...THE TOP TEN WAYS THAT CULTURE CAN AFFECT INTERNATIONAL NEGOTIATIONS by: Jeswald W. SalacuseIssues: March / April 2005. Categories: Global Business. * Share on LinkedIn * Share on googlePlus * Share on facebook * Share on twitter * Share by email When Enron was still – and only – a pipeline company, it lost a major contract in India because local authorities felt that it was pushing negotiations too fast. In fact, the loss of the contract underlines the important role that cultural differences play in international negotiation. For one country’s negotiators, time is money; for another’s, the slower the negotiations, the better and more trust in the other side. This author’s advice will help negotiators bridge the cultural differences in international negotiation. (This article first ran in the September/October 2004 issue of Ivey Business Journal). International business deals not only cross borders, they also cross cultures. Culture profoundly influences how people think, communicate, and behave. It also affects the kinds of transactions they make and the way they negotiate them. Differences in culture between business executives—for example, between a Chinese public sector plant manager in Shanghai and a Canadian division head of a family company in Toronto– can create barriers that impede or completely stymie the negotiating process. The great diversity of the world’s cultures makes it impossible for any negotiator, no matter how skilled and experienced...
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...a big meeting at the headquarters located in the United States to provide and explain the project and to help everyone become acquainted with one another. While attending the meeting the members in the group are staying with their own culture and not communicating with anyone outside their group. Because these different cultures are not mingling, the cultural phenomenon in this situation is the language, ethnocentricity, beliefs etc. This is because each of the groups has their own values and standards. Each of the cultures ethnocentricity is different and they use their own standards based on their culture to judge the behavior and beliefs of other individuals of a different culture. Each of the cultures has their own behaviors, values, customs, and beliefs that are taught from generation to generation, which is known as enculturation. Some of the other cultural phenomenons are nationality, race, ethnicity, and socioeconomic class. Each of these terms are used interchangeably and can cause much confusion in an organization. The different groups have a sense of connection with each other and can relate to their own culture. Intercultural communication is very important in the business world and is required when expanding business to other countries. To have a complete understanding of a different...
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...China has more than 4000 year’s history, and this long history has made China a unique culture that deeply impacts on China today. According to Brand China and “Harmonious and Integrated Culture” and the Building and Communication of China’s National Image, the authors both claim that Chinese traditional culture has shaped China’s national image. On the other hand, based on Neo-Confucianism and Chinese Business Culture, Chinese traditional culture also has impacted on Chinese business culture. Generally, Chinese traditional culture has impacted on current Chinese business practices, such as guanxi, face saving and so on. Moreover, as a result of influencing by Chinese traditional culture, negotiating process in China and related behaviors must be different from that of the rest of the world. Hence, knowing more about these special knowledge of negotiating in China would help people easier do business in China. As a Chinese student, those business practices that are influenced by Chinese traditional culture are very familiar for me. For face saving, it is exactly the same as the film The Interview by Sony shows that a few Chinese local governments might build a fake everyday-low-price grocery store which looks even better than Wholefoods to make higher level government officer think that the local people are very happy. On the other hand, during my daily life when I was in China, everyone are working on obtaining more guanxi. Guanxi seems like network in American, but it is more...
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...New Jersey MANAGING ACROSS CULTURES NEGOTIATING ACROSS CULTURES NEGOTIATING ACROSS CULTURES Published by: PRINCETON TRAINING PRESS Princeton, New Jersey a division of TRAINING MANAGEMENT CORPORATION 600 Alexander Road Princeton, New Jersey 08540-6011 USA Tel: Fax: Web: Email: (609) 951-0525 (609) 951-0395 www.tmcorp.com info@tmcorp.com Editor-in-Chief: Series Manager: Writer: Cover Design: Interior Design: Monique Rinere-Güven, Ph.D. Talia Bloch Robert J. Greenleaf Donna Lukis Bonnie Jacobs © 2000 TRAINING MANAGEMENT CORPORATION. Managing Across Cultures Series: Negotiating Across Cultures All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher. Printed in the United States of America ISBN: 1-882390-911 The Cultural Orientations Indicator®, COI® and TMC’s graphical depiction of our Cultural Orientations Model are registered trademarks of Training Management Corporation; Registration: 2,329,085 and 2,361,803. 4 Training Management Corporation TABLE OF Preface OF CONTENTS TABLE CONTENTS iii Introduction 1 Negotiation Defined Negotiating Across Cultures Chapter One: The Impact of Culture on Negotiating Behavior Case Scenario The Ten Dimensions of Culture Cultural Analysis of the Case...
