Culture Revision Notes



Culture Revision Notes

Cross-cultural negotiations

Hendon et al (1996) state that culture impacts on all areas of an international negotiation: the motivations the parties have to enter the negotiation, the process of the negotiation meeting, the outcomes achieved, the traditions and values that underlie the agreement, and the specific situational conditions within which the negotiation takes place.

In fact, cultural differences and similarities impact on all negotiations — it is characteristic of human interaction. What makes culture a special consideration in negotiation is when the supplier and purchaser are not familiar with the cultural context. As Hendon et al state: ‘when you are negotiating with someone from your own country, it is often truly possible to expedite communications by making reasonable cultural assumptions. The situation reverses itself when two cultures are involved.’ Culture is a ‘total communication framework’ and includes:

• shared meanings, values and beliefs

• group and ethnic orientation

• judgment and opinion on good and bad

• language.

Without an intimate understanding of these aspects, misperception and distortion in communication is certain. Information that contains significant cultural meaning is avoided or misinterpreted in favour of a more familiar meaning.

Lewicki et al (2003a) identify two key factors that influence cross-cultural negotiations: the macro-environment and the immediate context. The macro-environment comprises a number of aspects:

· the political and legal context

• the role of international economics

• the nature of government and bureaucracy `

• how political stable the country is

• the ideology of the people, whether they are individualistic or collectivist ;

• the negotiation setting or approach.

The immediate context includes the relative bargaining power, levels of conflict, relationships and outcome preferences, which all influence the negotiation. Thus, in preparing for a negotiation with a party from a different cultural context, it is especially important to consider the range of factors that may influence the negotiation.

Developing Cultural Awareness

Culture Revision Notes

Individualism/ collectivism: this represents an independent versus a team approach, where impact is likely to be on processes, outcomes and preferences for conflict resolution. Collectivist cultures (such as Pacific Rim and certain Latin American countries) favour a longer-term relationship whereas individualistic cultures (such as the UK, US and Australia) focus on the short-term, preferring to introduce new

negotiators to resolve problems.

Power distance: this relates to the acceptance of inequality in society and the use of power. High power distance cultures (Arab, Asian, South American countries) tend to defer decision making in negotiations to a leader within an organisation which results in a slow process, whereas low power distance cultures (Western Europe, US) tend to

make decisions more quickly because they are made throughout the organisation. _

Masculiniry/femininity: this refers to male assertiveness versus the more female concern for relationships. More masculine cultures (Japan, Austria, Venezuela, Switzerland) favour more competitive negotiations whilst feminine cultures (Taiwan, Spain, Costa Rica) prefer collaboration and compromise. .

Uncertainty avoidance: this is the extent to which structure and risk avoidance is preferred to rapid change and new situations. Those cultures that prefer structure (and are therefore more stable) tend to be high in avoiding uncertainty. Such cultures are uncomfortable with ambiguity and prefer procedures and rules to guide the negotiation

process (such as Greece, Portugal and Guatemala), while others (such as Sweden, Hong Kong and Ireland) are more appreciative of less structure in the negotiation process.

Hofstede and Bond (1988) identified a fifth dimension:

Long-term orientation: this includes work ethic and commitment, and is referred to as ‘Confucian dynamism’, although there has been little published on its impact in negotiations. This dimension relates to deeply rooted values and traditions. A high orientation in business may indicate non-acceptance of ‘outsider’ influence whereas a low orientation may indicate willingness to accept change more easily.

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