How Culture Affects the Negotiation Process

By Thomas F. Lovecchio

To understand how Culture impacts the negotiation process it is important to understand what culture exactly is. Culture “is the cumulative result of experience, values, religion, beliefs, attitudes, meanings, knowledge, social organizations, procedures, timing, roles, spatial relations, concepts of the universe and material objects and possessions acquired or created by groups of people, in the course of generations, through individual and group effort and interactions.” Chris Moore, Mapping Cultures- Strategies for Effective Intercultural Negotiations, Mediate.com (March 2004), http://www.mediate.com/articles/cdr1.cfm. Negotiation tactics not only affect several different industries and professions, they also affect how one should approach cross-cultural negotiations. Given the diversity of the United States, many of these principles can be utilized even domestically. Culture plays a big role in the negotiation process and negotiation tactics. Culture determines whether and how negotiations occur; what is negotiable; determines the importance of personal relationships, affects the responses of the parties, and governs the overall flow and style of the negotiation. The ability to overcome cultural obstacles and barriers can result in more successful business deals, and improve overall business operations.

There are several things that I will explore that differ across cultures such as; time orientations, communication styles, space orientations, power distance, and risk avoidance. I will provide some general examples of these differences are apparent in American culture, African culture, and Japanese culture. Finally, I will discuss how law schools can include culture within negotiations into its curriculum.

Time Orientations

How a culture perceives time orientation can impact the negotiation process. Two different approaches to time orientation exist; monochronic time and polychromic time. Michelle LeBaron, Culture-Based Negotiation Styles, Beyond Intractability (July 2003), http://www.beyondintractability.org/essay/culture-negotiation. Polychronic time orientation involves simultaneous occurrences of various things and the participation of various people. Id. Negotiators from polychronic cultures tend to begin and finish meetings at flexible times; take breaks whenever they feel it is needed; enjoy a high flow of information; sometimes speak over one another; and do not take lateness personally. Id. European influenced cultures like the United States, Switzerland, and Germany tend to be polychronic cultures. Id. While negotiators from monochronic time orientations prefer, meetings with prompt start and end times; scheduled breaks; discuss one piece of information at a time; prefer to take turns speaking; and consider lateness as a lack of respect. Id. Examples of Monochronic cultures are France, Italy, Greece, and Mexico. Id.

Other aspects of time also differ depending on the culture. Negotiators of different cultures have different perspectives on the amount of time that is devoted to a negotiation. In the United States the goal is often to close the deal as quickly as possible. Thus, Americans tend to skip all of the formalities and get straight down to business. Jeswald W. Sallacuse, Negotiating: The Top Ten Ways That Culture Can Affect Your Negotiation, Ivey Business Journal (September/October 2004), http://iveybusinessjournal.com/topics/the-organization/negotiating-the-top-ten-ways-that-culture-can-affect-your-negotiation#.U0NXX6VRH1p. In contrast to many Asian cultures, whose primary goal is to build and create good business relationships, and there is no rush to get straight down to business and sign the contract. Id. They believe that the parties need to truly invest in the negotiation process so the parties have an opportunity to get to know each other well enough to determine if they can operate in a long-term business relationship. Id. If a party is obviously trying to shorten the meeting these cultures may assume that the other party is attempting to hide something. Id.

Communication Style

The methods and styles of communication also differ among cultures. Specifically cultures may engage in a high context communication style or a low context communication style. Jeanne M. Brett, Culture and Negotiation, 35 INTERNATIONAL JOURNAL OF PSYCHOLOGY, 97, 101 (2000). High context versus low context refers to the degree to which the people within a certain culture communicate directly or indirectly. Id. In high-context cultures the meaning is to be inferred, and is not conveyed by direct communication between the parties. Id. Examples of high context cultures are the United States and Israel. Id. In contrast low-context cultures exchange information more explicitly and the meaning of a message will not have to be inferred. Id. Low context cultures include those such as the Japanese and the Egyptians. Sallacuse, supra.

Communication is a very important part of the negotiation process. In order for the parties to reach an optimal agreement they must exchange information to figure out the other party’s interests, goals, preferences, and priorities. Brett, supra. Exchanging information about interests, goals, preferences, and priorities is a direct communication tactic. Id. This usually involves the asking of direct questions, and in response there are direct answers. Id. During this “give and take” exchange of questioning the parties are working to develop an understanding of the other party’s interests, determine if there are commonalities, and gauge how important or irrelevant each interest is for the other party. Id.

A more indirect communication tactic involves a heuristic trial and error approach. Id. This is the process of parties exchanging settlement offers or proposals back and forth. Id. When an offer is rejected and a counter-offer is made the party who offered the initial offer uses this as a way to try and infer what was wrong with their proposal by how the party responds in their counter-offer. Id. All of the information regarding the interests and priorities of the parties is conveyed indirectly when each party makes their proposal or counter-offers. Id.

Space Orientations and Power Distances

Space orientations are another component of negotiations that differ among cultures. Space orientations relate to territory, differences between public and private, personal distance, and comfort with physical contact. LeBaron, supra. Certain cultures allow more touching or physical contact than others. Mediterranean, Latin American, and Arab cultures allow more touching than Asian, Canadian, and U.S. cultures. Id.

Space orientations also relate to how comfortable someone is with eye contact. In many Arab cultures, Canada, and the United States eye contact is perceived as a sign of honesty, respect, and trustworthiness. Id. However, in some North American indigenous cultures, eye contact may be taken as inappropriate or even disrespectful. Id. Also in many Asian cultures looking downward is interpreted as a sign of respect, and in Central America movement of the eyes may indicate that someone is embarrassed, showing respect, or disagreement. Id.

