Influence of culture on international negotiation

Author: Iloka Benneth Chiemelie
Published: 12/12/2013

1.0 How do cultural differences affect the perceptions and behaviours of different parties in an international negotiation?

Culture is something that is very distinctive, which implies that it varies amongst people (Bauman, 2004; Jenkins, 2004; Robins, 1996). As Iloka and Okafor (2012) made known, these differences will influence the behavioural patter and perception of people in international negotiation. Some of the ways that this influence can be seen are:

1.1 Time as linear-vs-time as circular – the understanding is that people who view time as linear want to do one thing at a time (usually completing A before going into B), while people who view time as circular can do many things at time (not necessary having to complete A before going into B) (Parkinson and Green, 2001). Therefore, this difference in culture will influence ways people negotiate. For instance, Germans are linear and they would prefer a step-by-step approach that is well detailed, and negotiations must be completed within the time frame. On the other hand, Japanese people are circular and negotiation can begin as well as end from any given angle.

1.2 Low context-vs-high context – in a low context culture, people tend to focus on finding solutions for their problems and not disturbing other people during negotiation; while people from high context culture need clarification with every bit of the negotiation process (Goffman, 1959). For instance, in a negotiation between Britain and China, the British will tend to seek clarifications in numerous cases and the Chinese which is more of low-context might start viewing this as a lack of trust (based on the ‘Guanxi’ or ‘Confucian’ perspective).

Therefore, it can be seen that cultural differences will have influences on the speed of negotiation and the level of information disclosure. The overall outcome will be a decrease on trust and it negative behavioural pattern that can yield negative outcome from the negotiation process.

2.0 Explain the relative importance of national culture, organisational culture, and individual personalities in contributing to the outcomes of a negotiation.

The importance of national culture on international business has received an extensive discussion in cultural management literatures (Varner, 2000; Kale and Barnes, 1992). The main reason for this is because of the role culture plays in the outcome of negotiation as discussed below:

2.1 National culture – this is the main culture that shapes negotiation between companies from different countries or different nations in international business. National culture is every important for the establishment of norms, morals and goals that will be used to ensure quality relationship between the countries involved and positive outcome from the negotiation process (Varner, 2000; Kale and Barnes, 1992). Normally, the terms and conditions for an agreement from international negotiation are based on influences shielded by national cultures.

2.2 Corporate culture – while the focus of national culture is on negotiation between two different countries, corporate culture seeks to define an understanding on negotiation between companies. In cases where the corporate cultures are well aligned, the outcome of the negotiation process is influenced positively while the reverse can also be the case when the corporate cultures seem to have different views to the business process (Varner, 2000; Kale and Barnes, 1992).

2.3 Individual personalities – depending on the countries that people are from, their personality can influence the negotiation outcome. For instance, appearances, attendance, competence, fluency in language and high emotional intelligence have all been found to influence the outcome of a negotiation process (Varner, 2000; Kale and Barnes, 1992).

3.0 What are the skills and attributes that a manager needs to negotiate successfully across cultures?

3.1 Ability to create cultural synergy – Hall (1996) made known that international business negotiation can be influenced positively by creating cultural synergy. Thus, people in international negotiation need to have the necessary skills to understand issues being negotiated from their own cultural view and then the cultural view of their partner; and finally combine these views based on a common ground of understanding. This will enhance the success of negotiation because the interest of both parties will be covered in line with their different cultural values.

3.2 Good Emotional intelligence and conflict resolution skills – since differences exist in culture, conflict should be expected (and can sometimes be positive). Therefore, managers engaging in international negotiation need to be well equipped with conflict management skills. There are four types of people and communication styles as: 1) cooperating (integrating) style- it is characterized by openness; 2) contenting (dominating) - these people are self-centred and as a result ignore other people’s needs; 3) Avoiding style – is associated with withdrawal or sidestepping (Rahim, 2002); and 4) third-party resolution style -which seeks the help of an intermediary to negotiate between parties in conflict (de Dreu and van Vianen, 2001). Thus, managers need to understand these people, their negotiation skills and behaviours in order to ensure success in the negotiation process (Rahim and Bonoma, 1979).

 4.0 Influence of culture on tolerance of dispute and how dispute can lead to negative or positive outcome in the negotiation process

Differences in culture can have a positive influence on how people tolerate disputes during negotiation. For instance, people from a feminine culture (e.g. the Norwegians known for their “Jentloven” approach to business) will be more tolerable as they seek to create harmony between parties in the negotiation process (Triandis, 1994). However, people from masculine culture will likely want to showcase their superiority and protected their own interest, thus they will not tolerate disputes easily (Schein, 2001).

Dispute in negotiation can yield but negative and positive outcome, but it is more likely to yield negative can positive outcome. When it yields negative impact, the outcome will normally be desolation or the negotiation and lack of an agreement (failure), but when things go around, the outcome will be an increase in clear understanding of business terms and adoption of business terms that will better meet the interests of both parties. This is because when parties in dispute decide to come together, they will not allow their interest to be sacrificed while at the same time ensuring that dispute is avoided in future.

5.0 References

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