There has been an increasing trend in the interdependence between culture and the way international business negotiations are done and the outcome of such negotiations. This paper is going to review the influence of culture on the process and outcome of business negotiations internationally. The paper will first introduce the concept of culture and the concept of international business negotiations. It will then evaluate their interdependence and possible effects of such interdependence.
A conclusion will be drawn based on the discussion made in the paper. Concept of Culture In literature, culture is designed in a number of ways. The concept of culture should be considered as a group phenomenon. Despite the fact that each group is made of individuals and the fact that it is through these individuals by which culture is manifested, culture is a phenomenon which can only be seem when shared by all or majority of individuals that comprise the group. Second, is individuals acquire culture from the group by which they are identified.
This can occur either by acculturation of through socialization. This brings an implication that culture should be shared by all individuals inclined to a group and if has to be preserved and passed on from one generation to the next. Some authors view culture as not having consistent definition. Culture is dynamic and varies over time. It has also been argued that culture in the short term should be seen as a structure that influences the behaviour of humans, while it should be taken as a dynamic phenomena in the long term.
Thirdly culture is unique in terms of the attributes that subsumes all aspects of social life. These attributes are either tangible or intangible. By definition, culture is norms, values and beliefs that are transmitted socially from the one generation to another in a given society. In other words, it refers to the collective mentality that people have developed or programmed in an environment. In business context, it refers to a behaviour influence that determines the away people approach and negotiate international business opportunities.
Concept of International business negotiation International business is any form of business transaction that is being done by people belonging to different countries and involves the processes of exportation and importation of commodities. In this respect, international business negotiation refer to the way international businessmen who in this paper are referred to as the negotiators carry out the process that leads to striking a business deal. Interdependence of culture and the international business negotiation is on the increase
In the recent decades, there has been a uniform trend all over the world in terms of increased interdependence of culture and the way international business deals are negotiated. The reason behind this universal trend is mainly due to the more intensification of business and trading relationships, more pronounced political integration among members of the European Union, economic integration among member countries of various global trade unions as well as the ever progressing globalization of almost every business, diplomatic, economic or social issues.
Most scholars have turned their interest to this issue of culture- business negotiation interdependence also due to the above mentioned reasons. Of the array of issues for international negotiations, the academic scholars have specifically been attracted to the way culture influence negotiations. Possible effects of the interdependence It is arguable that the current increasing trend in the interdependence of culture and international negotiation of business issues may lead to relationships that go beyond the bounds of culture.
This can result either due to attempts to attain Integrative mutual benefits for the two partners or can be due to challenges a negotiator may face in international business deals. As it has been highlighted else where in this paper, all business negotiations should be aimed at attaining mutual benefits to both parties and such ends are reached when each of the parties is willing to give and take. First, the influence of another culture to another individual is seen in this act because ‘he or she is willing to take’ what the other party offers.
In terms of communication which is always a major barrier, it may require one party to learn the language of the other so that the communication may be smooth. This process of learning the language of the other people is in itself going beyond the bounds of your cultural teachings. Some cultures may be gender biased in the sense that any negotiation involving a man and a woman as the negotiators, the man is not supposed to lose. Under such circumstances, to achieve synergistic benefits may require the man to disregard his cultural teachings to give room for equality.
Another example is the is a negotiation between two businessmen say one from America and another from Africa. The American may have the mentality of being superior than his counterpart. To attain mutual and non partisan benefits for both parties, There two may have to disregard their races, colours, cultural beliefs and related mentalities. The deal may lead to non agreement if any of them will to show how different he is or if he will concentrate more to his goals without minding the other party.
Challenges of the interdependence may also lead to relationships that go beyond cultural bounds. Most people who have faced these challenges are advised to act like Romans when they are in Rome. This advice has been effective and universally proved to be practical. But it has been challenged by other people. Based on this point, strategies that are responsive to the culture can be organised in accordance to the level of familiarity of a negotiator to his counterpart or how familiar the counterpart is to the negotiator’s culture.
This concepts calls for one to consider and study his counterpart and where applicable to try to adjust to those levels. If for example you have an international businessman who is an African and wants to negotiate with another businessman who is a Jew, their familiarity with each others culture is very low. The has never been to Jerusalem and does not understand the language of the Jews. Furthermore, this is his first interactions before. However, choosing an appropriate strategy that is culturally responsive will depend also on whether the Jew is familiar with African culture.
Assuming that the familiarity is low, the best option for these negotiators is to have a cultural expert or a translator or adviser on financial issues who is also familiar with the cultures of the two parties. This adviser can act as an agent for one of the negotiators or can recommend the most responsive strategies for the two parties. The involvement of a mediator is also an option if the two have low familiarity of each other’s culture and agree to have such a mediator. The way this strategy is implemented is controlled by the two negotiators.
