Negotiating in The US vs. HK

Negotiating in the United States and Hong Kong
Author(s): Catherine H. Tinsley and Madan M. Pillutla

Source: Journal of International Business Studies, Vol. 29, No. 4 (4th Qtr., 1998), pp. 711-727
Published by: Palgrave Macmillan Journals
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Negotiating
in
the
United
and
States
Hong
Kong
CatherineH. Tinsley*
GEORGETOWN UNIVERSITY
MadanM. Pillutla**
HONG KONG UNIVERSITY OF SCIENCE &TECHNOLOGY
We propose that cultural values

(self-enhancement,
self-transand
cendence, conservatism,
openness to change) provide a
social environment where some
negotiation strategies are selected
to survive over others. These
selected negotiation strategies
become normative. Results from
a negotiation simulation in the
United States and Hong Kong
indicate that U.S. negotiators are
more likely to subscribe to selfinterest and joint problem solving
norms, and Hong Kong Chinese
N
egotiationis the process by which
people attempt to settle what each

shall give and take or perform and
receive in a transaction between them
(Rubin &Brown, 1975). Negotiation is a
negotiators are more likely to

subscribe to an equality norm.
Further, U.S. negotiators report
more satisfaction
when they
maximize joint gain and Hong
Kong Chinese negotiators are
happier when they achieve
outcome parity. The reported
norms and outcome evaluations
are consistent with the value
profiles of the two cultures. The
implications
of these cultural
differences are discussed in terms
of expanding U.S. based negotiation theory.
criticalbusiness process, as it is necessarywheneverpeople are dependenton
one another for accomplishing objectives (Lewicki, Litterer, Minton &
Saunders,1994). Nationalcultural1dif-
Tinsley (PhD Northwestern University) is an Assistant Professor of Management

at the McDonough School of Business at Georgetown University. She studies how the
international context influences negotiation processes and outcomes, as well as how culture influences cognitive systems and social dynamics, and the implication of these effects
for international management.
*Catherine
Pillutla (PhD University of British Columbia) is an Assistant Professor in the

Management of Organizations Department at the Hong Kong University of Science and
Technology. His research interests include negotiation and decision making, with current
research focusing on fairness and trust and the impact of group characteristics on decisions.
**Madan
JOURNAL
OF INTERNATIONAL
BUSINESS STUDIES,
29, 4 (FOURTHQUARTER 1998): 711-728.
711
NEGOTIATINGIN THEU.S. AND HONG KONG
ferences in negotiation behavior have

been catalogued (cf., Adler, Brahm &
Graham, 1992; Graham, 1983; 1985).
Some researchers attribute these differences to culture (Cohen, 1991;

Druckman, Benton, Ali & Bagur, 1976;
Fisher, 1980; Graham, Mintu & Rogers,
1994; Weiss, 1997), while others are
more skeptical of this relationship
(Faure & Rubin, 1993; Zartman, 1993).
Recent books for practitioners, which
purport to teach techniques for negotiating in different cultures (cf., Brake,
Walker & Walker, 1995; Hendon,
Hendon & Herbig, 1996; Kublin, 1995;
Morrison, Conaway & Borden, 1994),
suggest a common understanding that
culture and negotiation are correlated,
and show managerial interest in modeling and understanding this relationship.
This research aims to demonstrate a
causal relationship between national
culture and negotiation strategies,
defined as a set of coherent behaviors
designed to meet a particular objective.

To demonstrate causation, we first provide a theory for how culture causes
certain negotiation strategies to domi-
nate over others. In brief, we propose

that cultural values create an environmental context that selects some negotiation strategies over others. The negotiation strategies are selected because
they "fit" with the cultural values, being
more effective than other strategies.
These selected strategies then become

normative,
as cultural
members
are
prone to use these effective strategies

more frequently.
Second, we offer evi-
dence showing that each culture's value

profile can be used to predict its normative negotiation strategies, and that the
use of normative negotiation strategies
results in higher negotiator satisfaction
than the use of non-normative strategies. Hence, culture is not merely corre712
lated with negotiation behavior; cultural

values may cause the variety of negotiation strategies found internationally.
THE INFLUENCEOF CULTURAL
VALUES
Values are desirable goals that serve

