Cross-Cultural Negotiations - Research Paper Example

Cross Cultural Negotiations Introduction Culture has been defined as the common outlooks, norms, values, and beliefs shared by individuals. National, ethnic, religious and other groups have their own unique cultural traits and attributes. Culture is a learned process that becomes an integral element of an individual. Human beings during their developmental phases acquire input from the surrounding environment. They need to adhere to cultural norms even though they might be critical or hostile to the process. Negotiations refer to the process of reaching an agreement between two parties. It is a continuous process which involves many variables. The aims of negotiations are to produce superior business outcomes for two parties. Successful negotiations are based upon flexibility, reliability, agility, and scalability. Cross cultural negotiations have become an important element of modern business organizations. This is due to the global nature of the corporate environment. The global economy has created a process where organizations in different geographical segments are interlinked and interrelated with each other. Effective and efficient cross cultural negotiations should be based upon careful appraisal of the environment. This research paper seeks to analyze and assess cross cultural negotiations. It will include a definition of culture and negotiations. It uses Hofstede’s cultural dimensions as a tool to understand the differences in culture. Finally it will identify the best practices that help in the success of cross cultural negotiations. Culture Culture refers to a broad array of norms, values, outlooks, thoughts, and habits that are commonly shared by individuals. It is a representation of national, ethnic, and religious groups. The attributes of culture are communal in nature since every individual inside society adheres to them (Cohen, 23). Further culture is considered to be a product of social responses to challenges in the external environment. It provides a framework for individuals to engage in social life. Cultural attributes are acquired through common struggle and evolution. An individual is unable or unwilling to challenge the established cultural norms. Culture develops through a complex and intricate manner. It involves an official and unofficial methodology for its propagation. Officially culture can be promoted through the use of learning, mentoring, coaching, and incentives. Unofficially culture is a product of social interactions and associations. Family and peer pressure act as factors in the evolution of cultural norms. Culture is interlinked with the social customs and conventions of society (Elashmawi & Harris, 67). The norms and values that are propagated in society soon become a part of culture. Some researchers suggest that culture is a learned attribute due to a number of reasons. An individual grows up in society. The external environment influences the thoughts and outlooks of that individual. Knowledge acquisition is thus directly tied with the ability of the individual to integrate with mainstream society. Hofstede’s Cultural Dimensions Geert Hofstede defined the theory of cultural dimensions in order to understand various cultures. Hofstede uses four variables in order to classify cultures based upon their thoughts, values, and beliefs. Power distance index (PDI) refers to the level of control and hierarchy by specific groups inside their cultures. Countries with high power distance index are usually authoritarian and totalitarian. The dominant groups enjoy absolute monopoly over the power structures (Hofstede, 74). Managers in such cultures are considered to have superior skills and competencies in making decisions. Countries with low power distance index have democratic and participative cultures. The dominant groups share power and authority with the lower groups. Managers will receive feedback and opinion from employees in order to implement efficient strategies. The individualism index is concerned with the level of freedom and autonomy that an individual enjoys in society. Western countries consider the individual to be a unique and dynamic person. Managers in western cultures tend to encourage the use of individual initiative and endeavor in order to achieve operational and strategic goals. Individuals are empowered to apply creativity and innovation for problem resolution (Hofstede, 79). Countries like India and China have collectivist mindsets. The entire organization is considered to take precedence over individual objectives. A collectivist organization helps to create a supportive and responsive work environment. It can also minimize the chances of conflicts and disputes during the work process. However it stifles the ability of individuals to apply ingenuity and novelty at the organizational level. Masculinity index is concerned with the impact of gender on organizations. It measures the scope of gender values in a specific culture. Western cultures have practiced and implemented gender roles that go beyond the traditional definitions (Hofstede, 82). Men and women are considered to have equal access to resources inside organizations. Women are encouraged to pursue educational and employment opportunities. Western organizations also promote the concept of assertive and competitive women in the upper echelons of management. Other cultures have defined traditional roles for men and women. Men are considered to be strong, sturdy, and vibrant. They are considered to be responsible for running the affairs of the entire organization. On the other hand, women are defined as being submissive, passive, and reliant on men. Uncertainty avoidance index is another variable that is used to understand and perceive culture (Hofstede, 89). Cultures that have high uncertainty avoidance will adhere to a set of official rules and regulations. These regulations help provide guidance and advise for people in the corporate world. Cultures with low uncertainty avoidance will provide high levels of flexibility and reliability to the employees. These rules enable the creation of informal work practices. Employees can respond to unforeseeable circumstances by using their own skills and competencies. Source: "Dimensions of Cultural Software." Smartcode. 