UNIVERSITY OF FINANCE - MARKETING

FACULTY OF COMMERCE
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GROUP ASSIGNMENT
Module: International Business Negotiation

NEGOTIATION IN THE UNITED STATES

Group No: 06
Semester: II FOR EXAMINERS ONLY
Grade (in number):
Academic year: 2022-2023
Lecturer: Ta Hoang Thuy Trang, MBA ………………..
Submission date: ……. Grade (in words):
Expected time: 1-hour 30min
………………..

Ho Chi Minh City, Nov 2022

 GROUP ASSIGNMENT

NEGOTIATION IN THE UNITED STATES

Group No: 06
No. Student’s full name Student ID
1 Đặng Vũ Thanh Ngân 2021009089

2 Huỳnh Nguyễn Hạnh Nguyên 2021009100

3 Lê Nguyễn Quỳnh Nhi 2021008936

4 Lê Quỳnh Như 2021008942

5 Huỳnh Châu Hiếu Thảo 2021008963

Cohort:

Ho Chi Minh City, Nov 2022

 i

STATEMENT OF AUTHORSHIP

Except where reference is made in the text of the group assignment, this assignment
contains no material published elsewhere or extracted in whole or in part from an
assignment which I have submitted or qualified for or been awarded another degree
or diploma.
No other person’s work has been used without due acknowledgements in the group
assignment.
This group assignment has not been submitted for the evaluation of any other modules
or the award of any degree or diploma in other tertiary institutions.

Ho Chi Minh City, 01 November 2022

No. Student’s full name Student ID Signature Notes

1 Đặng Vũ Thanh Ngân 2021009089

2 Huỳnh Nguyễn Hạnh 2021009100

Nguyên

3 Lê Nguyễn Quỳnh Nhi 2021008936

4 Lê Quỳnh Như 2021008942

5 Huỳnh Châu Hiếu Thảo 2021008963

 ii

EVALUATION OF SUPERVISING LECTURER

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Ho Chi Minh City, 01 November 2022

Supervising Lecturer
(Full name and signed)

Ta Hoang Thuy Trang, MBA

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TABLE OF CONTENTS
Page

STATEMENT OF AUTHORSHIP ............................................................................ i

EVALUATION OF SUPERVISING LECTURER .............................................. ii

TABLE OF CONTENTS .......................................................................................... iii

OUTLINE: ..................................................................................................................4

1. Introduction ..........................................................................................................5

2. Hofstede’s cultural dimensions affect on negotiation in U.S ...............................6

2.1. Compare the culture of America and Vietnam based on Hofstede’s culture
dimensions ...............................................................................................................6

2.2. Six Hofstede’s cultural dimensions affect on aspects of negotiation with

American ................................................................................................................11

3. High-Low Context Culture affects Negotiation with American ........................18

4. Time perspective of American affects on negotiation in U.S ............................20

5. Four Stages of Negotiation in U.S .....................................................................21

6. Case Study: Microsoft’s Acquisition of Nokia - Negotiation between Microsoft

and Nokia. .................................................................................................................24

7. Some other notes when business negotiating with American ............................30

8. Conclusion ..........................................................................................................31

9. Reference ............................................................................................................31
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OUTLINE:

1) Introduction

2) Hofstede’s cultural dimensions affect on negotiation in U.S

2.1) Compare the culture of America and Vietnam based on hofstede’s culture
dimensions

2.2) Six Hofstede’s cultural dimensions affect on aspects of negotiation with

American

3) High-Low Context Culture affects on negotiation with American

4) Time perspective of American affects on negotiation in the U.S

5) Four Stages of Negotiation in U.S

6) Case Study: Microsoft’s Acquisition of Nokia - Negotiation between Microsoft

and Nokia.

7) Some other notes when negotiating with American

8) Conclusion

9) Reference
 5

1. Introduction

The United States is the country with the largest economy in the world with a high
level of industry, industrialization, and development. Major US trading partners spread
across the world map: China, Canada, Mexico, Japan, Germany, Korea, United
Kingdom, France, India, and Taiwan. However, the US also faces difficulties in
negotiating with partners from other countries and reversely, due to differences in the
way of conducting business, language, default dress, preferences of meetings, and legal
and ethical considerations...Obviously, to lay the foundation for the commercial
partnership between the two countries, cultural negotiation is a significant key to
successfully signing thousands of contracts. (Francesco & Gold, 1998). Thus,
companies of today operate According to Czinkota and Ronkainen (1998), culture is one
of the most challenging elements of the international marketplace in an area of
globalization of business activities. This means that people from one country will often
be conducting business and/or sitting at negotiating tables with counterpartners from the
other nations and countries. Understanding and taking these cultural variables into
account in the country where business transactions are taking place is one of the most
important aspects of being successful in any international business attempt. Therefore,
it would be interesting and necessary to investigate how cultural differences affect the
business negotiations of American businessmen with partners coming from other parts
of the world in general, and with Vietnam partners in specific.
 6

2. Hofstede’s cultural dimensions affect on negotiation in U.S

2.1. Compare the culture of America and Vietnam based on Hofstede’s

culture dimensions
The examination of the United States' Hofstede cultural dimensions and the
comparison between Vietnam and the United States will be given below, using Vietnam
as a point of reference. Chart 1 summarizes the statistical results of the six Hofstede
dimensions discussed during this part.

Chart 1. Hofstede's Score between the United States and Vietnam

• Power Distance

Power Distance: The extent to which a society accepts the fact that power is
distributed unequally. In cultures with large power distance, each person has his/her
rightful place in society, where there is respect for old age, and status is important to
show power. In cultures with small power distance, powerful people try not to show
their status and power (de Mooij & Hofstede, 2002).

