The Culture and Negotiation Strategies


By:

K. Kiran Kumar
Assistant Professor
St. Anns Women's PG College of Management
Mallapur, Hyderabad
E-mail:
dakumars@gmail.com
 


This paper is prepared to present how culture affects the negotiation strategies and present scenario and traces its types, how and why it affects the negotiation strategies with a concluding remarks.
 


What is Negotiation?

Negotiation is a form of decision making. It is one of the several options you have when you are attempting to make a decision with another person. It is an exchange of series of offers by two or more people/groups of people. It is a bargaining, deal-making process. Negotiation is the process through which the activity of trading and exchanging tangible or intangible things between negotiators. The process of conferring among two or more interdependent parties to arrive at agreements about some matter over which they are in conflict. It includes the mutual dependence of each negotiator on the other. It usually involves you getting something, tangible or intangible, in return for your consent. But if you have nothing to trade then negotiation is unlikely. You can become competent in negotiation without compromising your sense of ethical conduct.

Negotiations do not always end in an agreement. Those making a decision by negotiation usually have the option of choosing some other solution, of saying 'no', of walking away, of minding their own business.

Why we negotiate?

People negotiate to resolve disputes and to make decisions in teams. When negotiators reach an agreement, resources are always distributed but the amount of resources available for distribution is not necessarily fixed. We negotiate because our decisions affect others and their decisions affect us. Individuals do not wish to leave decisions that affect them to the whim and fancy, not to mention material benefit, of somebody else. People's goals are incompatible. People are inter-dependent, but in conflict. They naturally negotiate to try to deal with the conflict.

Preparation for negotiation

The activity of preparation reduces wasted effort and time, identifies gaps in the information needed to make decisions by trading, and establishing the criteria for judging the merits of possible traded solutions.

It allows you to anticipate likely stances and demands, and to focus your attention on the potential for trade and potential solution, which increases your effectiveness as negotiation. If we left preparation t our good intentions we would never get it done. 

Where can we use?

We are using negotiations in every facet of life even without knowing. Most producers sell their out put to others and prices are set for them mainly by negotiation. Customers negotiate passively when they 'shop around', and actively when they ask for better deal then the one on offer. 

The basis for negotiation in an economy is replicated in the affairs of governments and international agencies. They negotiate to buy and sell labor services (the civil services, the armed forces, the judiciary etc.,) and out put (the public infrastructure, medicines, school etc.,) on much the same basis as private producers do in the market economy. Governments also make political decisions through processes that include negotiation. Over 50,000 international agreements between governments have been negotiated in the 20th century so far.

Present scenario

Negotiation has a long history, perhaps even a pre-history, as the early humans found forms of co-operation that signaled the beginning of an ever widening difference between them and the animals. But long as its history is, negotiation has only recently come into its own as an appropriate method with a potential for use in almost every sphere of human contact. It is no accident that the number of international agreements is growing each year, that new professions of mediators, conciliators, arbiters and consultant negotiations are growing in numbers., that more and more legal firms are turning to negotiating settlements rather than merely litigating their claims, that there is a growing interest in the theory and practice of negotiation. The age of negotiation coincides with the spread of pluralistic democracy and growing international economic and political integration.

Types of Negotiation

Some of the important forms of negation are briefly discussed below;

    * Deal-making negotiations
    * Decision-making negotiations
    * Dispute-resolution negotiations
    * Value-claiming negotiations
    *
    Value-creation negotiations

Deal-making negotiations are negotiations to buy and sell.

Decision-making negotiations: The process of arriving at an agreement when there is multiple potential and conflicting choices; it is the process by which multi-cultural teams reach an agreement. Dispute-resolution negotiations are negotiations to resolve conflict resulting from a claim being made and rejected.

Value-claiming negotiation : It is a negotiation to reach a Distributive agreement

    - It is about claiming value
    - How much a set of resources you are going to get and how much the other party gets.           

Value-creating negotiation : It is a negotiation to reach a integrative agreement

    - It is about creating value
    - How you and the other party can increase the resources available to divide.

Culture and Negotiation

When two parties negotiate both bring culture to the table with their

    * Interests and priorities
    * Negotiation strategies

Interests are the needs or reasons underlying the negotiator's positions.

Priorities reflect the relative importance of various interests or positions.

A negotiation strategy is an integrated set of behaviors chosen because they are thought to be the means of accomplishing the goal of negotiating.

All the negotiators have interests, priorities and strategies. These are affected by culture. Culture is the unique character of a social group, including the values and norms shared by members of the group and the group's social, economic, political and other institutions. Cultural values direct the attention of the negotiator to the issues that are more important and influence the negotiators' interests and priorities. Cultural norms define the behaviors that are appropriate and inappropriate in negotiation and influence the negotiators' strategies.