2009. Web. 23 Jan 2010. . Negotiations Negotiation is considered to be a process that helps in conflict resolution. It seeks to create a common ground for the disputed parties. It can also be used to create an alternative course of action that can satisfy both parties (Faure, 99). Negotiations are also used for creating business agreements and accords. It can help to produce excellent outcomes for business organizations. Negotiating Styles Empirical studies have recognized a number of negotiating styles. A competitive style seeks to obtain an excellent advantage for one party. This style uses intensive persuasion and influence in order to gain maximum advantage for the party’s interests and objectives (Faure, 98). Collaborative style seeks to create a compromise between both parties. It identifies a mutually beneficial and equal business relationship between the parties. Finally there is the concession style in which a party offers incentives to the other party. The first party can witness reduction in its bargaining position. It might offer concessions in order to create a business agreement. The outcome of negotiations is determined by the circumstances of the concerned parties. It can lead to an excellent outcome which is far above the expectations of the concerned parties. It might lead to a deadlock that cannot be further resolved. Successful Negotiators Empirical studies have identified a number of successful traits that can be present inside negotiators (Gudykunst, 120). Smart negotiators are able to utilize a number of strategies for their objectives. They can use a combination of different approaches based upon the analysis of the opposite party. Negotiators must be willing to listen to the other side. They should exhibit high levels of patience and determination in order to achieve superior results. Effective communication skills are also identified in successful negotiators. This is because communication skills help to remove gaps and misunderstandings. Negotiators must be able to apply innovative and creative strategies in order to produce successful outcomes. Chinese and Japanese negotiators value time because it is an essential element of their national culture. Such negotiators seek to talk in a straightforward and formal manner. Other countries like the United Kingdom and United States have negotiation styles that consist of both formal and informal work. This can be done through a logical and practical analysis of the business environment. The negotiators must be able to perceive the norms, beliefs, and values of the other party. Empirical studies have demonstrated that efficient and effective negotiators are able to transform a hostile environment into a supportive arrangement (Hank, 64). This is considered to be the greatest strength of effective negotiators. The use of multiple strategies helps the organization to achieve its organizational and strategic goals. Negotiation Phases The entire process of negotiation involves a number of phases and stages. At the basic level, the negotiators seek to identify their goals and objectives. They devise the negotiating styles and strategies that will be used during the process. A specific timeframe is created for accomplishment of objectives. The second phase involves creating rapport and support with the opposite party. It involves identifying the common ground. It includes the analysis and assessment of various alternatives. The best option is suggested to the other party. During the final phase, the negotiators attempt to reach an agreement. It can either involve a settlement or deadlock for both parties. The general phases of negotiations are as follows: Planning for the entire process of negotiations Information sharing procedures are performed at this stage Various forms of deals and agreements are discussed Settlement or deadlock is the outcome of the negotiations Source: "Leadership Lessons: Negotiating for Success - Basic Stages ." AAMC. Web. 23 Jan 2010. . Cross Cultural Negotiations Culture plays a strong role in the process of negotiation. The actors in the negotiating process are influenced by cultural attributes and traits. Their norms, values, and outlooks help to determine the outcome of negotiations. For instance a meeting between two parties that belong to collectivist and individualist cultures will produce different outcomes. The actors belonging to collectivist culture will perceive the negotiations based upon the interests of the group (Pruitt, 89). The other party will seek to identify the individual dimensions of the process. Similarly some cultures can expect only men to engage in the negotiating process. Saudi Arabian and Japanese negotiating teams exclusively have males because of the assertive and competitive nature of their cultures. Western negotiating teams will have women as part of the process. This is also in accordance with Hofstede’s cultural dimensions model. Another influential factor is the structure of the negotiation process. The negotiating environment will play a strong role in producing successful outcomes. The level of hierarchy and control amongst the groups also plays a crucial role in cross cultural negotiations. Negotiators belonging to high uncertainty avoidance levels will be willing to take risks during the business process. Western negotiators are more likely to make bargains based upon high levels of risks. Other negotiators like Chinese and Thai will seek to adopt a cautious and prudent approach towards the entire process. They will seek to adopt flexible and reliable business structures. Negotiators can utilize different strategies in order to achieve their targets and ambitions. Again culture plays a strong and vibrant role in strategy formulation (Pfetsch, 99). This is because culture helps to influence the business and marketing strategies of the organization. Some cultures will adopt a hostile posture in order to ensure a favorable outcome. However some cultures might use subtle means of exerting control over the negotiating process. Masculine oriented cultures might tend to be aggressive, assertive, and confrontational. Feminist oriented cultures will tend to use soft power in order to achieve their objectives during the negotiations process. Actors in the negotiations process will tend to make a set of estimates and calculations. They will define a level of risk. Further the team will agree on the best possible course of action depending upon