According to this data, the United States has a low score of 40, whereas Vietnam
has a high score of 70. Americans have built a hierarchy in the workplace, yet most
emphasize individualism in their job. Employees and supervisors are treated almost
equally. Their environment in business can be called a "Flatter organization". The words
with a positive connotation for a low Power Distance culture (and negative for high
 7

Power Distance Index culture) are "rights, complaint, negotiate fairness, necessity,
codetermination, objectives, question, and criticize." (Barkai, J., 2008)

In high PDI countries, positive words in a high-Power Distance culture are

"respect, father, master, servant, older brother, younger brother, wisdom, favor, protect,
obey, orders, and pleasing” (Barkai, J., 2008). These same words have a negative
connotation for a low Power Distance culture. Vietnamese accept a hierarchical order in
which everybody has a place, and which needs no further justification. Hierarchy in an
organization is seen as reflecting inherent inequalities, centralization is popular,
subordinates expect to be told what to do and the ideal boss is a benevolent autocrat. 1

• Collectivism vs. Individualism

The fundamental issue addressed by this dimension is the degree of

interdependence a society maintains among its members. It has to do with whether
people's self-image is defined in terms of "I" or "We".

Following the score of this statistic, the United States had one of the highest scores
on the Individualism Index—91, above the average of the globe, so it was the most
individualistic country. A high IDV score indicates weak interpersonal connection
among those who are not part of a core “family”. That means, in individualist societies
like the U.S, people are only supposed to look after themselves and their immediate
families and lose ties to groups.1 They placed high value on people's time, they needed
privacy and freedom. The American enjoy challenges, and expectation of individual
rewards for hard work.

Whereas Vietnam, with a score of 20, was a collectivistic society. Vietnam has a
very collectivist culture where long term commitment to family, community, and work
groups is high. Besides that, in collectivist societies, people belong to "groups" that take
care of them in exchange for unquestioning loyalty. People work for the group's rewards.

1 Hofstede Insights. (n.d.). Country Comparison. Hofstede Insights, from https://www.hofstede-

insights.com/country-comparison/
 8

Vietnamese people maintain harmony among group members and often offense leads to
shame and loss of face.1

• Masculinity versus Femininity

The fundamental issue here is what motivates people. A high score on this
dimension-masculinity society, implies that rivalry, accomplishment, and success will
drive society, with success defined as the "winner" or "best in the field."A low score on
the dimension-femininity society, indicates that caring for others and quality of life are
the prevailing values in society. A Feminine culture is one in which the quality of living
is regarded as a measure of achievement and standing out from the crowd is not
admirable.1

The United States has a strong masculinity score of 62, which is a typical American
behavioral characteristic. The common principles of behavior work are that individuals
should "strive to be the best they can be" and that "the winner gets all. Americans “live
to work” so that they can obtain monetary rewards and consequently attain higher status
based on how good one can be.1 As a result, Americans will prefer to show and freely
discuss their "successes" and accomplishments in life. Money and success are
significant in American culture (Adriana Teodorescu, 2013).

Vietnam receives a score of 40 on this dimension and is classified as a Feminine

society. In Feminine countries the focus is on “working in order to live”, managers strive
for consensus, people value equality, solidarity, and quality in their working lives.
Compromise and negotiation are used to resolve conflicts. Free time and flexibility are
preferred as incentives. The emphasis is on happiness. A successful manager is one who
is helpful, and decision-making is accomplished with engagement (Metcalf, L., & Bird,
A., 2004).

1
Hofstede Insights. (n.d.). Country Comparison. Hofstede Insights, from https://www.hofstede-
insights.com/country-comparison/
 9

• Long-term orientation

This dimension illustrates how every society must keep some connections to its
past while dealing with present and future concerns, and how civilizations prioritize
these two existential aims differently.

With a low score of 26, the United States ranks low in terms of long-term
orientation. This is reflected by the following: Americans are prone to analyze new
information to check whether it is true. Thus, the culture doesn’t make most Americans
pragmatic, but this should not be confused with the fact that Americans are very
practical, being reflected by the “can-do” mentality mentioned above. Businesses in the
United States assess their success in the short term, with profit and loss statements
produced quarterly. This also motivates people to seek speedy success at work. Values
and rights have also been emphasized. (Hofstede, 2001).

Vietnam scores 57 in terms of long-term orientation, making it a pragmatic culture.

Vietnam’s longer-term focus suggests a perspective that truth depends on the situation,
context, and time, and perseverance is honored. They show an ability to adapt traditions
easily to changed conditions, and a strong propensity to save and invest, thriftiness and
perseverance in achieving results. 1

• Indulgence

A tendency toward a relatively weak control over their impulses is called

"Indulgence" whereas a relatively strong control over their urges is called "Restraint".

On this, the United States ranks as an Indulgence (68) society. This, along with a
normative score, reflects the paradoxical attitudes and actions that Americans desire to
reward themselves for the hard work they perform - "work hard, play hard." Americans
aspire for a reward or benefit for their hard effort". In the US, individuals are socialized
to follow their impulses and desires, and pursuit of personal gains as well as leisure time
are acceptable. 1

1
Hofstede Insights. (n.d.). Country Comparison. Hofstede Insights, from https://www.hofstede-
insights.com/country-comparison/
 10

A low score of 35 on this dimension indicates that the culture of Vietnam is

characterized as Restrained. Societies with a low score in this dimension tend to
cynicism and pessimism. Also, in contrast to Indulgent societies, Restrained societies -
Vietnam do not put much emphasis on leisure time and control the gratification of their
desires. People with this mindset believe that their behaviors are constrained by societal
standards and that indulging themselves is bad (Hofstede, 2001).

