought

Low stress; subjective feeling of well being High stress; subjective feeling of anxiety

Aggression and emotions should not be

shown

Aggression and emotions at proper times

may be expressed

Comfortable in ambiguous situations and

with unfamiliar risks

Acceptance of familiar risks; fear of

ambiguous situations and of unfamiliar

risks

Few and general laws and rules Many and precise laws and rules

Tolerance, moderation Conservatism, extremism, law and order

Internationalism, regionalism Nationalism, xenophobia

Precision and punctuality have to be

learned

Precision and punctuality come naturally

Time is a framework for orientation Time is money

2.3 Cultural Dimensions of Various Cultures

Asian

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Countries Power Distance Individualism Masculinity Uncertainty

Avoidance

Japan Low Low High High

China High Low High Low

Korea High Low Low High

India High Low High Low

Pakistan High Low High High

Iran High Low Low High

Kuwait High Low High High

Saudi Arab High Low High High

Malaysia High Low Low Low

Singapore High Low High Low

Bangladesh High Low High High

European

Countries Power Distance Individualism Masculinity Uncertainty

Avoidance

UK Low High High Low

Germany Low High High High

Italy Low High High High

Russia High Low Low High

France High High Low High

Spain Low Low Low High

Netherlands Low High Low High

Denmark Low High Low Low

North American

Countries Power Distance Individualism Masculinity Uncertainty

Avoidance

USA Low High High Low

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Canada Low High High Low

Mexico High Low High High

South American

Countries Power Distance Individualism Masculinity Uncertainty

Avoidance

Brazil High Low High High

Argentina Low Low High High

Chile High Low Low High

Venezuela High Low High High

Australasia

Countries Power Distance Individualism Masculinity Uncertainty

Avoidance

Australia Low High High High

New Zealand Low High High High

African

Countries Power Distance Individualism Masculinity Uncertainty

Avoidance

South Africa Low High High Low

Egypt High Low Low Low

Nigeria High Low Low High

Kenya High Low Low High

Libya High Low High High

3. NEGOTIATION

3.1 Concept of Negotiation

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In simplest terms, negotiation is a discussion between two or more disputants who are trying to

work out a solution to their problem. This interpersonal or inter-group process can occur at a

personal level, as well as at a corporate or international level.

Negotiation is one of the most common approaches used to make decisions and manage

disputes. It is also the major building block for many other alternative dispute resolution

procedures.

Negotiation is a dialogue intended to resolve disputes, to produce an agreement upon courses

of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy

various interests. It is the primary method of alternative dispute resolution.

Negotiation occurs in business, non-profit organizations, government branches, legal

proceedings, among nations and in personal situations such as marriage, divorce, parenting,

and everyday life.

3.2 Why Parties Choose To Negotiate

The list of reasons for choosing to negotiate is long. Some of the most common reasons are

to -

• Gain recognition of either issues or parties;

• Test the strength of other parties;

• Obtain information about issues, interests and positions of other parties;

• Educate all sides about a particular view of an issue or concern;

• Ventilate emotions about issues or people;

• Change perceptions;

• Mobilize public support;

• Buy time;

• Bring about a desired change in a relationship;

• Develop new procedures for handling problems;

• Make substantive gains;

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• Solve a problem.

3.3 Cross Cultural Negotiation

Cross cultural negotiation is one of many specialized areas within the wider field of cross

cultural communications. In cross cultural negotiation, negotiation involves people from

different cultures and places. Simple process of negotiations into a cross-cultural context, it

becomes even more complex and complications tend to grow exponentially. Negotiation style

we use so effectively domestically can be inappropriate and when dealing with people from

another cultural background.

3.4 Factors Influencing Cross-Cultural Negotiations

3.4.1 Negotiating Goal and Basic Concept

How is the negotiation being seen? Is mutual satisfaction the real purpose of the meeting? Do

we have to compete? Do they want to win? Different cultures stress different aspects of

negotiation. The goal of business negotiation may be a substantive outcome (Americans) or a

long-lasting relationship (Japanese).

3.4.2 Protocol

There are as many kinds of business etiquette as there are nations in the world. Protocol factors

that should be considered are dress codes, number of negotiators, entertainment, degree of

formality, gift giving, meeting and greeting, etc.

3.4.3 Communications

Verbal and non-verbal communication is a key factor of persuasion. The way we express our

needs and feelings using body language and tone of voice can determine the way the other side

perceives us, and in fact positively or negatively contributes to our credibility. Another aspect of

communication relevant to negotiation is the direct or indirect approach to exchanging

information. Is the meaning of what is said exactly in the words themselves? Does "...it's

impossible" really mean impossible or just difficult to realize? Always use questions to identify

the other side's needs, otherwise assumptions may result in you never finding common

interests.

