Company Observation Essay: The Influence of Culture on Negotiations
Negotiation Elements and Cultural Dimensions adopt a less confrontational style to avoid direct, aggressive conflict. These cultures may have a more collaborative orientation towards negotiations. In developing a strategy, it is important to consider the levels of risk a party is willing to take for sharing information, revealing positions, and general considerations on the best approach for a collaborative negotiation. According to Hofstede, certain cultures also tend to be wary of unfamiliar risks.
Hofstede’s four dimensions of culture show that cultural diversity affects negotiations. The following paragraph presents another perspective on how culture influences the negotiation process, based on Jeswald Salacuse’s identification of ten factors in negotiations. In a survey involving 310 individuals from 12 countries and 8 occupations, Salacuse requested participants to assess their negotiation style for ten negotiation factors. The following points outline these ten negotiation factors.
The survey included respondents from Spain, France, Brazil, Japan, the U. S, Germany, the U. K., Nigeria, Argentina, China, Mexico, and India. They represented various job sectors such as law, military, engineering, public sector, students, accounting, teaching, and management/marketing. Through Salacuse’s research, it is evident that culture significantly impacts negotiating styles. While Salacuse identified numerous cultural effects, this paper will focus on four factors: negotiation goals, attitudes, agreement form, and risk-taking.
The 10 factors include the following: Goal, contract or relationship; Attitudes, win/lose or win/win; Personal Styles, informal or formal; Communications, direct or indirect; Time Sensitivity, high or low; Emotionalism, high or low; Agreement Form, specific or general; Agreement Building, high or low; Team Organization, one leader or decisions in group; and Risk-taking, high or low. The first area of the survey explores how respondents negotiate their goals, whether they prioritize the formation of a final contract or the establishment of a long-term relationship between the parties.
The results indicate that respondents had differing opinions on the issue. 54% of all respondents believed that the main goal was to form a contract. However, this viewpoint was only shared by 26% of Spanish respondents, while a majority of 66% of Indian respondents saw the primary goal as building a relationship. Additionally, when considering occupation rather than national culture, the percentage in favor of a contract was higher among law professionals at 71%, while a larger percentage of management/marketing professionals at 61% preferred the relationship goal.
We can observe from the study that actors in negotiations have the option to choose their style or approach. A third of all participants from various countries perceived it as a win-lose situation. However, the survey also indicated significant cultural differences in this aspect. All Japanese participants viewed negotiations as win-win, in contrast to only 36.8% of Spanish participants who shared this perspective. Moreover, a profession-based analysis revealed that while only 14% of those in diplomacy or the public sector saw negotiations as win-lose, 60% of individuals from the military held this belief.
The concept of a deal may vary among different cultures. Some cultures see a deal as a formal agreement, while others view it as a guideline for general principles rather than specific rules. Salacuse’s survey found that 78% of respondents preferred a detailed contract. Interestingly, 89% of British individuals preferred a specific agreement, whereas only 64% of Japanese individuals shared the same preference. When considering occupation, 100% of military respondents and 92% of student respondents favored a specific agreement. In contrast, only 64% of those in diplomacy/public sector and management/marketing professions preferred specificity.
The impact of culture on negotiation styles includes risk-taking, which refers to a party’s willingness to share information, explore new approaches, and tolerate ambiguity in order to reach a mutual solution. Approximately 70% of all respondents preferred high risk-taking, but this varied significantly across cultures. Only 18% of Japanese respondents opted for a high level of risk-taking, while France (90%), India (89%), and the UK (88%) displayed a higher inclination towards taking risks. Developing a cross-cultural negotiation strategy entails thorough preparation.
To effectively negotiate, it is important to not only analyze the present issues but also understand the culture and history of the other negotiator. Additionally, self-awareness of one’s own culture is necessary. Prioritizing building relationships with all parties involved before the negotiations commence is a valuable use of time. The negotiator’s research skills and preparation will have a positive impact on the negotiation outcome. It is also important for the cross-cultural negotiator to gain knowledge on the diverse interests of different cultures.
For individuals with a low tolerance for ambiguity, having precise information is crucial. One can develop a strategy for conducting cross-cultural negotiations. Chris Moore and Peter Woodrow have outlined five strategies that are dependent on the party’s ability and willingness to adapt to each other’s culture. In this context, ability refers to a negotiator’s strength, capability, and proficiency in adapting to a different culture. Selecting a negotiation strategy is a complex decision and goes beyond simply choosing the approach that aligns with the negotiator’s personal style.
Furthermore, during the negotiation process, a negotiator may need to modify their initial strategy as they progress through different stages. It is advantageous to have a broad understanding of the other party’s culture as a foundation. It is crucial to pay close attention to cultural influences, particularly in relation to values and trust, and to recognize how they impact the negotiation process. Flexibility is also a vital aspect that a negotiator should possess during the negotiation process.
The negotiator’s capacity and readiness to adjust to cultural disparities will help make the process easier. However, it is crucial to acknowledge that negotiators are not machines and other variables will also play a role in cross-cultural negotiations. It is necessary for negotiators to refrain from relying on cultural stereotypes when building relationships. Not all behaviors can be attributed solely to cultural distinctions. Wendi Adair defines culture as a collection of shared values and beliefs that define the behavior of national, ethnic, or other groups. In conclusion,
Negotiating is a crucial and valuable method for resolving conflicts when all parties share a commitment to achieving a collaborative agreement. Cultural factors play a significant role in negotiations as each participant brings their own unique cultural behaviors. This paper explores the essence of culture in negotiation and emphasizes the role of mentalities and values. An individual’s mentality is influenced by human nature, culture, and personality, but it is the cultural component from larger societies that ultimately determines the outcome.
Hofstede’s Dimensions of Culture and their Impact on Negotiations
The cultural theory developed by Hofstede offers a comprehensive summary of how different cultures vary based on their distinct values. This understanding plays a crucial role when discussing the influence of culture on negotiations. Additionally, a grasp of essential negotiation aspects is equally significant. Unlike other forms of communication, negotiations’ objective is to achieve an agreement. To attain this objective, all participants must demonstrate willingness to comprehend each other’s standpoint, actively foster trust, and enhance effective communication.
The text contains references to the following sources:
– “Cultures and Organizations: Software of the Mind” by Geert H Hofstede, published in 1997 by McGraw-Hill. Available at: http://www.springerlink.com/content/r2x64126572154t3/
– “Culture and Negotiation Strategy” by Wendi Adair, Jeanne Brett, Alain Lempereur, and Tetsushi Okumura. Published in Negotiation Journal in January 2004. Available in ABI/INFORM Global on page 87.
– “Mapping Cultures – Strategies for Effective Intercultural Negotiations” by Chris Moore and Peter Woodrow, published in March 2004. Available at: http://www.mediate.com/articles/cdr1.cfm#
