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CHAPTER

Cross-CuI ra1rN le\gotlatlon


· ·

When President G eorge W. Bush met with C rown Prince A bdullah of Saudi
A rabia to discuss rising oil prices and the Israeli-Palestinian conflict, something
surprising occurred: The two held hands while walking at the president's Texas
ranch. While it may have seemed odd to many Americans, the gesture is
considered an expression of affection between men in Saudi Arabia , and it can
be interpreted as an insult if a man chooses not to touch another in greeting.
President Bush followed Arab custom by kissing Abdullah on each cheek and
then walking with him, hand in hand. 1 After September 11,2001, when it was
determined that 15 of the 19 hijackers came from Saudi Arabia, tension grew
between the United States and Saudi Arabia. Criticisms of the Saudis and their
ties to the Bushes abounded, spurred on by filmmaker Michael Moore and CIA
veteran Robert Baer. 2 Yet President Bush allowed the meeting with Abdullah
to begin on friendly terms by participating in Saudi customs. The image of the
two men holding hands represented a repaired trust and a mutual respect, and
the talks were dubbed a success by both sides.

egotiations between people of different cultures often stir up deeply held val­

N ues and beliefs; behaviors that seem normative in one culture might meet with
severe censure and even legal action in other cultures. Cultural intelligence is
essential for effective negotiation. Cross-cultural negotiations do not always go
smoothly (see Exhibit 10-1 for an example of a failed cross-cultural negotiation). Most
managers cannot expect to negotiate only with people of their own country or culture
throughout their career. In fact , North Americans are a minority-about 7% of the
world's population. To get a better sense of the world's composition, imagine that the
world 's population is only 100 people. In this case, the population would include 55
Asians, 21 Europeans, 9 Africans, 8 South Americans, and 7 North Americans. 3

IFatta h, H. M . (2005, May 1). Why Arab men hold hands. Nelv York Tim es, p.4.
2Dickey, C. (2005, May 3). Shadowland: "Sharon had better listen". Newsweek. com. Retrieved July 17,2008,
from http://www.newswcck .com/id/51652
3Triandis, H . C. (1994). CLllliIre and social behavior (pp. 29-54). New York: McGraw-Hill.

258
CHAPTE R 10 Cross-Cultural egotiation 259

EXHm lT 10-1 Failed Cros.·Cuitnra i Negu li;uion

Just when the executives of Millicom International Cellular were ge tting ready to board a plane
for Beijing to celebrate the sale of their compan y to China Mobile Communications, China
called off the $5.3 billion deal. After months of negotiations between the Chinese company and
Millicom, a mobile phone company with 9 million customers in developing countries, the failed
deal demonstrated the differences between negotiating styles in China and those in Europe and
the United States. In China, the last-minute departure was considered a sma rt corporate stra tegy
because the company managed to avoid overpaying for a group of assets that would have bee n
difficult to manage. But the sudden exit frustr ated and ange red European and U.S. negotiators.
With no warning from China Mobile about its intentions, the failed dea l upset the slock mar ket
and didn't allow Millicom time to secure a ne w bidder.

Source: Timmons, H. & Greenlees, D. (2006, Jul y 14). Art of th e dea l mee ts th e Chin a syndrome. New York
Times, p. C6. R eprinted by permission .
g

When people from different cultures get together to negotiate, they may fail to
reach integrative agreements.4 Failure to expand the pie has a number of undesirable
effects, including (but not limited to) feelings of exploitation, souring of a potentially
rewarding relationship, and the destruction of potential global relationships.
Often, value is left on the table because people are not prepared for the challenges
of cross-cultural negotiation . This chapter provides a business plan for effective cross­
cultural negotiation . We begin by defining culture; then we identify the key dimensions
by which culture affects judgment, motivation , a nd behavior at the bargaining table.
Next, we identify the biggest barriers to effective intercultural negotiation and provide
strategies for effective cross -cultural negotiation.

LEARNING ABOUT CULTURES


This chapter does not provide a crash course on how to negotiate with peo ple of dif­
ferent cultures. Thus, we do not o ffer advice on a country-by-country b asis for two
reasons.
First, doing so would be contrary to the book's focus, which is to provide negotiation
skills that work across people and situations. We do not want to promote cultural stereo­
types. By making a generic list of characteri tics for cultures, we magnify stereotypes,
which is neither practical nor informative. M ost people prefe r to be considered unique
individuals, yet we are often too quick to lump together people from the same country.
A more useful approach is to develop a framework for thinking a bout culture.
Jeanne Brett distinguishes stereotypes from prototypes. P ro totypes recognize that
substantial variation is likely even within a culture.s Using a pro totype approach pro­
vides several advantages. A great deal of diversity can be found among peop le in any
culture. Within cultures, key personality traits vary, and differe nt traits are associated

4Bre tt, 1. M . (2007). Negotiating globally: How to negotiate deals, resolve disputes, and mak e decisions across
cultural boundaries(2nd ed ) . Sa n Francisco: Jossey-B ass.
sIbid .
26Q PART III Applications and Special Scenarios

with better performance within certain cultures but not others. 6 A cultural framework
is sensitive to heterogeneity within cultural groups.
Second, most cultures are different today than they were 10 years ago. We need a
dynamic framework that allows us to learn how cultures change and grow. This chapter
provides a means by which to expose our own cultural beliefs and those of others, how
to avoid mistakes, and how to profit from intercultural negotiations?

Defining Culture
Many people conceive of culture strictly in terms of geography; however, culture does
not pertain just to nations and countries. Rather, culture is the unique character of a
social group, the values and norms shared by its members that set it apart from other
social groups.8 Culture encompasses economic, social, political, and religious institu­
tions. It also reflects the unique products produced by these groups-art, architecture,
music, theatre, and Iiterature. 9 Cultural institutions preserve and promote a culture's
ideologies. Culture influences our mental models of how things work, behavior, and
cause-and-effect relationships. To broaden our thinking about culture, consider the
possible cultural differences contained in all of the following:
• Families
• Social groups and departments in an organization
• Organizations
• Industries
• States
• Regions
• Countries
• Societies (e.g., foraging, horticultural, pastoral, agra rian , industrial, service, information)
• Continents
• Hemispheres
Nations, occupational groups, social classes, genders, races, tribes, corporations,
clubs, and social movements may become the bases of specific subcultures. When
thinking about culture and diversity, avoid the temptation to think of it as a single
dime nsion (e.g., country of origin); culture is a complex whole, and it is best to use
many criteria to discern one culture from another.

Culture as an Iceberg
We use Schneider'S model of culture as an iceberg.10 Typically, about one-ninth of an ice­
berg is visible; the rest is submerged. As Exhibit 10-2 indicates, the top (visible) part of the
cultural iceberg is the behaviors, artifacts, and institutions that characterize a culture. This
portion includes things such as traditions, customs, habits, and other immediately visible

6Liu. L. , Fr iedman, R. , & Chi, S. (2005). "Ren Qing" versus the "Big Five":The role of culturally sensitive
measures of individual difference in distributive negotia tions. Management and Organization Review,
1 (2),225-247.
7For an extensive treatment, see Brett, Negotiating globally.
8LytJe, A. L. , Brett, 1. M., & Shapiro, D. L. (1999). The strategic use of interests, rights and power to resolve
disputes. Negotiation Journal, 15(1) , 31-49.
9Brett , Negotiating globally.

IOSchneid er, S. C. (1997). Managing a.cross Cu ifllres. Upper Saddle River, NJ: Pre ntice Hall; see also Brett,

Negotiating global/y, for an ex tensive rev iew.


CHAPTER 10 Cross-Cultural Negotiation 261

amework EXHIBIT 10-2 Culture as an Iceberg


...;;...------­
Ie need a
s chapter
~ers,how - - - - - --l.~
. Behavior, Artifacts,
Institutions

- - - ­... Values, Beliefs, Norms


ure does
lcter of a
)m other
s institu­
litecture,
culture's Source: Adapted by Susan Schneider (BEC Uni versity of Geneva) from Schein, E. H. (1985) . Organizational
vior, and culture and leadership, p. 14. San Francisco: Jossey-Bass. Reprinted by permiss ion .
;ider the

stimuli. These behaviors and artifacts are an expression of deeper-held values, beliefs, and
norms. Driving these values and norms are fundamental assumptions about the world and
humanity. The artifacts and customs that characterize a culture are not arbitrary; rather,
they are manifestations about fundamental values and beliefs about the world.

CULTURAL VALUES AND NEGOTIATION NORMS


Ition) We identify three dimensions of culture, based on Brett (see Exhibit 10-3):11
• Individualism versus collectivism
• Egalitarianism versus hie rarchy
Irations, • Direct versus indirect communication
i. When

a single These three dimensions refer to motivation, influence, and information, respectively.12
to use Individualism-collectivism refers to the basic human motive concerning preservation
of the self versus the collective. Egalitarianism-hierarchy refers to the means by which
people influence others, either laterally or hierarchically. Finally, direct-indirect com­
munication refers to the manner in which people exchange information and messages.
an ice­
t of the Individualism Versus Collectivism
re.This A key way in which cultures differ is with respect to individualism and collectivismY
visible

llBre tt, Negotiating globally; Gelfand. M. l , & Brett , J. M. (Eds.) (2004) . The handbook of negotiation and
itive culUire: Th eoretical advances and cultural perspectives Palo Alto, CA: Stanford Univers ity Press.
l2Brett, N ego tiating globally.
l3Triandis, Culture and social beha vior; H ofstede , G. (1980). Culture's consequences: International diffe rences
in work-related values. Bever ly Hills, CA: Sage; Schwartz, S. (1994). Beyo nd individu ali sm/co llectivism: New
solve cultural dimensions of values. In H. C. Triandis, U. Kim, & G. Yoon (Eds.) , Individualism and collectivism
(pp. 85-117). London: Sage; for a review, see Gelfand , M. J. , Bbawuk, D. P. S. , Ni shii , L. H., & Bechtold , D.
(2004). Individu ali sm and collectivism: Multilevel perspectives and implica tions for leadership. In R. J.
retl, House, P. J. Hanges, M. Javidan , P. W. Dorfmnn, & Vipin Gupta (Eds.) , Culture, leadership, and organiz a­
tions: Th e GLOBE study of62 cultures. Thousand Oaks, CA: Sage.
62 PART III Applications and Special Scenarios

EA[{lBIT 10-3 DrJnt!nsions of Cu h <Tr e C ,

Goal: Individualists/Competitors: Collectivists/Cooperators:


Individual versus Key goal is to maximize own Key goal is to maximize
coUec1ive orientation gain (and perhaps the differ­ the welfare of the group or
ence between oneself and collective; source of identity
others); source of identity is is the group; individuals
the self; people regard regard themselves as
themselves as free agents group members; focus
and independent actors. is on social relations.
Influence: Egalitarians: Hierarchists:
Egalitarianism versus Do not perceive many social Regard social order to be
Werarchy obligations; often regard important in determining
BA rN A to be major source conflict management
of bargaining power. strategies; subordinates are
expected to defer to
superiors; superiors are
expected to look out
for subordinates.
COllununication: Direct Communicators: Indirect Communicators:
Direct versus indirect Engage in explicit, direct Engage in tacit information
information exchange; ask exchange such as
direct questions; not storytelling, inference-making:
affected by situational situational norms.
constraints; face-saving
issues likely to arise.

Source: Brett, J. M. (2007). Negolialing gLob ally: How 10 negoliale deal.;~ resolve dispules, and make
across cultural boundaries. (2nd e d) San Francisco: Jossey-Bass.Repri.nte d by pe rmission.

Indl'Jidua!um
In the discussion in C h apter 5 on bargaining style, we outlined three motivational
entations: individualistic, compe titive, and cooperative. Individualism, as a
style, e pitom izes the individualistic motivational orientation. 14 In individualistic
tures, the pursuit of ha p p iness and regard for personal welfare are paramount.
in individualistic cultures give priority to their personal goals, even when these
conflict with those of their family, work group, or country. Individual happiness and
pression are valued more than collective and group needs. People from in
cultures enjoy having influence and control over their world and others.
individ ua l accomplishments are rewarded by economic and social institutions.
m ore, legal ins titutions in individualist cultures are designed to protect i
rights. One implication of individualism concerns the use of distributive tactics.

l4For simplicity, we include compe titive style with individual style.


