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The Problem With Culture

July 29, 2013 at 2:42 PM

Nigel Dunlop looks at the issues that arise in cross-cultural negotiation

Negotiations between parties of different cultures can be difficult, to say the least. As one expert has observed, if gender can complicate the negotiation process, cultural issues can be show-stoppers (Richard Shell, Bargaining for Advantage – Negotiation Strategies for Reasonable People (Second edition, Penguin, 2006)).

The problem is that people negotiate according to values, ideas, and expectations that are deeply rooted in culture and therefore not apparent to those of other cultures, or even to themselves.

Take Shell's example of the British CEO engaging in his first negotiation in Lebanon. Every time he made a concession, the other parties escalated rather than reduced their demands. Eventually, he abandoned the negotiations in disgust. Days later, the Lebanese came back to him with attractive settlement proposals based on surprising concessions. What the British CEO had not realized was that in Lebanon walking away from the negotiation table is a very common way to show serious intent to negotiate. Had the CEO walked away from the table earlier, then the deal could have been closed much sooner.

Or take Shell's example of the female lawyer from a prestigious New York law firm who accompanied a male CEO of a major client to negotiate a complex deal in Latin America. When the chief negotiator (a non-lawyer) from the other country proposed that he talk alone with the CEO and that the female lawyer go shopping with his wife, she was affronted, believing this to be an example of Latin American gender bias. In fact, the local practice was for lawyers to negotiate only with other lawyers, not directly with business people. Excluding the female lawyer was therefore an attempt to advance the negotiations and no offence was intended.

These examples illustrate that the tone, pacing, signals, cues, and underlying assumptions aboutrelationships can be radically different between cultures and impact adversely on negotiation.

However, the good news is that cultural issues usually have more to do with form than substance (Shell). That is, they add complexity and potential misunderstanding to the way people communicate with one another, but money, control, and risk are still likely to be the most important issues on the table regardless of the cultures represented by the parties.

The most obvious way to avoid cross-cultural difficulties is to gain a better understanding of unfamiliar cultures. In this regard, it is helpful to have some appreciation of the various dimensions by which cultural psychologists describe cultural difference.

Cultural dimensions

A distinguished cross-cultural psychologist, Geert Hofstede, categorized cultures (including 'New Zealand' culture, which Hofstede found to be highly egalitarian and individualistic and reasonably masculine, avoidant of uncertainty and disregarding of tradition) according to the following dimensions:

  • Hierarchical versus egalitarian;
  • Individualistic versus collective;
  • "Masculine" values versus "feminine" values ("Masculine values" are to be assertive, tough, and focused on material strengths, whereas "feminine values" are to be modest, tender, and concerned with quality of life);
  • Uncertainty comfort versus uncertainty discomfort;
  • Devotion to tradition versus little regard for tradition.

Other researchers, such as Fons Trompenaars and Charles Hampden-Turner, have added further dimensions including:

  • Importance of rules versus importance of relationships (a point much emphasised by Shell);
  • Displaying emotions versus not displaying emotions;
  • Preferring one thing at a time versus preferring several things at a time (ie sequential versus synchronic);
  • Status being something earned versus status being something received;
  • Communication being indirect versus communication being direct.

Applying cultural dimensions to negotiation

Cultural factors may affect all aspects of negotiation including such considerations as the venue, who should be present, the time allowed, how to meet, greet, and address, who has the authority to settle, the tone or style of negotiation, how best to problem solve, what tactics or strategies to engage, and most importantly, how to gauge the types and degrees of settlement the other party might be prepared to entertain.

