National Cultural Difference In Negotiations - Essay Example

Introduction From ancient times, negotiations have proven to be beneficial in making agreements as they have provided a fair and positive platform for both parties to present and argue their part. Despite this benefit, such negotiations have subsequently been slowed down or even collapsed as different cultural needs complicates the matter and makes it difficult to arrive at a proper negotiation. National cultural differences are perceived to be one of the reasons limiting negotiations and transactions both at the local and international level. When people belonging to different culture enter into negotiation they spend a lot of time to reach at an agreement as differenceinthe culture makes it difficult to arrive at a common consensus. Different countries have different cultural beliefs, so while looking to enter into a negotiation it is important to remove the cultural differences so that proper discussions can be made regarding the different topics and based on it correct decisions and made. This will help to arrive at a decision which will help both the parties to win as a conclusive decision which will benefit both the negotiating party will be arrived. This report helps to explain the manner in which national cultural differences affect or limit negotiations and their impact to the workplace. Research Findings The global economy has increased the importance of cross cultural negotiation as it forms an important aspect of management and marketing firms (Gulbro & Herbig, 1995). This makes it important that the cultural differences is expressed and looked at so that the differences between cultures can be removed and the organization is able to develop a positive framework based on which better performance can be generated. The ability of the organization to express and deal with cultural differences determines the steps which are likely to be taken so that the process of negotiation is carried out without any obstacle (Fumner, Gelfand, Severance & Dabbagh, 2012). While looking to deal with the cultural differences which is present between people it is important to uphold the respect and values which other people have so that due respect can be provided and the process of negotiation provides positive results (Fumner, Gelfand, Severance & Dabbagh, 2012). Different theoretical explanations have been established by researchers to provide an understanding of how variations in social behaviours across cultures have been a critical factor in negotiations. One such explanation has been identified by Dr Geert Hofstede, one of the current theoretical thinkers and his frameworks have highlighted the national cultural differences in negotiation. In his book ‘model of national cultural differences and their consequences’, he defines culture as “a collective programming and alignment of the brain, which effectively and accurately distinguishes the members of the party from one another” (Greet, 2002). The theoretical dimension developed by Hofstede believes that culture is inborn as it is present in the developmental structure of every one making it essential and a key factor in any decision that one makes. He ought to validate his theoretical framework through research conducted within IBM subsidiaries in 66 major countries. In his analysis, he identifies five main categories in which nations can be positioned (Geert, 2002). The theoretical dimension developed by Hofstede has identified five dimensions for measuring culture. The first dimension is power distance which states that inequality with relation to power sharing exist among people. A country with high power distance results in unequal distribution of power and people accepts the same whereas a country with low power distance ensures better sharing of power and members within the society believes people to be equal (Greet, 2013). The second dimension is individualism which helps to establish the strength of the connection that people have with people of other culture. A high individualism shows loose connection between people of different culture and hardly shows responsibility beyond the family and some close friends whereas a low individualism score shows strong group cohesion and people within the group are loyal and respect each other so that responsibility can be shared and group goals can be achieved (Greet, 2013). The third dimension is masculinity which refers to the degree with which the society sticks to its values, traditional males and female role in the society. A high masculinity score stresses that men dominates the society and women even if they work they work in a separate profession compared to men whereas a low masculinity score means that the differences between the men and women in the society is blurred and both can carry on the same profession and work (Greet, 2013). The fourth dimension is uncertainty avoidance which refers to the anxiety which is present in the society while looking to deal with unknown situation. A high uncertainty avoidance score means that people look to avoid unambiguous situations and tend to follow a particular set of rules and process whereas low uncertainty avoidance means people within the society are innovative and accept different situations and instead of running from it looks to develop new rules and process to deal with those (Greet, 2013). Lastly, the fifth dimension is long term orientation which refers to the degree to which society gives importance to long term tradition and values as compared to short term tradition and values. A high long term orientation score means that long term tradition and values are not considered important and people are willing to make changes in their culture as seen in Western countries whereas low score on long term orientation states