Negotiation A Vital Skill Commerce Essay

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Negotiation is a vital skill need for any business, or to settle a personal matter. However, how negotiation is carried out varies culture to culture. This report intends to investigate how negotiation style varies across different culture. There are many aspects that need to be taken in consideration when dealing with negotiation across different culture this is illustrated the diagram below:

http://www.mediate.com/articles/cdr1.cfm

Thus as a negotiator , one must bear in mind that, " Negotiation is a dialogue intended to resolve disputes, to produce an agreement upon courses of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy various interests. It is the primary method of alternative dispute resolution." http://en.wikipedia.org/wiki/Negotiation 18/1/2010

As a human nature people often tend to forget that people different culture do things in a different way, then individuals own culture. thus this needs to be taken into account when doing business in an another countries , many people tend to make this mistake when negotiating in another culture as one does not have greater understanding of another culture and make mistake of losing the deal. If one does don't take the culture difference into consideration when negotiating then it is most likely that one would create a bad opinion and disagreement with the other business party.

Introduction

In today's world, negotiating across different countries is becoming a vital arena for every business; therefore it is necessary to understand business ethnic for a particular culture, before deciding to undertake a negotiations process. Having some knowledge of the culture in advance can boost up the effectiveness of winning the deal from another party. The diagram, below illustrates the process that needs to be taken into account when negotiating from business intelligence to emotional and social intelligence of one culture, this would help compare business done across the cultures.

http://knowledgenetwork.thunderbird.edu/research/files/2009/03/negotiation.jpg

Communication in negotiation across the global is an important process, and needs to be carried out with great care. This aspect of negotiation is very challenging, having a effective communication with people of another culture is a challenging part for every individual, as many things can differ from culture to culture, this of course means the way we see, hear and think things, that are diverse from one culture to the another, most importantly the way we perceive and interpret things. This needs to be dealt with causation as communication can lead to an increase in misunderstanding between two cultures

This report would illustrate many examples of how a negotiation varies culture to culture, and what aspects we need to take into account, and how negotiation style differs across the globe.

Culture and Negotiation strategy

Negotiation strategies vary culture to culture. It is found that different culture has diffAerent norms and cultural values for the purpose of distributive tactics and for the purpose of information sharing.

Communication strategies

The study from different recourses suggests that the information sharing strategies vary from culture to culture (Hall 1976). Brett et al. (1998) found that negotiators from Japan and U.S use similar methods for information sharing in negotiation. But on the basis of successive research it is found that, the Japanese negotiators apply indirect information sharing strategies while U.S negotiators apply direct information sharing strategies the communication styles used by U.S negotiators and Japanese negotiators are also different. For example Japanese negotiator less expected to say "no" and more expected to remain silent than U.S negotiators.

It is expected that direct and indirect communication strategies leads high joints gains through different communication behaviours. It is very important for a negotiator to share sufficient information to understand each other's priorities and recognize trade-offs and compatible issues so that joint gain can be achieved. It is potential for a negotiator to exchange sufficient information using either direct or indirect information sharing strategies.

Power strategies

Power in negotiation is the basis of one party's capability to gain advantage over the other party through possible influence tactics (France and Raven 1997): Pruitt 1981) Social equality versus hierarchy is a cultural value with implications. For the purpose of to use power strategies in negotiation. Hierarchical cultural value stress the importance Of status and power whereas social equality culture value stress sameness, equal opportunity and achievement (hofstede1980); Schwartz 1994).

Brett et al. (1998) found that hierarchical culture in comparison to socially equal culture were more likely to expose norms for distributive plans. Distributive plans are power strategies that are focused on individual, not joint gains (Pruitt 1981 and 1983).

CULTURAL PROFILES

This section illustrates how each culture varies across the world when negotiating .

FRANCE

The culture of France is very difficult to understand, due to which France is called an Enigma. It is suggested that France has both the low and high-context culture. European politics was dominated by French negotiation in eighteenth and nineteenth century and was surely high-context, indirect, secretive and nuanced. French negotiators use more indirect way of communication. French institutions suggesting that negotiators may use direct way of communication. It was found that French negotiators were unlikely supported the hierarchy culture. For the other evidences it was clear that these negotiators avoid the power strategies which contradicts that France is hierarchical culture in which the power, status and rank plays very important part. It suggests that these negotiators would use the power strategies in the negotiation.

