THE TOP TEN WAYS CULTURE AFFECTS NEGOTIATING STYLE

SOME SURVEY RESULTS

by

Jeswald W. Salacuse

The impact of culture on the negotiating process has intrigued both scholars and practitioners. (e.g. Weiss 1994, Faure and Sjostedt 1993; Binnendijk 1987; Fisher 1980; Graham, J. L. et. al. 1988; Campbell et al. 1988). Their research and observations indicate fairly clearly that negotiation practices differ from culture to culture and that culture can influence "negotiating style",-- the way persons from different cultures conduct themselves in negotiating sessions.

Definitions of culture are as numerous and often as vague as definitions of negotiation itself. (Moran and Stripp 1991, p. 43-56. Zartman 1993, p. 19). Some scholars would confine the concept of culture to the realm of ideas, feelings, and thoughts. For example, one working definition offered by two experts is that "Culture is a set of shared and enduring meanings, values, and beliefs that characterize national, ethnic, and other groups and orient their behavior." (Faure and Sjostedt 1993, p.3) Others would have culture also encompass behavior patterns and institutions common to a given group or community. E. Adamson Hoebel, a noted anthropologist, defined culture as "the integrated system of learned behavior patterns which are characteristic of the members of a society and which are not the result of biological inheritance." (Hoebel 1972, p.7)

For purposes of this article, culture is defined as the socially transmitted behavior patterns, norms, beliefs and values of a given community. Persons from that community use the elements of their culture to interpret their surroundings and guide their interactions with other persons. So when an executive from a corporation in Dallas, Texas, sits down to negotiate a business deal with a manager from a Houston company, the two negotiators rely on their common culture to interpret each other's statements and actions. But when persons from two different cultures-- for example an executive from Texas and a manager from Japan -- meet for the first time, they usually do not share a common pool of information and assumptions to interpret each others' statements, actions, and intentions. Culture can therefore be seen as a language, a "silent language" which the parties need in addition to the language they are speaking if they are truly to communicate and arrive at a genuine understanding. (Hall 1959) Culture also serves as a kind of glue -- a social adhesive -- that binds a group of people together and gives them a distinct identity as a community. It may also give them a sense that they are a community different and separate from other communities.

Studies of cultural negotiating styles tend to divide into two basic groups. The first describe and analyze the negotiating style of a particular culture. Fascination with individual cultural negotiating practices has spawned a distinct literary genre: the "Negotiating With..." literature. Numerous books and articles bearing such titles as " Negotiating with the Japanese," "Negotiating with the Arabs," and Negotiating with the Chinese," seek to lead the novice through the intricacies of negotiating in specific countries. (For a bibliography of such literature, see Salacuse 1991, pp. 174-183).

A second approach is cross cultural and comparative. It seeks to identify certain basic elements in negotiating style and to determine how they are reflected in various cultures. The great diversity of the world's cultures makes it impossible for any negotiator, no matter how skilled and experienced, to understand fully all the cultures that he or she may encounter. How then should an executive prepare to cope with culture in making deals in Singapore this week and Seoul the next? One approach is to identify important areas where cultural differences may arise during the negotiation process. A knowledge of those factors may help a negotiator to understand a counterpart from another culture and to anticipate possible sources of friction and misunderstandings. Toward this end, scholars have developed a variety of frameworks and checklists that may be applied cross culturally. ( e.g. Weiss 1985; Moran and Stripp, 1991; Salacuse 1991).

Based on a review of the literature as well as interviews with practitioners, the author, in an earlier work (Salacuse 1991) identified ten factors that have an impact on the negotiating process and are influenced by a person's culture. The ten factors, each of which forms a continuum between two poles, consisted of the following: 1. negotiating goals (contract or relationship?); 2. attitudes to the negotiating process (win/win or win/lose?); 3. personal styles (formal or informal?); 4. styles of communication (direct or indirect?); 5. time sensitivity (high or low?); 6. emotionalism (high or low?); 7. agreement form (specific or general?); 8 agreement building process (bottom up or top down?); 9. negotiating team organization (one leader or consensus?); and 10. risk taking (high or low?). The ten negotiating traits listed above can be placed a spectrum or continuum illustrated in Figure I.