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...not just about nationalities, it is also about cultures. Cultures influence negotiation styles, values and communications. Image a situation where a Japanese supermarket manager negotiating with an American salmon supplier with their own negotiation styles: the Japanese negotiator want to extent the length of negotiation in order to seek the best result of the deal, but the American negotiator treats time as money and he/she wants to quickly reach the agreement (Evans & Richardson, 2010). This essay will firstly discuss the definitions of culture and negotiation, and then it will discuss cultural influence on negotiation and its behaviour; finally it will suggest possible strategies in addressing difficulties caused by cultural differences. This essay will argue that cultural impacts increase the difficulties of cross-culture negotiation, but negotiators can successfully manage the difficulties by increasing their knowledge of different cultures and continuously practise relevant strategies. Culture Culture is a term that can be explained in many different ways. According to Alon and Brett (2007), culture is a process of socialisation that people learn a shared pattern of behaviour and affective understandings. These patterns distinguish one group of people from another. Carrell, Shank and Barbero (2009) also state that culture is not physical elements but the perceptions that members consider them. People from the same culture usually perceive the tangible and intangible...
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...In this paper, I will discuss about the negotiating styles and concepts in context of India and its culture. I will explain the cultural setting and factors influencing negotiating styles in India using the five factors from the framework provided in the article – “Culture and Negotiating Styles: Ten factors in Deal Making” from the book – Negotiations: Readings, Exercises and Cases (Lewincki, R, 2009, Page 344). 1. Negotiating Goal: The Goal of negotiating deal for Indians is to achieve maximum profit close to or beyond their target point through multiple rounds of Bargaining. The Indian lifestyle teaches bargaining techniques as they bargain in every day activities with different businesses ranging from local vegetable vendors to well built shopping outlets. In contrast, Americans are known to buy things at fixed price and rarely involve in bargaining in every day activities. Indians are hard working and good with research for data collection. They come well prepared for the negotiating deals and push the opponent till their target point. When dealing with US or European clients, the Indians tend to be extra careful as the dollar-to-rupee or euro-to-rupee value is too high and any small increase in dollar or euro would greatly increase the rupee revenues. Thus the chances for quickly making-or-breaking a deal is higher with Indian clients. In addition, Indian managers are also subjected to budgetary restrictions and have low-power in decision making to exceed the...
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...are foreign trade issues; determinants of entering China, embarking in international negotiation and many more valid points are included in my research to soften the blow of unnecessary challenges. Dealing with foreign trade issues. Acting as treasurer several factors would have to be developed and monitored when expanding internationally such as money exchange, current exchange rates, cash flow, bribery, tariffs, and international trade laws for the company. Having knowledge of the country’s culture is very important simply to keep the lines of communication open and most of all not to offend someone. Determinants of foreign entry and how would our company enter A few factors that determines if our company is qualified to enter China are as follows; the size of the firm my play a significant role in the organization’s entry into the country. The profitability of the company would indicate experience and target a dimension of competition within the country. (Culture Distance) Our firm will enter the country with a licensing agreement that is wholly owned by its affiliates. (Market Knowledge) The organizations will have an advantage by using the wholly owned entry mode as we gain knowledge and get a better understanding about the environment. Having high-control entry modes will allow the company to establish manufacturing plants that will supply their tires to dominant automotive companies due to the company’s experience. (Value of firm-specific assets) The...
