Understanding Cross Cultural Management Browaeys and Price Chapter 15

Having given some attention to theories concerning cross-cultural communication, the following two chapters will examine two particular aspects of intercultural communication - negotiating and team·work. This chapter �amines one crucial component of international business dealings - negotiating.

ature of ne9otiatin9 from a Western perspective 1s consle!en:!tl d.nd compared

First, the n

with a non-western viewpoint. Thereafter, facets of cross-cultural business negotiation are described and applied to an examination of possible problems in the interaction between two negotiating parties, one from the on to examine

a

us. the other from China. The chapter then moves

framework that can be used to address t1'e Jssut' of strategy od.:>ptation

wllen negotiating with counterparts from other Ctlltures. Finally, the question of an inter· national negotiating (meta·) culture is briefly discussed.

Leaniing outcomes After reading this chapter you will: (. Understand how the perception of negotiating can differ from culture to culture. ,tfc-.. c... �? ri�he US, the deal is seen

as the objective of any negotiation while for the Chinese

a

negotiation is just part of the process of forming a life-long relationship. A focused, bottom­

line approach is at odds with the Chinese need to establish a good rapport before talking of a deal. However, Americans might feel that the wish by their Chinese counterparts to

� �ijsh frien4s}).ip is one way of getting a better deal later on in the negotiation{s). l:;oQtV(. Mf() Power orientation

It is usually dear where the power lies in a US negotiating team. The deference shown by

subordinates and experts towards the boss reflects the hierarchy within the team, even if

the language used between them is informal. The boss will probably have been delegated

considerable leeway in the negotiating process, although this will have been carefully dis­

cussed with headquarters beforehand. Risk-taking is part of the game and seen as inherent

t o getting thc- best deal possible.

The US team may find it difficult to determine who is leading the negotiation on the

Chinese side, particularly if there are a large number of people in the delegation. For the

Chinese, the consensus-building process is undergone not only between the negotiating teams but also within the Chinese team where a number of interested parties both from

within the company as well as outside the company (essentially government bureaucrats)

are involved. Pressure from the US side to get a deal will be stonewalled until all interested Chinese parties are satisfied. This dependence on consensus within the negotiating team

means that any risk-taking behaviour within or before negotiations needs to be cart·fully orchestrated.

Underlylng concept of negotiation

Negotiation strategies There are two main approaches used in the US towards negotiations: the wuipetitiV'I'!

('win-lose') approach and integrative ('wiil-win') approach. The former approach involves

taking up an initial position and then making concessions if necessary to reach a com­

promise agreement. The latter approach involves both 'sides' focusing on mutual interests rather than pre-determined positions, achieving joint profits using an objective standard.

Both approaches, however, should lead to a definitive contract to which both sides are expected to adhere.

Concept 15.l Approaches to negotiating in an international context

The Chinese will probably find it difficult to take such a linear approach. For them, a negotiation is just orte...of many encounters whereby the principle is to build a business partnership for the long term. Establishing a relationship entails getting to know your partner well. Hence a lot of questions will be asked to do with the interests and personalities of the other team rather than dealing directly with the details of any deal or joint project.

Detailed terms of any agreement need this strong consensual basis. However, observers, including Faure (1998), note that there is also another side to their strategic behaviour, namely a persistem:y whereby the negotiator does all he can to exploit his opponent to

the maximum. The style is what Faure sees as a combination of 'joint quest' and 'mobile warfare' which the Chinese negotiator uses to try and outflank their opponent (a reference to the tactics of Sun Tsu, the notorious ancient Chinese warrior). In US terms this oould be seen as a combination of affiliative, integrative behaviour (the affective dimension) and

competitive, forcing behaviour (the cognitive dimension}.

Strategic i'ime-freme For the Chinese, therefore, a negotiation is not a one-off event but a step along the path to a harmonious and mutually beneficial relationship in the long term. A deal made at the

end of a negotiation rr.mains in their eyes negotiable in the long-term since both parties

could benefit more from an improvement of some kind in an :igrce1\1t!llt made. Moreover. all agreements are hased on trwst and goodwill, so a firm contract is superfluous, This attitude i;an be frustrating for Americans since for them tiu�e 11> of the cssenl:�.

