Knowledge of the dimensions of national culture and how they manifest themselves in negotiators from different cultures is a prerequisite for formulating successful strategies for conducting intercultural negotiations.
The choice of strategy
The choice of strategy depends on the composition of the negotiating team in terms of the “individualism-collectivism” dimension. Some are individualists – they look only at their interests (and are often described as “difficult” in the negotiation process); cooperatives seek to find the intersection of their interests and those of other negotiators. Depending on the behavior of the negotiators, we distinguish two main strategies: distributive and integrative, corresponding to the distribution and integration negotiations. Reference: Specifics of conducting negotiations in a multicultural business environment, https://wikipedia-lab.org/specifics-of-conducting-negotiations-in-a-multicultural-business-environment/
For some negotiating managers, information is most important
For some negotiators, the information (which they receive and which they provide) is leading. Others use this information in their attempts to create or demand value – through carefully designed offers, specifying positions, developing creative solutions, etc.
During business negotiations, both types of strategies are more likely to be used: usually, the strategies used at the very beginning of the negotiations are distributive; during negotiations are integrative (exchange of information and proposals for an agreement); in the final stage – integrative, but accompanied by distributive behavior. The use of strategies is different in homogeneous and heterogeneous (in terms of the dimension “individualism-collectivism”) groups. The former reach an agreement more easily (they have a similar view of the problem); while the latter must first find a common approach to reaching an agreement.
The use of an integrative strategy is a condition for “adjusting” the priorities and interests of the negotiators. Negotiators’ strategies are influenced by their cultural affiliation.
In the process of intercultural negotiations, the interaction of the participants is expressed in the use of four specific strategies for reaching an agreement (confrontation, information, influence, motivation)
Confrontation in negotiations
Negotiations do not always represent direct verbal communication between the parties. Sometimes the verbal message is indirect. When the strategy of confrontation is likely to be losing, then it is better to use the strategy of indirect confrontation to reach an agreement.
Take, for example, an American company that has signed a contract with a German buyer to sell bicycles made in China. When the order is ready, it turns out that there is a problem – riding bicycles is accompanied by unwanted noise.
The American company does not want to take the delivery because it knows that it will not be accepted by the German customer. What to do in this case? According to American culture, the normal approach to the situation is to tell the manufacturer about the problem, demanding that it be fixed.
However, the American manager knows that in China such a confrontation is considered a manifestation of rudeness. That’s why he goes to the factory in China, gets on one of the bicycles, and asks if it is normal to hear such noise and if the German buyer would buy such a product. The result is not late: with the next delivery, only “silent” bicycles arrive.
Motivation in negotiations
This strategy is linked to the interests of the negotiators (their interests, the interests of the other party, or the common interests). Therefore, the motivation in individualistic cultures is different from the motivation in collectivist ones. In some negotiations, collective interests are very important. An example is a case when the French car manufacturer Renault acquired a large share in the ownership of Nissan.
Business analysts predict that measures aimed at turning Nissan into a profitable company (closing factories, layoffs, “sifting” suppliers) could prove extremely difficult to implement. Japanese companies usually feel responsible for their employees, and the above measures are not common business practices in Japan, where collective interests dominate.
Source of influence in the negotiations
The source of influence in the negotiations is BATNA, the characteristics of the negotiators (social status, life experience, professional experience, including experience in conducting business negotiations), the ideology of the negotiating parties. The smaller a BATNA of a negotiator, the more dependent he is on reaching an agreement and the less power he has to derive from business negotiations. Reference: “Negotiation strategies in a multicultural business environment”, https://www.polyscm.com/negotiation-strategies-in-a-multicultural-business-environment/
Different ideologies can cause difficulties in negotiations. As an example (this time at the macro level) we can point to the so-called “Banana wars” between the US and the EU. Both countries, as members of the WTO, must respect the principles of the open market. But France, as an EU member, has blocked imports from US companies by imposing tariffs that make American bananas more expensive, making them uncompetitive with bananas from the former French colonies (whose economies depend on banana exports).
French ideology has a markedly paternalistic and social orientation, extending to the former colonies, while American ideology is more capitalist, ie. market-oriented.
As for the Eastern European case, it is characterized by the frequent use of “telephone law” and sometimes the arrogance of the stronger (if you like!). Positive moments are observed in the younger and educated negotiators, whose influence is determined by their values, position, and communication skills.
The negotiations are aimed at concluding an agreement
The negotiations aim at agreeing, for the implementation of which a specific “currency” is used – the information. The information about NADS, the status of the other party is widely used in the distribution type of negotiations. Information on interests and priorities is used in integrative negotiations. When negotiators do not understand the information transmitted by the other party (interests and priorities), the potential for an integrative agreement remains untapped and participants in such negotiations may find themselves at a dead end.
Culture influences the direct, resp. the indirect transmission of information (which is embedded in the context of the message). An example is the following business situation, characterized by an unfavorable start to the negotiations: an American negotiator visiting Japan for the first time is puzzled by the formal opening of the meeting.
The hosts from the Japanese side have started with a story about the history of their company, the founder of the company, and the official presentation of the product. After the meeting, the American negotiator asked the local representative why the Japanese thought he had not heard of the product, given that he wanted to buy it and had information about the company and what it offered. The local representative explained that the Japanese negotiators were trying to pass on information, albeit indirectly, about the company’s status, while the American negotiator was “on another wave” – ready to take part in direct negotiations.
Here we must recall the power of informal sources in gathering the necessary information in Eastern European conditions and specifically the importance of being a member of a certain “network”.
Strategies for conducting business negotiations as part of the negotiation process are both a prerequisite and a necessary (but not the only) condition for success. Successful negotiations also require skills to direct communication in the desired direction, persuading the other party, a flexible approach to the specific situation of business negotiations, and, if necessary – making reasonable concessions. In addition (if we refer to a successful comparison) the negotiator must have a complex combination of qualities (partly Sherlock Holmes and partly Sigmund Freud), and at the same time be aware of the specific know-how for their application in the practice of business negotiations.
The choice of negotiation strategy, as we have already seen, depends on the specifics of the negotiation process, on the one hand, and the type of negotiations, on the other. According to a 2000 study by the Center for Liberal Strategies, 93% of Eastern Europeans are subject to a pre-modern culture: they believe that to win, the other must lose. And the latter overlaps with the so-called “Win-lose” (distribution) strategy for negotiations, discussed above.
Therefore, the culture of the average Eastern European harms the choice of the negotiation strategy. However, to draw objective conclusions (on the influence of the cultural characteristics of the Eastern European negotiators on the strategy they use), it is not enough to refer to only a few studies, which are also very general.
Further research is needed on the cultural characteristics of the negotiators (entrepreneurs owning their own business, managers, authorized representatives of the company), which are unlikely to be fully covered by the cultural characteristics of Eastern Europeans in general; A particularly interesting group in development are young (about 30 years old) Eastern Europeans in good management positions in prosperous companies, as mentioned above.
It is this group that can play the role of driving the complex transition of Eastern Europeans from collectivism to individualism (which is likely to last much longer than the transition to a market economy). Hence the influence of the cultural characteristics of the negotiators on the choice of negotiation strategy and last but not least what strategies (should) the negotiators from the Eastern European country apply to reach an agreement with “difficult partners” – specifically in a multicultural business environment.