[Figure I]

The purpose of the matrix in Figure I is to identify specific negotiating traits affected by culture and to show the possible variations that each trait or factor may take. With this knowledge, an international may be better able to understand the negotiating styles and approaches of his counterparts from other cultures. Equally important, the matrix may help negotiators determine how their own styles appear to those same counterparts on the other side of the bargaining table.

In order to test this approach to understanding negotiating style, the author translated the matrix into a survey questionnaire and administered it to 310 business executives, lawyers, and graduate students (many of whom had substantial work experience) from all continents at various sites in North America, Latin America and Europe. The respondents came from twelve countries: the United States, the United Kingdom, France, Germany, Spain, Mexico, Argentina, Brazil, Nigeria, India, China, and Japan. Since professional or occupational background also constitutes a type of subculture that may influence negotiating style, the survey asked respondents to provide background information on this issue as well. Eight occupational groups were represented among the respondents: 1. law; 2. management and marketing; 3. engineering; 4. the military; 5. accounting and finance; 6. diplomacy and public service; 7. teaching; and 8. students. Respondents also indicated their gender. After receiving an explanation of the matrix and questionnaire, respondents were asked to rate their own attitudes anonymously toward each of the ten negotiating traits on a five-point scale.

In general, as will be seen below, the survey revealed significant co-relations between the respondents' assessment of certain traits of their negotiating styles on the one hand and their national cultures and professional backgrounds on the other. However, one should read the survey results with several caveats. First, the answers that the respondents gave reflected only how they saw themselves (or would like others to see them) rather than their negotiating styles and behavior in actual negotiations. One can only interpret the survey results as indicating a limited predisposition of individuals from particular cultures toward certain factors affecting the negotiation process.

Second, style in a given negotiation may be influenced by numerous factors besides culture, including personality, bureaucracy, business experience, and the nature of the transactions under negotiation. For example, an executive who is predisposed to approach a business negotiation as a problem-solving, integrative process (win/win) may behave in a distributive, confrontational way (win/lose) when faced with a hostile counterpart at the negotiating table.

Third, all the respondents spoke English, completed the survey in English, had substantial international experience, and were participating in graduate university education or advanced executive seminars, also conducted in the English language. As a result, they may not be representative of most persons from in their respective cultures. On the other hand, they are fairly representative of executives and officials who conduct international negotiations on behalf of organizations.

Fourth the meaning of key terms in the survey, such as "direct ", "indirect", "risk" "general" and "specific" were not strictly defined but instead were interpreted by each respondent according to his or her own subjective view, a factor obviously influenced by culture.

Fifth, the size of the respondent group was limited; consequently, one should be cautious about drawing inferences from the survey that apply to whole cultures. Finally, although nationality and culture are not the same thing and several different cultures may sometimes be found in a single country, the questionnaire, which only asked the respondents to indicate their nationality, did not take account of this phenomenon.

[1] Negotiating Goal: Contract or Relationship?

Different cultures may view the very purpose of a business negotiation differently. For many American executives, the goal of a negotiation, first and foremost, is to arrive at a signed contract between the parties. Americans consider a signed contract as a definitive set of rights and duties that strictly binds the two sides and determines their interaction thereafter.

Japanese, Chinese, and other cultural groups in Asia, it is said, often consider that the goal of a negotiation is not a signed contract, but the creation of a relationship between the two sides. (e.g. Pye 1982). Although the written contact describes the relationship, the essence of the deal is the relationship itself.

The respondents as a group are were fairly evenly divided on this question, with 54% viewing contract as a negotiating goal and 46% pursuing relationship. Similarly while males had a slight preference for contract (57.3%) and females for relationship (52.5%), the difference was not significant, and certainly not as significant as the literature on gender might lead one to believe. On the other hand, the survey results revealed significant differences both among cultures and professions on this question. Thus, with respect to national cultures, only 26% of the Spanish respondents claimed that their primary goal in a negotiation was a relationship compared to 66% of the Indians. On the other hand, the preference for a relationship was not as pronounced among the Chinese ( 54.5%) as one might have expected from the literature, and the Japanese appeared almost evenly divided on the question as did the Americans. Table II summarizes the survey results on this issue.

[Table II]

NEGOTIATING GOAL: CONTRACT OR RELATIONSHIP?