as guiding principles in people's lives
(Rokeach, 1973). Cultural values are
those that are shared across cultural
(Kluckhohn
&
group members
Stodtbeck, 1961). Although values may
technically reside in the individual as
part of his or her cognitive structure,
these values are not merely influenced
by culture, but "thoroughly culturally
constituted" (Markus, Kitayama &
Heiman, 1997, p. 859). Shared values
represent a culture's solutions to fundamental questions of human survival,
such as coordinating social interaction
(Kluckhohn & Strodtbeck, 1961;
Schwartz, 1994). Cultural group members 'represent their [culture's solutions] cognitively as specific values
about which they communicate'
(Schwartz & Sagiv, 1995, p. 94).
Through this communication and
socialization that rewards conformity,
new members internalize cultural values.
Members use their cultural group's
values to guide their selection and justification of actions (Schwartz, 1992).
The primary content aspect of a value
that distinguishes it from other values is
the type of motivational goal it expresses (Schwartz & Bilsky, 1987).
Thus, a
person's values can influence his or her

behavior by encouraging those behaviors that would produce desired goals.
At the cultural level, shared values create a social environment that directs
members to select those negotiation
behaviors that "fit," that is, lead to outcomes that are socially desirable.
JOURNAL OF INTERNATIONAL BUSINESS STUDIES
CATHERINEH. TINSLEYAND MADAN M. PILLUTLA
Although cultural values may appear to

constrain individual choice, they are
functionally adaptive because they simplify members' behavioral decisions
(Fiske & Taylor, 1991). Cultural institutions (such as a system of values) help
people manage their complex environment by narrowing the set of acceptable
behaviors that they can engage in
(Malinowski, 1944). Our natural selection thesis argues that cultural values
create an evaluative environment that
selects negotiation strategies that lead to
desired outcomes. The implications of
this argument are that: i) strategies that
are conceptually congruent with the
cultural values will become normative;
and ii) the outcomes of these strategies
will be judged as more favorable.
Hence, the value profiles of the U.S. and
Hong Kong Chinese cultures can be
used to hypothesize specific comparisons of these cultures' negotiation
norms and how negotiators from these
cultures will evaluate their outcomes.
VALUE PROFILESOF THE U.S. AND
HONG KONG CULTURES
Schwartz and Sagiv (1995) delineate a
set of four higher-order cultural values,

arrayed as two sets of opposing dimensions. The first set juxtaposes selfenhancement versus self-transcendence.
This set is conceptually similar to individualism-collectivism (Parson & Shils,
1951; Kluckhohn
& Strodtbeck,
1961;
Hofstede, 1980; Triandis, 1983). As

with recent research, self-enhancement
and self-transcendence are treated as
separate
dimensions
(Triandis,
McCusker & Hui, 1990). Self-enhancement (individualism) emphasizes the
pursuit of one's own success. Individuals are independent, autonomous
entities (Marcus & Kitayama, 1989),
capable of directing their own future.
Self-enhancement is measured with values such as: Independent, choosing own

goals, and capable. Self-transcendence
(collectivism) emphasizes the embeddedness of the individual (Ho, 1993),
and thus socio-centric rather than egocentric values (Triandis, et al., 1990).
Self-transcendence is measured with
values such as: Social order, belonging,
and social recognition.
Previous
research finds the United States higher
than Hong Kong Chinese on selfenhancement, and the Hong Kong
Chinese higher than the United States
on self-transcendence (Schwartz, 1994).
These differences are congruent with
individualism-collectivism
research
that finds the United States extremely
individualistic (Hofstede, 1980) and the
Hong Kong Chinese collective (Bond,
1986; Leung, 1987, 1997).
The second set juxtaposes conservatism with openness to change.

Conservatism emphasizes conformity to
the status-quo, protection of the larger
social order, and "preservation of the
social and material environment"
(Schwartz, 1994, p. 105). Tradition and
security are valued, and the self may be

restricted in order to preserve social
harmony. Conservatism is measured
with values such as: Obedient, accepting of my portion in life, and moderate.
Openness to change emphasizes freedom (Schwartz, 1994) and risk. An
intellectual openness emphasizes an
acceptance of many views and possibilities, and is measured with values such
as: Creative, curious, and broadminded.
An affective openness emphasizes emotional stimulation and is measured with
such values as: Daring, exciting, and a
varied life. Previous research finds the
Hong Kong Chinese culture to be more
conservative and less open to change
than U.S. culture (Schwartz, 1994).
VOL. 29, No. 4, FOURTH QUARTER, 1998
713
NEGOTIATING IN THE U.S.
AND HONG KONG
Similarly, the U.S. culture has been

characterized as promoting innovation,
change, and experimentation (Cohen,
1991; Usunier, 1996)
A TYPOLOGYOF NEGOTIATION
STRATEGIES
Most behaviors in negotiations are,