The mediator has to ensure there is proper delivery of correct information about the counterparts culture as well as bring ideas and behavior observed from each side to ensure there is a coherent interaction. All the time, this should be done without losing the trust and the respect the two parties had for one another. More advise to negotiators for international business has been proposed. It may include being keen to notice in time any major differences in strategies and tactics that may result to any form of misunderstanding.
The culture of a negotiator affects his style and behaviour of negotiating and the cultural differences also result to differences in the style one uses during negotiations. If one is capable to anticipate these differences is more advantaged when it comes to negotiating international business matters. This is because the awareness of the disparity of world cultures reduces any negative attitude and attribution a negotiator may have about his partner and it will also help to a person to view the differences that may occur as inherent part and parcel of international negotiation process.
It is also advisable for negotiators to analyse the cultural differences so that you can be able to identify the differences that require to be prioritized. This means identifying the differences that create value to the process because value in the negotiation is generated by the differences of negotiators rather than their similarities. When cultural differences are of high level, this in international negotiations is an implication of a high potential for win- win agreement. Recognizing that your partner in negotiation may not have similar view of what power constitutes is also very important.
Power in the context of negotiation refer to the ability of a person to influence the decisions other people are going to make. Power is perpetual, and negotiators for an international deal are advised to be aware that their counterpart’s estimate of power may be based on factors that may be completely different and perhaps not important to them, for example in the case of alternatives’ power versus status power. Any form of engaging in a power context between the cross cultural negotiators may lead to reduction in the possibilities of attaining an integrative agreement.
Attribution errors should be avoided at all times. These errors occur when negotiators assume that their partners behavior are based on the kind of people they are instead of basing on the environmental and social influences that the people may be undergoing. Negotiators who are sensitive about the culture of their partners should perceive the way their partners behave to be as a result of what their culture has taught them but not the result of their individual personalities.
Respecting the other culture is also fundamental But during the initial stages of the negotiation process, learn how respect is shown in the partners culture because it is highly likely that the way respect is shown in your culture is very different from the what other cultures can term as a sign of respect. Most of the times, there is a clash in the cultures of negotiators. Under such circumstances, it is essential to know the options you have for change. The options are four in number and include integration, marginalization, separation and assimilation.
You can opt for integration when both of you are determined to maintain your own culture and also contact with your partner’s culture. Assimilation may occur if a negotiator opts to disregard its culture and adopt his or her counterpart’s culture. If the two negotiators maintains their cultures and have no room for the other partners culture, the option is always a separation. Opting for marginalization is advised when both negotiators are willing to disregard their own cultures and are reluctant in embracing each others culture for the period they are in business negotiations.
How culture affects, shapes and influences the outcome of international negotiation A model has been developed to explain the way negotiators belonging to different cultures can attain amicable solutions to challenges they may face during business deals. The model explains how the strategies of both negotiators directly determine the pattern of interaction of the two and how the pattern of their interactions in turn determine the type of agreement they are going to settle at last.
The same model shows how the culture of each negotiator directly determines how he sets his priorities and interests which in turn determine they possibility of an integrated agreement where each of them benefits to his satisfaction. The potential of this mutual benefit agreement determines the type of agreement. This model is an explanation of how culture affects negotiations and the ultimate agreement reached. According to the model, cultural values are a great influence on the priorities and interests of negotiations while cultural norms have effects on the resultant patterns of interactions and the strategies set for the negotiations.
Also from this theoretical model, scholars have internalised how the culture has an impact on the basic elements of negotiations namely the priorities, interests and strategy selection. another strategy is obvious from the knowledge that cultural influence is most of the times subconscious, all differences in the tangible aspects of bi-cultural or multi- cultural negotiations can be associated with the differences in cultural background of the negotiations involved.
Apart from culture, other variables that bring the same effects include the personality of the negotiators and the variables in the structure or the process of negotiation. it may not be simple to assess with accuracy the relative influence of the variables separately and also it will be incorrect to treat culture as the only explanatory variable that is unique during negotiation process as the unique determinant of the outcomes of such negotiation. Members belonging to a given cultural group do not necessarily share similar characteristics of the culture.
Instead, the differences in the behaviours of individuals within a given culture can be just as wide as the differences in characteristics of individuals who belong to different cultural backgrounds. As a result, the way culture is linked to business negotiations has remained to be one of the most disturbing issue especially in researches carried out at global levels of negotiations. Although at local level they play a key role, cultural factors should not be under- estimated in the way they influence at global negotiations.