An analysis of responses on the basis of occupational background also revealed significant variations. For example, while 71% of the lawyers favored contract as a negotiating goal, 61% of those with management or marketing experience preferred relationships. Table III summarizes the results.

[Table III]

(OCCUPATIONS) NEGOTIATING GOAL: CONTRACT OR RELATIONSHIP?

Although for the group as a whole, the responses by males and females did not reveal significant differences, one did find substantial variations between genders within certain cultures. Thus whereas 66.7% of U.S. male respondents chose contract as a negotiating goal, 71.4% of the U. S. female respondents opted for relationship -- a finding supported by American studies on the impact of gender on negotiation.( e.g., Kolb and Coolidge 1991). On the other hand 75% of French females and 66.7% of Spanish women chose contract -- data suggesting that gender roles in negotiation may be more influenced by culture than biology.

[2] Negotiating Attitude: Win/Lose or Win/Win?

Because of differences in culture or personality, or both, persons appear to approach deal making with one of two basic attitudes: that a negotiation is either a process in which both can gain (win/win) or a struggle in which, of necessity, one side wins and the other side loses (win/lose). Win/win negotiators see deal making as a collaborative and problem-solving process; win/lose negotiators see it as confrontational. In a reflection of this dichotomy, negotiation scholars have concluded that these approaches represented two basic paradigms of the negotiation process: 1. distributive bargaining (i.e. win/lose) and 2. integrative bargaining or problem-solving (i.e. win/win).(e.g., Hoppman 1995; Lewicki et al. 1993) In the former situation, the parties see their goals as incompatible, while in the latter they consider themselves to have compatible goals.

Among all respondents, approximately one-third claimed to see negotiations as win/lose, while two thirds saw it as win/win. Gender appeared to have no influence on responses, for the distribution among men and among women was essentially the same--one third of the male respondents and one third of the female respondents considered negotiation to be a win/lose process. On the other hand, the survey revealed wide differences among the cultures represented in the survey on this question. Whereas 100% of the Japanese viewed negotiation as a win/win process, only 36.8% of the Spanish were so inclined. The Chinese and Indians, the other two Asian cultures represented in the survey, also claimed that negotiation was for them win/win, and the French, alone among Europeans, took a similarly pronounced position on the question. Table IV summarizes the results.

[Table IV]

NEGOTIATING ATTITUDE: WIN/WIN OR WIN/LOSE?

An analysis of the responses by profession also found significant variations. Whereas only 14% of diplomats/public service personnel and 18% of management and marketing persons considered negotiations to be a win/lose process, 42% of the lawyers, 43% of the students and 40% of the military held this view. Table V summarizes the results with respect to occupational background.

[Table V]

(OCCUPATIONS) NEGOTIATING ATTITUDE: WIN/WIN OR WIN/LOSE?

Although the responses of males and females as a whole tended to be similar, the survey revealed significant differences according to gender within specific cultures. Thus while only 20% of U. S. female respondents saw negotiation as a win/lose process, 50% of Spanish female respondents took this view.

[3] Personal Style: Informal or Formal?

Personal style concerns the forms a negotiator uses to interact with counterparts at the table. Culture strongly influences the personal style of negotiators. It has been observed, for example, that Germans have a more formal style than Americans. (Hall and Hall 1990, p.48) A negotiator with a formal style insists on addressing counterparts by their titles, avoids personal anecdotes, and refrains from questions touching on the private or family life of members of the other negotiating team. An informal style negotiator tries to start the discussion on a first-name basis, quickly seeks to develop a personal, friendly relationship with the other team, and may take off his jacket and roll up his sleeves when deal making begins in earnest. Each culture has its own formalities, and they have special meaning within that culture.

Among all respondents, two thirds claimed an informal style, while only one third a formal style. Gender seemed to have no significance, for the distribution among males and females was almost exactly the same as that among the respondents as a whole--66% of women and 69% of men believed they had informal negotiating styles. The responses according to culture demonstrated greater variation. Except for the Nigerians, a majority of the respondents within each of the twelve groups surveyed claimed to have an informal negotiating style; however, the strength of this view varied considerably. While nearly 83 % of the Americans considered themselves to have an informal negotiating style, only 54% of the Chinese, 52% of the Spanish, and 58% of the Mexicans were similarly inclined. Among the four European national cultures surveyed, the French were the strongest in claiming an informal style. Although both Germans and Japanese have a reputation for formality, only slightly more than one quarter of the respondents in these two groups believed they had a formal negotiating style. Differences in cultures with respect to the meaning of the terms "formal" and "informal" may have influenced this result. The survey's findings on this negotiating trait are summarized in Table VI.