Power distance is the “degree of deference or acceptance of unequal power between people.” Id. Cultures that utilize a high degree of power distance are those cultures where certain people are classified as superior because of their education, age, social class, gender birth origin, family background, or other personal achievements. Id. Cultures that have a low power distance believe in equality among all people, and believe that status is earned. Id. Usually if there is a large difference is the distribution of wealth, the higher the power distance will be in that culture. Cultures with high power distances include: Arab countries, Mexico, Indonesia, and India. Id. Negotiators from high power-distance cultures are more comfortable with defined authority figures, the right to use power, and hierarchical structures. Id. Cultures with a low degree of power distance include: New Zealand, Norway, Germany, Ireland and Israel. Negotiators from low power distance cultures are more comfortable with shared authority, the right to use power in only limited situations, and democratic structures. Id. How a culture perceives the differences in power can affect their positions on various issues, and how they may perceive the other party during the negotiation.

Risk Taking or Risk Avoidance?

The final aspect of negotiation differences among cultures is how risk averse a culture is. This factor plays a big role in the negotiation process, because it will play a significant role in whether a party from a certain culture will take risks or avoid risks in the entire negotiation process. A negotiators culture can determine whether or not they take risks in divulging information, trying new approaches, and acceptance of uncertainties in proposed agreements. Sallacuse, supra. Americans, the French, and the British often consider themselves high-risk takers. Id.  How risk averse a culture is also ties into how well they adapt to ambiguity and uncertainty. Countries that are not comfortable with ambiguity and uncertainty place a high value on risk avoidance, safety, and reliance on rules and rituals. LeBaron, supra. In these cultures it may be harder for outsiders to build trusting relationships with members of these high-risk averse cultures. Id. Cultures that tend to be highly risk adverse include the Japanese, Muslim, and traditional African cultures. Id.

Some Examples

In the United States negotiators tend to be more competitive in their approaches. They often begin with an unrealistic offer, but always have a back-up plan. Id.  U.S. negotiators are energetic, confident, persistent, and enjoy arguing their positions. Id. They tend to focus on one problem at a time, and focus on points of disagreement as opposed to commonality. Id. Finally, U.S. negotiators like closure at the end of the negotiation process. Id.  Which easily relates back to their philosophy that, “time is money.” If you picture any type of negotiation depicted in film or television of the legal system it can be seen as more of a straight forward, hardball type of negotiation, which fits with the high risk taking and is much different from a risk adverse negotiation.

In African cultures the approach to negotiation is quite different. Many African cultures rely on indigenous systems of conflict resolution. Id.  These systems pay particular attention to kinship, age, and the structure of the local community. Id. Thus, these cultures will likely have a high degree of power distances.

Over time there have been several conflicts between the United States and Japan because of the different approaches to negotiation. Id. The Japanese usually focus on interdependence and group goals. Id. The Japanese often show an awareness to group objectives and desires, and show more deference to individuals with a higher status. Id.  As a result they are known for their politeness and their desire to build long-lasting relationships. Id.

These are only a few examples of how different cultures are in the negotiation process. Each culture will have different principles, value different things, and have different goals in a negotiation process.

For Law Schools

It is important that law schools include culture into its curriculum, so that students can become better negotiators. “Yet despite the importance of culture in dispute resolution, the reality is that the subject receives scant mention in the law curriculum.” Ilyhung Lee, In re Culture: The Cross-Cultural Negotiations Course in the Law School Curriculum, 20 Ohio St. J. on Disp. Resol. 376 (2005). Law schools should include this in its curriculum because many areas of the law are being internationalized. Id. at 380. Even laws that are not internationalized. Teaching about different cultures would help students negotiating or practicing at any level in the United States because students will presumably come across many different cultures while practicing law.

By studying culture in negotiations it would be encroaching students to understand the difference in cultures. Id.at 388. Some students may not know of the differences or even if they do, gaining a deeper understanding would only help those students to become better negotiators. Even if, as some will argue that this is based more in anthropology or management rather than law, cross-cultural negotiations involve many different areas. Id. at 409. Due to the complexity of the law and the factors that effect it, “cultural differences can contribute to competition interests and desires, tension, and dispute, all of which relate to legal rights.” Id. at 410. If lawyers can “identify the ‘cultural cues,’ so that the necessary adjustments can be made and the process be allowed to pursue more constructively.” Id. This identification can be compared to the classic issue spotting that law schools teach. Id. “Without cultural recognition and issue spotting, it may be impossible to proceed to a fruitful result: toward dispute resolution in the former and application of the law in the latter.” Id. This can be taught in a similar way that issues are taught, such as practice problems with more of a description of the clients’ background, power distance and time orientation. Id. at 411.

Conclusion

As time goes on Cross-cultural negotiation becomes more and more prevalent in every industry.  As detailed above time orientations, space orientations, power distances, communication styles, and risk avoidance are just some of the factors that play a role in cross-cultural negotiations. There are several others and, preparing for these negotiations and learning all of these intricacies will be crucial to the result of the negotiation process. It is important to keep these factors in mind during any negotiation process because some cultures are more risk adverse than others and place a high level of importance on certain factors. Law schools should teach this because a negotiator who familiarizes themselves with the other party’s culture will ultimately be more successful in reaching a favorable outcome, and building trustworthy business relationships.