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3.4.4 Risk-Taking Propensity - Uncertainty Avoidance

There is always risk involved in negotiations. The final outcome is unknown when the

negotiations commence. The most common dilemma is related to personal relations between

counterparts: Should we trust them? Will they trust us? Certain cultures are more risk averse

than others, e.g. Japan (Hofstede 1980). It means that less innovative and creative alternatives

are available to pursue during the negotiation, unless there is a strong trust-based relationship

between the counterparts.

3.4.5 View of Time

In some cultures time is money and something to be used wisely. Punctuality and agenda may

be an important aspect of negotiation. In countries such as China or Japan, being late would be

taken as an insult. Consider investing more time in the negotiating process in Japan. The main

goal when negotiating with an oriental counterpart is to establish a firm relationship, which

takes time. Another dimension of time relevant to negotiation is the focus on past, present or

future. Sometimes the past or the distant future may be seen as part of the present, especially

in Latin American countries.

3.4.6 Decision-Making System

The way members of the other negotiating team reach a decision may give us a hint: who we

shall focus on providing our presentation. When negotiating with a team, it's crucial to identify

who is the leader and who has the authority to make a decision.

3.4.7 Form of Agreement

In most cultures, only written agreements stamp a deal. It seems to be the best way to secure

our interests in case of any unexpected circumstances. The 'deal' may be the contract itself or

the relationship between the parties, like in China, where a contract is likely to be in the form of

general principles. In this case, if any unexpected circumstances arise, parties prefer to focus on

the relationship than the contract to solve the problem.

3.4.8 Power Distance

This refers to the acceptance of authority differences between people. Cultures with low power

distance postulate equality among people, and focus more on earned status than ascribed

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status. Negotiators from countries like Britain, Germany and Austria tend to be comfortable

with shared authority and democratic structures. When we face a high power distance culture,

be prepared for hierarchical structures and clear authority figures.

3.4.9 Personal Style

Our individual attitude towards the other side and biases which we sometimes establish all

determine our assumptions that may lead the negotiation process towards win-win or win-lose

solutions. Do we feel more comfortable using a formal or informal approach to

communication? In some cultures, like America, an informal style may help to create friendly

relationships and accelerate the problem solving solution. In China, by comparison, an informal

approach is proper only when the relationship is firm and sealed with trust.

3.5 Cross Cultural Negotiation Behavior

3.5.1 U.S. Approaches to Negotiation

U.S. negotiators tend to rely on individualist values, imagining self and other as autonomous,

independent, and self-reliant. This does not mean that they don't consult, but the tendency to

see self as separate rather than as a member of a web or network means that more

independent initiative may be taken. Looking through the eyes of the Japanese negotiator who

wrote "Negotiating With Americans", American negotiators tend to:

Be competitive in their approach to negotiations, including coming to the table with a

fall-back position but beginning with an unrealistic offer;

Be energetic, confident, and persistent; they enjoy arguing their positions, and see

things universally -- i.e., they like to talk about broad applications of ideas;

Concentrate on one problem at a time;

Focus on areas of disagreement, not areas of commonality or agreement;

Like closure and certainty rather than open-endedness or fuzziness.

Do these generalizations ring true? Clearly, it depends which Americans you are talking about,

which sector they represent, and the context surrounding the negotiations. Is this a family

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matter or a commercial one? Is it about community issues, national policy, or a large public

conflict? Strategies change according to context and many other factors.

3.5.2 African Approaches to Negotiation

Many African nations have indigenous systems of conflict resolution that have endured into the

present, sometimes quite intact and sometimes fragmented by rapid social change. These

systems rely on particular approaches to negotiation that respect kinship ties and elder roles,

and the structures of local society generally. In Nigeria, for example, people are organized in

extended families (nnu'), village (idu' or obio), lineage ('duk), and lineage groups (iman). A belief

in the continuing ability of ancestors to affect people's lives maintains social control, and makes

the need to have formal laws or regulations minimal. Negotiation happens within social

networks, following prescribed roles. Women in conflict with husbands, for example, are to

defer and apologize, preparing a ritual meal to symbolize the restoration of harmony.

