CROSS-CULTURAL NEGOTIATIONS

Cross-cultural Negotiations



Cross-cultural Negotiations

What Else Should The U.S. Company Find Out About Each Culture Before It Starts Negotiating?

The US company needs to find out the cultural values and orientations of all the three counties in order to devise a successful negotiation strategy. As the mediator will be involved in cross-cultural negotiation, he will face new challenges in understanding 3 different cultures, despite them belonging to the same region. Thus, in order for the negotiations to turn out into a win-win situation it is necessary that a cultural understanding be gained.

Along with that the middleman needs to have a comprehensive knowledge about the environment in which the negotiating will take place, sub-cultural differences, ideological differences, bureaucracy, government, financial standing, political climate, economic situation, and laws of the countries in question. For the reason, that all these variables come together to impact the overall cultural orientation of any country's citizens especially in business dealings (Horst, 2007).

What Are The Differences?

The company can make use of Hofstede's cultural dimensions so as to gain a better understanding of the cultural differences that will be at play during the negotiations.

Hofstede's Cultural Dimensions

Power Distance Index (PDI) "Hierarchy"

Individualism - IDV

"Identity"

Masculinity (MAS)

"Gender"

Uncertainty Avoidance Index (UAI)

"Truth"

Long-Term Orientation (LTO)

"Virtue"

China (High)

80

20

66

40

118

South Korea

60

18

39

85

75

Japan

54

46

95

92

80

All the three cultures give a lot of importance to the hierarchy; they show deference to their superiors, especially the Chinese. So a deferential approach should be taken while negotiating and communicating at executives at managerial levels and lawful authority. Japan has moved a bit towards individualism while China and South Korea still adhere to their collectivistic values, so the US company's employees will see that there is a huge contrast in them and these countries. All three countries are highly masculine, though South Korea still ranks a little lower on it, so the lesson is that men in power should be respected (Hofstede, 2001).

Moreover, South Korea and Japan are likely to steer clear of any risky options, will the Chinese might still show a little inclination for risk-taking. Also, all three countries have a long term orientation, meaning, not only do they take a lot of time in reaching a decision, but they believe in long-term relationship instead of just one time contracts.

How Do These Countries View Contracts?

In the traditional Japanese business practice, details are not paid a lot of attention to the documentation is kept to a minimum. Legal assistance is usually not involved. If a detail contract is asked to be drawn up, the Japanese take it as a sign of lack of trust, and this jeopardize the business relationship. The contracts are always open to re-negotiations. The Japanese will always expect the other party to be flexible so that any needed changes can be accommodated. Furthermore, their decision making process is very slow as it takes time for information to move through the various levels of hierarchy. Also, that the Japanese like to be thorough, so they will undertake a comprehensive evaluation (Barkai, 2011).

On the other hand, when dealing with the Chinese the US ...