Effects of Culture on Interests and Priorities

    * Economic Development
    * Preferences for Tradition over Development
    * Cultural Blinders

Cultural values may reveal the interests of the negotiators. Negotiators from cultures that value Tradition over change may be less enthusiastic about Economic Development. This was the situation in which Disney found itself after purchasing a large tract of land south of Paris to construct EuroDisney. Although EuroDisney promised jobs and economic development to an area that had high unemployment had few non-farm jobs for youth the local populace valued its traditional agricultural style. EuroDisney management with its American culture had difficulty reconciling the local population's preferences for tradition over development.  

Negotiators from one Culture expecting preferences to be compatible can not understand the rationality of negotiators from another culture. It is generally unwise in negotiation to label the other party as irrational. Cultural differences in preferences may also act as cultural blinders.

How Culture affects Negotiation Strategies

When people negotiate, their behaviors are strategic and their strategies may be culturally based. Not only are there differences in strategic behavior between cultures, but also within cultures and overlap between the cultures. With the result, some members of a culture may negotiate less like their own cultural prototype and more like the prototype of the another culture.

Negotiation Strategies are linked with culture because cultures evolve norms to facilitate social interaction. Norms are functional because they reduce the number of choices a person has to make, about how to behave and how others in the culture will behave. Culture may also affect the strategies that the negotiators bring to the table for example, the way they go about negotiating, whether they confront directly or indirectly, their motivations, and the way they use the information and influence. 

    * Confrontation
    * Motivation
    * Influence
    * Information

Confrontation is a meeting between negotiators, either directly (face to face or electronically), or indirectly (via third party or non-verbal behavior). People from different cultures vary in their preferences for confrontation in negotiation. Western cultures are characterized by direct confrontation where as the Asian cultures by indirect confrontation.

Motivation is the factor or factors urging a person to act. It is all about negotiators' interests. Negotiators may be concerned about self-interests, about the interests of the other party at the table, or about the collective interests. The relative importance varies by culture. Western cultures prefer self-interests whereas the Asian cultures prefer collective interests.

Influence: Trying to produce a desired effects in another person, usually an attempt to obtain a concession. Power is the ability to influence the other party to accede to your wishes. Negotiators try to influence each other to make concessions by talking about their power.

Influence strategies may be direct or indirect. Direct influence strategies include persuasion, argument, substantiation and threats. Indirect influence strategies include appeals to sympathy, references to personal stakes in the negotiation and references to status. A direct influence strategy focuses on the other party's interests, whereas the indirect influence strategy focuses on you.

Information: It is the knowledge or intelligence that is communicated. Information is the currency of negotiation. Negotiated agreements are constructed from information. Negotiators want full information about the other party's interests and priorities and reservation price, but they do not want to reveal the same information about themselves.

Sharing information in negotiation makes you vulnerable. When you share information about your interests and priorities, the other party knows what you are willing to give up and what you must have. Negotiators can share information directly or indirectly. Direct information sharing could be a series of questions and answers, comments on mutual interests and differences, or feedback about the correctness of negotiator's influence. Indirect information sharing is a series of proposals and counter proposals, particularly multi-issue proposals.

Why Culture affects Negotiation Strategy?

The behaviors that negotiators from a culture characteristically use to enact a negotiation strategy are related to other features of that culture including its values and norms. The following features of culture seem to be related to the variability in negotiation strategy across cultures:

    * Individualism Vs Collectivism
    * Egalitarianism Vs Hierarchy
    * Low-Context Vs High-Context Communications

Individualism: A cultural value that promotes personal independence and gives self-interest a high priority among important life values.

Collectivism: A cultural value that promotes the interdependence of individuals with the social groups to which they belong and supports collective interests over self-interests as the predominant life value.

Negotiators motivational orientations may also stem from their culture's values for individualism versus collectivism. This cultural value reflects a society's goal orientation. Individualist cultures emphasize self-interests. Collectivist cultures emphasize collective interests. 

Egalitarian Culture: A culture that aspires to social equality, especially in political, social and economic affairs. 

Hierarchical Culture: A culture that accepts social inequality in political, social and economic affairs. It emphasizes differentiated social status that implies social power.

People in hierarchical cultures may be reluctant to confront directly in negotiation because confrontation implies a lack of respect for social status and may threaten social structures. The norm in such a culture is not to challenge higher-status members. 

Low-context communication:

    * People prefer to communicate directly
    * Meaning is on the surface of the message
    * Information is explicit, without nuance, and relatively context free.