aimed at maximizing utility for the
negotiators (Raiffa, 1982), thus an
understanding of what provides utility
in a negotiation would help us identify
the behaviors we expect to find in the
United States and Hong Kong. Many
negotiation models acknowledge that a
negotiator's utility depends on both his
or her own outcome and the other party's outcome (Graham, et al., 1994;
Pruitt & Rubin, 1986; Raiffa, 1982;
Walton & McKersie, 1965). These models tend to array negotiation strategies
along two dimensions: Integration and
distribution. The former dimension
embodies concern for both self and other's outcomes; the latter dimension
embodies concern for either self or other's outcome (Pruitt & Carnevale, 1993).
Although these models acknowledge
awareness of the other party's outcome,
they fail to incorporate social compariSocial comparison
son processes.
processes influence people's behavior
(Adams, 1963; Homans, 1961), and
some researchers suggest that this relationship may be even more pronounced
in collectivist or self-transcendent cultures (Ho, 1993; Yang, 1993). Thus, a
complete negotiation model must
include the utility a negotiator receives
from relative gain to self, compared to
the other party's gain, in addition to the
utility gained from absolute outcomes.
For some negotiators, utility may not
result from gain to self, but from relative
gain to self over other party; for other
negotiators utility may result from equal
714
gain for both parties.

Social psychologists have incorporated these relative utilities in their models to explain people's preferences in
interdependent situations. McClintock
and his colleagues (McClintock, 1972;
Messik &McClintock, 1968) suggest that
individuals have relatively stable preferences for maximizing either own,
other, joint, relative, or equal outcomes
in interdependent interactions. These
stable preferences are referred to as
motivational orientations, and as in
negotiation research, it is assumed that
people choose behaviors that maximize
of their outcomes
the utility
(McClintock, 1972). Because these
models incorporate social comparison
processes, we use this typology to classify negotiation strategies. We propose
that negotiation behavior will fall into
five distinct categories, each defined by
the utility it is attempting to maximize.
A Self-interested negotiation strategy
will be aimed at maximizing a one's
own gain. This might include setting
high goals (Huber & Neale, 1987), and
holding firm to one's own position. An
Altruistic strategywill be aimed at maximizing the other party's gain. This
would map onto what Pruitt and Rubin
(1986) call "yielding"behavior - satisfying the other party's interests. A Joint
problem solving strategy will be aimed
at maximizing the joint gain. This
would map onto what Pruitt and Rubin
(1986) call "problem solving," Graham
and colleagues (1994) call "problem
solving approach," or what Walton and
McKersie (1965) call "integration."
Previous research finds joint problem
solving processes correlate to joint gain
(Pruitt, 1981; Pruitt & Lewis, 1975;
Weingart, Thompson, Bazerman &
Carroll, 1990). Joint problem solving
might include sharing information
about preferences, trading priorities, or

bridging underlying interests (Bazerman
& Neale, 1992; Lax & Sebenius, 1986;
Pruitt & Carnevale, 1993).
A
Competitive strategy will be aimed at
beating the other side, or maximizing
the relative gain to the self. This is not
the "forcing"behavior of previous models (cf., Pruitt & Rubin, 1986), because
competitive behavior may not result in
high absolute gain to self. Rather, a
party may sacrifice gain to self to ensure
the other party receives even less. This
strategy would include contending tactics, such as bluffing or threatening, that
are often found to lower both parties
gains (Pruitt, 1981), but may lower one
party's gains relatively more. An
Equality strategy will be aimed at distributing the outcomes equally between
the two parties. This is similar to "compromise" (Lax & Sebenius, 1986; Pruitt
& Rubin, 1986; Raiffa, 1982), or "tit for
tat" (Axelrod, 1984), with explicit reference to equal concession making.
UNITED STATES VERSUS HONG KONG
CHINESENEGOTIATIONNORMS
Because values represent a desired

end state (Schwartz &Bilsky, 1987), and
the above negotiation strategies are categorized based on the utility of the outcome they produce, we would expect
values to influence people's use of these
negotiation strategies. Moreover, we
propose that cultural values, which are
shared by members of a cultural group,
will promote a set of negotiation strategies that also will be shared by that cultural group. We call these shared strategies, "negotiation norms." A norm is a
cognitive representation, or mental
model, of what people perceive or
expect to be appropriate behavior
(McGrath, 1984). Norms are socially
shared standards for behavior, arising
from common experiences in social settings (Bettenhausen & Murnighan,