• Uncertainty Avoidance

The extent to which the members of a culture feel threatened by ambiguous or

unknown situations and have created beliefs and institutions that try to avoid these is
reflected in the score on Uncertainty Avoidance.

The US with a low score of 46, on the Uncertainty Avoidance dimension.

Similarly, Vietnam scores 30 on this dimension and thus has a low preference for
avoiding uncertainty. According to the scores of the U.S and Vietnam, both countries
belong to low Uncertainty Avoidance cultures.

The United States ranks low in terms of uncertainty avoidance, with a score of 46.
There is a fair degree of acceptance for new ideas, innovative products, and a willingness
to try something new or different, whether it pertains to technology, business practice.
Americans tend to be more tolerant of ideas or opinions from anyone and allow freedom
of expression. At the same time, Americans do not require a lot of rules.1

Vietnam scores 30 on this dimension, even lower than the American scores. Some
characteristics of Vietnam is that Vietnamese societies maintain a more relaxed attitude
in which practice counts more than principles and deviance from the norm is more easily
tolerated. In societies exhibiting low UAI, people believe there should be no more rules
than are necessary and if they are ambiguous or do not work, they should be abandoned
or changed. Innovation is not seen as threatening.1

1
Hofstede Insights. (n.d.). Country Comparison. Hofstede Insights, from https://www.hofstede-
insights.com/country-comparison/
 11

2.2. Six Hofstede’s cultural dimensions affect on aspects of negotiation with

American
• Aspect 1: Internal decision-making process - Independent vs. consensus
(Weiss & Stripp,1998)

This aspect refers to the system that negotiators use to reach decisions within their teams.

Firstly, Hofstede Uncertainty Avoidance dimension relates to the aspect of

negotiating behavior described above. America with a low score of 46, on the
Uncertainty Avoidance dimension. America belongs to Low Uncertainty Avoidance
culture. Hofstede (2001) found that Cultures with low Uncertainty Avoidance scores
tend to demonstrate a preference for independent decision processes and individual
decision-making.

Therefore, in negotiation, American negotiators in the negotiating team may make

decisions independently in their decision-making scope without concern for the
viewpoints of others on the team.

While in Vietnam, Vietnamese negotiators respect hierarchy, they look to the

higher-level person for direction in these decisions. (Meyer,2016) If the business counter
partner attempts to work directly with lower status individuals might trigger longer time
or ineffective transactions because in the end all the important decisions are still made
or approved by authority figures of the enterprise. (Sarason & Yuthas & Nguyen, 2018)

• Aspect 2: Influence of individual aspirations - Collectivist vs. individualist

(Weiss & Stripp,1998)

This aspect refers to the emphasis negotiators place on the achievement of

individual goals and the need for individual recognition during negotiation. Hofstede's
Individualism/Collectivism dimension relates to the aspect of negotiating behavior
described above. The United States 91, it was the most individualistic country, whereas
Vietnam, with a score of 20, was a collectivistic society.
 12

According to Hofstede (2001), Employees in individualist cultures are expected to

act rationally according to their own interests. Work tasks are organized in such a way
that an employee's self-interest and an employer's interests coincide.

Therefore, in negotiation, American negotiators are motivated primarily by their

own preferences, needs, and rights and they give priority to their personal goals over the
goals of others. They are emotionally independent from the organization to which they
belong. They may strive to achieve outcomes that are in their own best interests. Besides
that, when negotiating, they are trying to change the other’s side's mind and bring them
to America's own proposal. And sometimes, they made decisions by themself very
quickly without a lot of discussion and without involving all parties to gain their
expected personal reward and recognition for their decisions. (Metcalf & & Bird, 2004).

According to Hofstede (2001), in collectivist cultures employees are expected to

act in accordance with the interests of the organization, which may or may not coincide
with their individual interests.

Therefore, Vietnamese negotiators are motivated primarily by the norms of, and
duties imposed by the collectives to which they belong and give priority to collective
goals over their own personal goals. Collectivist negotiators have a strong sense of
identity with and loyalty to their organization. Consequently, they will strive to achieve
outcomes that are in the organization's best interest and will do so with little expectation
of personal gain. (Metcalf & & Bird, 2004)

In negotiation, VietNamese negotiators consider the general interests of the

organization first, then they assume joint responsibility and receive joint recognition for
actions taken or decisions made.

For example: In Vietnamese teamword, they will work for a team result. A high point
will be given to all the members so every member in a team must try all their best to
devote their effort to the general results.

• Aspect 3: Most significant type of issue: Task vs. relationship-based

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This aspect refers to the types of issues negotiators spend more time discussing.
Hofstede Individualism/Collectivism dimension relates to the aspect of negotiating
behavior described above. The United States with a score of 91 -Individualist culture,
IDV is very high compared to Vietnam, with a score of 20 - Collectivist culture.

According to Hofstede (2001), in Individualist culture, separating the people from

the issues, which is common among negotiators with a task frame view. And "the
task...[is] supposed to prevail over any personal relationships."

When coming to negotiate, American negotiators mostly pay attention to the task.

According to Hofstede (2001), in Collectivist culture, where relationships prevail

over tasks, it is impossible to separate the people from the issues at hand.

Therefore, when coming to negotiate, Vietnamese negotiators spend most of their

time engaging in activities that build trust and friendship a good relationship must be
established before task issues can be discussed and that as the social relationship
develops, task issues will be resolved. (Metcalf & & Bird, 2004). Common things we
can see in Vietnam, negotiations can be carried out among persons who have become
quite familiar with each other.

