The Impact of Cultural Differences on International Business Negotiation.docx

The Impact of Cultural Differences on International Business Negotiation.docx

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TheImpactofCulturalDifferencesonInternationalBusinessNegotiation

TheImpactofCulturalDifferencesonInternationalBusinessNegotiation

1.Introduction

Internationalbusinessnegotiationsarefarmorecomplexthandomesticones.Thedifficultiesareduetothebigdifferencesbetweenthetwopartiesinanegotiationinlanguage,value,behaviorpatterns,moralstandardsandsoon.Allthosefactorsareplayingcrucialrolesinnegotiations.Thekeytoeffectivecross-culturalcommunicationisknowledge.Sowemustlearnandknowasmuchknowledgeaswecan.KnowingtheseculturaldifferencescanhelpussolvetheproblemsandreducethemisunderstandingsinInternationalbusinessnegotiations.Duetotheseculturaldifferences,negotiatorswhocomefromdifferentpartoftheworldcanformdifferentnegotiationstyles.Therelationbetweencultureandnegotiationstyleshasbeenthetopicofmuchinvestigationandresearchinrecenttimes.Beingfamiliarwithdifferentculturaldifferencescanhelpusgetacloseviewofdifferentnegotiationstyles,andallthesepreviouseffortscanmaketheInternationalbusinessnegotiationsmooth.Thethesiswillelaborateontheculturalfactorsandtheirinfluencesonnegotiationstylesindifferentcountries.

2.CulturalInfluencesandTypes

2.1CulturalInfluences

Whentwogroupsfromthesamecountryaredoingbusiness,itisoftenpossibletoexpeditethewholenegotiationprocedure.Becausetheyhavethesameculturalbackground,themutualcommunicationsareeasytounderstand.Thisdoesnotmeantheyhavenoobstacleduringthewholenegotiationprocedure,butcomparewithpeoplewhodobusinessfromdifferentcultures,theydonothavetheimpactofculturaldifferences,sothecontradictionsseemtobeeasysolved.

Iftwodifferentculturesareinvolved,onepartywithoutarealknowledgeofanotherculture,itmayleadtomisunderstandings.Theinternationalnegotiatorsmustbecarefulwhenhandletheseculturaldifferencesanddonotusethesamewaylikenegotiatewithlocalbusinesspersons.

Agreatnumberofrealcasesshowthatduetomisunderstandings,manybusinesseswerelost.Forexample,anAmericanbusinessmanoncepresentedaclocktothedaughterofhisChinesecounterpartontheoccasionofhermarriage,notknowingthatclocksareinappropriategiftsinChinabecausetheyareassociatedwithdeath.Hisinsultledtotheterminationofthebusinessrelationship.ItisalsobadformtogivethegiftsofgreatvaluetotheJapanesethanthosereceived.

Asaninternationalbusinessnegotiator,heorshemusttryhisbesttolearnandknowtheculturedifferencesinordertoavoidsomemistakesandthroughtheculturalexchangetoestablishagoodcooperationrelationshipwithhispartners.

2.2CulturalTypes

Beliefsandbehaviorsaredifferentfromdifferentcultures,becauseeachdevelopsitsownmeansofexplainingandcopingwithlife.Fourculturaldimensionscanhelptoexplainthedifferencesbetweencultures.Thoughthedistinctionsbetweenthemseemclear,thedimensionshouldberegardedasageneralguide.Thefourdimensionsaregender,uncertaintyavoidance,powerdistanceandindividualism.

Genderculturescanbedividedintomasculineandfemininetypes.Masculineculturestypicallyvalueassertiveness,independence,taskorientationandself-achievement.Masculinesocietiestendtohavearigiddivisionofsexroles.Thecompetitivenessandassertivenessembeddedinmasculinesocietiesmayresultinindividualsperceivingthenegotiationsituationinwin-or-loseterms.Inmasculinecultures,thepartywiththemostcompetitivebehaviorislikelytogainmore.

Feminineculturesvaluemodesty,cooperation,nurturingandsolidaritywiththelessfortunate.Femininityisrelatedtoempathyandsocialrelations.

UncertaintyavoidanceThistermreferstohowuncomfortableapersonfeelinriskyorambiguoussituations.Inhighuncertaintyavoidancecultures,peopletendtoavoidtensesituations.Theseculturestendtoobserveformalbureaucraticrules,relyonritualsandstandards,andtrustonlyfamilyandfriends.

Inlowuncertaintyavoidancecultures,peoplearegenerallymorecomfortablewithambiguoussituationsandaremoreacceptingofrisk.Lowriskavoidersrequiremuchlessinformation,havefewerpeopleinvolvedinthedecision-making,andcanactquickly.Suchculturesdislikehierarchyandtypicallyfinditinefficientanddestructive.Devianceandnewideasaremorehighlytolerated.Culturescharacterizedbylowuncertaintyavoidancearelikelytopursueproblem-solvingsolutionsratherthanmaintainthestatusquo.