CHAPTER 10 Cross-Cultural Negotiation 263

who are more self-interested are motivated to use more tactics that increase their bar­
gaining power. Indeed , US. MBA students are more tolerant of certain kinds of ethi­
cally questionable tactics than are non-US. MBA students studying in the United
States. 15 Specifically, US. MBA students are more accepting of competitive bargaining
tors:
tactics and bluffing, which raises the possibility that US. negotiators may be perceived
ize
as less ethical by their international counterparts. I6 On the other hand, US. negotiators
,up or
are significantly less accepting of misrepresentation to the counterparty's network. The
jentity
norm in the United States of not spreading stories, particularly to the network of
31s
friends, is well entrenched.

Co//eclivldm
Collectivist cultures are rooted in social groups, and individuals are viewed as members
of groups. People in collectivist cultures give priority to in-group goals. The dominant
motive is concern for, and belonging to, the group. People of collectivist cultures view
their work groups and organizations as fundamental parts of themselves. Collectivists
are concerned about how the results of their actions affect members of their in-group;
~s are they share resources with in-group members, feel interdependent with in-group mem­
bers, and feel involved in the lives of in-group membersY In contrast to individualistic
'e cultures that focus on influence and control, people from collectivist cultures empha­
size the importance of adjustment. Collectivist cultures are more concerned with main­
taining harmony in interpersonal relationships with the in-group than are individualistic
Irs: cultures. Social norms and institutions promote the interdependence of individuals
lation through emphasis on social obligations and the sacrifice of personal needs for the
greater good. Legal institutions place the greater good of the collective above the
making; rights of the individual, and political and economic institutions reward classes of people
as opposed to individuals. IS
Whereas individualists want to save face and are concerned with their personal
outcomes, collectivists are concerned with others' outcomes as well. An analysis of US.
and Hong Kong negotiations reveal that US. negotiators are more likely to subscribe
~ decisions
to self-interest and joint problem-solving norms, whereas Hong Kong Chinese negotia­
tors are more likely to subscribe to an equality norm. 19 Further, US. negotiators are
more satisfied when they maximize joint gain, and Hong Kong Chinese negotiators are
happier when they achieve outcome parity. The tendency of North Americans to en­
gage in self-enhancement, an individualistic trait, is more than skin deep. In one inves­
nalori­ tigation of Canadians (individualists) and Japanese (collectivists), behaviors were
cultural covertly measured. 2o Canadians were reluctant to conclude they had performed worse
tic cul­
People
e goals ISLewicki, R. 1., & Robinson. R. 1. (1998). Ethical and unethical bargaining tactics: An empirical study.

md ex­ Journal of Business Ethics, 17(6).665-682.

161bid.

lalistic 17Billings, D. K. (1989). Individualism and group orientation. In D. M. Keats, D. Munroe. & L. Mann (Eds.),

uently, Heterogeneity in cross· cultural psychology (pp. 22-103). Lisse, The Netherlands: Swets and Zeitlinger; Hui.

lrther­ C. H. , & Triandis, H. C. (1986). Individualism·collectivism: A study of cross·cultural researchers. Journal of

Cultural Psychology, ]7,225-248.

vidual 18Brett, Negotiating globally.

>eople 19Tinsley, C. H. , & PiUutla, M. M. (1998). Negotiating in the United States and Hong Kong. Journal of inler·

national Business SILl dies, 29(4),711-728.

2oHeine, S. 1., Takata, T., & Lehman, D. R. (2000). Beyond self· presentation: Evidence for self·criticism

among Japanese. Personality and Social Psychology Bulletin, 26(1),71-78.

PART III Applications and Special Scenarios

than their average classma te (self-enhancement); in contrast, Ja panese were hesitant to


conclude that they had performed better. In short, they self-criticized. Individualism
and collectivism represent a continuum with substantial within-culture variation. One
factor that can push people toward behaving more in line with their native cultural val­
ues is accountability pressure-simply the extent to which they are answerable for con­
ducting themselves in a certain manner. 21

ImpucatWflJ for Negotultwn


Individualism-collectivism involves a variety of implications for the conduct of negoti­
ation . We will outline seven of them:
1. Soci al networks
2. Cooperation
3. In-group favoritism
4. Social loafing versus social striving
5. Emotion and inner experience
6. Dispositionalism versus situationalism
7. Preferences for dispute resolution

Social Networks Members of different cultures differ in terms of the density of their
work friendships (i.e., how many friendships they share at work) , the overlap of instru­
mental and socioemotional ties (i.e. , whether the people they seek for information are
also the ones whom they seek for comfort and emotional support), the closeness of the
tie, the longevity of the tie, and whether the network relationships are directed upward.
laterally, or downward . For example, interpersonal trust is an important element of Chi­
nese guanxi networks (see Exhibit 10-4). Affect-and cognition-based trust are more in·
terconnected among Chinese managers than U.S. managers. 22 In one study, U.S. and
Hong Kong students negotiated with someone whom they believed to be a friend or a

Anyone interested in doing business in a Chinese environment will quickly learn the term
guanxi. Literally speaking gu anxi means "connections" or "relations." More figuratively, guanxi
are the personal bonds that are established between people who may do business together.
H aving the right personal connection is a stronger predictor of success in the Chinese business
environment than in Western cultures. Western businesspeople who have worked in China
often experience difficulty establishing trust and breaking into the local social networks. If one
desires cognition-based trust from a Chinese counterparty, one cannot ignore the affect-based
trust with which it is closely intertwined.

Source: Based on Chua, R., & Mo rris, M . (2006). Dynamics of lrust in Guanxi ne tworks. In Y. Chen (Ed.).
Research on managing groups and teams: National culture and groups. O xford , Engl a nd: JAI Press.

21Ge lfa nd, M. 1. , & Realo, A. (1999). Individualism-collectivism and accountability in intergroup negotia·

tion s. Journal ofApplied Psychology, 84(5), 721-736.

22Chua, R oy Y. J., M . W. M orris, and P. In gra m . (in press). Guan xi versus networking: Di stinctive configura·

tions of affect· and cognition-based trust in the n e twork s of Chinese and America n managers. Journal of

International Business Studies.

CHAPTER 10 Cross-Cultural Negotiation 265

esitant to stranger from their own culture. The Hong Kong students changed their behavior more
lidualism when interacting with a friend than did the US. students. 23 Whereas US. managers are
tion. One equally likely to trust and reciprocate with a partner, as well as with someone in the net­
tural val­ work (whom they don't know directly), collectivist managers only trust and reciprocate
~ for con­ when interacting with the relationship.24 Perhaps this is why many realty agents report
that H ispanics are often perplexed by the US. culture's habit of not meeting the seller of
a home they are buying.25 Similarly, agents with whom the Hispanic principal works are
often treated as part of the extended family, with invitations to life cycle events.
'f negoti­ Morris, Podolny, and Ariel examined four cultures-North American, Chinese,
German, and Spanish-and proposed that each culture developed social networks
within the organization according to a different set of norms (see Exhibit 10-5).26
North American business relationships are characterized by a market orientation in
which people form relationships according to the market standard of whether it is
profitable. Practically, this tendency means North Americans form ties without the
prior basis of friendship, paying attention only to instrumentality. Chinese business re­
lationships are characterized by a familial orientation, in which employees make sacri­
fices for the welfare of the organization. Sharing resources within the in-group, loyalty,
and deference to superiors characterize network relationships. German business rela­
. of their tionships are characterized by legal-bureaucratic orientation, formal categories, and rules.
)f instru­ In addition, Spanish business relationships are characterized by affiliative orientations,
Ition are
ss of the
upward,
t of Chi­ EXH IBIT 1 0-5 Dornin,u1t Nor~ls "fB-usiiless. Rel~t;ons
'llore in­
Culture Dominant Attitude Business Relationships
:.1.S. and
~nd or a North American: Economic individualism Short-lived
Market norms Low-multiplexity
Chinese: Filial loyalty Directed upward to powerful
Familial norms Economic collectivism
German: Economic collectivism Bounded by formal rules
"Ie term Legal-bureaucratic norms Low affectivity
guanxi Sllanish: Self-expressive collectivism Long-lived
gether. Ajjiliative norms High affectivity
usiness
China Source: In P. CEarley & H. Singh (Eds.). "Innovation in International and Cross-Cultural Management,"
If one pp. 52-90. Thousand Oaks, CA: Sage Publications. Rprinted by permission of Sage Publications via
-based Copyright Clearance Center.

(Ed.),
23Chan, D. K. S.. Triandis, H. C , Carn e vale, P J , Tam. A., & Bond , M. H. (1994). Comparing negotiation

across cultures: Effects of collectivism, relationship between negotiators, and concessi o n patte rn on

negotiation behavior. Unpublished manuscript, Departme nt of Psychology, University of Illinois at

Urbana-Champaign.

24Buchan. N. , Croson, R , & Dawes, R. M. (2002). Swift neighbors and persistent strangers: A cross-cultural

ia­ investigation of trust and reciprocity in social exchange. American Joarnal of Sociology, 108(1), 168-206.

25Gendl er, N. (2003, June 14). Hispanic home buyers. Star- Tribune, p.4H.

lIra ­ 26Morris, M. w. , Podolny, J M., & Ariel S (2000). Missing relations: Incorporating relational constructs into

7f models of culture. In PC Earley & H. Singh (Eds.), lnnovarions in international and cross-cultural manage­

ment (pp. 52-90). 1110usand Oaks, CA: Sage Publications.

266 PART III Applications and Special Scenarios

such as sociability and friendliness. A controlled cross-national comparison of network


relationships in Citibank supported these network norms.27
Cooperation People from collectivist cultural traditions engage in more cooperative
behavior in mixed-motive interactions than do people from individualistic cultures.llI
For example, Japanese negotiators are more cooperative (and, in turn, expect others 10
be more cooperative) than are US. negotiators. 29 Greater cooperation in the face of
uncertainty and the potential for exploitation imply that people from collectivist cul­
tures place greater emphasis on the needs and goals of their group and are more likely
to be willing to sacrifice personal interests for the attainment of group goals. Americans
are more likely to remember situations in which they influenced others; in contrast,
Japanese people are more likely to remember situations in which they adjusted to oth­
ers (a form of cooperation).30 An examination of Japanese and US. newspaper stories
on conflict revealed that Japanese newspapers more frequently make reference to mu­
tual blame than do US. newspapers, presumably because ascribing blame to both par­
ties affords the maintenance of the social unit and is less threatening to the collective.31
Moreover, Americans who successfully influenced others reported feeling very
efficacious (a typical individualistic emotion), whereas Japanese people who adjusted
reported feeling related (a collectivist emotion).
Awareness of different cultural norms can be a powerful bargaining strategy. For
example, consider the negotiations that took place in Kyoto in 1997 to reach a pact on
global warming. For more than a wee k, the negotiators at the Kyoto climate-change
conference haggled over the terms of a treaty that would focus on reducing global
warming. In the last hours of the negotiation, all of the world 's industrialized nations
had agreed to firm targets for reducing six different greenhouse gases-all but Japan.
that is. The Japanese had been assigned the most modest goal: cut e missions 6% below
1990 levels by the year 2012, compared with 7% for the United States and 8% for the
15 nations of the Europea n Union. The Japanese would not budge. Their limit was
5%. So the US. delegation called Washington to report the impasse, and at 2:00 a.m.
an exhausted Vice President Al G ore got on the phone with Japanese Prime Minister
Ryutaro Hashimoto. Gore 's cross-cultural skills were sharp: He first praised
Hashimoto for Japan's leadership in playing host to the conference (focusing on hier­
archical cultural norms), and then he pointed out how bad it would look for the hosl
country to derail the agreement over a measly percentage point (focusing on collec­
tive well-being). It work ed .32

27Morris, Podolny, & Ariel , "Missing relations."

28Cox, T. H., L obel, S. A., & McLeod, P. L (1991). Effects of ethnic group cultural differences in cooperative

and competitive behavior on a group task. Academy of Management Journal, 34(4) , 827-847.

29 Wade-Benzoni, K. A. , Okumura, T., Brett, J. M ., Moore, D. Tenbrun sel, A. E. , & Bazerma n, M. H. (20fl2).

Cognitions and behavior in asymmetri c social dilemmas: A comparison of two cultures. Journal afApplied

Psychology, 87, 87-95.

30Morling, B., Kitayama. S., & Miyamoto, Y. (2002). Cultural practices emphasize influ ence ill the United

Stales and adjustment in Ja pan. Personality and Social Psychology Bulle/in, 28(3),311-323.