1985). Thus, negotiation behaviors that
are generally accepted by a group and
considered appropriate strategies are
negotiation norms.
Self-enhancing (individualistic) values are expected to cause individuals in
the culture to adopt self-interested
negotiation norms, while conservatism
will make it less likely that individuals
would subscribe to these norms. Selfenhancement implies the culture values
loose ties between its members
(Triandis, 1989) and individual autonomy over relationships
(Marcus &
Kitayama, 1991). In individualistic cultures, goals are aligned with self
(Triandis et al., 1990), and there is an
emphasis on personal needs (Yang,
1993).
The conceptual
congruence
between goals to self and personal

needs (self-enhancement) and self-interested negotiation behaviors suggests
these behaviors will fit well in selfenhancing cultures. On the other hand,
conservatism, which emphasizes moderation and self-sacrifice to the maintenance of the collective, suggests selfinterested behaviors will fit poorly in
conservative cultures. Given that U.S.
culture ranks higher than Hong Kong
Chinese on self-enhancement,
and
lower on conservatism, we would
expect self-interested behaviors to fit
better in the U.S. culture than in that of
Hong Kong.
U.S. negotiators will view selforiented behaviors as more appropriate than will Hong Kong Chinese
negotiators.
Hi:
Openness to change is expected to

cause high levels of the joint-problem
solving strategy. Joint problem solving
715
AND HONG KONG
requires a willingness to brainstorm creative solutions that might bridge both

parties underlying interests (Pruitt &
Lewis, 1975; Tutzauer & Roloff, 1988).
This means parties have to be willing to
invent, to create something new (Follett,
1940), rather than defer to an existing
framework. Moreover, parties need to
share information with the other party
(Pruitt, 1981; Weingart et al., 1990),
implying a willingness to take an initial
risk. When joint problem solving, each
side exposes some information that the
other party can either use to create joint
gain or simply gain to self (Lax &
Sebenius, 1986), so that each side has to
expose some vulnerability.
Given that the U.S. culture is more
open to change than the Hong Kong
Chinese culture, we expect to find more
use of joint problem solving among U.S.
negotiators than among Hong Kong
Chinese negotiators. This prediction is
consistent with previous research that
finds Americans focus more on problem
solving, experimenting, and integrating
during negotiation than other cultural
groups (Druckman et al., 1976; Fisher,
1980; Campbell et al., 1988; Cohen,
1991; Usunier, 1996; Tinsley, 1998).
H2: U.S. negotiators will view joint
problem solving as more appropriate
than will Hong Kong Chinese negotiators.
Self-transcendence and conservatism
are expected to cause individuals in the
culture to adopt equality norms. Selftranscendence is likely to heighten a
negotiator's awareness of the social collective and their outcome, which might
lead one to speculate a joint problem
solving approach. Yet, when coupled
with conservative values (which are
inconsistent with the innovative quality
716
of joint problem solving), we think this

heightened awareness of the social collective would instead translate into an
equality strategy. An equality strategy
offers a pro-social orientation (as
opposed to the competitive approach,
which is negative-social; or the selfinterested and altruistic which are individually oriented), without the social
disruption joint problem solving can
cause (Leung, 1997; Tinsley,
1997).
Equal concession making to arrive at a

compromise solution is thought to promote relational harmony (Gulliver,
1979; Leung &Wu, 1990; Nader &Todd,
1978).
Given
that the Hong Kong
Chinese culture is more conservative

and self-transcendent than U.S. culture,
we expect more use of an equality strategy among negotiators from Hong Kong
than those from the United States. This
prediction is consistent with previous
research that finds Hong Kong Chinese
arrive at more equal outcomes when
resolving work place conflict (Leung,
1997; Tinsley & Brett, 1997).
H3: Hong Kong Chinese negotiators