High-context communication

    * People prefer to communicate indirectly
    * Meaning is embedded in the context of the message and must be inferred to be understood.

Resolving Disputes

There are three ways to resolve disputes, regardless of whether the confrontation is direct or indirect

    * Interests and Culture
    * Rights and Culture
    * Power and Culture

You can uncover the interests underlying disputants' positions and integrate those interests.

You can determine who is right and who is wrong according to some standard of fairness, contract, and law or precedent. You can determine who is more powerful and therefore who should concede.

Interests: Wants needs or concerns of negotiator, company or the other party.

Rights and Standards: Explicit & implicit rules, procedures and regulations. A trend, traditions, conflicts, asking & telling.

Power Statements: Uncooperative statements to intimidate suggest negative consequences.

Procedures for Resolving Disputes.

    * Direct Vs Indirect Confrontation and Culture
    * Non-confrontation: Not really an Option
    * Direct Confrontation: Negotiating the Resolution of Disputes.
    * Indirect Confrontation without Third Parties.
    * Indirect Confrontation and Third Party Procedures

Direct Confrontation is a face to face verbal interchange between principals. It is consistent with the action-oriented and solution-minded communication that is characteristic of low context cultures. Characteristics of Western cultures encourage the disputants to confront directly.

Indirect Confrontation is either nonverbal or conducted by agents such as lawyers or intermediaries, or through mediators (mediation skills). Characteristics of Asian cultures encourage disputants to deal with conflict indirectly (Indirect Confrontation).

Characteristics of Western Cultures

    * Low-Context Communications
    * Self Interests
    * Egalitarian Power Distributions

Characteristics of Asian Cultures

    * High-Context Communications
    * Collective Interests
    * Hierarchical Power Distributions

Non Confrontation

Deciding to take a direct or an indirect approach to dispute resolution presumes that unless dealt with somehow, the dispute will have dysfunctional consequences

Direct Confrontation: Negotiating the Resolution of Disputes

To be effective at resolving disputes across cultures, negotiators need to know:

    * When to focus on Rights, Power, Facts and Interests.
    * How to change the focus from Rights or Power to Interests.
    * How to choose among different types of communication

When to focus on Interests, Rights and Power

When you think that you have a rights standard, the other party will recognize the weakness of its own position and come to an agreement.

When you want to make it clear that if the dispute cannot be resolved you will go to the third party.

How to change the focus from Rights or Power to Interests

    * Do not reciprocate with an emotional outburst
    * Declare the process ineffective
    * Combine reciprocity with a change of focus

Choosing how to communicate

    * Face to face negotiations
    * Electronic negotiations
    * Negotiating through agents

Indirect Confrontation without Third Parties

A claimant may use non-verbal behavior to express dismay at a claim's being rejected like slamming doors, pounding fists etc.

Another form of indirect confrontation is amassing information that you arrange to have delivered to the other party.

Indirect Confrontation and Third Party Procedures for Dispute Resolution.

Procedures with Authority

    * Litigation
    * Arbitration
    * Hierarchy

Procedures without Authority

    * Mediation

Government at and around the table

    * The Interests of Government in cross-cultural Negotiations may not be cost or profitability but will be social, economic and political.
    * Ideology: Private investment, Profits and Individual Rights.
    * Advice for dealing with Government Interests, Particularly Human Rights Issues.
    * Political and Economic Stability
    * Hedging Political Risks
    * Hedging Economic Risks
    * Power of the Bureaucracy
    * Dealing with Corruption
    * Advice for making Ethical Decisions in Cross-Cultural Negotiations
    * Legal context for Dispute Resolution in Cross-Cultural Negotiations.

Conclusion

Negotiation is about claiming value; how much a set of resources you are going to get and how much the other party gets. Successful Value-Claiming Negotiation leads to a distributive outcome that divides a fixed set of resources such that your interests or the needs underlying your positions are met. But negotiation can also be about creating value; how you and the other party can increase the resources available to divide. Successful Value-Creating Negotiation leads to an agreement that is both integrative and distributive, one that divides an enhanced set of resources. 

(The author acknowledges Dr. R Nageswar Rao, Joint Director, PG Admissions, Osmania University, Hyderabad, for his immense help and encouragement through out this study and Sri. D Aruna Kumar, Research Fellow, Institute of Public Enterprise, Hyderabad, for his motivation and inspiration)
 


K. Kiran Kumar
Assistant Professor
St. Anns Women's PG College of Management
Mallapur, Hyderabad
E-mail:
dakumars@gmail.com
 

Source: E-mail August 21, 2005

  

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