Negotiating process Style of negotiation US negotiators will be concerned with specifics, eager to get a lot of information to enable them to pursue their way of negotiating. Only when they have sufficient input can they gain a clearer idea of the other party's concerns and interests and so establish or modify their negotiating goals. They, in tum, are willing to give a lot of information as Jong as this is part of an exchange. The Chinese reluctance to give information is noted in the literature on this area as well as the resulting frustration amongst Western negotiators. However, as Kumar and Worm (2003) discovered during research on business negotiations with the Chinese, the majority of their Western respondents noted that their Chinese negotiating partners were willing to disclose information - provided they had it! As another respondent remarked: 'Chines·e firms are not accustomed to collect(ing) information' (Kumar and Worm, 2003). This raises two interesting issues in relation to the negotiating process. First, the importance of face to the Chinese: asking for information they do not have could be seen as an unintentional way of causing the Chinese to lose face. Second, times are changing in China: a freer exchange of information is now being applied in negotiations, presum�

ably because a more systematic collection of information li.as been i!evelopcd in Chinese companies.

}fa\'i.ng said that, however, co-operation ·with the Chinese still h as trust

a.s

its bedrock.

However successful information exchange may be, the process of gaming trust and con­ fidence remains, for the Chinese, of greater import than facts and figures.

A word of reservation is appropriate here. On the basis of a finding made by Kumar and Worm (2003) in their survey, younger managers who are involved in negotiations are more in tune with Western behavioural norms. One implication of this (although it is not tested in this study) is that Western managers may be able to conduct their negotiations more effectively/efficiently when dealing with Chinese who are younger. Perhaps younger Chinese are also more comfortable with a lower position on the high/low context dimension referred to earlier. Although the explicit, direct, fact-oriented, cause-effect nature of discussions as favoured by the Americans contrasts strongly with the generally consensus-focused, relationship-developing nature of the Chinese, some younger Chinese may be more comfortable than their older colleagues when negotiating with Americans. Outcome orientations For the ,Y.§_negotiators a detailed contract is the ide--:i

Much of the literature on neg,uliating internationally tends to focus on the rituals of negotiating in other countries and, particularly in the case of non-Western countries, gives a convenient outline of the systems of values lhey embrace. Little attention appears to be given to the question of the extent to which a negotiator should adapt to the cultural values of the other purty. Are international aegutialurs expected to adapt totally? ls the maxim 'When in Rome, do as the Romans do' appropriMe? Th� simplistk nature of this approach raises issues. First, it does uol take account of the dominant rule of one or the other partner: the Rome i.fq'uestion may well yield culturally to its counterpart. Second, is it ever possible to 'do as' the Romans? However much we try �

to behave as the other party does during negotiations, will they ever really consider us to be a member of their culture? Try as people may, behaving as the Romans will not make them Roman. Finally, there is a questionable assumption underlying this maxim - that a 'Roman' will al::Y?act as a Roman with a non-Roman in Rome! This last point is one of a number put forward by Weiss (1994a) when examining cultural aspects of negotiating. He sees that international negotiators in today's global business cannot resort to a 'one-size-fits-all' approach when confronted with a variety of

Concept 15.l Appr o aches to negotiatinQ In an International context

situations and individuals. Weiss advocates instead approaches that reflect the skills of the

individuals involved. He proposes stra tegie s that, while being culturally responsive, reflect the negotiators' own skills and the circumstances in which they are working.

In any communicative situation between two parties, one aim is to make sense of the interaction. In negotiations this means that the least both parties must be able to do is: o recognize each other's ideas and the types of behaviour that form an international part

of the negotiating process; � interpret these in such a way that they can detect common and differing standpoints as

well as changes made to these during the negotiating process: e ensure that communication is maintained as the negotiation proceeds.