• Aspect 4: Basis of trust: Task-based or Relationship-based

This aspect refers to the basis to build trust between negotiators. Hofstede
Individualism/Collectivism dimension relates to the aspect of negotiating behavior
described above.

The United States with a score of 91 -Individualist culture, IDV is very high
compared to Vietnam, with a score of 20 - Collectivist culture. According to Hofstede
(2001), Individualist culture placed the high value on self-reliance and independence.

Therefore, when coming to negotiation, Trust of American negotiators is built

through business-related activities and based on the practicality of the situation.
(Meyer). American negotiators trust their partners based on their partner’s
accomplishments, skills, and reliability, intelligence, and consistency.
 14

According to Hofstede (2001), Individualist culture placed the high value on

relationship. Therefore, when coming to negotiation, Vietnamese negotiators focus on
building up relationships slowly, as a result, developing trust over the long term. Trust
can be built through sharing meals, evening drinks, coffee. Trust arises from feelings of
emotional closeness, empathy, or friendship. (Meyer, 2016)

Vietnamese negotiators are quite likely to develop personal ties and affective
bonds when there is also a business or financial tie. (Meyer, 2016). For instance,
Vietnamese people often start or end negotiations with entertainment activities such as
eating, singing or even massage, gifts... to create friendliness and build trust by building
relationships.

• Aspect 5: Negotiating Goal: Short-term and Long-term relationship

(Shimutwikeni, 2011)

This aspect refers to the fact that negotiations have different purposes in different
cultures. Hofstede Long term/Short term relates to the aspect of negotiating behavior
described above.

America's negotiators favor the short-term orientation due to a low score on the
long-term component (26). During the negotiating process, Americans are primarily
concerned with short-term goals. The main goal is usually to get a signed contract, hence
building connections or assessing long-term advantages may be secondary to the present
transaction (eDiplomat, 2010, n.p.). Once an agreement is established, it is considered
final, and all terms must be followed.

The short-term focus in the US may influence prioritization of short-term

performance and quick results, so there will be a tendency to rush the pre-task stage,
which may result in mutual misunderstandings and offense, thus negatively affecting
the negotiating process. As they prefer to have done with a separate task during
negotiation, relationships with partners may be more transactional and goal oriented as
a result, work relationships are established and abandoned rapidly, this is considered
short-term relationship. (Erin Meyer).
 15

Whilst still Vietnam has a higher score than the US on this dimension (57).
Typically, favoring a long-term perspective. Vietnamese people want to spend as much
time as possible establishing and building a relationship with a potential partner before
getting into a discussion. The significance of creating and maintaining long-term
connections with stakeholders must be prioritized. These relationships, as well as the
associated social capital, are assets that may assist both groups achieve their goals.

Therefore, the primary goal of Vietnamese negotiators is to establish and build up

long-term relationships which may eventually lead to a contract, (Adriana Teodorescu,
2013).

• Aspect 6: Selection of negotiators: Abilities - Status (Weiss & Stripp, 1998)

This aspect refers to the criteria each party uses to select member of the negotiating
team. Hofstede Power Distance dimension relates to the aspect of negotiating behavior
described above.

The United States has a low score of 40 - low Power Distance country, whereas
Vietnam has a high score of 70 - high Power Distance country.

According to Hofstede (2001), low Power Distance cultures tend to minimize the
importance of inherited privilege and status. People at all levels in the organizational
hierarchy earn respect based on how effectively they perform their assigned tasks and
how adequate their knowledge is.

According to Hofstede (2001), Superiors in the organizational hierarchy are

viewed as being superior people. Respect is based on seniority and high status in the
organizational hierarchy.

Therefore, when selecting negotiators, in Vietnam, select members of the

negotiating team based on status-related factors. (Metcalf & & Bird, 2004)

• Aspect7: Concern with protocol - Formal vs. informal

 16

This aspect refers the importance that negotiators place on the existence of and
adherence to rules for acceptable self-presentation and social behavior. Hofstede Power
Distance dimension relates to the aspect of negotiating behavior described above.

The United States (low PDI) has a low score of 40, whereas Vietnam (high PDI)
has a high score of 70. According to Hofstede, The American premise of “liberty and
justice for all.” This is evidenced by an explicit emphasis on equal rights in all aspects
of American society and government.

Therefore, in America, it is often acceptable for communication to skip

organizational levels (Meyer,2016), and protocol is informal. Individuals are likely to
call people higher in the organization by their first names.

According to Hofstede (2001), in high PDI culture, there is respect for old age, and
status is important to show power. Team members must behave exactly according to the
norms of the culture and suffer severe criticism for even slight deviations from norms
when communicating with the higher level in organization.

Therefore, the protocol in Vietnam considers being formal. In negotiation,

Vietnamese negotiators communicate following hierarchical chains, use of titles, when
calling someone one, seated and spoken to in order of position. When entering a room,
the counter partner should know whose hand to shake first (the boss’s) and with whom
to exchange pleasantries before sitting down to serious business (everyone in descending
hierarchical order). (Meyer,2016)

• Aspect 9: Nature of persuasion - Factual-inductive vs. affective

This dimension refers to the type of evidence negotiators use to develop persuasive
arguments. Hofstede Uncertainty Avoidance dimension relates to the aspect of
negotiating behavior described above.

