The Importance of Understanding Cultural Characteristics in Negotiation

Non-Verbal Characteristics of Culture that Must be Understood When Engaging in Negotiations Overseas

            The non-verbal characteristics of culture that need to be taken into consideration on international negotiation include attitudes about the deadlines of negotiation solution and relationships (Sebenius, 2002), the location of the negotiation site, furniture and seating arrangement, the eye contacts and facial expressions (Sebenius, 2002). Understanding of the relationships and negotiation solution will help in achieving negotiation goals where positive result is the motivating factor. Therefore, having an understanding that the solution of the negotiation may be different from the expected solution will help in having a peaceful coexistence of the parties after negotiation process is done.

            The understanding of the location of the negotiation site can also help in achieving success in negotiation because it helps in planning a negotiation process. The location of the site for negotiation may be in a culture that is different from that of the third party and the parties that are required to come into agreement. An understanding of this non-verbal cultural characteristic will, therefore, help in planning for the negotiation on the overall accessibility.

            Understanding of furniture and seating arrangement is also a non-verbal cultural characteristic that can help in achieving success in the negotiation process. The physical arrangement of the negotiation site may differ depending on the culture of the people where the negotiation is to be done (Chu, 2005). It is, therefore, upon the negotiator to have a better understanding of the place to also understand the possible arrangement seats and furniture in the place. This will ensure that the negotiator is well prepared and familiar with the place of the negotiation and hence, success will be achieved in the negotiation process.

            Eye contact and facial expressions are also a non-verbal cultural characteristic that needs to be understood for success to be achieved in the negotiation process. The way people maintain eye contact while in the negotiation process also differs with the culture of the people. The negotiator has to have the understanding of the meaning of different facial expressions in the place of negotiation so that success may be achieved at the end of the negotiation process (Ribbink & Grimm, 2014).

The Stages of Negotiation Process

            The first step in a negotiation process is preparing. Preparation is a key factor for achieving success in a negotiation process (Rich, 2011). Preparation is an investment of time where there will be an allocation of time for the process of negotiation (Rich, 2011). The main component of the planning step is to have an understanding of the conflict that needs the negotiation. There is also a need to have an understanding of the history of people who are involved in the conflict to be solved. Failure to recognize the stakeholders might lead to biasness in decision making.

            The second step of a negotiation process is the definition of guiding rules in the negotiation process. After the planning stage, there is a need to form the rules and procedures that will guide the negotiation process. The rules that are established should also be as flexible as possible capable of promoting a relax atmosphere for negotiation (Sim, 2008). The flexibility in the rules ensures that the negotiation environment is as favorable as possible to ensure that the solution that is reached suits both the parties. It is at this stage that both the parties will be required to exchange their demands and proposals. Reluctance in incorporating the divergent groups in making rules will either lead to defiance or perpetuate tensions among the stakeholders.

            The third stage in the negotiation process is justification and clarification. A successful negotiation involves both justification and choice (Bendersky & Curhan, 2009). At this stage, both the parties are required to simplify, amplify, justify, and explain the demands they previously had. The parties also need to be confrontational at this stage. It is also at the justification stage that the parties get the opportunity to inform and educate each other on the issues that have arisen, how the issues are important and also how the parties were able to reach the initial demands. The parties support their positions as much as they can. Failure to effectively declare a position might provoke resentment as the other party might be suspicious and perceive the whole process as treachery.

            The fourth stage in the negotiation process is the Problem Solving and Bargaining stage. Bargaining always arises in the negotiation process as a result of uncertainty, lack of knowledge, cognitively complex issues, low levels of politicization, and presence of persuasive individuals in the parties (Niemann, 2006). It is at this stage that concessions are made by both the parties and an agreement, which is the solution, is arrived at. Elimination of problem bargaining and solving stage brings the negotiation to a standstill as the two groups hold their positions without an opportunity to identify advantages of the other party’s proposals before making a decision to enter into the contract.

            The fifth and the last stage in the negotiation process is the implementation and closure stage. Depending on the conclusion made by the views of the parties, a closure is made and the solution obtained is implemented where both the parties have to comply with the outcomes of the negotiation process (Guo & Lim, 2012). Closure in a negotiation process normally involves hammering out of specific vies of the parties in a formal contact to come up with the implementation of the solution that has been reached. Failing to close negotiations reduces the level of trust that might reduce any possibility of signing of relevant papers at a later date.

            If any of these steps are skipped, then the negotiation process is likely to fail. This is because the steps of negotiation are in a logical order and present what is required to be done at the right time.  

Cultural Variable Associated with Risk Tolerance

            Ethnicity is the major cultural variable that is related to risk tolerance in the negotiation process. It has been shown that ethnicity has a role in risk preferences during a negotiation process (Weber, 2013). For example, the Blacks and the Hispanics in the United States (US) have less tolerance to risk than the Whites. Also, the Blacks and the Hispanics have fewer stocks at low-income levels but the whites have a high tolerance to risk than the Blacks and Hispanics at all levels of income. Perception of tolerance to risks also differs depending on the cultures from where the people come from. Therefore, ethnicity is a cultural variable that is related to risk tolerance and contains other cultural variables like size of household and the number of children. The reason why the Blacks and Hispanics have more version to risk is that they have larger families than the Whites.