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...primarily due to the fact that the negotiating parties are often from different countries, with different cultural values and beliefs which they usually bring with them to the negotiating table. What is communicated, how it is communicated, how people think and behave during negotiations can differ across cultures. The purpose of this paper is to examine the effect of culture on negotiation and suggest ways to deal with cross cultural problems in international business negotiations. An analytical approach is applied in this research. The conclusion reached is that effective international negotiators need to know not only the fundamentals of negotiation, but also how culture can influence the negotiator’s behavior and the negotiation agreement. Understanding, accepting and respecting the cultural values of the other parties is very important as it will lead to a more successful outcome. * The Author is a legal practitioner and holds an LL.B (Hons) from the Igbinedion University, Okada. She is currently a postgraduate student of CEPMLP University of Dundee, Scotland, where she is pursuing an LL.M Degree in Energy Law and Policy. TABLE OF CONTENTS Page ABBREVIATIONS INTRODUCTION………………………………………………………………… CHAPTER ONE 1.0. 1.1. 1.2 1.3 . Negotiation – An Overview……………………………….……………… Negotiation Strategies…………………………………….………………. Stages of Negotiation……………………………………….……………... Principled Negotiation……………………………………….…………… 5 5 7 8 4 CHAPTER TWO 2.0. 2.1 Culture……………………………………………............
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...forefront of today’s business strategies. Culture in international negotiations has frequently been compared to an iceberg, although there is an appearance of an obstacle above the surface, the depth of understanding required to conduct successful international negotiations goes far beyond what is immediately transparent. Since culture has a substantial influence on how people deliberate, converse and act, it has significant effect on many aspects of business negotiations, and therefore must be considered when conducting business internationally. All too often companies try to operate using the same business structure and strategies in multiple different countries and are unsuccessful or have extreme difficulty due to the differences in culture. This paper will discuss several cultural differences which consistently cause difficulties in international negotiations specifically during the conduct of business between America and China. These differences are broken up into several different categories including: purpose of negotiation, cultural compatibility, governmental compatibility, communication barriers, risk aversion, formalities and negotiating speed, emotional response, and successful negotiating tactics. Purpose Understanding why both business parties are negotiating as well as cultural negotiation processes are important in obtaining a favorable outcome during international business transactions. While Americans consider negotiating as a short term process to reach a...
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...conducting business within their culture and more importantly, with other cultures as well. Indeed, cultural differences pose difficult challenges to international negotiations, however, these may present instrumental opportunities for both parties if conducted properly. There are various elements that impact international communication and decision-making such as Hofstede’s dimensions of culture, cultural intelligence, leadership and negotiation. This paper will discuss these characteristics in relation to how an employee should prepare when joining a team of international negotiators. Leadership is an essential ingredient in effective international agreements. Leadership makes a difference by establishing a “relationship of influence in which one actor guides or directs the behavior of others toward a certain goal” (Underdal, 1994). Leadership provides a model to others and removes uncertainty about whether the leader is actually devoted to meaningful action. It is important for any employee entering an international agreement to exercise leadership skills. Some universal skills include having charisma and being autonomous and a team player. It is important to enter a business agreement with some authority to ensure seriousness and portray a vision. Hofstede`s cultural dimensions have been extensively used when dealing with different cultures. In preparation for a negotiation with an international team, an employee must understand how that culture operates on power distance,...
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...Cross Cultural Negotiations Lecture 3: “The Incredible Shrinking World.” Culture in Negotiations Cross-Cultural Negotiations: An introduction 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. It is naive indeed to venture into international negotiation with the belief that “after all people are pretty much alike everywhere and behave much as we do.” Even if they wear the same clothes you do, speak English as well as (or even better than) you, and prefer many of the comforts and attributes of American life (food, hotels, sports), it would be foolish to view a member of another culture as a brother in spirit. That negotiation style you 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...