their cultural traits and attributes. Cultures with high levels of uncertainty avoidance index will derive general principles from the other party. They will seek to remove ambiguities during the initial phases of the process (Rubin, 53). Australian negotiators for instance do not care about the ambiguities. They seek to adopt an approach in which the outcomes are determined in a favorable and excellent manner. This variable will help to shape their response to the other party’s responses. The negotiating process is heavily influenced by cultural dimensions. This phase of negotiations involves the methods that are used to exchange vital information. It involves the various strategies which will be used to make deductions and inferences. Empirical studies have determined that personal views and notions play a strong role in determining the course of cross cultural negotiations. Individuals that have strong awareness and perception about other cultures will be able to successfully engage in the process. Such an approach helps to reduce areas where conflict seems to be inevitable. The actors in the negotiating process will attempt to find a common ground (Salacuse, 91). A flexible and reliable cross cultural negotiation strategy pays dividends for both parties. It leads to successful business agreements and accords that can be used for accomplishing strategic targets. Developing Cross Cultural Negotiation Strategy An organization should conduct an extensive homework regarding the cultural attributes of the opposite party. Such a process should include a study of cultural traits and values. The organization should select effective and efficient negotiators. It should use its own cultural attributes to develop a robust and vibrant strategy. Similarities and differences should be evaluated in order to achieve favorable results. Negotiators should have brilliant and dynamic skills (Salacuse, 222). They should be able to implement multiple strategies in order to accomplish organizational goals. A confrontational environment should be avoided through an assertive manner. The psychological interests of the opposite party should be logically assessed. Cross cultural negotiations is a methodical and logical process. The parties should have clear and precise goals. They should be able to devise effective strategies that seek to find common grounds. A compromise should be developed in cases where the talks have reached a deadlock. Cultural strategy and structure also plays a critical role in the success of cross cultural negotiations. Communication skills are vital for the success of the entire process (Salacuse, 225). Integrated and coordinated approach helps to accomplish organizational goals. Cross cultural negotiations are a broad and complex process. They should be based upon the use of appropriate negotiation styles. Various strategies can be utilized depending upon the situation and circumstances. Conclusion Cultural is an integral element of human society since the dawn of civilization. It helps to define the values, beliefs, habits, and lifestyle of various groups. It provides identification and recognition for individuals in society. Culture is a learned trait that is acquired through constant interaction and association with the environment. It seeks to identify the shared values that help to create unity and uniformity in society. Negotiations are a process in which two or more parties seek to achieve their goals and objectives. It can also be a form of alternative conflict resolution. There are various styles in negotiation which are helpful depending upon circumstances. Cross cultural negotiations involves the process of persuasion and influence between two different parties. Culture plays a strong and robust role in affecting the entire process. Cultural values can impact the negotiating style and strategy utilized. They can also determine the actors that will participate in the process. The structure of negotiations is dependent upon cultural attributes and traits. Negotiators use their cultural attributes in order to devise effective and efficient strategies. Hofstede’s cultural dimensions model helps to understand the role of culture in business and corporate processes. This model uses a number of variables to identify specific cultural traits and attributes. A successful cross cultural negotiation strategy should be based upon careful analysis of the business environment. It should seek to implement best practices. Works Cited Cohen, Raymond, Negotiating Across Cultures. Washington, D.C.: United States Institute of Peace, 1997 Elashmawi, Farid and Philip R. Harris, Multicultural Management. Houston, TX: Gulf Publishing Co., 1993 Faure, Guy-Olivier,and Gunnar Sjostedt. ”Culture and Negotiation: An Introduction.” In Culture and Negotiation. Edited by Guy Oliver Faureand Jeffrey Z. Rubin. Newbury Park, CA:SAGE Publications, Inc., 2004 Faure, Guy-Olivier, “International Negotiation: The Cultural Dimension.” In International Negotiation: Analysis, Approaches, Issues. Edited by Victor A. Kremenyuk. San Francisco, CA: Jossey-Bass, 2002 Gudykunst, William B. Bridging Differences: Effective Intergroup Communications. Thousand Oaks, CA: Sage Publications Inc., 2004 Hank, Dan. “Working Across Cultural Barriers: A Critical Senior Leader Skill.” Lecture. Air War College, Maxwell AFB, AL, 31 Aug 2006 Hofstede, Geert H, Cultures and Organizations: Software of the Mind. University of Limburg at Maastricht, The Netherlands: McGraw-Hill, 1997 Pruitt, Dean, “Strategy in Negotiation.” In International Negotiation: Analysis, Approaches, Issues. Edited by Victor A. Kremenyuk. San Francisco, CA: Jossey-Bass, 2002 Pfetsch, Frank R., “Institutions Matter: Negotiating The European Union.” In International Negotiation: Actors, Structures/Process, Values. Edited by Peter Berton et al. New York, NY: St. Martin’s Press, 1999 Rubin, Jeffery Z. “The Actors in Negotiation.” In International Negotiation: Analysis, Approaches, Issues. Edited by Victor A. Kremenyuk. San Francisco, CA: Jossey-Bass, 2002 Salacuse, Jeswald W., “Implications for Practitioners.” In Culture and Negotiations. Edited by Guy Oliver Faure and Jeffery Z. Rubin. Newbury Park, CA: Sage Publications, 1993 Salacuse, Jeswald W. “Ten Ways the Culture Affects Negotiating Style: Some Survey Results.” Negotiation Journal 14, no. 3 (July 1998): 221-240 Read More