Cultural Variable Associated with Internal/External Focus of Control

            One of the cultural variables that are related to the internal focus is the composition of the teams for negotiation. Effectiveness can be achieved in the internal focus of a negotiation by having an established and solid teams in the negotiation process. It is the internal focus of a negotiation process that determines the risks of the external factors. That is, having a proper control of the internal factors in a negotiation process will help in reducing the risks associated with the external factors.  

            A variable that is associated with external focus is trust. Trust is the main determinant of a credible negotiation. The parties will only be satisfied if they have trust in the outcome of the negotiation process. Therefore, trust and internal control need to be well established in any negotiation. A negotiation process that is based on the trust and internal control is expected to be successful and the parties will leave the negotiation site when they are well satisfied. The satisfaction obtained shows the success in the negotiation process.  

Why Risk Tolerance and Internal/External Factors Important Factors to Consider in a Negotiation Process

            Risk tolerance and internal/external factors form the basis of negotiation and that is where they become important in every negotiation process. If the negotiator is not informed of the possible risks, then it will be difficult to overcome the risk when it appears. Likewise, if the internal and external factors that can affect a negotiation process is not well understood, then it indicates that the process of negotiation lacks preparation and hence when the factors change, the negotiator will not have the knowledge on how to bounce back in such a situation. Therefore, having an understanding of risk tolerance and internal/external factors will prevent the negotiator from looking as if there is lack of preparation and hence, untrustworthiness will be prevented in the outcome of the negotiation process. Despite the different cultures that are encountered, preparedness and trustworthiness are important for international businesses.  

Negotiation as a Business Person in the Lucrative Joint Venture in Mexico

            The strategy and the style used in this negotiation is what will determine the kind of outcome to expect from the negotiation. Since the negotiation is international, there will be a need to have an understanding of the different behaviors in negotiation noting reasons for every behavior in the negotiation process. This will help in knowing what happens in the course of negotiation. The strategies that I will use in this negotiation include the styles that vary spontaneously and passionately to ensure calmness, patience, quietness, and are direct to the point, depending on the culture where the negotiation site is based and the cultures of the people involved in the negotiation process.

            The style that I will adopt also needs to be based on the understanding of what the counterpart has to do and how the counterpart is likely to react on the style that is selected. For instance, the high-context cultures of the Mexican managers are what affect their interpretations. An indirect approach is, therefore, necessary in such a case to help in maintaining dignity and patience during the discussions of the ideas. On the other hand, Americans have an approach that is based on low-context and this can make the negotiation go personal by the Mexicans. Negotiating a lucrative joint venture in Mexico will require that I have a variety of decisions to make before the day of the negotiation process. For the case where quick turn-around is expected, then there is a need to have a throughout decisions that are made during the preparation for the negotiation process. However, the decisions that are made in the course of the negotiation have to be quick. A positive outcome will, therefore, be achieved by having a prior preparation to have the decisions ahead of time.

References

Bendersky, C., & Curhan, J. R. (2009). Cognitive Dissonance in Negotiation: Free Choice or Justification? Social Cognition, 27(3), 455–474. https://doi.org/http://dx.doi.org/10.1521/soco.2009.27.3.455

Chu, Y. (2005). Silent Messages in Negotiations : the Role of Nonverbal Communication in Cross-Cultural Business Negotiations. Journal of Organizational Culture, Communications, and Conflict, 9(2), 113–129.

Guo, X., & Lim, J. (2012). Decision support for online group negotiation: Design, implementation, and efficacy. Decision Support Systems, 54(1), 362–371. https://doi.org/10.1016/j.dss.2012.05.043

Niemann, A. (2006). Beyond Problem-Solving and Bargaining: Genuine Debate in EU External Trade Negotiations. International Negotiation, 11(3), 467–497. https://doi.org/10.1163/157180606779155246

Ribbink, D., & Grimm, C. M. (2014). The impact of cultural differences on buyer-supplier negotiations: An experimental study. Journal of Operations Management, 32(3), 114–126. https://doi.org/10.1016/j.jom.2014.01.004

Rich, C. (2011). Successful negotiation is 80 percent preparation: How to get more of what you want by preparing properly. Strategic Direction, 27(3), 3–5. https://doi.org/10.1108/02580541111109543

Sebenius, J. K. (2002). The hidden challenge of cross-border negotiations. Harvard Business Review, 80(6), 76–85.

Sim, K. M. (2008). Evolving fuzzy rules for relaxed-criteria negotiation. IEEE Transactions on Systems, Man, and Cybernetics, Part B: Cybernetics, 38(6), 1486–1500. https://doi.org/10.1109/TSMCB.2008.928210

Weber, C. S. (2013). Cultural Differences in Risk Tolerance. IWE Working Paper, 01(01). Retrieved from http://www.economics.phil.uni-erlangen.de/forschung/workingpapers/riskaversion.pdf