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... ABSTRACT International management studies have been based primarily on the comparison of managerial behavior in countries around the world. Often, these studies have implied that businesspeople behave similarly with their domestic colleagues as with their foreign counterparts which indeed sums up to conflicting results. Context of the negotiations at the international level are faced with the differences between various cultures: a longterm attitude towards communication, the power placement, the uncertainties avoiding, emotional differences between the negotiating parties and others. These and other differences in cross-cultural dimensions can influence the process of negotiations between the representatives of different cultures in the negotiations. There may happen in a variety of misunderstandings in negotiations and between the two parties of the same culture, while the process of preparing for the talks with different cultures requires empirical studies in Intercultural Communication. The article discusses cultural dimensions of two contrasting cultures and their effect on negotiations. The Article includes cross cultural studies between an Asian and a European nation’s cultural strengths and weaknesses to anticipate an opposing nation’s possible behaviors in the negotiation process, and to understand the cultural factors that may influence their decision making. It is commonly believed that cross-cultural studies are focused on certain phenomena and discuss the...
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...right and wrong, disagreement on what is fair and equitable, understanding each other’s message and form of communication, and even the procedures that will be used to conduct negotiations are but a few of the hurdles that negotiators will encounter. Negotiation is further complicated when the parties find themselves negotiating across dissimilar cultures. Culture is a powerful factor in shaping how people think, communicate and behave. It therefore affects how they negotiate. In business arena, negotiations are crucial aspects of inter-organizational relationships like joint ventures, mergers and acquisitions, licensing and distribution agreements, and sales of products and services. As the proportion of foreign to domestic trade increases, so does the frequency of business negotiations between people from different countries and cultures. To successfully manage these negotiations, businesspeople need to know how to influence and communicate with members of cultures other than their own. This paper investigates the impact of culture on negotiations. It begins by defining negotiation, cross cultural negotiation, culture, including a discussion on how culture is imbedded in negotiation orientations, processes and styles around the globe. Finally, it attempts to analyze the influence of cultural differences on and approaches to negotiations and the importance of ascertaining and identifying the players in business negotiation and the processes...
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...nature of Chinese business negotiating style in Sino-Western business negotiations in business-to-business markets involving large industrial projects from a social cultural point of view. Design/methodology/approach – A conceptual approach developed from personal interviews. Findings – This study reveals that the Chinese negotiator does not possess an absolute negotiating style but rather embraces a mixture of different roles together: “Maoist bureaucrat in learning”, “Confucian gentleman”, and “Sun Tzu-like strategist”. The Chinese negotiating strategy is essentially a combination of cooperation and competition (termed as the “coop-comp” negotiation strategy in this study). Trust is the ultimate indicator of Chinese negotiating propensities and role choices. Research limitations/implications – The focus of this study is on Chinese negotiating style shown in large B2B negotiations with Chinese SOEs. Originality/value – Differing from most other studies on Chinese negotiating style which tend to depict the Chinese negotiator as either sincere or deceptive, this study points out that there exists an intrinsic paradox in Chinese negotiating style which reflects the Yin Yang thinking. The Chinese negotiator has a cultural capacity to negotiate both sincerely and deceptively and he/she changes coping strategies according to situation and context, all depending on the level of trust between negotiating partners. Keywords China, National cultures, Negotiating, Management skills, International...
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...and the United States when it comes to dealings with business transactions. For example business partners within the United States tends to lean towards an interpersonal level and having other form of relationship outside is frowned upon. In Asian countries businesses will not even begin negotiating until a relationship is built and there is a level of trust. The use of a middle man can be helpful when negotiating in order to gain an understanding of the background information of the foreign negotiators. Aside from the importance of etiquette and social customs it is important to know the negotiating tactics employed. When doing business with China, Japan, and South Korea it is important to know the differences between each individual country. While they are all Asian countries and there are many similarities in etiquette there are many differences when dealing with negotiations. Before negotiations starts one must be conscientious of attitudes and styles, the sharing of information, pace of negotiations, and bargaining. China and South Korea share the attitude and style of distributive and contingency, while Japan is more cooperative. The Japanese see “negotiating as joint problem solving”. (Lothar Katz) China and South Korea’s distributive and contingency style of negotiating rely on the use of aggressive techniques they are usually willing to compromise. Even though the use of aggression is common it is generally easy to reach an agreement if a conflict were...
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