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9/21/2010

MGX5360
Principles of Negotiation

Week 12 - The Cultural Context of


Negotiations
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Exercise:

Cultural Encounter – of the third kind!

(see handout)

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National Culture and Negotiations

• Negotiations across cultures are


commonplace and, in many cases, a
requirement for effective management in
multinational and international companies.

• Often cross-cultural negotiations do not


always go smoothly and money is left on the
table.

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Defining culture

• Unique character of a social group; shared values


and norms that set it apart from other groups
• Concerns economic, social, political, and religious
institutions; also the unique products produced by
these groups
• Cultural institutions preserve and promote culture’s
ideologies
• Culture influences mental models, behavior, and
cause-and-effect relationships.

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Think in “prototypes”, not “stereotypes”.

• Developing a framework for thinking about


culture
• Framework is sensitive to heterogeneity
within cultural groups
• Allows us to learn how cultures change and
grow.
• Avoid temptation to think of culture and
diversity as a single dimension; culture is a
complex whole.

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Culture as an Iceberg

Behavior, Artifacts,
Institutions

Values, Beliefs, Norms

Assumptions

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Dimensions of Culture
Cultural Dimension
Individualists/Competitors: Collectivists/Cooperators:
Goal: Key goal is to maximize own gain Key goal is to maximize the
(and perhaps the difference welfare of the group or collective;
Individual vs source of identity is the group;
between oneself and others);
Collective source of identity is the self; individuals regard themselves as
Orientation people regard themselves as free group members; focus is on
agents and independent actors. social interaction.

Influence: Egalitarians:
Hierarchists:
Regard social order to be important
Egalitarianism vs Do not perceive many social in determining conflict management
Hierarchy obligations; often regard BATNA strategies; subordinates expected
to be major source of bargaining to defer to superiors; superiors
power. expected to look out for
subordinates.
Direct Communicators: Indirect Communicators:
Communication:
Engage in explicit, direct Engage in tacit information
Direct vs Indirect information exchange; ask exchange, such as storytelling,
direct questions; are not inference-making; situational
affected by situational norms.
constraints; face-saving issues www.monash.edu.au
likely to arise.
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SOURCE: Brett, J. (2001). Negotiating globally: How to negotiate deals, resolve disputes, and make decisions across cultural boundaries.
San Francisco, CA: Jossey-Bass.

Cultural Values and Negotiation Norms #1

• Individualism versus Collectivism


• Implications for negotiation
– Social networks
– Cooperation
– In-group favoritism
– Social loafing versus social striving
– Endowment
– Preferences for dispute resolution
– Bargaining
– Mediation
– Adversarial adjudication
– Inquisitorial adjudication

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Cultural Values and Negotiation Norms #2

• Egalitarianism versus hierarchy.


• Egalitarian power relationships.
• Hierarchical power relationships.
• Hofstede’s (1980) analysis of collectivist/hierarchical
countries.
• Implications for negotiation
– Choose your representative
– Understand the network of relationships
– Face concerns
– The conduct of negotiation

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Cultural Values and Negotiation Norms #3

• Direct versus indirect communication

• Implications for negotiation


– Information necessary to reach integrative
agreements
– Dispute resolution preferences

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Key Challenges of Intercultural Negotiation

• Expanding the pie


• Dividing the pie
• Sacred values and taboo trade-offs
• Biased punctuation of conflict
• Ethnocentrism
• Affiliation bias
• Faulty perceptions of conciliation and coercion
• Naïve realism
– Western Canon debate
– Fundamental attribution error

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Predictors of Success in Intercultural Negotiations (I)

• Conceptual complexity
• Broad categorization
• Empathy
• Sociability
• Critical acceptance of stereotypes
• Openness to different points of view
• Interest in host culture
• Task orientation

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Predictors of Success in Intercultural Negotiations (II)

• Cultural flexibility
• Social orientation
• Willingness to communicate
• Patience
• Intercultural sensitivity
• Tolerance for differences among people
• Sense of humor
• Skills in collaborative conflict resolution

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Advice for Cross-Cultural Negotiators #1

• 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.

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Advice for Cross-Cultural Negotiators#2

• Avoid attribution errors.

• Find out how to show respect in the other culture.

• Know your options for change:


• Integration
• Assimilation
• Separation
• Marginalization

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Conclusions
• Negotiating across cultures is a necessity for success in the business
world
• Unfortunately, cross-cultural negotiations frequently result in less-
effective pie expansion than intra-cultural negotiations; part of the
problem is a lack of understanding of cultural differences
• Key dimensions of cultural differences are individualism-collectivism,
egalitarianism-hierarchy, and direct-indirect communication
• Key challenges of intercultural negotiation: Expanding the pie, dividing
the pie, dealing with sacred values and taboo trade-offs, biased
punctuation of conflict, ethnocentrism, the affiliation bias, faulty
perceptions of conciliation and coercion, and naïve realism
• Negotiators should learn to analyze cultural differences to identify value
differences that could expand the pie, recognize different conceptions
of power, avoid attribution errors, find out how to show respect in other
cultures, and assess options for change
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