31Gelfand , M. J, Nishii, L. H ., Holcombe, K. M., Dyer, N., Ohbuehi , K-l. , & Fukuno, M. (20m). Cultural

mfluences on cognitive representations of conflict: Interpretations of conflict episodes in the United States

and Japan. Journal ofApplied Psychology, 86(6), 1059-1074.

32Lemonick, M. (1997, December 22). Turning down the heat. Time, p.23.

CHAPTER 10 Cross-Cultural Negotiation 7

In-Group Favoritism In-group favoritism is the strong tendency to favor the mem­
bers of one's own group more than those in other groups, even when one has no logical
ve basis for doing so. The in-group bias is so powerful that even when groups are formed
28 on the basis of an arbitrary procedure, such as by drawing lots or random assignment,
to people evaluate their group members more positively and reward them with more re­
of sources than members of the out-group3 3 Members of collectivist cultures display
LII­ more in-group favoritism than members of individualistic cultures. For example, mak­
~ ly
ing group boundaries salient creates more competitive behavior among members of
ns collectivist cultures than among members of individualistic cultures.34 Moreover , mem­
st, bers of collectivistic cultures become more competitive when they perceive their group
:h­ to be in the minority.35 In-group favoritism often has positive effects for members of
les in-groups, but it can be deleterious for members of out-groups and for intergroup rela­
iU­
tions (see Chapter 9 for more on intergroup negotiation). However, according to
H- Gabrie l and Gardner, you don't have to be from a collectivist culture to show collec­
31 tivist behavior, such as in-group favoritism; rather, everyone has an "interdependent"
:ry and an "independent " self, which can be " triggered.,,36 And bicultural individuals are
ed often able to spontaneously trigger either self, depending upon which cultural cue is
present Y (See Exhibit 10-6 for an example of how priming works.)
'or Social Loafing versus Social Striving Social loafing is the tendency for people to work
on less hard and contribute less effort and resources in a group context than when work­
ge ing alone. For example, people clap less loudly, work less hard, and contribute less
)al when working in a group, as opposed to working alone. 38 Social loafing should occur
less in collectivist cultures than in individualist cultures, presumably because individu­
alist cultures do not reward group effort but collectivist cultures do. In a study of social
loafing among management trainees in the United States and the People's Republic of
China, American students loafed (individual performance declined in a group setting),
but Chinese students did no1. 39 I n fact , among Japanese participants, the opposite pat­
tern occurred in the group: Social striving-collectivist concerns for the welfare of the
group-increased people's motivation and performance. 4o Self-serving biases, such as
egocentrism (as discussed in C hapter 3) are more prevalent in individualistic cultures,
such as the United States, in which the self is served by focusing on positive attributes
and desire to stand out and be better than others. In contrast, members of collectivist

33Tajfel , H . (1982). Social psychology of in tergroup relations. Annual Review of Psychology, 33, 1-39.
34 Espinoza , 1. A. , & Garza , R. T. (1985). Social group sa lience and interet hnic coope ration. Journal of
Experimenral Social Psychology, 21, 380-392.
30Ibid.
36Gabriel, S., & Gardner, W. L. (1999). Are there " his" and " he r" types of interdependence? The implica­
tions of gender diffe rences in collective and relational interdependence for affect, be havior, and cognition.
Journal of Personalily and Social Psychology, 75, 642-655. .
37 Fu, 1., Chiu, C, Morris, M., & Young, M. (2007). Spontaneous inferences from cultural cues: Va ryin g
responses of cultura l insiders and outsid e rs. Journal of Cross-CullUml Psychology, 38(1) , 58-75.
38 Ke rr , N. L. (1983) . Motivation losses in small groups: A socia l dilemma ana lysis. Journal of Persona lily and
Social Psychology, 45, 819-828.
39Earley, P. C (1989). Social loafing and collectivism: A comparison of the United States a nd the People's
R epublic of China. Admini.l'lralive Science Quarterly, 34, 565-581.
4oShirakashi, S. (1985). Social loafing of Japanese students. Hiroshima Forum for Psychology, 10, 35-40;
Yamaguchi, S., Okamoto, K. , & Oka, T. (1985). Effects of coactors' presence: Social loafi ng and social facili­
tation. Japanese Psychological R esearch, 27, 215-222.
-268 PART III App lications and Special Scenarios

. EXHIBIT 10-6 Priming Individu'llisillllndCoHeclivism

Everyone needs to be individualistic at times and more collectivistic, or group-focused, at times.


In a series of investigations, we " primed" U.S. managers to be either individualistic (focused all
the self) or relational (focused on others). To create th is focus, we had the U.S. managers read a
story about a leader who had an important decision to make-choosing a successor, In one ver­
sion of the story, the leader chooses someone on the basis of personal talent and merit (individ­
ualistic value); in the other ve rsion of the story, the leader chooses someone on the basis of his
relationship to him (collectivistic value). Then , we watched how the U.S. managers resolved a
dispute. The U.S. managers who were in a position of power in a dispute were significantly more
generous and coo perative if they had previousl y read the collectivistic story. In contrast, the U.S.
managers who had read the individualistic story were significantly more self-interested.
In another twist, we then had teams of managers negotiate against other teams. We hypoth­
esized that if we used the same collectivistic prime, it would increase the negotiator's loyalty to
his or her team but would lead to significantly more in-group favoritism and less generosity
across the table, That's exactly what happened . Negotiato rs were more generous when they were
"primed" with interdependence (rathe r than ind ependence) in a one-on-one (dyadic) negotia­
tion (see pane l A), However, the tabl es turned when the priming occurred in a group setting:
Negotiators primed with interdepe ndence were less generous. In panel B, we see the likelihood
of impasse follows the same pattern: Witll interdependent negotiators, they are least likely to im­
passe when they are one-on-one and mas! likely to impasse when they are team -on-team.
The message? Self-interested or other-focused behavior can be triggere d in negotiations
with subtle primes. Triggering collectivism in a two-party situation will lead the powerful persall
to be more generous across the table; however, in a team situation, collectivism leads to greater
in-group favoritism (to the tun e of more than $80,000). Groups primed for colle ctivism were
more successful in avoiding costly court action than were those who were primed to be indepen­
dent-ev e n though the facts in the situation, their bargaining reservation prices, and other de­
tails were objectively identical. In fact , no one who was primed with interde pendence escalated
to court action, but 20% of those with an independent focus did.

Panel A

150000

130000

~
~ 11 0000
0
Q
-0 I
90000
'"
0..
C
:J
0
o Independent
E 70000 - ,
<l: Interdependent

50000 ­
1,-
/,

30000
- I 1
Dyad Group

CHAPTER 10 Cross-Cultural Negotiation 269

Panel B
50

45

40

35
~
'"OJ 30
m
ex:
OJ
25 o Independent
'"'"
1-
'"Ea. 20 Interdependent

:0
15
ty 10
re
3- 5
g:
0
)d
Dyad Group
n-

Source: Howard , E., Thompson , L., & Gardner, W. (2007). The role of the self-concept and the social context
~s
in determining the behavior of power holders: Self-construal in intergroup versus dyadic dispute resolution
m negotiations. Journal of Personalily and Social Psychology, 93(4),614-631.
er

cultures are less likely to hold a biased, self-serving view of themselves; rather, the self
is served by focusing on negative characteristics in order to "blend in.,,41
Emotion and Inner Experience Collectivists and individualists differ in the ways they
describe emotional experience, with Chinese using more somatic and social words than
Americans. For example, when Chinese and Americans are both speaking English dur­
ing emotional events, less acculturated Chinese Americans used more somatic (e.g.,
dizzy) and more social (e.g. , friend) words than European Americans. 42
Dispositionalism Versus Situationalism Dispositionalism is the tendency to ascribe
the cause of a person 's behavior to his or her character or underlying personality.
SituationaJism is the tendency to ascribe the cause of a person's behavior to factors and
forces outside of a person 's control. For example, suppose you are in the midst of a
high-stakes negotiation, and you place an urgent call to your negotiation partner. Your
partner does not return your call; yet you know your partner is in town because you con­
tacted the office assistant. What is causing your partner's behavior? It is possible our part­
ner is irresponsible (dispositional ism); similarly, it is possible your partner never got yo ur
message (situationalism). Depending upon what yo u think is the true cause, your behavior
toward your partner will be different-anger versus forgiveness, perhaps.43

41Gelfand , M. 1., Higgins, M., Nishii, L. H., Raver, 1. L., Dominguez, A. , Murakami, F.. Yamaguchi,S.. &
Toyama, M. (2002). Culture and egocentric perceptions of fairness in contlict and negotiation. Journal of
Applied Psychology, 87(5), 833-845.
42Tsai, J., Simeonova, D. , & Watanabe, 1. (2007). Somatic and socia l: Chinese American s talk about emotion.
Personality and Social Psychology Bulletin, 30(9) , 1226-1238.
43Rosette, A. 5., Brett, 1. M. , Barsness, Z ., & Lytle, A. L. (2008) . When cu ltures clash electronically: The impact
of email and culture on negotiation behavior. Unde r review atJournal of Internation.al Busin.ess Swdies.
'27
1
PART III Applications and Special Scenarios

People from individualistic cultures view causality differently than do members


of collectivist cultures. Dispositionalism is more widespread in individualistic than in
collectivist cultures. To see how deep-seated these cultural differences are, look at
Exhibit 10-7, panels A and B.
In Exhibit 10-7, panels A and B, the dark fish swims on a trajectory that deviates
from that of others (indicated by the darkest arrows). When asked to describe what
was going on in videotapes of swimming fish whose movements were similar to those
illustrated in Exhibit 10-7, members of individualistic cultures (Americans) perceived
more intluence of internal factors (dispositionalism) , whereas members of collectivist
cultures (Chinese) perceived more external int1uence (situationalism) on the blue
fish's motions. 44 Specifically, Chinese people were more likely to view the fish as want·

EXHlBIT ] 0-7 Dispositiona lism Versus Silllation"Jism

• 4

~ _4--
... • ~
-4---­

• ...

• ~ _
4 _-


~

A B

Diagrams showing trajectories of fish. In A, the group joins the individual (top), and the individ·
ual jOins the group (bottom). In B, the group leaves the individual (top), and the individual
leaves the group (bottom.)

Source: Adapted from Morris. M. W. , & Peng, K. (1994). Culture and cause: American and Chinese attribu·
tions for social and physical events. .Journal of Personality and Social Psychology, 67(6).949-971

44Morris. M. W., & Peng, K. (1994). Culture and cause: American and Chinese attributions for social and
physical events. .Jo urnal of Personality and Social Psychology, 67(6),949-971.
CHAPTER 10 Cross-Cultural Negotiation 271

do members ing to achieve harmony, whereas Americans were more likely to view the dark fish as
listic than in striking out on its own. Similarly, an investigation of stories in American and Chinese
are, look at newspapers reveals that English-language newspapers are more dispositional and
Chinese-language newspapers are more situational when explaining the same crime
:hat deviates stories 45 Specifically, when newspaper articles about "rogue trader" scandals were an­
~scribe what alyzed, U.S. papers made more mention of the individual trader involved, whereas
,ilar to those Japanese papers referred more to the organization. 46 Similarly, when a team member
s) perceived behaves in a maladjusted way, U.S. participants are more likely to focus on the mem­
,f collectivist ber's traits, whereas the Hong Kong participants focus on situational factors. East
on the blue Asians, for example, are more sensitive to both external constraints and group influ­
fish as want- ences (as compared to Westerners), but only when there is information about the
situation to discoun t personality traits 47 Moreover, East Asian people first assign
responsibility for events to the collectivity or organizational unit and then extend re­
sponsibility to the manager representing that group, thus leaders are held responsible
through proxy logic. 48 Dispositionalism also affects biases. People from individualistic
cultures, such as the United States, are more likely to fall prey to the fixed-pie bias than
are people from collectivistic cultures, such as Greece. 49
Preferences for Dispute Resolution Four types of dispute resolution procedures
characterize how different cultures resolve disputes: bargaining, mediation, adversarial
adjudication, and inquisitorial adjudication. In bargaining, or negotiation, two dis­
putants retain full control over the discussion process and settlement outcome. In
mediation, disputants retain control over the final decision, but a third party guides the
process. In adversarial adj udication, a judge makes a binding settlement decision, but
disputants retain control of the process. In inquisitorial adjudication, disputants yield
to a third party control over both the process and the final decision. Collectivist cul­
tures such as China differ from individualistic cultures such as the United States in
terms of preferences for dispute resolution. 5o For example, when it comes to resolving
conflict, Japanese managers prefer to defer to a higher-status person, Germans prefer
to regulate behavior via rules, and Americans prefer an interests model that relies on
resolving underlying interests. 51 One investigation examined differences between

45Ibid.
46Menon, T., Morris. M. w., Chiu. C, & Hong, Y. (1999). Culture and construal of agency: Attribution to

individual versus group dispositions. Journal of Personalily and Social Psychology, 76(5),701-717.