will view equality-oriented behaviors
as more appropriate than will U.S.
negotiators.
This distinction between the two prosocial negotiation strategies (joint problem solving and equality-orientation) is
important because it often gets blurred
when one talks about cooperation.
Empirical evidence shows that joint
problem solving and high joint gain
result when negotiators are instructed to
"be concerned with how well they did
as a team" (Rubin & Brown, 1975), or
when they are asked to be "interested in
the needs of the other party" (Pruitt &
Lewis, 1975). This evidence may lead
to the incorrect conclusion that cooperJOURNAL OF INTERNATIONAL BUSINESS STUDIES
CATHERINE H. TINSLEY AND MADAN M. PILLUTLA
ative instructions always lead to problem solving behaviors. We would speculate, however, that such instructions
would not lead to joint problem solving
unless the culture valued openness to
change as well. In cultures where harmony and conformity are valued over
innovation and risk, individuals who
receive cooperative instructions are
expected to behave in a pro-social, but
non-disruptive, manner, hence to equalize outcomes.
H4: Pro-social instructions will lead
to the goal of maximizing joint outcomes for U.S. negotiators, but to the
goal of equal outcomes for Hong Kong
Chinese negotiators.
CULTURE
ANDTHEEVALUATION
OF
NEGOTIATION
OUTCOMES
Our natural selection thesis argues
that those negotiation strategies that fit
with the cultural values will come to
dominate because they offer a means to
a desirable end state. These negotiation
norms are more effective strategies,
meaning they offer parties better results.
On the one hand, since joint problem
solving is normative in the United
States, we expect that its result (high
joint gain) will be perceived as a good
result for U.S. negotiators. On the other
hand, since an equality strategy is normative in Hong Kong, we expect that its
result (equal outcomes) will be perceived as a good result for Hong Kong
Chinese negotiators. This suggests the
following interaction hypotheses
between cultural group and satisfaction
with negotiation outcomes:
H5a: The relationship between joint
gain and negotiator satisfaction will
be moderated by culture. Specifically, the relationship will be stronger
VOL.
29, No. 4,
FOURTH QUARTER,
for U.S. negotiators than it will be for

Hong Kong negotiators.
H5b: The relationship between equality in outcomes and negotiator satisfaction will be moderated by culture.
Specifically, the relationship will be
stronger for Hong Kong negotiators
than it will be for U.S. negotiators.
METHOD
Participants
Business students (N=153 for Hong
Kong, N=78 for the United States2) participated as one of the first exercises of
the year, so that neither group had any
formal negotiation instruction prior to
the exercise. Although students were
selected as the participants, so as to
minimize variance on age, gender, and
socio-economic status as has been previously advocated (Mann, 1980), U.S.
students were significantly older than
their Hong Kong counterparts (F=345,
p<.001). Thus, we entered age as a
covariate in the analyses to control for
its effect on people's negotiating behavior.
Procedure
Snell and Rangaswamy's "Medical
Equipment" negotiation exercise was
modified as a scorable negotiation with
six issues. Before receiving their confidential role instructions as either buyers
or sellers, participants completed a prenegotiation questionnaire to measure
their values and negotiation norms.
Role instructions included individual
payoff information for each issue, as
well as one of the following instructions: (i) to be concerned with own
needs (self-maximizing instructions);
(ii) to do better than the other party
(competitive instructions); or (iii) to
1998
717
NEGOTIATING
IN THEU.S. AND HONG KONG
take care of the other party's needs, as

well as their own (cooperative instructions). Participants were also told that
they should aim to get above 3000
points, as their BATNA was 3000. The
day of the negotiation, participants were
randomly assigned a partner for the
exercise and asked to negotiate for 40
minutes. After they reached an agreement, or after 40 minutes, participants
filled out a short post-negotiation questionnaire that assessed the personal
goals that they set for themselves in the
exercise, and their satisfaction with the
negotiation process and outcomes.
Measures
Cultural Values were measured using
the Schwartz (1992) value inventory.
As analyzed in later papers (1994;
Schwartz & Sagiv, 1995) these values
can be categorized into the following
dimensions: self-enhancement
(Hong
Kong coefficient (x=.80; U.S. (x=.72), selftranscendence (H.K. (x=.67; U.S. (x=.69),
openness to change (H.K. (x=.79; U.S.
(x=.75), and conservatism (H.K. (x=.72;
U.S. (x=.37).
Negotiation Norms were measured
with items drawn from existing literature that addressed our five focal norms:
TABLE1
NORMS
FACTORLOADINGOF ITEMSMEASURINGNEGOTIATION
Competitive Equality
Altruistic
Self-interest
Problem-Solving
Go50-50withtheother
-.07371
partyto reachan agreement
Givein if the otherpartymeets
.03036
you halfway
Meetthe otherpartyat the mid-.06528
range
pointof the bargaining
Sethighgoalsforyourown outcome .16331
.25005
Satisfyyourown needs
Makestrongarguments
to support
.00531
yourposition
Be firmin pursuingyourposition -.03768
Blufforgivemisleadinginformation .78862
Resistmakingconcessionsto
.62087
the otherparty
Threatenthe otherpartythat
.66282
you maywalkfromthe deal
Threatento withdrawa
.72653
previousoffer
Askthe otherpartyto explain
-.08613
theirneeds&interest
.05945
Askthe otherpartyforproposals
Usethe otherparty'sideasto
.35774
generatea proposal
Blendyourideaswith other
party'screatinga novelagreement -.09850
Yieldto the otherparty'sdemands .03516
.01381
Satisfythe otherparty'sneeds
Eigenvalue
of varianceexplained
Percentage
718
3.42
20.1
.82247
- .02658
-.01676
.05602
.81386
-.15463
-.14368
.04182
.76848
.09804
.04963
-.04902
.59765
.58588
-.07690
.23563
.16851
.06494
-.10380
-.02043
-.17821
-.20670
.01458
.76507
.73410
.01648
.05313
.01636
.19398
-.05618
-.00138
-.16747
.15397
.18376
.00238
-.12175
-.25851
.24849
-.02761
.27034
-.18946
-.05566
-.13261
.27102
-.16146
-.10797
.10234
.15827
.66857
.71816
-.10753
.04743
-.10779
.12692
.65824
-.00771
.09307
.12008
.05717
.04095
-.20089
.03944
.62040
-.11216
.28321
.21282
.77916
.78594
2.04
12.0
1.84
10.8
1.60
9.4
1.14
6.7
joint problem solving, self-interested,

