International Negotiation / Cross –Cultural Negotiations

International negotiation is often a process of power-based dialogue intended to achieve certain goals or ends, and which may or may not thoroughly resolve a particular dispute or disputes to the satisfaction of all parties. International negotiation can be bilateral or multilateral, public or secret, and can involve different forms of negotiation among states and non-state civilian actors, as well as with anti-state actors, such as individual terrorists and terrorist organizations. In addition, different cultures may engage in negotiations with different styles and for different purposes, with different expectations. Negotiation aimed at conflict management seeks to limit or minimize tensions and disputes as much as possible, without necessarily changing the status quo or the relations of power, values, and interests between the disputing parties. Negotiation aimed at conflict transformation seeks to go beyond the status quo to transform relations of disputed power, values, and interests in a more “positive” and less controversial direction although largely expecting a number of disputes and differences to remain. Conflict resolution is generally seen as an even longer-term process that attempts to find a common and complete agreement among the different parties despite their different values, interests, and power relationships.

Negotiation is an unavoidable part of any international business and an important instrument of international business communication. International business negotiations have many characteristics that distinguish them from negotiations in the domestic markets mainly due to cross-cultural factors. A lot of studies conducted are focusing on the effect of culture in specific countries. John Graham (2003) has done studies in the negotiation styles of business people in 16 countries. Graham found that there were significant differences in the negotiation process in the countries that he studied. Although negotiators from different countries obtained the same outcome, the way they negotiated was different. National culture programming leads to patterns of thinking, feeling and acting. The behavior of the negotiators is strongly influenced by their cultural background, which defines the range of strategies negotiators develop as well as tactics and communication styles they implement. Successful negotiations require understanding of each party's culture and may also require adaptation of the negotiation strategy so it is consistent with the other party's culture (Hollensen 2001).

Cultural differences in negotiations tend to occur for two main reasons. First, when confronting cultural differences, people tend to rely on stereotypes. Stereotypes are often pejorative (for example: Italians always run late), and they can lead to distorted expectations about your counterpart’s behavior as well as potentially costly misinterpretations.

Instead of relying on stereotypes, try to focus on prototypes —cultural averages on dimensions of behavior or values.

A second common reason for cross-cultural misunderstandings is that we tend to interpret others’ behaviors, values, and beliefs through the lens of our own culture. To overcome this tendency, we need to learn about the other party’s culture.

Culture is a major element of international business negotiations. It is often compared to an iceberg; there is more to it than meets the eye. These hidden elements, if not understood, can make or break an international business transaction. It is thus important to be aware of cultural influences on negotiations.

Salacuse, a leading expert on negotiations, has identified the ten most important cultural factors that affect business negotiations. These “top ten” elements of negotiating behaviour constitute a basic framework for identifying cultural differences that may arise during the negotiation process. Applying this framework in your international business negotiations may enable you to understand your counterpart better and to anticipate possible misunderstandings.

Source: Salacuse, J.W., Negotiating: The Top Ten Ways That Culture Can Affect Your Negotiation, IBJ (2004)

The ten negotiating traits can be placed on a spectrum or continuum, as illustrated in the chart below.

The Impact of Culture on Negotiation

Negotiation Factors

Goal	Contract <––––––– > Relationship
Attitude	Win/Lose <––––––– > Win/Win
Personal Styles	Informal <–––––––– > Formal
Communications	Direct < –––––––– > Indirect
Time Sensitivity	High < –––––––– > Low
Emotionalism	High < –––––––– > Low
Agreement Form	Specific < –––––––– > General
Agreement Building	Bottom Line < ––––– > Top Down
Team Organization	One Leader < ––––– > Consensus
Risk Taking	High < –––––––– > Low

Negotiating Goal

The purpose of negotiations varies among cultures. For some cultures, the primary goal of negotiations is to reach a deal and sign a contract (North American culture), while other cultures (Asian cultures) view it as the establishment of a long term relationship between the parties which will eventually lead to a contract. Salacuse found that whereas 74 percent of the Spanish respondents claimed their goal in a negotiation was a contract, only 33 percent of the Indian executives had a similar view.

Negotiating Attitude

Parties from different cultures tend to come to the negotiation table with a win-lose or win-win attitude. The win-win negotiators view the negotiations as collaborative efforts where both parties gain, whereas the confrontational nature of the win-lose negotiators usually results in one side winning and the other losing. For example, whereas 100 percent of the Japanese respondents claimed that they approached negotiations as a win-win process, only 33% of the Spanish executives took that view.

Personal Style: Informal or Formal?

Culture strongly influences the personal styles of negotiators. Negotiators with a formal style tend to address their counterparts by their titles and avoid discussing personal matters. In contrast, negotiators with an informal style tries to start the discussion on a first-name basis and tend to quickly establish a friendly relationship. For an American, calling someone by the first name is an act of friendship and therefore a good thing. For a Japanese, the use of the first name at a first meeting is an act of disrespect and therefore bad.

Communication: Direct or Indirect?

Cultures can differ in preferred communication styles. Some cultures value direct and simple methods of communication whilst others prefer indirect and complex methods such as the use of figurative forms of speech, facial expressions and body language. In a culture that values directness, such as the American or the Israeli, you can expect to receive a clear and definite response to your proposals and questions. In cultures that rely on indirect communication, such as the Japanese, reaction to your proposals may be gained by interpreting seemingly vague comments, gestures, and other signs. What you will not receive at a first meeting is a definite commitment or rejection.

Sensitivity to Time: High or Low?

Attitudes to time vary among cultures. It is said that Germans are always punctual, Latins are habitually late, Japanese negotiate slowly, and Americans are quick to make a deal. For Americans, the deal is a signed contract and time is money, so they want to make a deal quickly. Americans therefore try to reduce formalities to a minimum and get down to business quickly. Japanese and other Asians, whose goal is to create a relationship rather than simply sign a contract, need to invest time in the negotiating process so that the parties can get to know one another well and determine whether they wish to embark on a long-term relationship. This reflects their contrasting views on the purpose of a negotiation.

Emotionalism: High or Low?

Some cultures show their emotions at the negotiation table, while others hide their feelings. According to the stereotype, Latin Americans show their emotions at the negotiating table, while the Japanese and many other Asians hide their feelings. Obviously, individual personality plays a role here. There are passive Latins and hot-headed Japanese. Nonetheless, various cultures have different rules as to the appropriateness and form of displaying emotions, and these rules are brought to the negotiating table as well. Deal makers should seek to learn them.