47Valenzuela, A., Srivastava. 1., & Lee, S. (2005). The role of cultural orientation in bargaining under incom­

plete information: Differences in causal attributions. Organizational Behavior and Human Decision

Processes, 96, 72-88.

48Zemba, Y, Young, M. , & Morris, M. (2006). Blaming leaders for organizational accide nts: Proxy logic in

Ie individ­ colJective- versus individual-agency cultures. Organizational Behavior and Human Decision Processes,

individual 101(1) , 36-51.

se attribu­
49Gelfand. M . 1. , & Christakopolou, S. (1999). Culture and negotiator cognition: Judgment accuracy and
negotiation processes in individualistic and collectivistic cultures. Organizalional Behavior and Human
Decision Processes, 79(3), 248-269.

5°Leung, K. (1987). Some determinants of reactions to procedural models for conflict resolution: A cross­

-
national study. Journal of Personality and Social Psychology, 53(5),898-908; Morris, M. w., Leung, K., & Iyengar,

S. S. (2004). Person perception in the heat of conflict: Negative trait attributions affect procedural preferences
and account for situational and cultural differences. Asian Journal ofSocial Psychology, 7(2),127-147.
51Tinsley, C H . (1998). Models of conflict resolution in Japanese, German , and American cultures. Journal
l and ofApplied Psychology, 83(2), 316-323:Tinsley, C. H. (2001). How we get to yes: Predicting the constellation
of strategies used across cultures to negotiate conflict. Journal ofApplied Psychology, 86(4),583-593.
272 PART lII Applications and Special Scenarios

Chinese and American commercial arbitrators. Chinese arbitrators make higher


awards for interfirm contract violations than do A mericans, presumably because the
Chinese arbitrators actually make greater internal attributions, even when observing
the actions of a group. 52 F urthermore, cultural differences in attributional tendencies
(i.e., collectivists view behavior as a function of situation; individualists view behavior
as a function of disposition) create even more of a gap between preferences. Specifi­
cally, when negotiators encounter a disagreeable person across the bargaining table, in­
dividualists attribute that person 's behavior to underlying disposition and desire more
formal dispute resolution procedures; in contrast, collectivists are more likely to as­
cribe behavior to situational factors and prefer informal procedures. 53

Egalitarianism Versus Hierarchy


A key factor that influences behavior across cultures is the means by which people in­
fluence others and the basis of power in relationships. Some cultures have relatively
permeable status boundaries and are egalitarian. O ther cultures have relatively fixed
status boundaries in which influence is determined by existing hierarchical relation­
ships. We describe these relationships in greater detail in the following subsections.
EgaLitarian Power Rel.atiotlJbipJ
In egalitarian power relationships, everyone expects to be treated equally. E galitarian
power relationships do not mean that everyone is of equal status, but rather that status
differences are easily permeated. Social boundaries that exist within organizations are
permeable, and superior social status may be short-lived. Egalitarian cultures empower
members to resolve conflict themselves. Furthermore, the base of power in negotia­
tions may differ; in egalitarian cultures, one's BATNA and information are key sources
of power (and status and rank are irrelevant). Th is same power base is not necessarily
true in hierarchical cultures.
Hi.erarcbicaL Power Rel.atiolIJbiPd
In some cultures, great deference is paid to status; status implies social power and is not
easily permeated or changed. Social inferiors are expected to defer to social superiors
who, in return for privilege, are obligated to look out for the needs of social inferiors.54
Conflict threatens the stability of a hierarchical society because it implies either that social
inferiors have not met expectation or that social superiors have not met the needs of so­
cial inferiors. 55 111e nonn in hierarchical cultures is not to challenge high-status members;
th us, conflict is less frequent between members of different social ranks than in egalitarian
cultures. 56 Furthermore, conflict between members of the same social rank in hierarchical
cultures is more likely to be handled by deference to a superior than by direct confronta­
tion between social equals. 57 In cultures, as in organizations, hierarchy reduces conflict by
providing norms for interaction. For this reason, when managers who are superior to

52Priedman, R. , Liu , w., Chen, c., & Chi, Soc. (2007). Casual attribution for inter firm contract violation: A
comparative study of Chinese and American commercial arbitrators. Journal ofApplied Psychology, 92(3).
856- 864.
53Morris, Le ung, & Iyengar, " Person perception."
54Leung, "Some determinants of reactions."
55Brett, Negolialing globally.
16Ibid .
57Leung, "Some determinants of reactions. "
CHAPTER 10 Cross-Cultural Negotiation 273

higher disputants intervene in conflicts (in China and Japan), they behave more autocratically
Ise the and decide on more conservative outcomes; conversely, when managers who are superiors
;erving to disputants intervene (in Western cultures) they generally involve the disputants them­
lencles selves and obtain integrative outcomes that go beyond contract-related mandates. 58
~havior To examine which countries were collectivist and which were hierarchical, H ofstede
'pecifi­ analyzed the responses that IB M employees gave to a values questionnaire. 59 The re­
ble, in­ spondents were diverse in nationality, occupation within IBM , age, and sex. Exhibit 10-8
=illore
to as­

8 • Small Power Distance -ECA -GUA


_ -VEN -PAN
,pie in­ • Collectivistic ~
100
atively 16· ~ Large Power Distance
Collectivistic
y fixed
24 ·
lation­
_ -YUG - MAL
>I1S.
32 • ---~ - MEX -PHI
~----=~­
40·
itarian
x
status (])
"0 48·
c
ms are
power E
.!!? 56·
~gotia­ "iii
::>
"0
ources .:;: 64 •
ssarily "0
c
72'

80 •
is not
eriors 88 •
iors.54
96 •
social
of so­
04 •
Ibers;
• Small Power Distance Large Power Distance
arian 112 • Individualistic Individualistic
:hical
)nta­
10 20 30 40 50 60 70 80 90 100 110
ct by
) f to
Power Distance Index

Source: Geert Hofstede, Culture's Consequences: Comparing Values, Behaviors, Institutions and Organiza­
tions Across Nations, (2nd ed.) .Thousand Oaks. California: SAGE Publications, 2001.
:A
'(3),

58Brett, 1., Tinsley, C, Shapiro, D. , & Okumura, T. (2007). Intervening in employee disputes: How and when
will managers from China, Japan, and the US act differently. Managem ent and OrganiZalion Review, 3(2 ),
183-204.
59Hofstede, Culture's consequences.
~ 274 PART III Applications and Special Scenarios

presents a grid of where different countries fall in terms of individualism and power
distance. Power distance reflects the tendency to see a large distance between those
in the upper part of a social structure and those in the lower part of that structure.
It is clear from Exhibit 10-8 that individualism and power distance are highly cor­
related: Countries high in collectivism are also high in power distance. The most collec­
tivist high-power countries are Venezuela, several other Latin American countries, the
Philippines, and Yugoslavia. The most individualistic, low-power-distance countries are
Austria and Israel.

ImpLt~'atiolZdfor N egotiatiolZ
Choose Your Representative Cultural differences in power sources and power dis­
plays can be dramatic and unsettling because power is the basis for pie-slicing. One of
the first issues that negotiators must consider prior to intercultural negotiations is deter­
mining who will do the negotiating. In egalitarian cultures, power is usually determined
by one 's BATNA and , thus, it is not unusual for persons of different status to find them­
selves at the bargaining ta ble. In contrast, in hierarchical cultures power is associated
with one's position and rank, and it is insulting to send a lower-rank employee to meet
with a CEO. For example, in China, relationships follow people, not organizations. The
ideal negotiator is an "old friend of China" with whom the Chinese have had positive
experiences or owe favors.60
Understand the Network of Relationships In cultures that have hierarchical power
relationships, negotiations often require several levels of approval, all the way to the
top. For example, in one failed negotiation, the central government of China voided the
long-standing agreement of McDonald 's with the Beijing city government because
leases of longer than 10 years require central government approval. 61 In the central­
ized Chinese authority structure, negotiators seldom have the authority to approve the
final deal. One by-product of this authority structure is that Chinese negotiators will
attempt to secure a deal that is clearly weighted in their favor, so it will be easier to per­
suade the higher authorities that the Chinese "won" the negotiation.
Face Concerns Saving and giving face are important in hierarchical cultures. 62 Face­
maintaining behavior raises the esteem of the negotiator in the eyes of his or her supe­
riors and will in turn help them give face to their stakeholders. In Western culture.
people whose face is threatened act more assertively; in contrast, members of Eastern
cultures act more passively.63 Flattery is a common form of Chinese face-saving.64
Pachtman cautions:
Be aware of the effect flattery has on you; the proper response is not " thank
you," but a denial and an even bigger compliment in return. Apologies are an­

60 P achtman , A. (1998 , July 1). G e tting to "hao ' " International Business, pp. 24-26.
61Ibid .
62Ting-Toomey, S. (1988). Intercultural conniet styles: A fac e nego tiation theory. In Y. Kim & w. Gudykunst
~ Eds.) , Th eories in interculLUral communication (pp. 213-235). Newbury Park, CA: Sage.
3Bre w, F. P., & C airns, D. R. (2004). Styles of managing inte rpersonal workplace connict in relation to sta­
tus and fa ce concerns: A s tud y with Anglos and Chinese. International fournal of Conflict Management,
75(1), 27- 56.
64Pachtman, " G e tting to ' ha o ! '"
CHAPTER 10 Cross-Cultural Negotiation 7

)wer other powerful way to give face, but can obligate the apologizer; be prepared
hose with a token concession in case the Chinese decide to "cash in" on your apol­
ture. ogy. (p. 25)65
cor­
)llec­ The Conduct of Negotiation A Western view of negotiation holds that each party is
S, the expected to voice its own interests, and a back-and-forth exchange will occur. An East­
s are ern view of negotiation is quite different. For example, negotiation among Japanese
persons is similar to that of father and son, according to Adler. 66 The status relation­
ship is explicit and important. The son (seller) carefully explains his situation and asks
for as much as possible because he will have no chance to bicker once the father
- dis­
(buyer) decides. The son (seller) accepts the decision because it would hurt the rela­
ne of
tionship to argue and because he trusts the father (buyer) to care for his needs.
leter­
lined
hern­ Direct versus Indirect Communications
iated Direct versus indirect information sharing is a cultural dimension that refers to the
meet amount of information contained in an explicit message versus implicit contextual
;. The cues.67 For example, different cultures have different norms about information -sharing
sitive strategies in negotiation. 68 Broadly speaking, some cultures' norms favor direct com­
munication , whereas in other cultures, people communicate in an indirect, discreet
fashion. The indirect-direct communication dimension has a direct implication for how
,ower
much people should rely on contextual cues. 69
o the
:d the Direct Communication
:ause In a direct communication culture, such as the United States, messages are transmitted
iltral­ explicitly and directly, and communications are action-oriented and solution-minded. 7o
e the The meaning is contained in the message; information is provided explicitly, without
swill nuance? 1 Furthermore, information is context-free, meaning the message has the same
I per­ meaning regardless of the context. In negotiations, these factors mean parties will often
ask direct questions about interests and alternatives.
:;'ace­
Indirect Communication
.upe­
In some cultures, people avoid direct confrontation when conflict occurs. The meaning
ture,
of communication is inferred rather than directly interpreted; the context of the mes­
;tern
sage stimulates preexisting knowledge that is then used to gain understanding.72 In ne­
ng. 64 gotiations, asking direct questions is not normative; rather , making a lot of proposals is
a matter of indirect communication.73 The pattern of proposals allows inferences to be

65 Ibid , p. 25.

66Adle r, N. J. (1991) . Intern ational dim ensions of organizational behavio r. Bosto n: PWS-Ke nt.

67H a ll , E. T. (1976). Beyond culture. Gard en C ity, NJ: Anchor Press.

68Ibid.