equality, altruistic, and competitive
(Pruitt & Rubin, 1986; Brett et al., 1998;
Weingart et al., 1990). Participants
were asked to rate the appropriateness
of particular negotiation behaviors on a
5-point Likert scale. Although many
items had been validated across cultures, a factor analysis was run to assess
the factor structure. Significant loadings of items on intended constructs,
and non-significant cross-loadings,
offers evidence for convergent and discriminant validity for these measures
(Joreskog& Sorbom, 1989). These items
and their factor structure are shown in
Table 1.
Outcomes are the total outcomes for
the negotiators across all six issues.
Participants were assigned a total of
3000 (their BATNA) in cases where they
did not reach an agreement. In addition
we measured individual negotiators satisfaction with the negotiation. The 12
items used to measure this construct
included items about satisfaction with
own outcomes, projections of how satisfied the other party was with their outcome, and participants' affective feelings about the negotiation process (coefficient ox= .87 for the whole sample;
Hong Kong coefficient x=.83; U.S.
x=.91).
RESULTS
To control for any cultural differences

in response style, values, norms, and
outcome scale, items were standardized
for each cultural group (Leung & Bond,
1989). We used these standardized
variables for all of the tests we report
below. A comparison of the self-reported values confirmed that the value profiles in our sample of negotiators were
consistent with previous research.
Americans were significantly higher on
self-enhancement (individualism) and

openness to change, while the Hong
Kong Chinese were significantly higher
on self-transcendence (collectivism) and
conservatism.3
We used a series of ANOVA's to test
our hypotheses of cultural differences
in negotiation norms, with cultural
group as the independent variable,
norms as the dependent variables, and
age as a co-variate. Results revealed significant differences for culture, as
hypothesized. U.S. participants rated
self-interested and joint problem solving behaviors as significantly more
appropriate than their Hong Kong
Chinese counterparts, supporting
hypotheses 1 and 2. Hong Kong
Chinese participants rated equality
behaviors as significantly more appropriate than their U.S. counterparts, supporting hypothesis 3. There were no
significant differences on the altruism
or competitive norms. Moreover, there
was no significant effect for age, suggesting that age did not affect negotiation behavior for this sample. Table 2
shows the means, F statistics, and effect
sizes for each of the norms by cultural
group.
To test hypothesis 4, we classified
participants' self-stated negotiation
goals for the exercise, by culture, under
each set of instructions (self-maximizing, competitive, cooperative). Table 3
shows the classification pattern that
supports hypothesis 4. Hong Kong
Chinese negotiators were significantly
more likely to interpret cooperative
instructions (consider the needs of the
other party as well as your own) as
meaning that they should strive for
equality, whereas almost all U.S. negotiators interpreted these instructions to
strive for joint gain (chi-square = 51.04,
df=6, p<.001).
VOL. 29, No. 4, FOURTH QUARTER,1998
719
AND HONG KONG
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CATHERINE H. TINSLEY AND MADAN M. PILLUTLA
To test hypotheses 5a and 5b, we created two outcome indices: i) the dyadic
sum, which was the addition of both
parties' total points; and ii) the dyadic
difference, which was the difference
between the two parties' total points.
Culture is a dummy variable (US = 1,
Hong Kong = 2). According to Baron
and Kenny (1986), the test for modera-
tion should include a term for the direct

effect of the predictor (dyadic sum and
dyadic difference), a term for the direct
effect of the moderator (culture), and
the interaction term (i.e., product of the
two terms). The moderator hypothesis
is supported if the interaction term is
significant. Following Aiken and West's
(1991) recommendation
that we use
standardized variables when faced with

multicollinearity, we used standardized
predictors and outcome variables in the
moderator analyses (where, of course,
multicollinearity is inevitable given that
one of the variables is a product of the
two others that are entered in the equation).
Culture interacted with dyad sum (13=
-1.98, p <. 001) and with dyad difference (,B = -.218, p < .004) in predicting
negotiator satisfaction. A sub-group

analysis revealed that dyad sum was
positively related to satisfaction for U.S.
negotiators (,B = .46, p <. 001) and not
significantly related to satisfaction for