[Table VI]

PERSONAL STYLE: FORMAL OR INFORMAL?

Variations were also to be found among occupational groups, as can be seen in table VII.

[Table VII]

PERSONAL STYLE (OCCUPATION): FORMAL OR INFORMAL?

[4] Communication: Direct or Indirect?

Methods of communication vary among cultures. Some groups place emphasis on direct and simple methods of communication; others rely heavily on indirect and complex methods. It has been observed, for example, that whereas Germans and Americans are direct, the French and the Japanese are indirect. (Hall and Hall 1990 p. 102) Persons with an indirect style of communication often make assumptions about the level of knowledge possessed by their counterparts and to a significant extent communicate with oblique references, circumlocutions, vague allusions, figurative forms of speech, facial expressions, gestures and other kinds of body language. In a culture that values directness such as the American or the Israeli, one can expect to receive a clear and definite response to proposals and questions. In cultures that rely on indirect communication, such as the Japanese, reaction to proposals may be gained by interpreting seemly indefinite comments, gestures, and other signs.

In the survey, respondents in all cultural groups by a high margin claimed to have a direct form of communication. Here too the organizational culture of the participants and their international experience may have strongly influenced their responses to the questionnaire. It is worth noting, however, that the two cultural groups with the largest percentage of persons claiming an indirect style were the Japanese and the French. Table VIII summarizes the results on this issue.

[Table VIII]

COMMUNICATION STYLE: DIRECT OR INDIRECT?

Males and females responded to this question identically: 90% claimed an direct style of communication while only 10% claimed an indirect style, precisely the distribution of responses for the respondent group as a whole. Among occupational groups 50% of those with public service or diplomatic backgrounds claimed to have a formal style, while in all other occupational groups this response was limited to no more than 20%

[5] Sensitivity to Time: High or Low?

Discussions of national negotiating styles invariably treat a particular culture's attitude's toward time. So it is said that Germans are always punctual, Latins are habitually late, Japanese negotiate slowly, and Americans are quick to make a deal.

Among respondents as a whole, 80% asserted a high time sensitivity and 20% claimed a low time sensitivity, and this same distribution was found among men, women, and the various occupational grouping represented in the survey. However, a different pattern emerged among certain cultural groups. A majority of the respondents from all cultural groups surveyed claimed to have a high sensitivity to time; however the strength of the minority view on this question varied considerably among the groups. The Indians, French, and Germans included a substantial percentage of respondents asserting a low sensitivity to time. Table IX summarizes the results.

[Table IX]

TIME SENSITIVITY: HIGH OR LOW?

The survey data on this question could have been affected by the organizational cultures of the respondents, as well as by variations in the way that respondents interpreted the term "time sensitivity." Cultural discussions about time in negotiations often refer to two elements: promptness is meeting deadlines and the amount of time devoted to a negotiation. Germans, it has been observed, are highly time-sensitive with regard to promptness but less so with respect to their willingness to devote large amounts of time to a negotiation. (Hall and Hall 1990 p. 37) Thus they are punctual (high time sensitivity) but slow to negotiate and make decisions (low time sensitivity).

[6] Emotionalism: High or Low?

Accounts of negotiating behavior in other cultures almost always point to a particular group's tendency or lack thereof to display emotions. According to the stereotype, Latin Americans show their emotions at the negotiating table, while Japanese and many other Asians hide their feelings. Obviously, individual personality plays a role here. There are passive Latins and hot-headed Japanese. Nonetheless, various cultures have different rules as to the appropriateness and form of displaying emotions, and these rules are brought to the negotiating table as well. Among all respondents, 65% claimed to tend toward high emotionalism while 35% indicated a tendency to low emotionalism, and roughly the same distribution was to be found among male and female respondents. Professional groups revealed a similar distribution, except for teachers, 90% of whom saw themselves tending toward high emotionalism. The various cultures surveyed indicated greater variations. The Latin Americans and the Spanish were the cultural groups that ranked themselves highest with respect to emotionalism in a clearly statistically significant fashion. Among Europeans, the Germans and English ranked as least emotional, while among Asians the Japanese held that position, but to a lesser degree that the two European groups. Table X summarizes the results with regard to emotionalism.