69H a ll, E. T., & H a ll, M. R. (1990) . Understanding cultural diffe rences. Yarmouth, ME: Intercultura l Press;

Cohe n, R. (1 991 ). Negotiating across cultures: Communication obstacles in international diplomacy. Washingto n,

unst DC: United Sta tes Institute of Pe ace Press.

70Ting-Too me y, "Intercultural conflict styles."

ta ­ 7lBretl, Negotiating globally.

72 Ibid.

73Bre tt , J. M ., Shapiro, D. L. , & Lytle, A. (1 998). Brea king the bonds of reciprocity in negotiation s. A cadem y

of Management Journal, 41 ( 4), 41 0--424.

276 PART III Applications and Special Scenarios

EXHIBIT 10-9 DirecfahiflndirectC omrnuDicatiol1 Cultures

Direct Communication Cultures Indirect Communication Cultures


Germany Japan
United States Russia
Switzerland France
Scandinavian cultures Arabs
Mediterranean peoples
In general, cultures in which people have exten­
sive information networks among family, friends,
colleagues, and clients and in which people are
involved in close, personal relationships
Source: Brett, 1. M. (2007). Negotiating globally: How to negotiate deals, resolve disputes, and make decisions
across cultural boundaries (2nd ed.). San Francisco: Jossey-Bass.Reprinted by permission.

made about what is important to each party and where points of concession might be.
Indirect cultures (such as Japan) transmit messages indirectly and implicitly, and com­
munication is elusive. 74 For example, Japanese negotiators are less likely to say "No"
and more likely to remain silent than U.S. negotiators when confronted with an option
that is not favorable. 75 (For a classification of direct and indirect communication cul­
tures, see Exhibit 10-9.)
Culture affects how negotiators share information. Negotiators from direct cul­
tures prefer sharing information directly, asking questions, and getting (in return for
giving) answers. In contrast, negotiators from indirect cultures prefer sharing informa­
tion indirectly, telling stories in an attempt to influence their opponents, and gleaning
information from proposals. 76 Cultural norms and values have implications for the rec­
iprocity principle in negotiation. In an investigation of intracultural and intercultural
negotiation between the United States and Japan, negotiators reciprocated culturally
normative behaviors. 77 U.S. negotiators were more likely to reciprocate direct informa­
tion exchange; in contrast, Japanese negotiators were more likely to reciprocate indi­
rect information exchange.

ImpLication<1 for Negotiation


Information Necessary to Reach Integrative Agreements Getting information out on
the table is critical for expanding the pie; relying on context alone to convey informa­
tion necessary to craft integrative agreements is not enough. 78 Adair examined inte­

7'"Ting-Toomey, "Intercultural conflict styles."

7sOraham,1. L., & Sano, Y. (1984). Smal'l bargaining: Doing business with the Japanese. Cambridge, MA:

Ballinger; March, R. M. (1990). The Japanese negotiator: Subtlety and strategy beyond Western logic (1st
~lperback ed.). New York: Kodansha International. .. .
Brett,1. M., AdaIr, W. A., Lempereur, A., Okumura, T., Shlkhlrev, P., Trnsley, C, & Lytle, A. (1998). Culture
and joint gains in negotiation. Negotiation Journal, 14(1),61-86.
77 Adair, W. L., & Brett, 1. M. (2005). The Negotiation dance: Time, culture, and behavioral sequences in ne­
9iotiations. Organization Science, 16, 33-5l.
SBrett, Adair, Lempereur, Okumura, Shikhirev, Tinsley, & Lytle, "Culture and joint gains in negotiation."
CHAPTER 10 Cross-Cultural Negotiation 277

grative sequences in same and mixed-culture negotiations. Managers from Hong Kong,
Japan , Russia, and Thailand used more indirect integrative strategies (e.g., making mul­
tiple offers at same time); in contrast, managers from Israel, Germany, Sweden, and the
United States used direct integrative strategies (e.g., asking for priority information) ?9
People from indirect cultures seamlessly enter into a "dance" of complementary, indi­
rect information exchange. 80 For example, by complementing priority information and
offers, negotiators from indirect cultures supplement the information that may not
have been sufficiently conveyed through reciprocal offers.
Because indirect communication requires more complex and subtle communica­
:xten­
tion skills, direct communicators often find it difficult or impossible; in contrast, indi­
riends,
: are rect communicators can be direct, when necessary.S1
Brett and colleagues investigated negotiation strategies in six cultures: France,
Russia, Japan, Hong Kong, Brazil, and the United States. Cultures that used direct (as
decisions
opposed to indirect) information-sharing strategies or a combination of direct and
indirect strategies reached the most integrative, pie-expanding agreements. 82 Fur­
thermore, exchanging information about preferences and priorities was insufficient.
For example, in the same study of intracultural nego tiations involving the United
ight be. States, Japan, Brazil, France, Russia , and Hong Kong, negotiators from Russia and
d com­ Hong Kong generated the lowest joint gains, or integrative agreements. 83 Russia and
y"No" Hong Kong are indirect communication countries. However, Japanese negotiators
option had high joint gains, even though they also are an indirect communication culture.
on cul­ The difference is that Japanese negotiators engaged in more direct information ex­
change (i.e., asking questions) than the negotiators from Russia or Hong Kong. Thus,
:ct cul­ making comparisons and contrasts to identify trade-offs and direct reactions appea rs
Jm for to be essential. 84 Moreover, offers have different effects across cultures. Early offers
forma­ generate higher joint gains for Japanese negotiators but lower joint gains for U.S. ne­
eaning gotiators. 85 Conversely, direct exchange of information about interests and issues
he rec­ generates higher joint gains for U.S. negotiators but lower joint gains for Japanese
ultural negotiators. 86
turally In direct cultures, the process of deal making comes first; in other cultures, the
Forma­ relationship comes first and provides a context for making deals. Frank Lee, a na­
e indi­ tive of Taiwan, who launched Global Intelligence Consultation in San Diego, says,
"In negotiations with Chinese, the first 30 minutes are just warming up. " If Ameri­
cans force Chinese negotiators to get down to business too quickly, conflicts can
arise. 87
out on
'orma­
j inte­

79Adair, W. (2003). Integrative sequences and negotiation outcome in same- and mixed-culture negotiation.

1nternationalloumal Conflict Management, 14, 273-296.

80 Adair, W., & Brett, 1. M. (2005). The negotiation dance: Time, culture, and behavioral sequences in negoti­

fA: ation. Organization Science, 16(1), p33-51.

1st 8lBall, Beyond culture.

82Brett , Adair, Lempereur, Okumura, Shikhirev, Tinsley. & Lytle, "Culture and joint gains in negotiation."

)jlture 83Ibid.

84Ibid.

in ne- 85 Adair, W., Weingart, L., & Brett, 1. (2007) . The timing and function of offers in U.S. and Japanese negotia­

tions. Journal ofApplied Psychology, 92(4),1056-1068.

ion." 861bid.
87Simons, C. (2005, September 6). Companies try to learn China's ways. Atlanta Journal-Constitution, p. Cl.
278 PART III Applications and Special Scenarios

Dispute Resolution Preferences US. mana~ers often feel satisfied with their out­
comes following interests-based negotiations. 8 However, other cultures use different
dispute resolution strategies, often with equally satisfying results. 89 For example, U.S.
managers prefer to use interests-based methods, such as discussing parties' interests
and synthesizing multiple issues. 9o In one investigation, US. managers were more
likely than Hong Kong Chinese managers to resolve a greater number of issues and
reach more integrative outcomes; in contrast, Hong Kong Chinese managers were
more likely to involve higher management in conflict resolution 91 and choose a rela­
tionally connected third party.92 One way people from indirect cultures communicate
their disapproval is by shaming others. For example, Chinese managers show a stronger
desire to shame and teach moral lessons compared to US. managers.93 In collectivist
cultures, shaming is a common form of social contro1. 94 In contrast, US. managers are
more likely to choose a direct approach in response to conflict.

KEY CHALLENGES OF INTERCULTURAL NEGOTIATION


We identify eight common intercultural challenges.

Expanding the Pie


Negotiators have more difficulty expanding the pie when negotiating across cultures
than within a culture. A landmark study of five countries (Japan, Hong Kong, Germany,
Israel, and the United States) , examined intracultural (within the same culture) negoti­
ations versus intercultural (across cultures) negotiations. Negotiations between Japan
and the United States resulted in a smaller expansion of the pie than did intracultural
negotiations (Japan-Japan and U.S.-US. negotiations).95 Another study examined
joint gains in intra- and inter-cultural negotiations between Japanese and US. negotia­
tors and found that joint gains were significantly lower in intercultural negotiations, as
opposed to intracultural negotiations. 96 The key reason appeared to be the degree to
which parties understood the priorities of the counterparties and the opportunity
for exploiting compatible issues. In cross-cultural negotiations, negotiators ' bargaining
styles did not match, meaning they had less understanding of the counterparty's prior­
ities and consequently did not create as much value. Each culture expected the other

8&rinsle y, "How we get to yes."


89Ibid.
9Donsle y, C H ., & Brett, J. M. (2001 ). Managing workpl ace conflict in the Un ited States and Hong Kong.
Organizational Beha vior and Human Decision Processes, 85(2), 360-381.
91Ibid.
92Fu , 1. , Morris, M ., Lee, S-I. , Chao, M., Chiu , C , & Hong, Y. (2007). Epistemic motives a nd cultural confor­
mity: Need for closure, culture, and context and dete rminants of conflict judgments. Journal of Personality
and Social Psychology, 92(2), 191-207.
9:J-rinsley, C H. , & Weldon, E . (2003). R esponses to a normative conf1ict among American and Chinese
man agers.lntemational.Joumal of Cross- Cultural Management, 3(2), 183-234.
94Creighton, M . R. (1990). Revisiting sh ame and guilt cultures: A forty- year pilgrimage. Ethos, 18, 279- 307;
De mos, J. (1996). Shame and guilt in e arly New England. In R. Har re & w. G. PalTott (Eds.) , The emotions
~~p. 74-88) . London: Sage.
Bre tt, Negotiating globally.
96Brett, J. M. , & Okumura, T. (1998). Int er- and intra cultural nego tiation: U.S. a nd Japa nese negotiators.
Academy of Managemenl.Joumal, 41 (5),495-510.
CHAPTER 10 Cross-Cultural Negotiation 279

ut­ culture to adopt its own style of negotiating. For example, North Americans expected
~nt others to talk directly, whereas people from indirect cultures expected to use other, im­
J.S. plicit forms of communication, such as heuristic trial and error. U.S. negotiators ex­
sts change information directly and avoid using influence strategies when negotiating
)re intra- and interculturally. In contrast, Japanese negotiators exchange information indi­
nd rectly and use influence when negotiating intraculturally but adapt their behaviors
~re
when negotiating interculturally.97
la­
lte
Dividing the Pie
~er

ist We pointed to a number of biases when it comes to thinking about fairness, and
Ire these biases are magnified when people of different cultures sit down to negotiate.
As compared to other cultures, people from the United States are more un­
abashedly self-interested and, consequently, often have higher aspirations. We pointed
out that aspirations manifest themselves in first offers negotiators make and spirations
are strongly predictive of the ultimate slice of the pie negotiators receive. Indeed, U.S.
negotiators who have higher aspirations than their opponents achieve greater profit
than managers from China and Japan , primarily because these collectivist cultures are
not as self-interested. 98

Sacred Values and Taboo Trade-OEEs


Sacred values , or protected values, are the beliefs, customs, and assumptions that form
the basis of a group or culture's belief system. 99 Sacred values are, by definition, those
values and beliefs people regard to be so fundamental that they are not discussible nor
debatable. Sacred values resist trade-offs with other values, particularly economic val­
ues. When people contemplate buying or selling "sacred objects," they are more likely
to distort the price, refuse to answer questions, and express moral outrage and cogni­
tive confusion. JOo H owever, when it is in their economic interest, people may turn a
blind eye to taboo trade-offs.lOl Consider the reaction that John Poindexter, a retired
rear admiral, received in 2003 when he put forth a plan for the Pentagon to run a " ter­
rorist futures-trading market" -an online trading parlor that would reward investors
who could accurately forecast terrorist attacks, assassinations, and coups.102 The day
after the plan was announced , Poindexter was forced to resign from his position

97Adair, w.. Okumura, T., & Brett, .T. M . (2001 ). Negotia tion be havior wh e n cultures collide: The U.S. and

Japan. Journal of Apphed Psychology, 86(3). 371-385.