In the Nigerian Ibibio context, the goal of restoring social networks is paramount, and individual

differences are expected to be subsumed in the interest of the group. To ensure that progress

or an agreement in a negotiation is preserved, parties must promise not to invoke the power of

ancestors to bewitch or curse the other in the future. The aim of any process, formal or

informal, is to affect a positive outcome without a "residue of bitterness or resentment." Elders

have substantial power, and when they intervene in a conflict or a negotiation, their words are

respected. This is partly because certain elders are believed to have access to supernatural

powers that can remove protective shields at best and cause personal disaster at worst.

In other African contexts, a range of indigenous processes exist in which relationships and

hierarchies tend to be emphasized.

3.5.3 Asian Styles of Negotiation

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In certain Asian countries such as India, Nepal or Sri Lanka or in the Mid-Eastern countries such

as Egypt or Saudi Arabia, the social contacts developed between the parties are more

significant than the technical specifications and price. It is often suggested that in cultures like

China and Japan, pride and honor are of great importance. Because of the influence of

Confusiaism, honesty, integrity and sincerity in deal making are greatly appreciated in these

countries. Many cultures are holistic, especially in the Far East, all issues are discussed at once

and no decisions made until the end. Especially in the Far East, the negotiating session is less a

forum for working out issues than it is a formal and public expression of what has already been

worked out beforehand. Asians may use cooperative styles when negotiating among

themselves but can be ruthless with outsiders.

Asian negotiation is as much a ceremony as it is a form of business communication. The

negotiation style in the Asian context is often described as relationship-oriented, and

concentrates on a long-term single source arrangement. The implication of this style is that it is

collaborative and will lead to some mutual satisfaction.

There is a great deal written about Japanese approaches to negotiation, and collisions between

American and Japanese approaches are legendary. The following values tend to influence

Japanese communication: focus on group goals, interdependence, and a hierarchical

orientation. In negotiations, these values manifest themselves in awareness of group needs and

goals, and deference to those of higher status. Japanese negotiators are known for their

politeness, their emphasis on establishing relationships, and their indirect use of power.

Japanese concern with face and face-saving is one reason that politeness is so important and

confrontation is avoided. They tend to use power in muted, indirect ways consistent with their

preference for harmony and calm. In comparative studies, Japanese negotiators were found to

disclose considerably less about themselves and their goals than French or American

counterparts.

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Japanese negotiators tend to put less emphasis on the literal meanings of words used in

negotiation and more emphasis on the relationships established before negotiating begins.

They are also less likely than their U.S. counterparts to make procedural suggestions.

3.5. 4 European Styles of Negotiation

European styles of negotiation vary according to region, nationality, language spoken, and

many other contextual factors. One study found the French to be very aggressive negotiators,

using threats, warnings, and interruptions to achieve their goals. German and British

negotiators were rated as moderately aggressive in the same study.

The French expect everyone to behave as they do when doing business, including speaking their

language. Negotiations are likely to be in French unless they occur outside France. The French

enjoy conversation for the sake of conversation, but they are also very pragmatic about details

of the proposed agreement during negotiations. They are very much individualists and have a

sense of pride that is sometimes interpreted as supremacy. The French follow their own logic,

referred to as “Cartesian” logic, when negotiating,

English negotiators reflect their cultural characteristics; they are very formal and polite and

place great importance on proper protocol. They are also concerned with proper etiquette.

British negotiation behavior is characterized by the soft sell. British negotiators are reserved

and mannered. The status and the role of the negotiators are very important.

Protocol is important and formal in Germany. Dress is conservative; correct posture and

manners are required. Seriousness of purpose goes hand in hand with serious dress. Since

Germans tend to be detail oriented, having technical people as part of the negotiation team is

important. Being punctual is expected. German negotiations are planned and well organized,

direct in their approach.

The Swedes tend to be formal in their relationships, dislike haggling over price, expect though,

professional proposals without flaws, and are attracted to quality. Italians tend to be extremely

hospitable but are often volatile in temperament. When they make a point, they do so with

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considerable gesticulation and emotional expression. Impressed by style, they tend to dress

well themselves. Moreover, they enjoy haggling over prices. Italians often exhibit a calculated

nonchalance. A common tactic is to unexpectedly close a negotiating session, pretending the

whole thing is of minor importance.

3.5.5 Latin American Styles of Negotiation

Role expectations influence negotiation in Latin American contexts. Responsibility to others is

generally considered more important than schedules and task accomplishment. Their

negotiation approach relates to the polychronic orientation to time and patterns of high-

context communication and communitarianism, described earlier. Lederach reports that a

common term for conflict in Central America is enredo, meaning "entangled" or "caught in a

net." He explains that enredosignifies the way conflict is part of an intimate net of relations in

Guatemala and elsewhere in Central America. Thus, negotiation is done within networks,

relationships are emphasized, and open ruptures are avoided.

