Negotiation in Cross Cultures

Negotiation In a Cross-Cultural Environment--American versus Japanese

By Therese Perlmutter

HR595 Negotiation Skills

Keller Graduate School of Management

Dr. Larry Ray

May 10, 2005

Table of contents

I. Introduction

II.

III.

IV.

V. Conclusion

VI. References

I. Introduction

Negotiations always occur between parties who believe that some benefit may come of purposeful discussion. The parties to a negotiation usually share an intention to reach an agreement. This is the touchstone to which any thinking of negotiations must refer. While there may be some reason to view negotiations as attempts by each party to get the better of the other, this particular type of adversarial negotiation is really just one of the options available. Among the beginning principles of a negotiation must be an acknowledgment that the parties to a negotiation have both individual and group interests that are partially shared and partially in conflict, though the parameters and proportions of these agreements and disagreements will never be thoroughly known; this acknowledgment identifies both the reason and the essential subject matter for reflection on a wide range of issues relevant to a negotiation. (Gregory Tropea, November 1996)

Any negotiation challenges the parties involved in a variety of ways, but parties with conflicting interests face important additional difficulties when attempting to negotiate an agreement across culture lines. Not only will the difficulties arising from the known similarities and differences of opinion be more pronounced, but also unsuspected factors could easily enter the picture and condition perceptions of the situation. In cross-cultural negotiations, a reasonable second acknowledgment should be that the hidden factors that are always at work are more likely to interfere with reaching an agreement. It is especially important that this acknowledgment be understood to apply not only to the dynamics of interactions across the table, but those of individuals on the same side of the table. [At times, it may be tempting to attribute the outcomes of negotiations to a single variable (such as the culture or the relative power of a country).] The term culture has taken on many different meanings but basically it reflects the shared values. Culture affects negotiations in different ways. In this paper, we are going to discuss the American and Japanese negotiation styles and the different ways culture affects negotiation in each style. (See Lewicki)

II. The Problem

How to overcome culture differences in cross-cultural negotiations?

III. Problem Analysis

To analyze the problem we have to study the American and Japanese negotiation styles and how culture in its different meanings affects negotiations.

1-Negotiation Styles

a. The American style (Doing Business with the New Japan, Hodgson, Sano, Graham, 2000)

Probably no single statement better summarizes the American negotiation style than "Shoot first, ask questions later," Throughout the American educational system we are taught to compete, both academically and on the sporting field. Adversarial relationships and winning are essential themes of the American socialization process. But nowhere in the American educational system is competition and winning more important than in case discussions in our law and business school classrooms. Of course, such skills are important at the negotiation table, but the most important skills such as how to ask questions, how to get information, how to listen, or how to use questioning as a powerful persuasive strategy are not taught or, at best, are underemphasized.

b. The Japanese negotiation style

The Japanese negotiation style is indeed unique. It is even different than that of its neighboring countries China and Korea. Contrary to their haggling styles, the Japanese style is more subtle and low-key. The Japanese style has far deeper roots than the American style. Another characteristic is that it could be suitably used internationally. Three environmental factors are most important on the business negotiation style: insular and mountainous geography, dense population, and the importance of rice as the basic food crop. (Hodgson, Sano, and Graham, 2000)

Japan is surrounded by seas which always made it difficult for foreigners to come in into the country as much as locals leaving the country. Moreover, the mountains made it difficult for groups to move within Japan itself. That meant that the people had to stick together.

Japan is the most densely populated land in the entire world with respect to people per square mile of arable land. This crowding fosters obedience and cooperation among groups. Rice cultivation, which is a hard chore, is an important factor influencing the values and behavior of the Japanese. About five sixth of Japan's population work in cultivating rice, which means that people have to learn to cooperate. The small group in the community is central to its culture. Individual needs are de-emphasized. Loyalty and consensus decision-making are key elements that bind such groups together.

As in America, classroom behavior is influenced by and tends to reinforce these cultural values and behavioral norms. Lively discussions are not part of the educational process, rather professors present lectures with no questions or feedback. Listening skills and obedience, rather than debating are rewarded.

2- How the variations of the term culture affect negotiations:

-Definition of negotiation:

Americans view negotiations as a competition while Japanese view it as an opportunity to exchange information.

- Groups versus individuals: Americans don't mind sending one person to handle any situation by himself and it usually