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How International Cultural Differences Can Affect Negotiations

By Bisk
How International Cultural Differences Can Affect Negotiations

In a lecture on negotiation, Michigan State University’s Eli Broad College of Business professor Donald Conlon, Ph.D. explores how diverse the world population is: out of every 100 people in the world, only about seven are from North America, while 55 are Asian, 21 are European, nine are African and eight are South American. Since we North Americans represent such a small portion of the world’s population, "it really behooves us to understand how people in other cultures negotiate," said Dr. Conlon.

Cultural norms, such as physical touching, an aversion to touching, periods of silence during meetings or a casual approach to time can be unfamiliar or disquieting to people from different cultures.

Four Dimensions of Culture to Consider in International Negotiations

According to Dr. Conlon, there are four dimensions of culture as described in Hofstede's Model of International Culture. Geert Hofstede developed this model while working for IBM with its hundreds of thousands of employees throughout the world. Taking these dimensions into consideration during international negotiations can help you be more successful.

1. Power Distance

In some countries, the levels of power are distinct and understood internally but may not be apparent to outsiders. For example, in Russia, power tends to be concentrated at the top. Executives or government officials may negotiate an agreement, only to have it re-negotiated by higher-level officials.

2. Individualism/Collectivism

People in a culture may think of themselves in terms of the individual or as members of a connected group, or collective. In the United States, people score highly in individualism while Pacific Rim countries, such as China and Japan, tend to be more collectivist. This thought process influences the way societies are organized and decisions are made.

3. Masculinity/Femininity

The third element refers to the extent to which societies endorse what are considered traditional or stereotypical masculine and feminine characteristics. For example, aggressiveness and competition are often considered “male” characteristics, while a focus on relationships and cooperation are traditional “female” characteristics. Many Scandinavian countries score higher on quality of life in relationships while other cultures, such as the United States and Mexico, score higher on competition.

4. Uncertainty Avoidance

Uncertainty avoidance refers to the extent to which someone is comfortable with unstructured or uncertain situations. Some cultures are uncomfortable with ambiguity; in negotiations, businesspeople would seek rules and regulations to guide them. Other cultures are low in uncertainty avoidance, and more relaxed about negotiations. Americans tend to be comfortable with uncertainty.

These elements describe cultural values in a general way and certainly not all people in a given culture will adhere to each and every aspect. These can, however, be broad descriptions of how different cultures approach negotiations.

How Can These Elements Impact Negotiations?

According to Dr. Conlon, these cultural subtleties can impact a number of phases of negotiation. For example, people from cultures with high uncertainty avoidance are likely to be very thorough in planning. While Americans tend to be okay with ambiguity, and expect a surprise or two, other cultures would not be comfortable with surprises. People who are high in uncertainty avoidance will also rely more on rules to guide them.

As for the importance of relationships in negotiations, the masculine/feminine characteristic of a culture comes into play. People from more feminine cultures will care more about relationships, and may also tend to be more collectivist in their thinking. Negotiators from more masculine countries are probably more likely to use a distributive bargaining – a more competitive approach to negotiation. You’re more likely to see the use of power with negotiators from a masculine culture; they may also rely on rules rather than bending them in search of a cooperative settlement.

Negotiations with people from collectivist countries are more frequently going to occur with groups, rather than between individuals. That’s why expecting to conduct one-on-one negotiations with someone from Japan or China might not be realistic. You can also expect a longer time to consensus, as the speed of negotiation will be slower in a collectivist culture.

Your negotiations may also be under the influence of a high power distance; while you may prefer to deal directly with the decision maker, you may find that your negotiating party is just the beginning of a chain of people you will need to deal with. In a low power distance country, the negotiator typically has authority to make agreements; in a high power distance culture, the agreement will ultimately need to be ratified by someone higher up.

SPM, Another Look at Cultures

Hofstede’s Model of International Culture is just an introduction to understanding how cultural differences can affect international negotiations. You’ll be more successful if you go into these negotiations with an open mind and the desire to learn more about cultural differences.

Assessing your own style and personality also is an essential step in deciding how to make adjustments when negotiating with different cultures. One method to gain that vital personal insight is through the Spony Profiling Model, or SPM.

Developed by Dr. Gilles Spony and built partly on the work of Hofstede and on Dr. Shalom Schwartz’s research on value systems, SPM can provide a personalized assessment of work values, motivation, preferences and other traits, as well as how others perceive you, according to Keith Niblett, assistant director of customized and international executive development programs in Michigan State University’s Eli Broad College of Business.

Results from an SPM analysis show areas and strengths in what Spony refers to as 12 styles, such as persuader, driver, monitor, innovator, pioneer and moderator. And like Hofstede’s dimensions, different countries are stronger or weaker in various SPM styles.

With the knowledge of your core work values and the perception of others, you can gain insights about how you can adapt to dealing with people in different cultures and where your strengths and weaknesses match with theirs, Niblett said during his cross-cultural management lecture.

Melded with Hofstede’s dimensions, a collectivist culture such as China or India has strengths as maintainer, monitor, driver and monitor under the SPM analysis. Someone from an Anglo-Saxon, individualist culture such as the U.S. or Canada would be strong as an achiever, pioneer and persuader.

Some traits generally seen in a Western culture such as the United States include valuing material rewards, individual achievement, need for change, informality, fast-paced decisions and the need for action, Niblett said. People stand on their own two feet.

In China, there is a tendency for interdependence, respect for social hierarchy, humility, obedience and duty for the group objective, he said. Every relationship should be a two-way street.

Comparing the two, some of the aspects least valued in Western cultures – analyzer, maintainer or moderator – are among the highest-valued aspects in an Eastern culture, Niblett said.

The cultural styles of Spony, as well as the insights gained from a personal SPM analysis, can add another layer of perception to various cultures and how members may react during negotiations.

Remember, there are many more people in the world from cultures other than your own, and it’s likely you’ll be dealing with them throughout your career.

Category: Strategic Leadership and Management