Hong Kong negotiators (1B= -.02, p <.82
), supporting hypothesis 5a. Dyad difference was negatively related to satisfaction for Hong Kong negotiators (,B= .28, p <.001), and not significantly relat-
ed to satisfaction for U.S. negotiators (,B

=.12, p <.35), supporting hypothesis 5b.
DISCUSSION AND IMPLICATIONS
Cultural groups develop different

negotiation strategies that are conceptually consistent with their shared culturVOL.
29, No. 4,
FOURTH QUARTER,
al values. Negotiators from the U.S. culture espouse significantly higher levels
of self-interested and joint problem
solving norms, while their Hong Kong
Chinese counterparts espouse significantly higher levels of an equality norm.
These differences were anticipated from
each culture's value profile. There were
no significant differences on either the
altruism or competitive norm, which
might be expected because the value
profiles of the cultures studied were
conceptually orthogonal to both competitive and altruistic strategies. The
overall pattern of results (finding both
cross-cultural similarities and differences) suggests results were not simply
due to methodological error (Brett et al.,
1997). We note one limitation herelow alphas on negotiation strategies that
are non-normative for a country (selfinterested and problem solving in Hong
Kong and altruistic strategies in the
U.S.). Since low alphas indicate random
error,this makes systematic cultural differences harder to detect, meaning our
resulting differences in self-interested
and problem solving strategies may be a
conservative estimate of the true differences. The pattern of the reliability
coefficients may in fact support our
hypotheses of normative and non-normative strategies across cultures; low
alphas for non-normative strategies may
indicate that the set of behaviors that
makes up a particular negotiation strategy does not "hang together" as well
when that strategy is not prevalent in
the culture.
Cultural groups not only develop different negotiation norms, but they also
interpret negotiation instructions in
ways that are congruent with their
norms and cultural values. The prosocial instruction to cooperate with the
other party translates into two very dif-
1998
721
IN THEU.S. ANDHONGKONG
NEGOTIATING
ferent orientations,
depending
on the
cultural context. In the U.S. culture

that values openness to change and
espouses a joint problem-solving norm,
this instruction translates into maximizing joint outcome. In the Hong Kong
Chinese culture that values conservatism and espouses an equality norm,
this instruction translates into ensuring
parties have equal outcomes. This distinction explains previous findings that
show collectivist Hong Kong Chinese
display surprisingly few integrative or
problem solving behaviors (Leung,
1997; Tinsley, 1997).4 A presumption
that collectivism leads to joint problem

solving may stem from the theory that
collectivism is associated with cooperation (Earley, 1989; Wagner, 1995), and
empirical results that link cooperative
instructions to joint problem solving
(Pruitt & Lewis, 1975; Rubin & Brown,
1975; Schultz & Pruitt, 1978; Weingart,
Bennett & Brett, 1993). However, these
empirical results are primarily derived

from studies of U.S. participants who
espouse openness to change. Without
this value, cooperative instructions are
more likely to lead to equality, since
this strategy is also pro-social, but does
not require innovation.
Finally, a culture's normative strategies lead to more negotiator satisfaction.
Negotiators from the U.S. culture feel
more satisfied with their outcomes
when they maximize joint gain.
Negotiators from the Hong Kong culture
feel more satisfied with their outcomes
when they maximize the parity between
both parties' outcomes. These findings
suggest that prescriptions from U.S.
research to expand the pie (Pruitt, 1981;
Raiffa, 1982; Bazerman & Neale, 1992;
Fisher, Ury & Patton, 1991) may be culturally bounded. It is possible that in
other cultural contexts maximizing joint
722
gain is not necessarily the most optimal

outcome, at least not when it comes at
the expense of equal outcomes. One
modification to expanding the pie might
be to both maximize joint gain, and then
divide the joint gain equally. However,
this prescription discounts several
negotiation findings. First, integration
(creatingjoint gain) and distribution are
intimately linked in the same behaviors
(Lax & Sebenius, 1986) so that treating
these processes as separable is not simple. Second, when dyads do attempt to