The American with a low score of 46, on the Uncertainty Avoidance dimension.
And Vietnam with a lower score than America, with a score of 30. According to
Hofstede (2001), Cultures with low Uncertainty Avoidance scores tend to favor
inductive reasoning - the development of general principles from empirical facts.
 17

Case study:

Jorge Da Silva, a Brazilian engineer with a steel company headquartered in

southern Brazil, negotiated with a new team of colleagues located in Houston, Texas to
persuade them to use a new method for monitoring safety risks that was applied in the
Brazil factory and was working beautifully and required less oversight than the status
quo. While Latin American offices were in the process of adopting the new method, the
U.S. office was resisting. They felt the method they used worked fine.

Regardless of trying to explain to U.S partners why the new process was so
important. However, Brazilian engineer - Jorge Da Silva didn’t seem to be persuading
them. So, Jorge Da Silva's team developed a very detailed presentation that explained,
slide by slide, the key concepts addressed in the new method. But the more detailed we
became, the less responsive our American teammates were.

Finally, Jorge Da Silva called one of my colleagues in the U.S., Jake Kuderlee.
Jake asked, “Have you tried showing the decision-makers in the American office an
example of what could happen if the new process is well implemented?”

Based on this discussion, the Brazilian team invited two of the American decision-
makers to their Brazilian plant to witness how the new safety process worked. The
Brazilian team took two days to show American partners around the plant, to have them
interview the workers on the assembly lines, and to review the production reports.

From that, the American team got a good look at the process in action, and they
asked a lot of questions. And when the American team got back to the U.S. They agreed
to apply a new method in the American office. (Meyer,2016)

Lesson learned from this Case study: When persuading in negotiation with
American negotiators. They like to receive practical examples up front; they will extract
learning from these examples. To persuade them successfully, support persuasive
arguments includes such things as scientific evidence, professional standards, expert
opinion, costs, market value, and other hard data. (Metcalf & & Bird, 2004).
 18

3. High-Low Context Culture affects Negotiation with American

The United States, a country with a mere few hundred years of shared history, has
been shaped by enormous inflows of immigrants from various countries around the
world, all with different histories leading to shortest shared history, different languages,
different backgrounds, and cultural diversity. This helps to explain why the United
States is the lowest-context culture country. (Meyer, 2016)

A low-context (LC) culture is one in which people are highly individualized,

somewhat alienated, and fragmented, and there is relatively little involvement with
others (Hall, 1976, p. 39). Therefore, social hierarchy, as well as society in general,
imposes less on individuals’ lives, and communication between people is more explicit
and nonpersonal. (Kim & Pan et al.,1998)

How Low Context Culture affects Aspect of Negotiation with American

• Communication:

Hypothetical situation between American and high context culture partner

Dialogue between Denise Austin Guillon, an American consultant living in Paris and
Mr Chen, the employees from China.

MR. Guillon: It looks like some of us are going to have to be here on Sunday to host
the client visit.

MR. CHEN: I see.

MR. Guillon: Can you join us on Sunday?

MR. CHEN: Yes, I think so.

MR. Guillon: That would be a great help.

MR. CHEN: Yes, Sunday is an important day.

MR. Guillon: In what way?

 19

MR. CHEN: It’s my daughter’s birthday.

MR. Guillon: How nice. I hope you all enjoy it.

MR. CHEN: Thank you. I appreciate your understanding. (Meyer E., 2014)

Think back to the dialogue between Mr. Chen and Mr. Guillon above. In this
dialogue, Mr. Chen says “yes,” but he simultaneously indicates that the real answer is
“no.”

First, in this dialogue, Guillon was quite certain Mr Chen had said he was coming
and made sure that Mr Chen could come. But Mr. Chen was quite certain that he had
communicated that he absolutely could not come because he was going to be celebrating
his daughter’s birthday with his family.

In this situation, Mr Chen was from China, and belongs to high context culture. In
high context culture uses communication that focuses on underlying context, meaning,
tone in message, not just the words themselves. (Lintzén & Svedjeholm, 2006). Based
on this case, Chinese vaguely express an idea or an opinion, the real message is often
just implied. They expect their conversational partner to be highly involved and to take
an active role in deciphering messages, as well. (Meyer, 2014) The answer is “It’s my
daughter’s birthday.” implied that he could not come to this meeting. But the American
can’t thoroughly understand because Mr Guillon was from America and belongs to low
context culture. In low-context culture expect communications to be explicitly stated so
that there is no risk of confusion.

The lesson learned from this case is when we come to business negotiation with
partners from low context culture in general, and in America in specific, we need to start
the conversation by stating the main idea, make your points clearly, and at the end of
the discussion recap what has been decided and what will happen next. If you’re not
sure whether your ideas have been absorbed, then feel free to ask, “Am I clear enough?”
Follow up with an e-mail clarifying anything that might still be a bit vague and stating
the main conclusions in writing. (Meyer, 2014)

• Commitment
 20

With high context culture negotiators, A person’s word is his or her bond and a
promise for others to take, and they are expected to do as they say. a person’s word is
his or her bond and the details need not be spelled out to make him or her behave as
promised (Kim & Pan & Park,1998). But in America belonging to low context culture,
the more people tend to put everything in writing, which is a mark of professionalism
and transparency.

• Confrontation

Compared to Vietnamese negotiators, American negotiators are less likely to avoid

direct and open confrontation at the expense of expressing and defending self, and
criticism is more direct and recorded formally. So, in negotiation, they are likely to be
completely honest in delivering their negative evaluations.

4. Time perspective of American affects on negotiation in U.S

Time is so valued in America which has enabled Americans to be extremely

productive, and productivity itself is highly valued in the United States. A well-known
American proverb sounds like “Time is money”. The issue of saving time is very
important to Americans, chatting in vain means wasting time, and therefore money.
(Kohls,1984)

Therefore, Orientation toward time in America is Monochronic. (Lintzén & Svedjeholm,

2006).

