The effect of culture on international negotions

The effect of culture on international negotions

Michigan State University’s Eli Broad College of Business Gambrel Family Endowed Professor in Management Donald Conlon, Ph.D. explores how diverse the world population is: out of every 100 people in the world, only about seven are from North America, while 55 are Asian, 21 are European, nine are African and eight are South American. Since we North Americans represent such a small portion of the world’s population, “it really behooves us to understand how people in other cultures negotiate,” said Dr. Conlon. Cultural norms, such as physical touching, an aversion to touching, periods of silence during meetings or a casual approach to time can be unfamiliar or disquieting to people from different cultures.

• How Cultural Differences Can Affect International Negotiations

According to Dr. Conlon, there are four dimensions of culture as described in Hofstede’s Model of International Culture. Geert Hofstede developed this model while working for IBM with its hundreds of thousands of employees throughout the world. Taking these dimensions into consideration during international negotiations can help you be more successful.

• Four Dimensions of Culture to Consider in International Negotiations

1. Power Distance

• 1. Power Distance
• In some countries, the levels of power are distinct and understood internally but may not be apparent to outsiders. For example, in Russia, power tends to be concentrated at the top. Executives or government officials may negotiate an agreement, only to have it re-negotiated by higher-level officials.
• 2. Individualism/Collectivism
• People in a culture may think of themselves in terms of the individual or as members of a connected group, or collective. In the United States, people score highly in individualism while Pacific Rim countries, such as China and Japan, tend to be more collectivist. This thought process influences the way societies are organized and decisions are made.

3. Masculinity/Femininity

• 3. Masculinity/Femininity
• The third element refers to the extent to which societies endorse what is considered traditional or stereotypical masculine and feminine characteristics. For example, aggressiveness and competition are often considered “male” characteristics, while a focus on relationships and cooperation are traditional “female” characteristics. Many Scandinavian countries score higher on quality of life in relationships while other cultures, such as the United States and Mexico, score higher on the competition.
• 4. Uncertainty Avoidance
• Uncertainty avoidance refers to the extent to which someone is comfortable with unstructured or uncertain situations. Some cultures are uncomfortable with ambiguity; in negotiations, businesspeople would seek rules and regulations to guide them. Other cultures are low in uncertainty avoidance, and more relaxed about negotiations. Americans tend to be comfortable with uncertainty.
• These elements describe cultural values in a general way and certainly not all people in a given culture will adhere to each and every aspect. These can, however, be broad descriptions of how different cultures approach negotiations.

According to Dr. Conlon, these cultural subtleties can impact a number of phases of negotiation. For example, people from cultures with high uncertainty avoidance are likely to be very thorough in planning. While Americans tend to be okay with ambiguity and expect a surprise or two, other cultures would not be comfortable with surprises. People who are high in uncertainty avoidance will also rely more on rules to guide them.

• How Can These Elements Impact Negotiations?

Culture strongly influences the personal styles of negotiators

Negotiators from formal styles tend to address their counterparts by
their titles and avoid discussing personal matters.
In contrast, negotiators from informal cultures tend to hastily
attempt to establish a friendly relationship.