A negotiator expresses his views based on how his or her culture has taught him or her. This is because of the strong connection between a person’s culture and his style of negotiation. An indirect way through which culture influences the negotiation outcome is the behavior of the negotiator. This is argued on the basis that a person’s behavior is greatly determined by the moral and social values and practices a person learns from his culture. In turn, the behavior of the negotiator greatly determines the outcome of the negotiation.
For example, if a person has never learnt the art of listening to the other persons during dialogue or if his culture has not stresses on the importance of this good virtue, it is very likely that the other party will get annoyed for not being given a chance to express his or her opinions and it is very likely that no agreement will be reached at all or if any, it will not be in favour of both parties. This aspect of not practicing fairness is the major cause of most of the business conflicts that may arise. Usually, the negotiation traits that can be observed from a negotiator’s behavior are the basis of such judgement.
From a negotiation, either one of the usually three possible outcomes may result. these outcomes are integrative agreements, no agreements at all and agreements that are distributive. Integrative outcomes are the results of a negotiation whereby there is increased benefits by use of negotiation process. The benefits are more than the sum of inputs by the two parties in to the negotiation process. A good example of such negotiation is when the output of the process is solutions that satisfy the interests of each party to the excess of what each expected.
This leaves both parties fully satisfied and there is room for future similar business or even bigger ones. On the other distributive outcomes are those which result to a division of the original inputs among the negotiators. It results to no new solutions from the process of negotiation. It occurs when the negotiators are either in conflict or when each negotiator is too selfish and is defending or expanding his or her interests or position while ignoring the key rule of negotiations which requires them to be ready to give and take.
This kind of output leaves the two parties worse off, and it discourages any further possibility of similar business deals with one another. Any negotiator entering in to a deal knows very well of a possibility to have such result, and he or she avoids it by all means. It has been noticed that most of the business negotiation endeavours that involve negotiators from different cultural backgrounds ends up failing or assuming the course of distributive output. This has been mainly attributed to the inability of the negotiators, either one or both, to accept and adapt to the beliefs of their counterpart.
Cultural diversity is more pronounced at global levels that at national levels because the difference in culture is further complicated by influence of races and racial values and practices. This simply translates to more difficulties in international business negotiations than it is experienced during negotiations for local business deals across tribal borders of a given country. To address this issue, the collaborative synergistic approach to negotiation has been adopted.
The cultural style of negotiating a business deal requires mutual understanding of one another, an understanding of the other party’s interests, his or her ability to master the criteria used by the other counterpart in assessing. This makes international business negotiations very difficult especially due to the different culture and communication barriers. Nevertheless,the cultural diversity may lead to enhancement of a process designed to come up with creative options such that the two parties mutually benefit.
With this point in mind, it is safe to draw a deduction that if it is possible to recognise and appreciate that there is a cultural diversity among international negotiators, and also a proper understanding of the differences that the negotiators may expect, and once proved there is very clear communication between the two parties, then this knowledge can be turned in to an opportunity by building for building a firm environments that favour mutualism, in other words a win- win agreements. Several stages are involved in the win- win synergistic negotiation process.
These stages includes preparation stage during which initial desires for the two parties to be involved in a deal is established, followed by a stage of building a good relationship between the two parties to give way for the next stage of effective communication and exchange of information where the parties get to know and understand each other very well. The actual negotiation stage come where a deal is debated by the two parties. The next stage is the progression of the negotiation until the final stage of reaching the ultimate agreement that is signed by the two negotiators.
Research has revealed that differences in the cultural dimensions directly affects the stage of information exchange. This stage being one of the most important factors influences whether solutions are achieved or the way integrated solutions are achieved during negotiations for international business deals. Conclusion The complexity of international negotiations is much higher than domestic business negotiations. This is mainly due to the differences in cultures which greatly influence the behavior and the perception of the negotiator.
The cultural differences are the causes of differences between negotiating styles. However, members of a particular culture do not negotiate in a similar way but there are behavior patterns that are typical for most of them. Success in international negotiation requires one to be highly sensitive to cultural factors, to pursue culturally responsive strategies and also acknowledge individual and structural aspects. References Dialdin Kopelman and others, Distributive Outcomes of Negotiations (Northwestern University, Evanston, 1999).
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LeBaron Michelle, Culture-Based Negotiation (University of Colorado, Boulder, 2003). Lederach John, Peaceful Negotiations ( SUP, Syracuse NY, 1995). Rodgers Drew, Cross-Cultural Approach to Negotiations (CUP, Cambridge, 2003). Pervez Ghauri and Milind Agarwal, Business in Emerging Markets ( Sage, London, 2002). Salacuse Jeswald, Global business Deals: Negotiating Abroad ( PON Books, Cambridge, 2003). Stefan Kroll, International Commercial Arbitration (Harvard Business School, Boston, 2003) William Ury, Negotiating Without Giving In ( Penguin, New York, 1991).
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