Specific difficulties

Professor Jeswald Salacuse, Professor of Law at Boston's Tufts University, and a member of the executive committee of the Program on Negotiation at Harvard Law School, has identified the following 10 features of negotiation as being particularly susceptible to cultural difference:

  • Goal – whether the negotiations are about 'cutting the deal' or about relationships.
  • Attitude – whether the negotiations are confrontational (win-lose) or collaborative (win-win).
  • Personal style – whether formal or informal.
  • Communication – whether direct (blunt and unambiguous) or indirect (subtle and contextual). An example of a direct, low-context message is "We consider the quality of your product to be unacceptable". By contrast, the indirect, high-context equivalent would be: "Our technicians have spent a good deal of time examining your product; we need to discuss our quality objectives in the light of those examinations".
  • Sensitivity to time – whether punctual or late, quick or slow.
  • Emotionalism – whether emotion should be displayed or hidden.Form of agreement – whether the agreement should only involve general principles or be specific as to all circumstances and contingencies.
  • Building the agreement – whether the settlement process should involve working bottom up from general principles to the specific (deductively) or involve working from top-down from specifics to the general (inductively). Those who work bottom up will say, "Let us work out some general points of agreement and then we will apply those to resolving the specific issues we are facing", whereas those who work top-down will say, "Let us first resolve the immediate issues and then see whether we can distil some general points of agreement from those solutions".
  • Team organization – whether one leader has the sole authority to settle or whether group consensus is required.
  • Risk taking – whether risk tolerant or risk averse.

 

United States

Japan

Goal

Emphasize the signed contract

Emphasize the creation of a relationship

Attitude

Okay with a win-lose outcome

Preference for a win-win outcome

Personal style

Using first name at an initial meeting a sign of friendship

Using a first name at an initial meeting disrespectful

Communication

Prefer directness

Prefer obliqueness

Sensitivity to time

Negotiate quickly

Negotiate slowly

Emotionalism

Prepared to show emotions

Hide emotions

Form of agreement

Prefer detailed agreements covering every eventuality

Prefer agreements setting out general principles

Bottom up or top-down

Prefer reaching agreements on specifics first (top-down)

Prefer reaching agreement on general principles first (bottom up)

Team organization

Prefer a team leader having complete authority to decide all matters

Prefer the negotiating team to reach a consensus

Risk taking

Risk takers

Risk avoidant

Cultural impact

The degree of impact of culture in each particular cross-cultural negotiation will depend on such factors as the subject matter of the negotiation, the extent of differences between the cultures involved, the degree of cross-cultural understanding of the negotiators, and the strength of cultural influence on the parties.

For example, it is reasonable to suppose that a negotiation between a fourth-generation European New Zealander and a newly arrived immigrant from Uzbekistan concerning a medical mishap to a child will be more culturally fraught than one concerning a money claim between the same New Zealander and a US immigrant who has lived in New Zealand for five years.

Preparation

The required thoroughness of preparation for a cross-cultural negotiation will depend on the degree of impact just discussed.

A suggested approach for negotiators is as follows:

  • Research the unfamiliar culture on the Internet by such topics as culture, etiquette, protocol, doing business, and negotiating with.
  • Reflect on how the cultural features identified differ from the negotiator's own culture and what difficulties may be encountered as a result.
  • Consider whether any special arrangements should be made for the negotiations, for example, the provision of an interpreter or cultural adviser, the choice of venue, dietary needs, and religious requirements.
  • Ascertain the appropriate way to meet, greet, and address.Consider particularly the 10 areas of susceptibility identified by Salacuse.More generally, identify the cultural values, mores, and traits which are most likely to affect the manner in which the other party will behave in the negotiation, and then plan negotiation styles, tactics, and strategies accordingly.
  • As always, consider what settlement options and levels the other party might be prepared to entertain, having regard to their cultural mind-set.

Conclusion

If all this sounds difficult, let me conclude on an optimistic note.

Shell notes that anthropologists and other social scientists have observed a similar basic approach to negotiation across diverse cultures consistent with the four stages of negotiation which he identifies. Those four stages are: preparation, information exchange, proposing and concession making, and commitment.

He states that people in different cultures tend to go through the four stages at different speeds. But nonetheless, regardless of culture, skilled negotiators everywhere are a bit like good dancers: they are alert to their counterpart's pace, striving to stay "in step" as the process moves along.

Fundamentally, cross-cultural negotiation is no different from any other sort of negotiation. It requires the observance of one of the basic maxims of negotiation: to understand the other party.

Therefore, cross-cultural negotiation is special only because it requires extra devotion to the task ofunderstanding the other party. That should be a welcome task, because as Jawaharlal Nehru said, culture is the widening of the mind and of the spirit.

 

 

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Category: Negotiation