[Table X]

EMOTIONALISM: HIGH OR LOW?

[7] Form of Agreement: General or Specific?

Cultural factors may also influence the form of the written agreement that parties try to make. Generally, Americans prefer very detailed contracts that attempt to anticipate all possible circumstances and eventualities, no matter how unlikely. Why? Because the "deal" is the contract itself, and one must refer to the contract to handle new situations that may arise in the future. Other cultures, such as the Chinese, prefer a contract in the form of general principles rather than detailed rules. Why? Because, it is claimed, the essence of the deal is the relationship between the parties. If unexpected circumstances arise, the parties should look to their relationship, not the details of the contract, to solve the problem.

Among all respondents in the survey, 78% preferred specific agreements while only 22% preferred general agreements. Male and female participants responded in roughly the same proportions. The survey found that a majority of respondents in each cultural group preferred specific agreements over general agreements. This result may be attributable in part to the relatively large number of lawyers among the respondents, as well as to the fact that multinational corporate practice favors specific agreements and many of the respondents, regardless of nationality, had experience with such firms. The survey responses on this point may have been a case where professional or organizational culture dominated over national cultural traits. On the other hand, the degree of intensity of responses on the question varied considerably among cultural groups. While only 11% of the British favored general agreements, 45.5% of the Japanese and of the Germans claimed to do so. Table XI sets out the survey results with respect to agreement form.

[Table XI]

AGREEMENT FORM: GENERAL OR SPECIFIC?

Occupational groups demonstrated wider variations, a factor which supports the notion that professional culture may dominate national culture on this question. For example, while 100% of the respondents with military backgrounds preferred specific agreements, only 64% of management and marketing persons and of diplomats and civil servants had a similar inclination. Table XII summarizes the data with respect to occupations on this question:

Table XII

(OCCUPATIONS) AGREEMENT FORM: GENERAL OR SPECIFIC?

SPECIFIC: MIL STUD ACCT/FIN LAW ENG TEACH MGT/MKT DIP/PS

(%): 100 92 86 84 74 71 64 64

[8] Building An Agreement: Bottom Up or Top Down?

Related to the form of the agreement is the question of whether negotiating a business deal is an inductive or a deductive process. Does it start from agreement on general principles and proceed to specific items, or does it begin with agreement on specifics, such as price, delivery date, and product quality, the sum total of which becomes the contract?

Different cultures tend to emphasize one approach over the other. Some observers believe that the French prefer to begin with agreement on general principles, while Americans tend to seek agreement first on specifics. For Americans, negotiating a deal is basically making a series of compromises and trade-offs on a long list of particulars. For the French, the essence is to agree on basic principles that will guide and indeed determine the negotiation process afterward. The agreed-upon general principles become the framework, the skeleton, upon which the contract is built.

The respondents as a group divided fairly evenly on this question, with 47% viewing the deal-making process as bottom up while 53% saw it as top down. The responses among men and women followed this same distribution closely. The survey did not reveal significant cultural trends on this issue among Americans, Germans, and Nigerians, since the respondents from these three groups were relatively evenly divided on the question. On the other hand, the French, Argentineans, and Indians tended to view deal making as a top down (deductive process) while Japanese, Mexicans and Brazilians tended to see it as a bottom up (inductive) process. Table XIII summarizes the results on the question.

[Table XIII]

AGREEMENT BUILDING: TOP DOWN OR BOTTOM UP?

Responses among professional groups showed marked variation, with 71.4% of the diplomats and civil servants viewing the process as bottom up while only 38% of accounting and financial respondents taking a similar position. The following table summarizes the responses by occupation.

[Table XIV]

(OCCUPATIONS) AGREEMENT BUILDING: TOP DOWN OR BOTTOM UP

[9] Team Organization: One Leader or Group Consensus?