98Ch e n, Y , Ma nnix , E.. & Okumura , T. (2003 ). The importance o f who you meet: Effe cts of self- versus

othe r-concerns amo ng nego tiators in the Unite d States, the People's R e public of C hina , a nd Japan. Journal

o f Experimental Social Psychology, 39,1-15.

99Baro n, l , & Spranca , M. (1997). Protec te d va lu es. Organizational Beha vior and Human Decision

Processes, 70(1 ), 1-16; Te tJock, P. E., Pe terso n, R. , & Lern er, l (1 996). R evising th e value pluralism mode l:

Incorporating social content and co ntext postulat es. In C. Seligman , l O lson, & M. Z a nna (Eds. ), The psy­

chology of values: The Ontario Symposium (Vol. 8). Mahwa h, NJ: Erlbaum.

lOOMcGraw, A. & Te tlock , P. (2005). Tabo o trade-offs, relational framing, and the acce ptabilit y of exch a nges.

Journal of Consumer Psychology, 15(1),2- 15.

IO)Ibid.

lO2Schmitt, E. (2003, August 1). Poindex ter will be quitting over terrori sm be tting pla n. New York Times,

p. All.
28(f PA RT III Applications and Special Sce narios

EXHIBIT1 0-1 O. Sacreci:Values

Instructions: The following list contains actions some peo ple oppose. Some of these activities are
happening right now, and others are not. Suppose those in favor of each were willing to pay a
great deal of money to see the action carried out. Please answer these questions with a "Yes,"
"No," or " Not Sure," according to whether you would accept money to perform these actions.

Actions:
1. Destruction of natural forests by human activity, resulting in the extinction of plant and
animal species forever
2. Raising the 10 of normal children by giving them (comple tely safe) drugs
3. Using genetic engineering to make people more intelligent
4. Performing abortions of normal fetuses in the early stages of pregnancy
5. Performing abortions of normal fetuses in the second trimester of pregnancy
6. Fishing in a way that leads to the painful death of dolphins
7. Forcing wom en to be sterilized because they are retarded
8. Forcing women to have abortions for the purposes of population control
9. Putting people in jail for expressing nonviolent political views
10. Letting people sell their organs (for example, a kidney or an eye) for whatever price th ey
could command
lL R efusing to treat someone who needs a kidney transplant because he or she cannot afford it
U. Letting a doctor assist in the suicide of a consenting terminally ill patient
13. Letting parents sell their daughter in a bride auction (i.e., the daughter becomes the bride of
the highest bidder)
14. Punishing people for expressing nonviolent political opinions

Source: Adapted from Baron , 1, & Spranca, M. (1997). Protected va lues. Organizational Behavior and
Human Decision Processes, 70(1),1-16. Reprinted by permission of Elsevier via Rights Link.

because several people, including Democratic senators Byron Dorgan (North Dakota)
and Ron Wyden (Oregon), called it "morally repugnant." (For an example of how to
assess sacred or protected values, see Exhibit 10-10. "Yes" or "Not Sure" answers imply
the value is secular, or tradeable; "No" answers imply the value is sacred.)
Sacred values are the opposite of secular values, which are issues and resources
that can be traded a nd exchanged. Within a culture, a near-universa l ascription to sa­
cred values ge nerally exists, with some notable exceptions. However, between cultures,
extreme conflict may occur when one culture regards an issue to be sacred and another
treats it as secular. Taboo trade-ofts take place when sacred values are proposed for ex­
change or trade.103
Most people are horrified and shocked when parents offer to sell their children,
citizens sell their right to a jury trial, and immigrants buy voting privileges. A thin line
separates acceptable from taboo trade-offs. On a purely rational level, these exchanges
simply reflect the powerful trade-off principle we discussed in Chapter 4 on integrative
bargaining.

l03Tetlock, Peterson , & Lerner, "Revising the value pluralism model. "
CHA PTER 10 Cross-Cultural Negotiation 281

The trade-off principle is ideal for handling scarce resource conflicts containing is­
sues that are fungible. P rinciples of rationality (see Appendix 1) assume people can
are compare and trade resources in a way that maximizes their outcomes. R ational bar­
lya gaining theory assumes everything is comparable and has a price (see Appendix 1).
es,"
However, the notion of trading becomes unconscionable in some conflict situations.104
)DS.
People sometimes refuse to place a monetary value on a good or even think of trading
it. To even suggest a trade is cause for moral outrage and can sour negotiations. A ttach­
~nd ing a monetary value to a bottle of wine, a house, or the services of a gardener can be a
cognitively demanding task, but it raises no questions about the morality of the individ­
ual who proposes the sale or trade. In contrast, attaching monetary value to human life,
familial obligations, national honor, and the ecosystem seriously undermines one's so­
cial identity or standing in the eyes of others. IOS In a dispute concerning the construc­
tion of a dam that would remove native Indians from their ancestral land, a Yavapai
teenager said, "The land is our mother. You don't sell your mother.,,106
P roposals to exchange sacred values (e.g., body organs) for secular ones (e.g.,
money, time, or convenience) constitute taboo trade-offs. Given the inherently sacred
ley values that operate in many countries, the familiar notions of trading and logrolling, so
important to interests-based negotiation, are likely to be considered unacceptable and
d it reprehensible to members of different cultures.
Sacred and secular issues are culturally defined, with no absolutes. 107 Socio­
: of cultural norms affect the sacredness of certain positions, such as smoking, which is
now generally considered baneful but in the recent past was completely acceptable.
The sanctity of issues is also influenced by the labels and names used to define con­
flicts. For example, in 1994 all three members of Alaska's congressional delegation
md
began referring to the part of the Arctic National Wildlife R efuge (AN WR ) that
would be subject to oil exploration as the "Arctic O il Reserve." The group believed
this term was more accurate because that part of the refuge was not officially classi­
fied as either wilderness or refuge. E nvironmentalists, on the other hand, objected to
this term and did not even like the use of the acronym ANWR because they worried
that unless the words "wildlife refuge" were clearly stated, the public would not un­
o derstand the value of the land.
y Truly sacred values cannot exist because we make value trade-offs every day,
meaning that everyone "has their price." The implication is that with sufficient com­
s pensation, people are willing to trade off a "sacred" value. The critical issue is not how
much it takes to compensate someone for a sacred issue but, instead, what factors allow
trade-offs to occur on sacred issues.
"
The term sacred describes people's preferences on issues on which they view them­
selves as uncompromising. It immediately becomes obvious, however, that labeling an
issu e as sacred may be a negotiation ploy, rather than a reflection of heartfelt value. B y
anointing certain issues as sacred and removing them from bargaining consideration, a
negotiator increases the likelihood of a favorable settlement. The strategy is similar to

I04Ibid.

I05Schlenker, B. R. (1980). Impression managemenr: The self-concepl, social idemily, and imerpersonal rela­

lions. Belmont, CA: Brooks-Cole.

106Espeland, W. (1994). Legally mediated identity: The national environmental policy act and the bureau­

cratic construction of interests. Law and Sociely Re view, 28(5),1149-1179.

I07Tetlock, Peterson, & Lerner, "Revising the value pluralism model."


282 PART III Applications and Special Scenarios

the irrevocable commitment strategy.108 We refer to issues that are not really sacred, but
are positioned as such, as pseudosacred.109 Thus, for example, if the Yavapai Indians
would trade 1 acre of land for a hospital, new school, or money, then the land is not truly
sacred but pseudosacred.

Biased Punctuation of C<>nflict


The biased punctuation of conflict occurs when people interpret interactions with their
adversaries in self-serving and other-derogating terms. 110 An actor, A, perceives the
history of conflict with another actor, B, as a sequence of B-A , B-A, B-A, in which the
initial hostile or aggressive move was made by B, causing A to engage in defensive and
legitimate retaliatory actions. Actor B punctuates the same history of interaction as A­
B, A-B, A-B, however, reversing the roles of aggressor and defender. The biased punc­
tuation of conflict is a frequent cause of warfare. Consider the long, sad history of
international conflict between the Arabs and Israelis. Each country chooses different
historical moments of origin in order to justify its own claims to land and thus casts the
other country in the role of the invader.
Negotiation behaviors are a continuous stream of cause-and-effect re lationships in
which each person's actions influence the actions of others. III To an outside observer,
their interaction is an uninterrupted sequence of interchanges. However, people who
are actively engaged in conflict do not always see things this way. Instead, they orga­
nize their interactions into a series of discrete causal chunks,1l2 a process known as
causal chunking or punctuationY3 Causal chunks influence the extent to which people
are aware of their influence on others, as well as their impressions of others. Two kinds
of chunking patterns are self-causal and other-causal. People form self-causa} chunks
(e.g., "My action causes my partner's action") when they possess an offensive set,
other-causal chunks when they possess a defensive set.
Disagreement about how to punctuate a sequence of events and a conflict rela­
tionship is at the root of many cross-cultural disputes.

Ethnocentrism
If egocentrism refers to unwarranted positive beliefs about oneself relative to others, then
ethnocentrism refers to unwarranted positive beliefs about one's own group relative to
other groups. 114 We noted in Chapter 9 that most people display an in-group bias byevalu­
ating members of their own group more favorably than members of out-groups and re­

108Schelling, T. (1960). The strategy of conflict. Cambridge, MA: Harvard University Press.
!09 We are indebted to Max Bazerman for this term;Thompson, L., & Gonzalez, R. (1997). Environmenlal
dispules: Competition for scarce resources and clashing of values. In M. Bazerma n, D. Messick,A. Tenbrunsel,
& K. Wade-Benzoni (Eds. ), Environment, ethics, and behavior (pp. 75-104). San Francisco: New Lexington
Press; Wade-Benzoni, Okumura , Brelt, Moore, Tenbrunse l, & Bazerman , "Cognitions and behavior."
llOKahn, R. L. , & Kramer , R. M. (1990). Untying the knot: De-escalatory processes in international conflicl.
San Francisco: Jossey-Bass.
111Jones, E. E., & Gerard, H. B. (1967) . Foundations of social psychology. New York: Wiley.
1l2Swa nn, W. B., Pelham, B. w., & Roberts, D. C. (1987). Causa l chunking: Memory and inference in ongoing
interaction. Jo urnal of Personality an d Social Psychology, 53(5) , 858- 865.

I13Whorf, B. L. (1956). Science and lingu istics. In 1. B. Carroll (Ed.), Language, thought, and reality: Selected

writings of Benjamin Whorf New York: Wiley.

114LeVine, R. A. , & Campbell , D. T. (1972 ). Ethnocentrism: Theories of conflict, ethnic attitudes, and group
beha vior. New York: Wil ey.
CHAPTER 10 Cross-Cultural Negotiation 83

ward members of their own group more resources than members of out-groups, even
when allocations of resources do not affect their own welfareYs Ethnocentrism, or the
universal strong liking of one's own group and the simultaneous negative evaluation of
out-groups, generates a set of universal reciprocal stereotypes in which each culture sees
itself as good and the other culture as bad, even when both groups engage in the same be­
haviors. The behavior may be similar, but the interpretation is not: "We are loyal, they are
clannish; we are brave and willing to defend our rights, they are hostile and arrogant."
Even when members of groups do not know one another and never interact, peo­
ple show in-group favoritismY6 However, conflict between groups and intergroup bias
do not always arise from competition over scarce resources. Much intergroup bias
stems from fundamental differences in cultural values. Symbolic conflict can occur be­
tween cultural groups due to clashes of values and fundamental beliefs.
f One unfortunate by-product of in-group favoritism is the tendency to view people
from different cultures as more alike than they really are. Thus, the phrase "They all look
alike" means that within-race and within-culture errors are more prevalent than between­
race or between-cultural errors because people categorize members of other cultures not
as individuals but as part of a group. As an example, consider the long-standing conflict
between pro-choice and pro-life activists on the abortion issue (see Exhibit 10-11).
Stereotypes are another manifestation of ethnocentrism. Stereotypes of cultural
groups are common; however, they often do not have a basis in reality. The problem is

EXHIBIT 10- 11 Stereotyping: ,he Other Party

As an example of how members of groups tend to stereotype the other party, consider the conver­
sation that occurred between Naomi Wolf, author of the best-seUer The Beauty Myth, and Freder­
ica Mathewes-Green , a syndicated religion columnist and author of a book entitled Right Choices.
Try to figure out which woman made which of the following comments during a discussion in 1996:
Where the pro-life movement has made its mistake is to focus only on the baby, and not the
woman.... You can boil 25 years of the pro-life rhetoric down to three words: "It's a baby."
There's a whole industry to promote bonding with the wanted fetus, yet unwanted fe­
tuses are treated as though they are unwanted lumps of batter.
The criticism of the pro-life movement's " It's a baby" focus came from Mathewes-Green ,
one of the movement's own. The criticism of the pro-choice movement's "unwanted lumps of
batter" rhetoric came from Wolf, a staunch abortion-rights supporter.
When Wolf and Mathewes-Green met to talk, Wolf said it was the first time she had ever
"knowingly been in the presence of a pro-lifer." To her surprise, the other side was willing to
have a conversation. And Mathewes-Green acknowledged that the pro-life movement had in­
vited being stereotyped by "focusing only on the baby and not the woman ."