integrate first and then distribute equally, arguments over what constitutes an
equal division can erupt because both
parties can show ego-centric interpretations of which equality principle is
most valid (Thompson & Lowenstein,
1991; Zartmanet al., 1990). Parties may
argue whether an equal outcome is
defined by equal benefit in the final
agreement (Pruitt & Carnevale, 1993),
equal excess above their BATNA
(Komorita & Kravitz, 1979), equal concessions from their initial positions
(Raiffa, 1982), or equal concessions
from aspiration levels (Tietz & Weber,
1978). Future research might focus on
what types of equality are most important in different cultural contexts. Our
results also suggest that we might
expand our definition of an optimal outcome, beyond dyadic total points
(Tinsley,
1997).
Some researchers
include subjective outcome measures

(Dwyer & Walker, 1981; Graham et al.,
1994),
as we have done, which
can
assist us in refining our definition of an

optimal outcome.
Finally, our results suggest that
cultural values create an environment
in which some negotiation strategies are
selected to survive over others. These
strategies are selected and become normative because they offer an outcome
CATHERINE
H. TINSLEYAND MADAN M. PILLUTLA
that is socially desirable. Hence, we

find joint gain to be correlated with
higher utility in the U.S. culture, and
equal outcomes to be correlated with
higher utility in Hong Kong culture.
These interactions are consistent with
the thesis that cultural context causes
the variety of negotiation behavior
found internationally. We should note
that we have used the nature of a dyad's
outcome are a proxy for the negotiation
strategies used. We may infer the
process (for example, joint problem
solving) from the outcome (level of
dyadic gain), but obviously our thesis
would receive stronger support if we
directly demonstrated that strategy
interacts with culture to give outcomes
that are evaluated more highly. Future
research could record negotiations in an
attempt to measure negotiation strategies.
CONCLUSION
Cultural context promotes some negotiation strategies over others. Cultural
group members are the operating agents
for culture. They internalize cultural
values that inform their utilities for a
negotiated outcome. Through experience, members learn the association
between strategies and outcomes, and
learn to choose those strategies that give
high utility. Strategies that fit with the
culture's values become normative, as
using these strategies results in higher
satisfaction. In our data, U.S. negotiators espoused higher self-interested and
joint problem solving norms, and rated
joint gain as more satisfactory, while
Hong Kong Chinese negotiators
espoused higher equality norms and
rated equal gain as more satisfactory.
Hence, we suggest U.S. negotiation prescriptions should be refined for application internationally.
VOL. 29,
NOTES
1. We consider national cultures
when we use the word culture.
However, we recognize that other cultural groups exist both below the
national level and above it.
2. We sampled across nations, since
nation is a good first approximation of
national culture. However, we tested
for cultural values to assure that our
national group sample conformed to our
theoretical cultural group. As well, all
students from other national cultures
were excluded from analyses.
3. All these differences are significant. We do not report means and significance tests because our intent in this
analysis is to confirm that the cultural
values reported by our sample are not
different from those reported in other
studies. The specifics of these analyses
are available upon request.
4. Note, however, Graham (1996)
found Hong Kong Chinese to be better at
joint profits and worse at equality than
Americans. These discrepancies highlight the value of replication research,
and the need for meta-analysis.
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Negotiating in the United States and Hong Kong

Author(s): Catherine H. Tinsley and Madan M. Pillutla

We propose that cultural values

egotiationis the process by which

people attempt to settle what each

negotiators are more likely to

Tinsley (PhD Northwestern University) is an Assistant Professor of Management

Pillutla (PhD University of British Columbia) is an Assistant Professor in the

29, 4 (FOURTHQUARTER 1998): 711-728.

NEGOTIATINGIN THEU.S. AND HONG KONG

ferences in negotiation behavior have

Some researchers attribute these differences to culture (Cohen, 1991;

designed to meet a particular objective.

nate over others. In brief, we propose

These selected strategies then become

prone to use these effective strategies

Second, we offer evi-

dence showing that each culture's value

lated with negotiation behavior; cultural

Values are desirable goals that serve

person's values can influence his or her

CATHERINEH. TINSLEYAND MADAN M. PILLUTLA

Although cultural values may appear to

set of four higher-order cultural values,

Hofstede, 1980; Triandis, 1983). As

Self-enhancement is measured with values such as: Independent, choosing own

The second set juxtaposes conservatism with openness to change.

security are valued, and the self may be

VOL. 29, No. 4, FOURTH QUARTER, 1998