that importance is given to long term tradition and values and people don’t want to move from the traditional culture (Greet, 2013). Organizations or economies entering into negotiation needs to understand and give importance to the Hofstede cultural dimensions so that the culture of the negotiating party can be understood. This will help to develop the required framework through which better process can be developed which will facilitate the negotiation process. There exists a higher impact of cultural differences within a country, given that culture is homogenous and diverse in depth. Such cultural differences within the organisation are dangerous as they tend to destabilize any negotiation effort (Shalin & Alan, 1999). To efficiently and effectively manage the effects of cultural differences in negotiations, they advise that, the nation needs to consider the small cultural differences originating from individuals and organisations as it would improve and provide a better understanding on the nations real attitudes and values (Lansing, 2003). Impact of Cultural Differences in Workplace Most scholarly authors believe that culture is ‘organisation specific” (Johanson, 2010). Since, organization based on their assumptions, beliefs and the general understanding of the environment develops a process through which the goals will be achieved results in creating a different work culture from one another. This has an impact on the workplace as the decision, situation and opportunities makes an employee act in a manner which will help to accomplish the goals (Johanson, 2010). One of the main impacts of cultural difference is that most cultures which are unifying present a common basis of action (Jeswald, 2011). For example, an organisation with employees from different culture will be challenged in their efforts to ensure that all the employees work over the weekend. Some cultures view Saturday as a holy and resting day, other see Sunday as the same, while still others view it as a normal working day. Individuals from the first and second cultures will uniformly reject the opportunity to work on weekends while other may uniformly accept the offer (Johanson, 2010). Thus, difference is culture makes people act in a different manner though the actions are directed in the same direction. For instance, Asians will reject this proposal as it betrays their values while Westerns might accept unanimously. The organisation will instead have to ensure that, individuals who are to rest on Saturday are given a day off. This will ensure needs of both individuals from the diverse cultures are considered. The same case applies to the issue of corporate clothing. This impact relates culture to its behaviour as it provides a common set of values to its people providing them with a uniform management basis and motivational approach. Hence, most employees from the same cultural setting tend to react uniformly to specific instructions given, depending on their own understanding. This is a challenge to organisations which employ personnel from different cultural backgrounds as the difference in culture creates gap in the communication process. The process will prove to be costly and take a lot of time in the organisation’s efforts to ensure that all employees share a common view point (Lansing, 2003). The second impact of cultural differences in the workplace is that every culture presents various characteristics which define their unique and distinctive values. The different characteristics are attributed to the behaviours and structure of independent individuals as they offer their own values to the workforce and organisation at large (Mills, 2009). Individuals in the workforce should be viewed as having patterned behaviours and offering different kinds of competencies. It can prove to be a challenge to the organisation to provide solutions to ensure that the varied competencies of employees are merged to share a common organisation attribute. Proper integration of competency and attribute and values may prove to be beneficial to the organisation if they are properly utilized and improved on (Mills, 2009). Another impact associated with cultural differences is the inability to communicate effectively across different culture. This also can prove to be a challenge in the work place as removing the cultural differences and integrating people to work together requires special efforts on the part of the organization (Mills, 2009). To effectively manage this in the work place, organisations need to remove cultural differences, which will enable both their employees from different cultural settings to easily understand the subjectivity of each individual. Effect of culture in negotiation The purpose of a negotiation can be viewed differently across cultures and this affects negotiation outcomes. For some cultures line the US culture, considers the negotiation process as a contract, while other cultures like those in India consider the negotiation process to be an initiative of developing long term relationships between the two parties. Some cultures like the Chinese culture may also view the process of negotiation as a process through which contracts can be achieved by building a positive relationship. The purpose plays an integral role in ensuring the success of the negotiation as cultures which view the process as a relationship will be flexible in their understanding of the other party’s values and attitudes. On the other hand, the culture which views the process as a contract may tend to be formal and strictly remain to the terms of the agreement not taking into account the other party’s interests. Some cultures view the negotiation process as being a platform where both parties win, while some other cultures view the negotiation process as being a win lose