How time perspective of American affects on negotiation in U.S

● Punctuality when coming to negotiation

Negotiators with a monochronic orientation - American negotiators believe that

time is money. So American negotiators are concerned with being on time and expect
their counterparts to be as well. For Americans, being on time shows their
professionalism and respect for their partners. Delays can be mitigated when not so
much, and you should notify your partner of the delay, with the reason, if possible.
(Lintzén & Svedjeholm, 2006).
 21

● Scheduling in negotiation

American negotitators set agendas for meetings and adhere to preset schedules.
They schedule negotiations in ways that create psychological pressure in having to
arrive at a decision by a certain date (Hall & Hall, 1990). They believe that outstanding
or contentious issues in a negotiation should be resolved effectively within an allotted
time frame. (Lintzén & Svedjeholm, 2006.) The focus is on the deadline and sticking to
the schedule. So, American negotiators’ counter partners should consider not
“hijacking” the meeting by bringing up some topic not found on the agenda.

And they also dislike interruptions or digressions during scheduled negotiation

meetings.

5. Four Stages of Negotiation in U.S

Negotiation is a dynamic, complex skill and one that is difficult to master. During
a successful negotiation both parties whilst inherently in conflict with each other must
reach a mutually beneficial agreement and be broadly satisfied with the outcome (Win-
Win). Both sides should feel that a fair conclusion was reached, the agreement will be
delivered as negotiated and importantly want to work with each other again. To gain
such a goal, negotiators must consider an appropriate negotiation process for a specific
scenario.

The process of international business negotiation is divided into different stages.

A stage of the process refers to a specific part of the process and includes all actions and
communications by any party pertaining to negotiations made during that part. Parties
communicate with each other to exchange information within each stage. A particular
stage ends where parties decide to proceed further on to the next stage or decide to
abandon the communication if they see no point in further negotiations.

For the United States, the process of international business negotiation is divided
into four stages:

❖ The first stage, non-task sounding, includes all those activities which might be
described as establishing a rapport or getting to know one another, but it does not
 22

include information related to the “business” of the meeting (Graham & Sano,
2003).
❖ The information exchanged in the second stage of business negotiations regards
the parties’ needs and preferences, or, stated more precisely, the parties’
subjective expected utilities of the various alternatives open to the interactants
(Graham & Sano, 2003).
❖ The third stage, persuasion, involves the parties’ attempts to modify one
another’s subjective expected utilities using various persuasive tactics (Graham
& Sano, 2003).
❖ The final stage of business negotiations involves the consummation of an
agreement which often is the summation of a series of concessions or smaller
agreements (Graham & Sano, 2003).

Non-task Task-related Concessions

exchange of Persuasion and
sounding
information agreement

• Non-task sounding

When coming to negotiate, American negotiators mostly pay attention to the task.
Americans spend relatively shorter periods on this non tasking sound stage, usually, the
discussion is moved to the specific business at hand after 5 to 10 minutes. (Graham &
Sano, 2003).

• Task-related exchange of information

Only when the non-task sounding is complete, should business be introduced

(Graham & Sano, 2003).

❖ Giving information

They prefer to use English in negotiation.

 23

Once comfortable with the language, attention can be turned to more subtle aspects
of giving information.

Because America had little shared context (low-context culture), Americans

learned quickly that if they wanted to pass a message, they had to make it as explicit and
clear as possible, with little room for ambiguity and misunderstanding.

And when bargaining or discussing price, Americans also tend to make initial
offers they consider “fair” or near what they expect the eventual agreement to be
(Graham & Sano, 2003).

❖ Getting information

The US is one of the countries which has a low-context culture. Negotiators in low
context culture are less likely to notice and understand non-verbal cues. The American
negotiator is direct, straightforward and to the point, using language that is precise, open,
and frank. They value information that is straightforward and to the point.
(Trompenaars, 1994).

• Persuasion

From the American perspective, persuasion is the heart of a negotiation. Once it is

determined what each side wants, then “the fun” begins - trying to change the other
side’s mind and bring them closer to one’s own side’s proposal. Besides that, bargaining
in America between buyers and sellers is like an interaction between brothers along with
opening informal channels of communication in the U.S. If an impasse is reached with
American counter partners, rather than persuade them in usual American manner,
American negotiators will openly disagree and use aggressive persuasive tactics below:

AGGRESSIVE INFLUENCE TACTICS

Threat. Same as promise, except that the reinforcing consequences are thought to
be noxious, unpleasant, or punishing. “If you insist on those terms, we will have to
find another suitor for our company.”
 24

Warning. Same as recommendation, except that the consequences are thought to be

noxious. unpleasant, or punishing. “If we can’t get together at this stage, few other
companies will be interested in your proposal.”

Punishment. Same as reward, except that the consequences are thought to be

unpleasant. “You can’t possibly mean that. Only a fool would ask for such a high
price.”

Negative normative appeal. Same as positive normative appeal, except that the
target’s behavior is in violation of social norms. “No one else we deal with requires
that kind of guarantee.”

Command. A statement in which the source suggests that the target performs a
certain behavior. “It’s your turn to make a counteroffer

(Anglemar & Stern, 1978)

• Concessions and agreement

So, in stages 4 making concessions and agreements. Frequently, impatient

Americans make unnecessary concessions right before final agreements. Americans
tend to make concessions throughout, settling one issue, then proceeding to the next.

