Negotiations and cross cultural considerations

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Negotiations

“Negotiation” steams from the Roman word negotiari meaning “to carry on business”. It was true for ancient Romans as it is for businesspersons of today that negotiations and business involves hard work. (Hendon, Hendon & Herbig 1996)

Negotiations are a frequent part of international business. Parties involved in a negotiation face different problems in reaching a successful outcome. When parties have different cultural backgrounds the faced problems becomes even more complex.

Negotiation is a process to manage relationships. It is a basic human activity that exists between husband and wife, children and parents, employers and employees, buyers and sellers and between business associates. In business relationships the stakes are often high and therefore it is necessary to plan an prepare the negotiation more carefully. (Ghauri 2003) When business parties negotiate the purpose is to influence the process so they can get a better deal rather than to accept or reject what the other party is offering. Negotiations are treated as an important part of developing business in any market. The estimated time spent in negotiations is 50 per cent of the total working time. (Fraser & Zarkanda-Fraser 2002)

Business negotiations differ from other negotiations. In business negotiations it is considered the most challenging communication tasks (Woo & Prud’homme 1999) and are more and more considered a crucial part of the managerial process, which is highly relevant to the implementation of business strategy (Ghauri 2003) Successful negotiations require understanding of each party’s culture and may also require adaptation of the negotiating strategy so it is consistent with the other party’s culture. (Hollensen 2001) Negotiations is important, especially in business to business markets where companies build long term relationships. Establish, maintain and foster relationships are of prime importance for the market transaction to take place (Ghauri 2003). Due to globalization, many companies have also set up overseas branches and many managers are facing greater problems in negotiating with local sales office often manned with local managers. It is therefore, interesting to investigate how culture interfere the negotiation behaviour of parties coming from different countries and cultures.

Cross-Cultural Considerations
The different social behaviour patterns international negotiators encounter have been broadly and loosely defined as cultural differences. Furthermore, there is limited research on the relationship of culture to negotiation, most probably because of the inherent difficulties in the methodology of studying these problems. There are, however, four approaches taken by negotiation literature implying a connection between culture and behaviour : culture as a learned behaviour, culture as shared value, culture as dialectic, and culture-in-context. (Robert 1991) Each approach is conceptually different, and this implies that it is important to understand these differences during the conduct of negotiation of international partnerships.

Learned behaviours focuses on negotiating etiquette, that is the use of proper social customs, such as whether or not negotiations are conducted over dinner or not. Most books on “how to negotiate abroad” are written based on this approach to international negotiations. Researchers following this approach observe that certain types of behavior are common to certain cultures, and attempt to catalog those behaviors. Some of the earliest investigations into cultural differences take this form. However, this approach has difficulty accounting for individual variations in negotiation styles. (Robert 1991)

Culture as a shared value focuses on the negotiation process. For this approach "the assumption, simply put, is that thinking precedes doing, and that one's thinking patterns derive from one's cultural context." Researchers try to discover the basic values and attitudes of a...