In any international negotiation, it is important to know how the other side is organized and makes decisions. Culture is one important factor that affects the way groups are organized and the way organizations function. Some cultures emphasize the individual while others stress the group. These values may influence the organization of negotiating teams. One extreme is the negotiating team with a supreme leader who has complete authority to decide all matters. Many American teams tend to follow this approach, which has been labeled the "John Wayne style of negotiations." (Graham and Herberger 1983, p. 160) Other cultures stress team negotiation and consensus decision- making.

Among all respondents in the survey, 59% tended to prefer one leader while 41% preferred a more consensual form of organization. Male and female respondents tended to follow this same distribution. On the other hand, the various cultural groups showed a wide variety of preferences on the question of team organization. The group with the strongest preference for consensus organization were the French. Many studies have noted French individualism (e.g., Hall and Hall 1990), and perhaps a consensus arrangement in a French person's eyes is the best way to protect that individualism. Despite the Japanese reputation for consensus arrangements, only 45% of the Japanese respondents claimed to prefer a negotiating team based on consensus. The Brazilians, Chinese, and Mexicans, to a far greater degree than any other groups, preferred one-person leadership, a reflection perhaps of the political traditions in those countries. The results of the survey on this point are summarized in Table XV.

[Table XV]

TEAM ORGANIZATION: ONE LEADER OR CONSENSUS?

The survey also revealed significant differences among occupational groups. For example while 100% of the military respondents preferred a single leader for a negotiating team, only 42% of persons in finance expressed a similar view. The following table summarizes the survey results by occupational background:

[Table XVI]

(OCCUPATIONS) TEAM ORGANIZATION: ONE LEADER OR CONSENSUS?

Within cultures, male and female responses to this question demonstrated significant differences. Thus 78% of US male respondents preferred a one-leader team organization but only 35% of U.S. female respondents expressed a similar preference. On the other hand, among Nigerians, 80% of the men preferred consensus arrangements while 80% of the women opted for one leader. In addition, a majority of Japanese, Chinese, French, Spanish , Argentine, and Brazilian women all preferred a one leader approach to team organization.

[10] Risk Taking: High or Low?

Research indicates that certain cultures are more risk averse than others. (Hofstede 1980) In deal making, the culture of the negotiators can affect the willingness of one side to take "risks" in a negotiation -- to divulge information, try new approaches, or tolerate uncertainties in a proposed course of action.

Among all respondents, approximately 70% claimed a tendency toward risk taking while only 30% characterized themselves as low risk takers. Here too, the distribution among men and women was similar and tended to follow that of all respondents as a group. Among cultures the responses to this question showed significant variations. The Japanese are said to be highly risk averse in negotiations, and this tendency was affirmed by the survey which found Japanese respondents to be the most risk averse of the twelve cultures. Americans in the survey, by comparison, considered themselves to be risk takers, but an even higher percentage of French, British, and Indians claimed to be risk takers. Table XVI summarizes the survey results with respect to risk.

[Table XVI]

RISK TAKING: HIGH OR LOW?

The survey also found significant differences among professional groups. For example, whereas 100 % of the military respondents considered themselves to be high risk takers in negotiations, only 36 % of the diplomats and civil servants characterized themselves similarly. The following table summarizes survey responses on the question of risk taking.

[Table XVI]

(OCCUPATIONS) RISK TAKING: HIGH OR LOW

Generally, males by a large majority within each cultural group considered themselves high risk takers, with the exception of the Japanese (12.5%), Spanish (39%) and Mexicans (44%). Female respondents who registered higher percentages of risking taking than males from the same culture were US women (86%), Spanish women (67%) and Mexican women (67%).

Conclusion

The limited survey reported in this article confirms what numerous others have studied and observed: that culture can influence the way in which persons perceive and approach certain key elements in the negotiating process. A knowledge of these cultural differences may help negotiators to better understand and interpret their counterpart's negotiating behavior and to find ways to bridge gaps created by cultural differences. (Salacuse 1993) Equally important, the survey suggests that professional and occupational culture may be as important as national culture in shaping a person's negotiating style and attitudes toward the negotiation process. If true, this finding has at least two important implications. First, both scholars and practitioners need to take into account professional culture, as well as national culture, in their studies and analysis of the impact of culture on negotiating behavior. Second, when faced with a cultural differences at the negotiating table, negotiators from different cultures but similar occupational or professional backgrounds might seek to reply on the elements of their professional culture in trying to bridge the cultural gap between them.

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