Source: Shirk, M. (1996, June 10.) Women go beyond rhetoric. St. Louis Post- Dispatch, p. lIB. Reprinted by
permission of St. Louis Post-Dispa tch .

l15Doise, W. (1978). Groups and individuals: Explanations in social psychology. Cambridge. England:

Cambridge University Press.

116Brewer, M. (197 9). In-group bias in the minimal inte rgroup situation: A cognitive-motivational analysis.

Psychological Bulletin, 86, 307-324; Tajfel, " Social psychology "; Tajfel, H., & Turner, 1. (1986). The social

identity th eory of intergroup be havior. In S. Worchel & w. Au stin (Ed s.), Psychology of intergroup relations

(pp. 7-24). Chicago: N elson-Hall.

284 PART III Applications and Special Scenarios

that if people act as if stereotypes are true, they are likely to create a self-fulfilling
prophecy, whereby the stereotypes affect behavior. For example, Americans described
their Japanese counterparts as being "poker-faced" or displaying no facial expressions
in a negotiation simulation. However, in the laboratory, a camera focused on each per­
son's face during an intercultural negotiation recorded all facial expressions and re­
vealed no differences in the number of facial expressions (smiles and frowns) between
the Americans and Japanese. Americans are simply not able to " read " Japanese expres­
sions, and they wrongly describe them as "expressionless."U7

Mfiliation Bias
Affiliation bias occurs when people evaluate a person's actions on the basis of his or
her affiliations rather than on the merits of the behavior itself. For example, when foot­
ball fans watch a game, they believe the other side commits more infractions than does
the ir own team.11 8 Consider the following actions a country could take: establishing a
rocket base close to the borders of a country with whom it has strained relations; test­
ing a new assault weapon; or establishing trade relations with a powerful country. Peo­
ple's perceptions of the acceptability of these actions differ dramatically as a function
of the perceived agent. For example, during the time of the Cold War, U.S. citizens re­
garded the preceding actions to be much more beneficial whe n the United States was
the one responsible than when what was then the U.S.S.R. engaged in the same
actions.1l9 People perceive the same objective behavior as either sinister or benign,
merely as a consequence of the agent 's affiliation.

Faulty Perceptions of Conciliation and Coercion


During World War II, the American journalist Edward R. Murrow broadcasted nightly
from London, reporting on the psychological and physical consequences of the Nazi
bombing of British cities. l2O Contrary to Nazi intent, the bombing did not move the
British toward surrender. It had quite the opposite effect, strengthening rather than
diminishing British resolve to resist German domination. Shortly after the United
States entered World War II, the Americans joined the British in launching costly
bombing raids over Germany. In part, the intent was to decrease the German people's
will to resist. Later research reported by the Office of Strategic Services that compared
lightly and heavily bombed areas found only minimal differences in civilians' will to resist.
Several other conflicts follow the same psychological pattern, such as Pearl Har­
bor, South Africa, and North Vietnam. All of these instances point to important differ­
ences in countries' perceptions of what will be effective in motivating an enemy and
what will be effective in motivating themselves or their allies. Coercion is viewed as
more effective with our enemies than with ourselves, whereas conciliation is viewed as

l170raham, 1. L. (1993). TIle Ja pa nese negotiation style: Charactelislics of a di stinct approach. Negotiation
Journal, 9(2), 123-140.
1I8Has lorf, A ., & Cantril, H . (1954). Th ey saw a game: A case study. Journal of Abnormal and Social Psy­
chology, 49,129-134.
11 90sk amp, S. (1965). Attitudes toward U.S. and Russ ian actions: A doubl e standard. Psychological Reports,
16, 43-46.
120Rothbart, M. , & Hallmark, W. (1988). In-group and out-group diffe rences in the perceived efficacy of co­
ercio n and conciliation in resolvin g social conflict. Journal of Personality and Social Psychology, 55. 248-257.
CHAPTER 10 Cross-Cultural Negotiation 285

ulfilling more effective with ourselves than with our enemies. The unfortunate consequence, of
~scribed course, is that this perception encourages aggressive rather than constructive action.
ressions Three key reasons explain why this behavior occurs.J2l A prefere nce for punitive
3Ch per­ strategies with one's enemies may reflect a desire to inflict injury or pain , as well as a
and re­ desire to inOuence behavior in a desired direction. The relativ e prefere nce for punish­
Jetween ment is based on an incompatible desire to both injure and modify the behavior of the
expres­ enemy. Alternatively, people may be inclined to use more coercive strategies with an
counterparty because the appearance of toughness conveys information about their
motives and intentions, which, in the long run, may bring about the desired resu lt. Fi­
nally, the mere creation of mutually exclusive, exhaustive social categories (e.g., "them"
)f his or and "us") leads to different assumptions about members of such groups: More favorable
en foot­ attributes are assigned to in-group than to out-group members. 122 Social categorization
an does processes may be particularly powerful in cross-cultural disputes because of stereotypes.
ishing a
ns; test­ NaIve Realism
ry. Peo­ A heated debate among English teachers concerns which books should be on the re­
'unction quired reading list for U.S. high school students. The Western Canon D e bate features
lens re­ traditionalists, who prefer to have classics on the reading list , and revisionists, who
ltes was believe the reading list should be more racially, ethnically, and sexually diversified . In
e same one study, traditionalists and revisionists were interviewed about their own and th e
benign, other party's preferred books.123 Most strikingly, each party exaggerated the views of
the other side in a way that made their diffe rences bigger rather than smaller. Tradi­
tionalists viewed revisionists to be much more extreme than they really were; revi­
sionists viewed traditionalists to be much more conservative. In fact, the groups
agreed on 7 out of the 15 books on the reading list! Nevertheless, each group greatly
nightly
le Nazi exaggerated the diffe rence between their own and the other 's belief systems in a
lve the way that exacerbated the conflict. Further, peo ple perceived the other side to be
T than
more uniform in their vi ews, whereas they perceived th eir own views to be more var­
Jnited ied and heterogeneous. 124 This faulty percep tion, of course, leads to beliefs such as
"They 're all alike." Ideological conflict is oft en exacerbated unnecessarily as parti­
costly
ople's sans construe the other person's values to be more extremist and unbending than
pare d they really are.
resist. The fundame ntal attribution error occurs when people explain the causes of the
Har­ behavior of others in terms of their underlying dispositions and discount the role of sit­
uational factors.l2S Many environmental disputes involve a group that is believed to be
'iffer­
t and
interested in the economic development of the environment and an opposing group
~ d as
that represents the interests of the ecosystem. According to the fundamental attribution
:d as
I21Rothbart & Hallmark, " In-group and out-group differences."
l22Brewer, " In-group bias";Tajfel, H. (1970). Exp erime nts in intergroup discrimination. Scientific American,

223, 96-102.

'on 123Robinson, R. l , & Ke ltner, D. (1996). Much ado about nothing? Revisionists and traditionalists choose

an introdu ctory English syllabus. Psychological Science, 7(1) , 18-24.

124Linville, P. w., Fischer, G. w., & Salovey, P (J 989). Perceived distributions of the characteristics of in­

group and out-group members: Empirical evidence and a computer simu lation. fournal of PersonalilY and

Jrts, Social Psychology, 57, 165-188.

125Ross, L. (1977). The intuitive psychologist and his shortcom ings: Di stortio ns in the attribuLion process.

0­ In L. B erkowitz (Ed.), Advances in experimental social psychology (Vol. 10) (pp. 173-220). Orlando, FL:

:57. A cademic Press.

286 PART III Applications and Special Scenarios

error, when each group is asked to name the cause of the dispute, each attributes the
negative aspects of conflict to the dispositions of the other party. Specifically, develop­
ers regard environmentalists to be fanatic lunatics; environmentalists regard develop­
ers to be sinister and greedy.

PREDICTORS OF SUCCESS IN INTERCULTURAL INTERACTIONS


Your pharmaceutical company wants to expand its international base. You are charged
with the task of selecting a few managers to participate in a special global initiatives as­
signment in various countries. You know that fajlure rates as high as 70% can be
avoided. 126 These costs include not only the lost salary of an executive, the cost of
transporting the family, and the cost of setting up an office abroad but also damage to
your organization, lost sales, on-the-job mistakes, and loss of goodwill. Unfortunately,
ready-made personality measures are not good predictors of success abroad. The fol­
lowing characteristics have some value in predicting success: 127
• Conceptual complexity: Peopl e who are conceptually complex (think in terms of shades of
gray, rather than black and white) show less social distance to different others 128
• Broad categorization: People who use broad categories adjust to new environments better
than do narrow categorizers 129
• Empathy
• Sociability
• Critical acceptance of stereotypes
• Openness to different points of view
• Interest in the host culture
• Task orientation
• Cultural flexibility (the ability to substitute activities in the host culture for own culture-
valued activities)
• Social orientation (the ability to establish new intercultural relationships)
• Willingness to communicate (e.g. , use the host language without fear of making mistakes)
• Patience (suspend judgment)
• Intercultural sensitivity
• Tolerance for differences among people
• Sense of humor
• Skills in collaborative conflict resolution

ADVICE FOR CROSS-CULTURAL NEGOTIATIONS


Global negotiations are characterized by differences that emerge at interpersonal be­
havioral levels and are manifestations of more deep-seated societal and institutional
differencesYo Negotiators should avoid arguing about the inherent legitimacy of a so­
cial system and instead focus on understanding at the interpersonal level. Brett re­

126Copeland, L. , & Griggs, L. (1985). Going inlernalional. New York: Random Hou se.

127Martin,1. N. (J989).lntercultural communication competence. Inlernalional Journal of Intercultural Rela­

tions, 13, 227-428; Triandis, Culture and social behavior.

128Gardiner, G. S. (1972). Aggression. Morristown, NJ: General Learning Corp.

129Detweiler, R. (1980). The categorization of th e actions of people from another culture: A conceptual

analysis and behavioral outcome. International Journal of Intercultural Relations, 4, 275-293.

13()Tinsley, C. H., Curhan, 1. R., & Kwak , R. S. (1999). Ar:\opting a du al lens approach for examining the

dilemma of differences ill international business negotiations. International Negotiation, 4,5-22.

CHAPTER 10 Cross-Cultural Negotiation 287

EXHIBIT 10-12 Advi citl<;,1' lntern~tiolllih_ eg(lI iato


1. Acknowledge differences at the individ­ 4. Understand the norms and the meaning
ual and societallevels. underlying them.
2. Trade off differences in preferences and 5. Avoid arguing the inherent legitimacy
abilities. of a social system.
3. Ask questions to ensure understanding 6. Be prepared to manage bureaucratic in­
of the other party's perspective. teractions with governments.

Source: Tinsley, C. R. , Curhan, 1. R. , & Kwak , R. S. (1999). Adopting a dual lens approach for examining the
dil emma of differences in international business negotiation s. lnternaliona/ Negotiation.

searched and proposed several strategies to improve cross-cultural effectivenessYl


(See Exhibit 10-12 for Tinsley 's similar suggestions,) A discussion of Brett's prescrip­
tive advice appears in the following sections.132

Anticipate Differences in Strategy and Tactics


That May Cause Misunderstandings
Negotiators from different cultures differ in terms of three major dimensions that affect
their negotiation behavior and style: individualism-collectivism, hierarchy-egalitarianism,
and direct-indirect communications. The negotiator who is able to anticipate differences in
terms of these three dimensions is going to be at a pie-expanding and pie-slicing advantage
in intercultural negotiations. Further, when encountering differences, the negotiator who is
aware of cultural differences will not make negative attributions about the counterparty
but will, instead, view discomfort as a natural consequence of different cultural styles.