RUSSIA

Russia is placed as a high context culture. The communication in Russia is holistic (Berdiaev 1990) and indirect and also secretive (Rajan and Graham 1991). Information is processed associatively and subjectively in Russia and characterised as the typical high context communication customs or norms (Morrison,Conaway, and Borden 1994). It suggests that negotiators of Russia would use indirect strategies of communication. It is said that social norms of Russia are enclosed by hierarchy and power (Lefebvre and Lefebvre 1986; Smith 1991). It was found by Brett et al. In (1998), the negotiators of Russia recognized hierarchy as the guide of cultural values, distributive plans as normative and the role of negotiator as a resource of the power in negotiation. It is suggested by empirical and descriptive evidence that negotiators of Russia would use probably further power strategies in the negotiation.

Hong Kong and Chinese

The Hong Kong Chinese culture is a high-context culture (Ting-Toomey 1985), where associative information allowance is the standard (Morrison, conaway, and Borden 1994). Descriptive accounts highlight the role of power in Hong Kong Chinese society for example strong social control standards (Schneider and Barsoux 1997) and valid power determines behavioral standards (Morrison, Conaway, and Borden 1994. On the basis of all these studies it is recognized that Hong Kong Chinese negotiators uses power strategies in negotiation.

Brazil

Brazil is a high-context culture (Morrison, Conway, and Borden 1994).The problem solving approach in brazilin is indirect. Brazilian uses the nonverbal indication which such as touching, tone of voice and relationship, Oliveira (2001) which categorize Brazil as a high context culture according to Hall's (1976) criteria. These accounts suggest that Brazilian negotiators use the indirect strategy for the purpose of communication.

United States

United States is a low context culture. The communication in U.S is direct. Negotiators use facts and analytical approach when they deal with their counter parts. U.S negotiators believe in more searching and experimenting strategies than relying on history and precedents context (Schneider and Basoux 1997). On the basis of all these approaches it is recognized that U.S negotiators are most probably use direct communication strategies.

Edward Hall:

Edward hall explain his cultural negotiation in different way. He explains that cultural negotiation normally depends on time, space and language atmosphere.

Time

Monochronic and polychronic

Past, Present and future

Space

Personal and physical

Language

High-low context

Time:

In the world there are two different time orientation. Number one is the Monochronic and number two is Polychronic. In the Monochronic orientation we see that people are liner sequential and involve facing on one thing at a time. Their activities are carefully compartmentalized and they are also respecting their timetables. Halls give us one country examples. The country is Germans (international management-John Mattock, p: 68) the cultures that fit in monochronic are countries like: - United States, Switzerland and Scandinavia.

Monochronic cultures tend to:

They are prefer to talk in sequence

They are deal with one agenda at a time

They are really on specific

On the other hand, in the polychromic orientation it can be found that people are involve immediate occurrences such as people answer the phone, transmit sign language to their colleagues, drink tea or coffee and they involvement of many people all at the same time. Halls give us example and the country is France (international management-John Mattock, p: 68). The countries that involve in polychromic culture are: - Latin cultures including Italy, Greece Mexico and some Eastern and African cultures. Time orientation influenced attitudes to change.

Polychronic cultures tend to:

They are overlap their talk

They are not take lateness personally

They are start and end meeting at flexible times

Time perceptions is vary in different cultures this shows Halls analysis. He found four aspects:

Schedule time

Discussion time

Acquaintance time

Appointment time

Space:

Space are expressed both physical and personal feelings. In Japanese culture we see that they maintain physical space. When they talk with people they take a distance about the other people. But when we see Chinese people they do not maintain these they talk very closely. They do not maintain physical distance. So therefore when going to do business in another culture it is vital to understand what the distance of space would have an impact from one culture to another.

Language:

Language is very important to express our self in today's world. Languages express what we see and fail to see, who is allowed to say what and what we say and miss out to say. The American people when they communicate with others, they try to talk directly and get to the point to be made clear and open. Like as Britain people their speech is more suggestive. Whereas in Japan they are more silence even when two close friend drink silently together. So it is important to understand the language behaviour culture to culture in order to maintain a good relationship.

Cultural Dimensions by Geert Hofstede

 "Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster."   Prof. Geert Hofstede, Emeritus Professor, Maastricht University.

