International Negotiations- Do You Understand How Important Culture Is?

International Negotiations- Understand Its About Culture!

International business negotiations are much more complex than domestic negotiations.  They challenge negotiators to understand the science of negotiation while they develop their artistry as negotiators.

The science of negotiation provides research evidence to support broad trends that often, but not , always occur during negotiations. The art of negotiation is deciding which strategy to apply when, and choosing which models and perspectives to apply to increase cross-cultural understanding.

As I discussed before, some of the external factors that make international negotiations more challenging than domestic negotiations include political and legal pluralism, international economics, foreign governments, culture and ideology.  Though negotiators do not have much control if any over those factors, they do have some measure of control over other immediate factors such as:

-Relative bargaining power

-Levels of conflict

-Relationship between negotiators

-Desired outcomes

-Immediate stakeholders

It is therefore incumbent upon international negotiators to use the above factors to their advantage, but also try and obtain some control over the other factors- primarily culture.  If one is able to understand the culture of his counterpart, one is more prepared to negotiate from a position of strength instead of weakness.

Culture has long been the boogeyman of international negotiations.  The wild card so to speak.  But it doesn’t have to be if properly understood.  If  you look at culture as learned behavior- as a set of shared values and norms  learned over time you can predict the basic cultural attitudes of your counterpart.

The most famous study done on culture is  the “Model of Cultural Dimensions “by Hofstede who breaks down culture into four basic dimensions:

  1. Individualism/ Collectivism
  2. Power Distance
  3. Career success/quality of life
  4. Uncertainty avoidance

Definition of Individualism/Collectivism

  • The extent to which the society is organized around individuals or the group.

Definition of Power Distance

  • The extent to which the less powerful members of organizations and institutions ( like the family) accept and expect that power is distributed unequally.

Definition of Career Success/quality of life

  • Cultures differ in the extent to which they hold values that promote career success or quality of life.

Definition of Uncertainty avoidance

  • This indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations.

Understanding how the culture of one’s counterpart in international negotiations is reflected in Hofstede’s Cultural Dimensions will enable one to anticipate how culture will influence the other side’s negotiation strategy.  Culture has been found to have significant effects on the negotiation process, including :

-How negotiators plan

-The offers made during negotiations

-The communication process

-Accountability to a constituent

-How information is shared during negotiation

-Risk propensity

-Protocol

As the effect of culture on international negotiations is very apparent, it behooves one to study Hofstede’s Model of Cultural Dimensions prior to developing a negotiation strategy.  Remember, strategies should be arranged on the level of familiarity with the other party’s culture.  The more familiar one is with the other party’s culture, the better one is able to prepare for effective and efficient negotiations- which is the most valued of outcomes.

2 Comments

  • Thanks for putting in the effort to keep your blog up. I think it would be interesting if you could expand on this with some of your personal experiences. There aren’t many people out there with as much international experience as yourself.

    Cheers!

    Corey

    Corey March 6, 2015
  • Good idea. I will do that next time.
    Cheers!

    Bryan Hopkins March 11, 2015

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