Analyze Cultural Differences to Identify Differences


in Values That Expand the Pie
We noted in Chapter 4 (integrative negotiation) and Chapter 8 (creativity in negotiation)
that differences, rather than similarities, between negotiators can open windows for ex­
panding the pie and creating joint gain. Presumably, more degrees of difference are pre­
sent between members of different cultures than members of the same culture. The level
of differences means that the amount of integrative, or win-win, potential is higher in in­
tercultural negotiations, as opposed to intracultural negotiations. The culturally enlight­
ened negotiator will search for differences in beliefs, values, risk profiles, expectations, and
abilities that can be used to leverage opportunities for joint gain, such as through the cre­
ation of value-added trade-offs (logrolling) and the construction of contingency contracts.

Recognize That the Other Party May Not Share


Your View of What Const itutes Power
The other party's estimate of his or her power may be based on factors you think are ir­
relevant to the negotiation. Negotiators from egalitarian cultures should be prepared to

13JBrett, Neg otiatin g globally, 4, 5-22. Courtesy of BrilL


132Ibid.
288 PART III Applications and Special Scenarios

present information about their company and products, even when they think such il1­
formation should have no bearing on the outcome. In failing to make a presentation
comparable to the one made by the negotiator from the hierarchical culture, negotia­
tors from ega litarian cultures risk appearing weak . By the same token, negotiators
from hierarchical cultures should be aware that power-based persuasion, although nor­
mative in deal-making negotiations in their own cultures, is not normative in egalitar­
ian cultures. Furthermore, in egalitarian cultures, power-based persuasion is likely to
be reciprocated and may lead to impasse. o3 One American businessperson suffered
due to a lack of understanding about cultural behavioral styles. After long, hard bar­
gaining, a U.S. firm landed a large contract with a Japanese firm. At the signing cere­
mony, however, the Japanese executive began reading the contract intently. His
scrutiny seemed endless. The American panicked and offered to take $100 off each
item. What the U.S. executive did not know was that the Japanese president was merely
demonstrating authority, not backing out 134

Avoid Attribution Errors


An attribution error is the tendency to ascribe someone's behavior or the occurrence
of an event to the wrong cause. For example, people often attribute behaviors of others
to their underlying personality (e.g. , a smile from another person is often attributed to
a "good" disposition; similarly, a frown is presumed to be a manifestation of a grouchy
personality) .135 However, the behavior of others is more often a reflection of particular
features of the situation, rather than enduring personality traits. Negotiators who are
interculturally na'ive are more likely to fall prey to the fundamental attribution error
than are people who are interculturally sensitive, who are more likely to view behavior
as a manifestation of cultural and situational norms.

Find Out How to Show Respect in the Other Culture


One of the most important preparatory steps a negotiator can take when commencing
intercultural negotiation is to find out how to show respect in the other culture. It is a
fallacy to assume that the other culture will have the same customs as one's own cul­
ture and that ignorance of customs will be forgiven. In one simulation, parties on oppo­
site sides of the table attempted to show respect by studying the cultural style of the
other and adapting to it (see E xhibit 10-13). (For an example of a failure to show re­
spect in another culture, see Exhibit 10-14.)

Find Out How Time Is Perceived in the Other CuJtm-e


Percept.ions of time differ dramatically across cultures 136 Consider, for example, the
lengthy negotiations between the C hinese government and P hilip Morris Interna­
tional. After more than three years of negotiations, the C hinese government selected
three domestic cigarette brands, of the hundreds sold, to market abroad in partnership

l3JB rett & Okumura, " lnter- and intracuJtural negotiation."


13~Cultural differences can make or bre ak a deal. (1986 , February 10). Chicago SUI1- Times, p. 60.
13)Ross, B. H. (1987). This is like that:The use of earlier problem s and the sep<)f3tion of similarity effects.
Journal of Experimel1/al Psychology: Learning, Memory and Cognition, J3( 4) , 629-639.
136 Alon, 1. , & Brett, 1. (2007 , January). Perceptions of time and their impact on negotiation s in the Arabic­
speaking Islamic world. Negotiation Journal, 23,55-73.
CHAPTER 10 Cross-Cultural Negotiation 289

EXH lBIT lO~1 3. AnExpe,;imentihCultural Pe rspecti\'e-Taki~,g; '.


n
Two professors-Shyam Kamath and Martin Desmaras-arranged for a realistic mock negotia­
s tion between U.S. managers and Brazilians. Most of the time, executives from different cultures
are not prepared for one another, but the managers in this situation went overboard: Each party
carefully researched the other party's cultural style and decided to adapt its own bargaining style
to it. The strange result was a situation in which the Brazilians wanted to get down to business
:)
immediately and the Americans avoided negotiations while attempting to establish relationships
j
before talking about any contract details. Said one American, "What really surprised us was that
they wanted to get down to business right away. We knew better than to push them into a deci­
sion at the start, but they came in with their price offer right away." Said the Brazilians, "They
S [the Americans] seemed to want to take more time at the start. Our side acted more like Ameri­
1 cans." Kim Smith, business development manager for Hertz Corp., said, "I began to worry that if
Y their side acted like Americans and we acted like Brazilians, we wouldn't get anything done."

Source: Transnational executive education exercise shows Brazilians, Americans must negotiate past
cultural difference. (2003, June 5). Ascribe News. Reprinted by permission.

s with PM!. According to PMI Chief Executive Andre Calantzopoulos, the negotiations
) were delayed partly because of cultural differences. "By Chinese standards, urgency is
y in terms of decades, versus U.S. companies, where urgency is next quarter."l37
r Cooperative and competitive behaviors in global negotiations wax and wane across
four stages: relational positioning, identifying the problem, generating solutions, and
reaching agreement. l38 Cultural differences occur at these stages, perhaps the most
r notable being that direct cultures use more rational arguments in stages 3 and 4. Differ­
ences in how time unfolds may lead Westerners to want to talk (i.e., discuss their feelings
with the goal of repairing frayed relationships); however, the meaning of such talk may
not be shared by people from culturally different backgrounds.139 Instead of talking di­
rectly about feelings, Westerners may be advised to consider visual and aesthetic outlets.

EXHIBITIO- I..f F-ail,og;ro h w RespeclinAllolher · ultuJ~Cai1Lead ~Ou,nmCI .

In 1992, the Walt Disney Company undertook a $5 billion EuroDisney theme park project in
Paris. It began with great visions of a united workforce wearing Disney dress and adopting
American grooming. Behavioral codes banned alcohol in the park, and meetings were con­
ducted in English. The French perceived these requirements and restrictions as an unnecessary
cultural imposition. They retaliated with insults, storming out of training meetings, and initiating
lawsuits. The French press joined in by launching an anti-Disney campaign, and French railroad
workers regularly initiated strikes from the Paris-EuroDisney train for months. The annual em­
ployee turnover hit a crippling 25 percent, pushing up labor costs by 40 percent. Disney paid a
heavy price before making amends.

Source: Based on Mishra , B. & Sinha , N. (1999, November 8). Cross-cultural booby traps. Economic Times.

I31Zamiska, N. , Ye, J., & O'Connell V. (2008, January 30). Chinese cigarettes to go global. Wall Street Jour­

nal, p. B4.

138 Adair & Brett, "TIle negotiati o n dance."

1390linow, M A. , Shapiro, D . L., & Brett, J. M . (2004). Can we talk, and should we? Managing emotional

conflict in multicultural teams. Academy of Management Review, 29(4),578-592.

290 PART III Applications and Special Scenarios

Know Your Options for Change


Succeeding in international business requires that people gain international, as well
as business, competence. 140 You have done your homework, researched the counter­
party 's culture, and have a good idea of what to expect during the meeting and
which customs are important. You have also uncovered an unsettling fact: In your
client's culture, women are regarded as property and second-class citizens. They are
not supposed to be opinionated or hold jobs with decision making importance.
Imagine you are a man and your key business associate is a woman , trained at an Ivy
League university and well-versed in cultural issues and your client's strategic situ­
ation. For you both to sit at the bargaining table would be an insult to your client.
Your supervisor is pressing you to open the door to this client's company. What do
you do?
It is difficult to imagine leaving one 's colleague behind; you need her skills and,
moreover, you do not want to break up your partnership. Yet, bringing her involves an
inevitable culture clash. Further, shutting the door on this client shuts the door on the
entire country. You have thoughts about enlightening your client but wonder whether
a five-minute lesson from you can overcome centuries of discrimination sewn into the
fabric of a country.
The manager who identifies this situation early on is in a better situation to positlively
address it than is the manager who nai"vely steps off the plane with the issue unresolved.
Sometimes, options for change are driven by skill sets-or lack thereof. Most Amer­
icans are monolingual, compared to other cultures. Furthermore, members of other cul­
tures know that Americans are monolingual, and so they adapt accordingly. For example,
in interactions between North Americans and Mexicans, Mexican bilingual managers im­
mediately switched to English when interacting with North Americans; however, North
American linguistic accommodation was a rare occurrence. 141
Before reading further, think about what courses of action you might take. Berry
described four ways for two cultures to relate to each other (see Exhibit 1O-15). 142 The
first issue is whether the individual (or group) finds it valuable to maintain distinct cul­
tural identity and characteristics. The second issue is whether the individual (or group)
desires to maintain relationships with other (cultural) groups.
• Integration is a type of acculturation whereby each group maintains its own culture and
also maintains contact with the other culture. Thus, you bring your associate to the meetings
and clearly uphold your firm 's egalitarian attitudes, yet you also make it clear that you have
a strong desire to build relationships with the other group.
• Assimilation occurs when a group or person does not maintain its culture but does main­
tain contact with the other culture. You leave your associate at horne and try to follow the
mores of the other party's culture.
• Separation occurs when a group or individual maintains its culture but does not maintain
contact with the other culture. You bring your associate to the meetings and remain oblivi­
ous to the other group's culture, or you tell your supervisor you do not want this assignment.

140Matsumoto, D. (1996). Cullure and psychology. Pacific Grove, CA: Brooks-Cole.


141Lindsley, S. L. (1999, Jun e). A layered mod el of problematic intercultural communication in u.S.-owned
maquiladoras in Mexico. Communication Monographs, 66(2), 145-167.
142Berry, 1. W. (1980) . Acculturation as varieties of adaptation. In A. Padilla (Ed.) , A cculturation: Theory,
models, and som e new findings. Boulder, CO: Westview.
CHAPTER 10 Cross-Cultural Negotiation 291

EXIIIBIT 10-15 t\crlllturalio~FramewOl-k


.veil Issue 1
ter­
and Is it consi1iered to be of I.'alue
our to maint ain culturalideotity
are and characteristics?'-:-.:_':'- ­
lce. "YESJ' ~ N O"
Ivy
itu­
~nt.
Issue 2
do
Is It considered to De "YES'
md, ,.- Assimilation
ofvalUe to maintain
ian relationships '
Mariiinalization
the with ()ther group:s? "NO"
her
the
Source: Reprinted by permission of John W. Berry
rely
'ed.
ler­
:ul­ • Marginalization occurs when neither maintenance of the group's own culture nor contact
Die, with the other culture is attempted. You leave your associate at home and do not attempt to
lm­ understand the cultural values of the other firm . Marginali zation is the most unfavorable
condition,l43
'rth

~ry
!he CONCLUSION
'ul­
~ p)
Negotiating across cultures is a necessity for success in the business world because global­
ization is a major objective of most companies. Unfortunately, cross-cultural negotiations
frequently result in less effective pie expansion than do intracultural negotiations. Part of
md the problem is a lack of understanding cultural differences. We used B rett's tripartite
Ilgs model of culture and identified individualism-collectivism, egalitarianism-hierarchy, and
ave direct-indirect communication as key dimensions of cultural differences. l44 Key chal­
lenges of intercultural negotiation are expanding the pie, dividing the pie, dealing with sa­
in­
cred values and taboo trade-offs, biased punctuation of conflict, e thnocentrism, the
:he
affiliation bias, faulty perceptions of conciliation and coercion, and nai've realism. Negotia­
~ in
tors should analyze cultural differences to ide ntify differences in values that could expand
VI­ the pie, recognize different conceptions of power, avoid attribution errors, find out how to
nt. show respect in other cultures, find out how time is perceived, and assess options for
change, including integration, assimilation, separation, and marginalization.

143Berry, 1. w., Poorlinga , Y H., Segall, M H.. & D asen, P. R. (1992). Cross-cultural psychology: Research
and applications. New York: Cambridge University Press,
144Bre tl , Nego tiating globally

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