However, as indicated earlier, the knowledge and skills required to perform these crucial acts is

often limited. What is needed, Weiss says, is a strategic framework allowing the

parties to make sense of the negotiating process as best they can, using their own attributes and, where necessary, the skills of others.

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Rice and nemawashi Bieker (2002) pre s e nts a case study which hlQh·

when It was clear that the question of rice

lights American and Japanese behaviour when

imports was more a multilateral Issue, that

both countries needed seven yPars to come to

r�rusal to make some sort of deal in this area could have a serious effect on Japan s trading

en agreem!nt on i m p orting US rice Into Japan.

'

Rice was, and stlll is, a highly sensitive Issue since

activities generally. A r.onsensus had to be created within the country that discussions with

the Japanese consider It to b(! an fndispenslble

part of their culture. a pr oduct embedded In

the US cou l d actually go ahead. This consensus·

the country's development. The US demand made In 1986 for access to t he Japanese rice· market was considered In essence as an attack

on Jaµanese culture.

bulldinQ process. called nemawashi, involved not • ·

only polltlclans. but also the whole bureaucratic m;ichlne as wc:ll as prl vatt" groups of lndlviduals who wielded considerable power In business and

Blaker (2002} describes in considerable detall

society. At every negotiating step the interested

the US set the negotiat·

gatlons and personal envoys went to the US to

lnq agenda, and that the Japanese essentially

explore possible agreements. Towards the end, a

the l ong . tortuous path towards a settlement. . He considered that

domestic parties were consulted, and even dele·

reacted de fe nsiv e ly throughout the whole

Japanese qroup of people not offlcially Involved

process. starting from an initial refusal to even

in the negotiations pail.1 a visit to the US Rice

discuss the issue. The Japanese became very

active outside the negotiatin_g arena, however,

Millers Association to see whether the final compromise plan was likely to �ucceed.

The Weiss strategic framework The framework Weiss drew up is given in Figu re 15.1. lt shows in a n organized form the culturally r esp onsive strategies that can be adopted according to the level of familiarity that

each negotiator has with the other's culture. The strategies in bracke ts reflect a co-ordinated approach between the parties involved .

323

High J:.

Induce counterpart to follow one's own script

Counterpart's familiarity with negotiator's culture

(Effect symphony}

Adapt to the counterpart's script

{Co-ordinate adjustment of both parties)

Employ agent or advisor

Low

Improvise an approach

\" L

Embrace the counterpart's

(Involve mediator)

script ;

- ������

-a---

Low

-·-----------------

Nego tiator 's familiarity with counterpart's culture

High

Figure 15.l St ra t egi c framework for negotiating Source: Weiss (1994a): $4.

Before briefly examining the strategies, note that: c:, 'Familiarity' is the term Weiss uses to denote not only one party's knowledge of the other

party's culture, but also the ability to apply this knowledge effectively to the interaction.

High familiarity entai ls fluency in the predominant language, extensive exp osure to the culture concerned and previous successful social inter actions with those from the

culture in question.

di 'Script' is the term that Weiss uses to denote a standardized sequence of behaviour

expected by lh� tJeLSOl1 C011Cerned.

According to Weiss (1994a), negotiators may consider using not only the strategit::1 appro­

p riate for their degree of familiari t y, but also any strategies that correspond to lower degrees ot tamiliarity.

The strategies proposed by the framework are: c

If a neg otiator

has low familiarity

with the counterpart's culture, a third-party of some

kind can be introduced t o help out. This can be an age nt who takes over the negotiating

role (thus creating other possible problems, especially with regard to accountability and

trust), or an adviser to help in pr eparations and during the process. Th e negotiator may also explicitly persuade the counterpart to adapt his approach, pleading ignorance with

the other's culture and language, but every respect for them. The result ma y be further hin drance to agreement if the counterpart regards this as arrogant behaviour which

1C$ults in a disadva ntagc ou� �itu.-.tinn.