PowerdistancePowerdistancereferstotheacceptanceofauthoritydifferencesbetweenpeople—thedisparitybetweenthosewhoholdpowerandthoseaffectedbypower.Highpower-distanceculturesarestatusconsciousandrespectfulofageandseniority.Inhighpower-distancecultures,outwardformsofstatussuchasprotocol,formality,andhierarchyareconsideredimportant.Decisionsregardingrewardsandredressofgrievancesareusuallybasedonpersonaljudgmentsmadebypowerholders.Whensomeonefromahigh-masculinitycultureattemptstoworkwithsomeonefromahighpower-distanceculturewithouteitherpartyrecognizingthevariationsintheirrespectivebehaviors,clashesarelikelytodisruptnegotiations.Inlowpower-distancecultures,peoplestriveforpowerequalizationandjustice.Alowpower-distanceculturalvaluescompetenceoversenioritywitharesultingconsultativemanagementstyle.Lowmasculinityandlowpowerdistancemayberelatedtothesharingofinformationandtheofferingofmultipleproposalsaswellasmorecooperativeandcreativebehavior.

IndividualismInindividualismcultures,peopletendtoputtasksbeforerelationshipsandtovalueindependencehighly.Peopleintheseculturesareexpectedtotakecareofthemselvesandtovaluetheneedsoftheindividualoverthoseofthegroup,community,orsociety.Individualisticculturespreferlinerlogicandtendtovalueopenconflict.Membersfromindividualisticsocietiesexpecttheotherside’snegotiationtohavetheabilitytomakedecisionunilaterally.

Bycontrast,culturesthatvaluecollectivismemphasizesolidarity,loyalty,andstronginterdependenceamongindividuals.Relationshipsarebasedonmutualself-interestandaredependentonthesuccessofthegroup.Collectivistculturesdefinethemselvesintermsoftheirmembershipwithingroups.Maintainingtheintegrityofgroupsisstressedsothatcooperation,conflictavoidance,andconformitydominatetheculture.Collectivistsocietiestendtostressabstract,generalagreementsoverconcrete,specificissues.

Collectivistnegotiatorstendtoassumethatdetailscanbeworkedoutifthenegotiatorscanagreeongeneralities.Collectivistsocietiesshowmoreconcernfortheneedsoftheotherpartyandfocusmoreongroupgoalsthanindividualisticsocietiesdo.Membersofcollectivistsocietieschafewhenmembersfromindividualisticsocietiespromotetheirownpositionsandideasduringnegotiations.

3.TheRelevantCulturalFactors

Intermsofinternationalbusinessnegotiation,thefollowingelementsofculturearegenerallybelievedtohaveanimportantimpactoninternationalbusinessnegotiation.Knowingmuchrelevantknowledgeofdifferentculturescanmaketheinternationalbusinessnegotiationsmooth.

3.1LanguageandCommunication

Thewaysinwhichpeoplecommunicate,includingusingverbalandnon-verballanguage,directlyaffectsinternationalbusinessnegotiation.Whenwecommunicatewithpeoplefromothercultures,ourbodylanguagesometimeshelpsmakethecommunicationeasierandmoreeffective,suchasbyshakinghandswhengreetingothers.Thishasbecomesuchauniversalgesturethatpeopleallovertheworldknowthatitisasignalforgreeting.

Sometimes,bodylanguagecanbemoreofahindrancethanafavor.Itcanleadtomisunderstandingsincepeopleofdifferentculturesoftenhavedifferentformsofbehaviorforsendingthesamemessage.Forexample,noddingone’sheadisgenerallymeanttoshowagreement,toindicate‘yes’.TotheNepaleseandSriLankans,however,itmeantnot‘yes’,but‘no’.

So,asamasterhand,hemusttryhisbesttoknowasmuchasinformationofhiscounterpart,theproficiencyoflanguagesandnegotiationtechniquesarenotenough,healsoneedstohavesomemasteryofthenon-verbalbehaviorofdifferentcultures.Peopleusebodylanguagesmorefrequentlyindailylife.Excellentlanguageandcommunicationcanhelpusmakesuccess.

3.2Values

Valuesarethestandardsbywhichacultureevaluatesactionandtheirconsequences.Theyaffectperceptionandcanhaveastrongemotionalimpactuponpeople.Indifferentcultures,valuesmayvarysignificantly.One’sproperactionsinoneculturecanbeseenaswronginamoralsenseinanotherculture.

Thus,itisimportanttounderstandtheprevailingvaluesinaparticularsocietyandtheextenttowhichtheyarerespectedintheeverydaybehaviorofindividuals.Valuesaffectthewillingnesstotakerisks,theleadershipstyleandthesuperior-subordinaterelationships,etc.Thisistruefortherelationshipsbetweennegotiatorswithineachteam.Everyculturehasdefinedprioritiesforeveryaspectofsociallife.Thediscussionherewillfocusonvaluescriticalforunderstandingtheeconomicperformanceofasociety,morespecifically,andthevaluethatdeserveattentioninordertodevelopinterculturalcommunicationskills.

3.2.1ValuetowardsTime

Valuetowardstimeandhowtheyshapethewaypeoplestructuretheiractionshaveapervasiveyetinvisibleinfluenceoninternationalbusinessnegotiation.Differencesinpunctuality,reflectedineverydaynegotiationbehavior,mayprobablyappearasthemostvisib