6. Case Study: Microsoft’s Acquisition of Nokia - Negotiation between

Microsoft and Nokia.

Introducing the process of negotiation between Microsoft - American company and

Nokia - Finland company

• On 11 February 2011:

Nokia announced a “broad strategic partnership” with Microsoft. Partnership to

arise between Microsoft and Nokia. Microsoft’s dominance in software and Nokia’s in
hardware. At this time, Nokia began installing Microsoft’s Windows Phone operating
 25

system (OS) on its smartphones. Microsoft and Nokia were each duplicating their
efforts—investing marketing money to build separate brands and lure app developers,
but they were both solidly way behind—the Windows Phone was a second-tier product
behind Google’s Android and Apple’s iOS. Nokia’s stock price and revenue had
declined alarmingly. Nokia was lagging far behind smartphone manufacturers Samsung
and Apple in terms of innovation and market share, and the Windows Phone OS, used
primarily on Nokia handsets, was failing to meet expectations as well.

• In January 2013:

Microsoft CEO Steven Ballmer who was frustrated with the slow pace of growth
for the device made a quick phone call to Risto Siilasmaa, the chairman of Nokia’s board
of directors, to raise the possibility of Microsoft buying divisions of Nokia.

A $7.2 billion merger between Microsoft and Nokia began with a phone call and
three simple words, “Can we talk?”, and it set in motion eight months of complex
negotiations.

After the phone call, executives (Ballmer and Siilasmaa) from both companies first
met for an hour in Barcelona to discuss their ideas, brainstorming solutions ranging from
minor tweaks to their current deal to more extensive collaborations and business
mergers.

A month later, on 22 April 2013, in New York at the offices of Nokia’s outside
law firm. Nokia was represented by Siilasmaa, CEO Stephen Elop — who was a former
top executive at Microsoft — as well as the company’s top in-house lawyer Louise
Pentland and Chief Financial Officer Timo Ihamuotila. (Mossberg, 2013)

For Microsoft, the key players were CEO Steve Ballmer, Windows Phone unit
head Terry Myerson, then-CFO Peter Klein (and later CFO Amy Hood) and longtime
general counsel Brad Smith.

For the April 22 meeting, though, Smith was late, because that day he was in
Washington, D.C., testifying before Congress about immigration reform. Smith had
 26

hoped to be there close to the start of discussions, but he couldn’t. Ballmer was calling
and Pentland, his counterpart at Nokia, was sending a series of text messages.

By the time he arrived at the meeting, things were already heading toward an
impasse. Microsoft had made its pitch — essentially discussing a potential bid — and
Nokia was preparing a response. Smith had about 30 seconds to huddle with Ballmer,
Myerson, and Klein before the two sides reconvened.

When they did, Siilasmaa spent about 10 minutes calmly and politely stating that
the two sides were on different planets when it came to valuation. Ballmer replied that
it was good to know where they stood. After that, both sides decided there was no point
in meeting in the future

In this early meeting between Microsoft and Nokia, the deal fell apart due to
Siilasmaa’s frustration over the low perceived value of Nokia by Microsoft executives
while other key issues, such as which company would own Here, Nokia’s mapping
weren't considered.

While things seemed at a total impasse, Smith suggested his colleagues give things
a day and check back. The next day, on April 23, Siilasmaa broke the silence the next
day, sending a text message to Ballmer to reopen talks

• On May 24:

A meeting between the two teams in the London office of Microsoft’s law firm
also flopped. An unexpected event happened; a scream was heard during a break. Deep
in thought, CEO Ballmer had failed to see a clear glass coffee table in front of him,
tripped, and hit his head. As the security team patched up Ballmer’s forehead, he began
to talk to the Nokia executives.

Aiming to see if they could resolve the impasse, Smith and Ballmer flew to
Finland, landing in the afternoon of Friday, June 14. For a couple hours, the Microsoft
team met with Siilasmaa and Elop, talking through some of the challenges. The meeting
didn’t lead to a solution, but the sides agreed to keep working.
 27

Nokia and Microsoft agreed to meet on July 20, back in New York. Ballmer grew
frustrated that he was unable to simplify things enough to come up with a solution for
mapping technology questions. Nokia executives believed strongly that they needed to
hold on to Here and their ability to sell the software to other companies. Nokia wanted
to provide mapping technology to a broad range of partners, including rival mobile
phones, cars, and other emerging devices. Meanwhile, Microsoft felt it couldn’t keep
pace with competitors without controlling the mapping technology it was using in its
phones, tablets, and PCs and on the web

As the group talked, they decided that Nokia could retain the intellectual property,
while Microsoft got what are known as “rights equivalent to ownership.” That meant
essentially the ability to not only use Nokia’s map data, but to do whatever it needed to
with the code.

By the end of the New York meeting, Ballmer and Siilasmaa shook hands, though
at that point, they had only agreed to some principles in a PowerPoint, which
subsequently led to legal pacts covering patents, trademarks, the selling of Nokia’s
handset business, and platform mapping.

• Over the following week:

Legal and business teams worked to turn the PowerPoint into a term sheet. The
two sides started their due diligence and began work on a definitive agreement with an
eye toward having that ready by September 3. (Mossberg, 2013)

To reach that goal, teams at both companies met daily, deciding which issues
needed to be elevated to a group that included Hood, Smith, Pentland and Ihamuotila.
What resulted wasn’t a single agreement, but a series of contracts with pacts covering
patents, trademarks, the selling of the handset business and the hard-fought agreement
in mapping. (Mossberg, 2013)

Finally, On September 2013, Microsoft announced that it would acquire Nokia’s

mobile phone division for $7.2 billion. That fall, Ballmer flew to Finland to finalize one
of the largest mergers of all time. (Stoll, 2013)
 28

Some detailed points we need to focus on during the negotiation to recognize how
cultures affect negotiation of American negotiators through the case of Microsoft and
Nokia.