In Central America, people think about and respond to conflict holistically. Lederach contrasts

his natural (American) inclination to "make a list, to break story down into parts such as issues

and concerns" with his Central American experience, where people tended to respond to

requests for naming issues to be negotiated with "yet another story." They preferred a storied,

holistic approach to conflict and negotiation, rather than a linear, analytical one. When Central

Americans needed help with negotiations, they tended to look to insider partials rather than

outsider neutrals, preferring the trust and confidence of established relationships and cultural

insight to other credentials or expertise. They referred to the concept of confianza to explain

this preference. Confianza means "trustworthiness," that "they know us" and "we know them"

and they will "keep our confidences."

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3. 6 Coping With Culture

Negotiating in the international environment is a huge challenge for any negotiator. How do we

cope with the cultural differences? What approach is more efficient and proper when dealing

with Japanese, Americans or Germans? There are some very helpful guidelines we can apply:

3.6.1 Learn the other side's culture

It is very important to know the commonest basic components of our counterparty's culture.

It's a sign of respect and a way to build trust and credibility as well as advantage that can help

us to choose the right strategies and tactics during the negotiation. Of course, it's impossible to

learn another culture in detail when we learn at short notice that a foreign delegation is visiting

in two weeks' time. The best we can do is to try to identify principal influences that the foreign

culture may have on making the deal.

3.6.2 Don't stereotype

Making assumptions can create distrust and barriers that expose both your and the other side's

needs, positions and goals. The way we view other people tends to be reserved and cautious.

We usually expect people to take advantage of a situation, and during the negotiations the

other side probably thinks the same way, especially when there is a lack of trust between

counterparts. Instead of generalizing, we should make an effort to treat everyone as

individuals. Find the other side's values and beliefs independently of values and beliefs

characteristic of the culture or group being represented by your counterpart.

3.6.3 Find ways to bridge the culture gap

Apart from adopting the other side's culture to adjust to the situation and environment, we can

also try to persuade the other side to use elements of our own culture. In some situations it is

also possible to use a combination of both cultures, for example, regarding joint venture

businesses. Another possible solution is to adopt a third culture, which can be a strong base for

personal relationships. When there is a difficulty in finding common ground, focusing on

common professional cultures may be the initiation of business relations.

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4. CONCLUSION

Negotiation is an important and valuable tool for resolving conflict when all parties involved

have a shared commitment to reaching a collaborative, joint outcome that satisfies both parties

needs and interests. Cultural considerations play an important role in the negotiation process

as all of the actors bring with them their own specific cultural behaviors; that is their patterns of

thinking, feeling, acting and most importantly, their own set of culturally shared values.

This assignment paper explains the nature of culture and its impact on negotiation. Hofstede’s

dimensions of culture provided a summarization of how cultures differed based on their overall

proclivity toward various values or norms. An understanding of cultural theory in this manner is

an important element in describing culture’s impact on negotiations. Equally important is an

understanding of key aspects of negotiations. Negotiations differ from other forms of conflict

resolution in that, when appropriately conducted, the parties strive to reach agreement by

accommodating their conflicting interest into a mutually acceptable agreement. In order to

achieve this state, all parties must be willing to commit to understanding each other’s position,

work toward building trust, and effectively communicate with each other.

Although other factors can and will impede on any negotiation, this paper intended to

demonstrate that cultural differences are also a variable in the negotiation process.

Understanding culture’s implications, the cultural baggage that individual actors bring to the

negotiation table and that it does play a role in the process, is an important element for any

negotiator to prepare for in order to reach for the optimum negotiated solution for all parties.

The manner in which the parties will interact in an attempt to reach an interdependent, joint

decision agreeable to and accepted by the parties will be influenced by each negotiator’s

culture.

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5. BBILIOGRAPHY

Websites:

http://www.au.af.mil/au/awc/awcgate/army/usace/negotiation.htm

http://en.wikipedia.org/wiki/Negotiation

http://www.beyondintractability.org/essay/negotiation/

http://www.millicentrogers.org/what_is_culture.htm

http://en.wikipedia.org/wiki/Culture

http://www.calumcoburn.co.uk/articles/cross-cultural-negotiation/

http://www.kwintessential.co.uk/resources/country-profiles.html

www.au.af.mil/au/awc/awcgate/awc/horst_ crosscultural _negot.pdf

http://www.clearlycultural.com/geert-hofstede-cultural-dimensions/power-distance-index/

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