Geert Hofstede's research on cultural variation:-

It is wonderful to know, more about the other cultures. Such as to identify How do different culture behave, especially those who work in an international business. Individuals believe that every country do business the same way as home country, however this is not the right thinking, knowing other culture and the way they do business deal is important to identify, as many conflict can arise and every one would clash.

To minimise all the confuse Geert Hofstede's research gave us imminent to the cultures so that we can be able to interacting with people easily in different other countries. If people will understand the practical applications on cultural differences and they practice it very well, no one will be annoyance, worry and nervousness.

Hofstede's five Cultural Dimensions:-

This clarifies Hofstede's cultural dimension theory and describes the five dimensions, which is measure constructs of power distance, individualism, individualistic society, masculinity and uncertainty avoidance:-

http://www.geert-hofstede.com/

Power distance index : When negotiating in different culture one needs to understand the difference between negotiating style varies across culture. The culture belong to high power distance, and the country that belong to high power distance are Arab countries, Guatemala, Malaysia, the Philippines, Mexico, Indonesia, and India.

and the country that belong to Low Power Distance are: Austria, Denmark, Israel, New Zealand, Ireland, Sweden, Norway, Finland, Switzerland, Britain, and Germany.

The table belong indicates what each cultures from both power distance tend to involve when negotiating across culture:

High power distance

Low power distance

Power / Authority are facts of life

Minimize social / class structures

Everyone has a specific place

No set hierarchy

Those in power emphasize position 

Those in power minimize position

Respect for authority

Respect for individuality 

Centralized authority

Decentralized authority

http://www2.andrews.edu/~tidwell/bsad560/Hofstede.html

individualism: individualism means more focus on the individual achievements and status of a person countries which focus more on individualism are United states and Britain. When the negotiators deal with their counterpart based in these countries they should understand this individualism focus of them.

Opposite of individualism is collectivism it means less focus on individualism and more focus on collective efforts by the group. The countries which is collectivism dominated are india and thiland.

Masculinity: This dimension focuses on the gender of the person ,he is male or female. It describe the distribution of work between the genders in a society:

a) women's values differ less among societies than men's values

b) men's values from one country to another contain a dimension from very assertive and competitive and maximally different from women's values (Source: Hofstede)

Negotiators may find it useful to think on the way of gender positions it play out in the cultural contexts of their negotiating members.

Uncertainty Avoidance Index which is about the tolerance for the uncertainty and the doubts or searching the truth. It is to measures where is culture comfortable or not in an institution.

High Uncertainty Avoidance

Low Uncertainty Avoidance

Formal values and rules are very important

Believe that the fewer rules the better

Specific plans and preferred details

Tolerate generalization

Less tolerant of deviant ideas

Tolerate deviance

Consensus seeking

Seek individual opinions

Minimize risk

Approve of risk taking

Ritualized / ceremonial

Avoid ritualization and ceremony 

Belief in absolute truth / high expertise

Accept relativity of belief

http://www2.andrews.edu/~tidwell/bsad560/Hofstede.html

Long-Term Orientation This is the fifth dimension which had been added after the Chinese employee and managers designed a survey for student in different countries around the world. That is the deal with the regardless of truth. The values of the LTO are savings and perseverance.

Negotiation style across culture

Intercultural business negotiation does the business frequency of among the people in different countries with different culture. It is very difficult to point out exact path of cross cultural negotiation. Especially cultures are in constant flux. It can be argued that, cross cultural negotiations' competing principles and values. In the individualist cultures fairness goals may be important then in collectivist cultures. According to the literature of cross- cultural negotiation we found the Americans as individualists and Japanese are collectivist. For example Americans and Japanese were asked to rate their conflict experiences in terms of goal orientation, the Americans were strongly oriented toward achieving justice, but the Japanese were more motivated by a concern for relationship with others. Although in efficiency of tactics, Americans are preferred in self-assured tactics on the other hand Japanese are preferred in evasion tactics. There has another negotiation style which as known as holistic approach. Most of European countries in negotiations compound are split up in to separate issues like attacked consecutively and settled in one at a time. With a holistic approach negotiators used to a sequential approach often experience difficulties when negotiating with people who discuss all issues. (G. Maureen)

moreover, many researchers says that, success in cross-culture negotiations business people need to know how to communicate with and influence members of cultures other then their own. A growing literature may provide some example about approaches in cross-cultural negotiations in a various national settings. One of the researchers Dr. Nancy Adler pointed out some success used by negotiators from four national backgrounds Table bellow identified some key points among the business people from different settings:

Americans Negotiators

Japanese Negotiators

Chinese Negotiators

Latin Americans

Negotiators

groundwork and development skill

enthusiasm

determination

Preparation and planning skill

Thinking under pressure

Perceive and exploit power

Win respect and confidence

Thinking under pressure

decision and intelligence

Win respect and confidence

Preparation and planning skill

Judgment and intelligence

Verbal communication

honesty

Product knowledge

Verbal expressiveness

Product knowledge

exhibit listening skill

Interesting

Product knowledge

Perceive and exploit power

Broad perception

Judgment and intelligence

Perceive and exploit power

Veracity

Verbal expressiveness

Competitiveness

(beyondintractability.org)

U.S approaches to negotiation:

Americans are individualist, independent and self reliant. American negotiators see them self as separate rather than as a member of a board. There has some Americans approach of negotiations pointed out by the Japanese negotiators.

Americans are being competitive in their approach to negotiations.

Americans are being energetic, confident, and persistent; they enjoy arguing their positions.

They are concentrating on one problem at a time. and

Belief rather than open-endedness or uncertainty.

Japanese approach to negotiation:

There have some values tend to influence in Japanese negotiation which has been identified by the researcher. Japanese are focus on group goals, interdependence, and a hierarchical orientation. Japanese negotiators are known for their politeness, their emphasis on establishing relationships, and their indirect use of power. Some more point out in Japanese negotiation as follows:

Face saving crucial, decisions often made to save some one from embarrassment

Decision makers openly influenced by special interest

They are not argumentative

Step by step approach to decision making

Written statement must be accurate and valid etc.

Japanese are also less likely than their U.S. counterparts to make procedural suggestions.

Europeans approach to negotiation:

In Europeans negotiation style many researcher pointed some of their values and norms. Their styles vary according to the region, nationality, language spoken etc. literature found that, the French to be very aggressive negotiators, using threats, warnings, and interruptions to achieve their goals. German and British negotiators were rated as moderately aggressive in the same study.

Latin American approach to negotiation:

Latin American negotiation approach relates to the polychronic orientation to time and patterns of high-context communication. In Latin America, people think about and respond to conflict holistically. However, some of them key points in negotiation style given as bellow:

They have emotional sensitivity and valued

Loyal to employer

Decisions come down from one individual

Argumentative and passionate when Wright or wrong

Impulsive, spontaneous decision making

Good personal relationship necessary for good decision making etc.

Conclusion

Negotiation is a communication between two parties to resolve the disputes. Negotiation accurse between business organizations, non profitable organizations, different countries. Culture plays a important role in negotiation because every negotiators act according to their specific cultural behavior; that their specific way of thinking, acting, feeling amnd the most importantly they act on the basis of their own cultural values.

This report Explains the importance of cultural behavior in negations. Hofsted's dimensions' of culture provides the information how the cultures varies according to there values and on the basis of their own set of norms. On the basis of many studies it is concluded that the cross culture negotiation skills are the key of success for international business. The process of negotiation which finally reaches the agreement may ultimately determine the level of success or the relationship. The conclusion shows that the U.S culture focus more on individual performance and individual achievements, accomplishment and initiatives. Although other countries Japan, Malaysia, Hong Kong, China and Taiwan and most of African cultures in South Africa gives less importance to individual efforts. These countries give more important to group efforts.

(Ivey business Journal March/April 2005)

Recommendation

Negotiating strategies and tactics are usually analysed as problem solving or adversarial. In negotiation these two tend to be alternative. However, different sets of tactics can be pursued at different time or, in team negotiating, by different people. research on cross culture negotiation, has been identifying influence on individuals negotiators who have pursue adversarial tactics, having ambitious goals, seeing attractive alternatives to agreement, expecting low costs, framing issues negatively, religion, demands, accountable representative, and being high in self concern as distinct to concern for others.

On the basis of different studies it is recommended to the foreigner negotiator that they must understand the culture and language of their counter part. A foreigner must respect the cultural values and ethics of their counter part. To understand the culture value of any country where a negotiator goes to negotiates on the behalf of their organization and their country. Some times it is not easy to learn, understand other countries culture if any time such a problem occurs then the negotiator should need to take help from a translator from the same country where he goes to negotiate so that the foreigner negotiator can deal with the situation effectively.

Reference

Books

Maureen Guirdham, /F T/Interactive behaviour at work,/ third edition

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