• On 22 April 2013, the key players were CEO Steve Ballmer, Terry Myerson,
CFO Peter Klein (and later CFO Amy Hood) and Brad Smith (longtime general
counsel). But Smith was late. Although he is longtime general counsel, Microsoft
had made its pitch without his counsel in this meeting and Smith had about only
30 seconds to huddle with Ballmer, Myerson, and Klein before the two sides
reconvened when Smith had arrived.

Explanation: Because

+ According to Americans, “Time is money”, being on time shows their professionalism

and respect for their partners (Kohls,1984)

+ And according to Hofstede (2001), America belongs to a low uncertainty avoidance

culture country (46), so American negotiators in this case are key negotiators of
Microsoft who may or may not consult with others in the group.

 In this situation, instead of waiting for Smith to establish consensus when making
a pitch, Microsoft didn’t take a long time to wait and made its pitch early.

On other aspects, on 22 April 2013, in New York at the offices of Nokia’s outside
law firm, the thing leads to the results that both sides decided there was no point in
meeting in the future.

In its initial presentation, Microsoft lost Nokia’s interest by making a price offer
that the Finnish firm considered far too low. The American negotiators (Microsoft
negotiating team) in this case, discussed price so early, particularly since there were lots
of pieces of Nokia’s business that Microsoft might not have fully understood. This is
considered a mistake by Microsoft.

Explaination: One of the cultural dimensions affecting this negotiation behavior of

Microsoft in this case is that according to Hofstede, America belongs to the Masculinity
country (62), so they focus on competition, achievement, and success, financial goals.
 29

As a result, Microsoft in this case went straight to the main part of the negotiation about
price.

 Lesson learned: Don’t jump into discussing price too early. Microsoft may have
erred by raising the issue of price before it understood key aspects of Nokia’s
business and its interests in a potential sale. So, it often makes sense to hold off
on making concrete price offers until later in a negotiation, after you have
engaged in thorough fact-finding. 1

❖ By the end of the New York meeting on July 20, Ballmer and Siilasmaa shook
hands, though at that point, they had only agreed to some principles in a
PowerPoint. Over the following week, legal and business teams worked to turn
the PowerPoint into a term sheet. The two sides started their due diligence and
began work on a definitive agreement with an eye toward having that ready by
September 3. (Mossberg, 2013)

To reach that goal, teams at both companies met daily, deciding which issues
needed to be elevated to a group that included Hood, Smith, Pentland and Ihamuotila.
What resulted wasn’t a single agreement, but a series of contracts with pacts covering
patents, trademarks, the selling of the handset business and the hard-fought agreement
in mapping. (Mossberg, 2013)

Explanation of the post-negotiation behavior of Microsoft in this above situation.

Because America also Finland belongs to low context culture - means there is relatively
little involvement people have with each other, putting everything in writing, which is a
mark of professionalism, transparency, and shows the high commitment between 2
parties is preferred. According to that, Microsoft, and Nokia in this case, after reaching
agreement, they spent much time (met daily) to make a series of contracts precisely,
detailedly, and extensively in writing with pacts covering patents, trademarks, the

1
Pon Staff (2020), For Business Negotiators, Patience Can be a Virtue,
https://www.pon.harvard.edu/daily/batna/for-business-negotiators-patience-can-be-a-virtue-nb/
 30

selling of the handset business and the hard-fought agreement in mapping. (Lintzén &
Svedjeholm, 2006).

7. Some other notes when business negotiating with American

• Punctuality

A well-known American proverb sounds like “Time is money”. The issue of saving
time is very important to Americans, chatting in vain means wasting time, and therefore
money.

• Meeting and Greeting

Americans shake their hands when first introduced to a new person.

- The handshake is the common greeting.

- Handshakes are firm, brief, and confident.

Americans maintain eye contact during the greeting and meeting.

• Business cards

Business cards are exchanged without formal ritual. They may not initiate the
exchange of business cards, they offer their cards at the end of the meeting (Lintzén, &
Svedjeholm, 2006)

• Eye contact

Americans maintain eye contact during negotiation, American custom demands

that there should be eye contact. (Zhou & Zhang, 2008).

• Space

The social distance that Americans used to carry out most business activities such
as meetings of members and transactions is around 1m to 2m. (Lintzén, & Svedjeholm,
2006)

• Gift-giving
 31

A business gift giving in the USA is a nice gesture, however not obligatory. Gift
giving is much stricter than it used to be.

8. Conclusion

Each country has its own culture, and it is the uniqueness of each country's culture
that affects business negotiations. The aim of this study is to gain a better understanding
of how the culture affects business negotiations of American businessmen. This work
has provided an understanding of the culture of Americans. Especially how the culture
affects business negotiation between Americans with their partners. This report has
clarified the main content including how six Hofstede’s cultural dimensions, low context
culture and time perspective affects on aspects of negotiation with Americans. When we
understand the factors which affect negotiation in the United States, we consider the
process of business negotiation in the U.S. This process includes four stages: non-task
sounding, Task-related exchange of information, persuasion and Concessions and
agreement. Each stage will show you about aspects of American negotiation. Each stage
will show you about aspects of American negotiation. This report also has some case
studies, from which we can know how cultures affect business negotiation with
Americans practically, also along with there are some lessons learned and some notes
that need to be focused to successfully negotiate with Americans.

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