process. This makes the negotiation a “struggle of necessity” (Fisher, 2009) as both parties will aim to arrive at a decision which ensures a win-win situation for both. Such cultures will seem to be confrontational while those who view it as a win-win platform will view the negotiation process in a positive light and will look towards benefitting from it. The third cultural effect is the difference in communication between the two parties. Communication involves the terms used and means of addressing each term/culture. Each culture has its own ways of formalities, which have varied meanings (Jeswald, 2011). This makes it important to use clear and complete sentences with no ambiguous meaning so that the other party is able to understand it clearly. This will remove the doubts and help to address the correct situation. The fourth effect of culture is the differences in timing (Jeswald, 2011). Some cultures are always punctual in their dealings while some are not. Cultures which advocate for punctuality may feel dissatisfied from the negotiation table by delays as they will feel the other party is not being collaborative and serious. The fifth effect is the emotional expression by some cultures (Jeswald, 2011). Different cultures behave differently towards a disagreement at the negotiation table for example western culture are punctual with regard to time as compared to the Indian culture. This is the individual personality displayed by the party portraying their cultural upbringing. Such cultures may scare away the other party, especially if this behaviour is seen as authoritative and abusive. The sixth effect of cultural differences in negotiations is the agreement agreed between countries (Sornarajah, 2012). Different cultures line US and Australian culture believe a written agreement to be a contract or a mutual relationships, while other cultures like Chinese take it to be a general agreement between the two parties. In a formal agreement the cultures that believe legal action may follow if one fails while those that see it as an informal agreement will see it only as an act of utmost good faith. Such differences in agreements can prove to be essential in the negotiation process (Fisher, 2009). Role of Ethics in Cultural Negotiation Ethics play an integral role in negotiations as they build or develop the process. Ethics is also directly linked to cultures as most of individual behaviour is shaped by the upbringing and different values which a person imbibes. This promotes and initiates a fruitful process in the long run. The second role is that ethics makes the negotiation process continuous enabling the process to develop long term relations. Both parties representing the various cultural backgrounds will be willing to negotiate and develop long term relations with each other as long as they represent themselves ethically and morally well. Cultures need to present and provide good ethical behaviour during negotiations as this articulates where they come from and what they say. For example, a situation where the organization would benefit from a decision which would be go against the society will be determined by the ethical values which the person has. Conclusion Cultural differences have an impact on the process of negotiation and it is important that the cultural differences are removed to arrive at a better decision. The ability of the organization to understand the culture of another party helps to bring the required transformation through which business effectiveness will be gained. The ability to look at different dimensions and brining the change in the working style benefits the organization. Therefore it becomes imperative that the business looks at removing the cultural differences and develops a process to act in a positive manner (Jeswald, 2011). The success of the negotiation process will be determined only when the business is able to remove the cultural differences and are able to act in a positive manner. References Geert, H. (1984). Cultural Consequences: International Differences in Work related Values. Journal of Accounting Literature. Geert, H. (2002). Models of National Culture differences and their consequences. A Triumph of Faith- A failure in the Analysis. Human relations Jeswald, S. (2011).The continuing Struggle of Life against Form. International Business Transactions. Jeswald, S. (2011).Ten Ways that Culture affects Negotiation. International Business Transactions Johanson, B. (2010). International Business Negotiations in Sweden.A Comparison of Cross Cultural Issues and Successful Approaches Lansing, M. ().Doing Business in Japan.The Importance of Unwritten law. The International Lawyer Mills, K. (2009). Cultural Differences and Ethnic in International Dispute resolution. Transnational Dispute Management Shalin, C. & Alan, M. (1999).A Synthesis of Cultural Studies in Accounting. Journal of Accounting Literature. Sornarajah, M. (2012).The Settlement of Foreign Investment Disputes. Commercial Approaches And Cultural Principles Fisher, R. (2009). Getting to Yes.Negotiating Without Giving in. Transnational Dispute Management Fumner, A., Gelfand, M., Severance, L. & Dabbagh, M. (2012). Explaining & Predicting Cultural Differences in Negotiation. Retrieved on October 10, 2013 from http://www.academia.edu/1606873/Explaining_and_Predicting_Cultural_Differences_in_Negotiation Gulbro, R. & Herbig, P. (1995) Cross-cultural negotiation behavioural differences: domestic-focused versus worldwide-oriented firms. Cross Cultural Management: An International Journal, 2 (3), 3 – 14. Retrieved on October 10, 2013 from http://www.emeraldinsight.com/journals.htm?articleid=1656921 Greet, H. (2013). Hofstede's Cultural Dimensions. Retrieved on October 10, 2013 from http://www.mindtools.com/pages/article/newLDR_66.htm Read More