1. International and Cross-Cultural Negotiation
CHAPTER ELEVEN
International and
Cross-Cultural Negotiation

2. What Makes International Negotiations Different?
Two overall contexts have an influence on international negotiations:
Environmental context
Includes environmental forces that neither negotiator controls that influence the negotiation
Immediate context
Includes factors over which negotiators appear to have some control

3. Environmental Context
Factors that make international negotiations more challenging than domestic negotiations include:
Political and legal pluralism
International economics
Foreign governments and bureaucracies
Instability
Ideology
Culture
External stakeholders

4. Immediate Context
“Factors over which the negotiators have influence and some measure of control”:
Relative bargaining power
Levels of conflict
Relationship between negotiators
Desired outcomes
Immediate stakeholders

5. The Contexts of International Negotiations

6. Conceptualizing Culture and Negotiation
Culture as shared values
Understanding central values and norms
Individualism/collectivism
Power distance
Career success/quality of life
Uncertainty avoidance

7. GEERT HOFSTEDE’ S CULTURAL DIMENSIONS http://www.geert-hofstede.com/
Also includes business etiquette for several countries

8. Hofstede’s Dimensions of Culture
Individualism/collectivism
Power distance
Career Success/Quality of Life
Uncertainty avoidance

9. Individualism/Collectivism
Definition: The extent to which the society is organized around individuals or the group
Individualism/collectivism orientation influences a broad range of negotiation processes, outcomes, and preferences
Individualistic societies may be more likely to swap negotiators, using whatever short-term criteria seem appropriate
Collectivistic societies focus on relationships and will stay with the same negotiator for years

10. Power Distance
Definition: “The extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally”
Cultures with stronger power distance will be more likely to have decision-making concentrated at the top of the culture.

11. Career Success/Quality of Life
Definition: Cultures differed “in the extent to which they held values that prompted career success or quality of life.”
Cultures promoting career success characterized by “the acquisition of money and things, and not caring for others, the quality of life, or people
Cultures promoting quality of life characterized by “the concern for relationships and nurturing.”

12. Uncertainty Avoidance
Definition: “Indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations”
Negotiators from high uncertainty avoidance cultures are less comfortable with ambiguous situations--want more certainty on details, etc.

13. Hofstede’s Cultures Ranking in the Top 10
Cultures Raking in the Top 10 on the Cultural Dimensions Reported by Hofstede (1991)
Individualism Power Assertiveness Uncertainty Distance Avoidance
United States 1. Malaysia 1. Sweden 1. Greece
Australia 2. Guatemala 2. Norway 2. Portugal
Great Britain Panama Netherlands 3. Guatemala
Canada 4. Philippines 4. Denmark 4. Uruguay
Netherlands 5. Mexico 5. Costa Rica 5. Belgium
New Zealand Venezuela Yugoslavia Salvador
Italy Arab Countries 7. Finland 7. Japan
Belgium 8. Ecuador 8. Chile 8. Yugoslavia
Denmark Indonesia 9. Portugal 9. Peru
France India Thailand Argentina
Sweden West Africa Chile
Costa Rica
Panama
Spain
Source: Based on G. Hofstede, Culture and Organizations: Software of the Mind (London, England: McGraw-hill, 1991). Reproduced with permission of the McGraw-Hill Companies.

14. Dimensions of Culture Cultural Dimension Goal:
Individual versus Collective Orientation
Influence:
Egalitarianism versus Hierarchy
Communication:
Direct versus Indirect
Individualists/Competitors:
Key goal is to maximize own gain (and perhaps the difference between oneself and others); source of identity is the self; people regard themselves as free agents and independent actors.
Egalitarians:
Do not perceive many social obligations; often regard BATNA to be major source of bargaining power.
Direct Communicators:
Engage in explicit, direct information exchange; ask direct questions; are not affected by situational constraints; face-saving issues likely to arise.
Collectivists/Cooperators:
Key goal is to maximize the welfare of the group or collective; source of identity is the group; individuals regard themselves as group members; focus is on social interaction.
Hierarchists:
Regard social order to be important in determining conflict management strategies; subordinates expected to defer to superiors; superiors expected to look out for subordinates.
Indirect Communicators:
Engage in tacit information exchange, such as storytelling, inference-making; situational norms.
SOURCE: Brett, J. (2001). Negotiating globally: How to negotiate deals, resolve disputes, and make decisions across cultural boundaries. San Francisco, CA: Jossey-Bass.

15. Key Challenges of Intercultural Negotiation
Expanding the pie
Dividing the pie
Biased punctuation of conflict
Ethnocentrism
Affiliation bias
Faulty perceptions of conciliation and coercion

16. Culturally Responsive Negotiation Strategies
When choosing a strategy, negotiators should:
Be aware of their own and the other party’s culture in general
Understand the specific factors in the current relationship
Predict or try to influence the other party’s approach
Strategies are arranged based on the level of familiarity (low, moderate, high) that a negotiator has with the other party’s culture

17. Low Familiarity Employ agents or advisers (unilateral strategy)
Useful for negotiators who have little awareness of the other party’s culture
Bring in a mediator (joint strategy)
Encourages one side or the other to adopt one culture’s approaches or mediator culture approach
Induce the other party to use your approach (joint strategy)
The other party may become irritated or be insulted

18. Moderate Familiarity
Adapt to the other negotiator’s approach (unilateral strategy)
Involves making conscious changes to your approach so it is more appealing to the other party
Coordinate adjustment (joint strategy)
Involves both parties making mutual adjustments to find a common process for negotiation

19. High Familiarity
Embrace the other negotiator’s approach (unilateral strategy)
Adopting completely the approach of the other negotiator (negotiator needs to completely bilingual and bicultural)
Improvise an approach (joint strategy)
Crafts an approach that is specifically tailored to the negotiation situation, other party, and circumstances
Effect symphony (joint strategy)
The parties create a new approach that may include aspects of either home culture or adopt practices from a third culture

20. Advice for Cross-Cultural Negotiators
Anticipate differences in strategy and tactics that may cause misunderstandings
Analyze cultural differences to identify differences in values that expand the pie
Recognize that the other party may not share your view of what constitutes power
Avoid attribution errors
Find out how to show respect in the other culture
Know your options for change