Marks: Describe, compare, and discuss the “Negotiating goal: Contract or relationship?” by identifying the cultural dimension(s) affecting the goal and discussing the effects.

10 Marks: Describe, compare, and discuss the “Negotiating goal: Contract or relationship?” by identifying the cultural dimension(s) affecting the goal and discussing the effects.

In: Hofstede, G. (1994) The business of international business is culture, International Business Review, 3(1), 1-14, Hofstede lists for behavior at the workplace for High Collectivism societies:

Value standards are different for in-group and out-groups (particularism).
Other people are seen as members of their group.
Relationship prevails over task.
Moral model of employer-employee relationship.

Hofstede: High Individualism societies:

1. Same value standards apply to all: universalism

2. Other people seen as potential resources

3. Task prevails over relationship

4. Calculative model of employer-employee relationship

In: Salacuse, J. W. (1999). Intercultural negotiation in international business. Group decision and negotiation, 8(3), 217-236.

In the discussion of “contract or relationship” issues in negotiation, the articles by Salacuse indicate that in general, collectivists tend to seek a long-term relationship over a contract.

It is important to determine how your counterparts view the purpose of your negotiation. If relationship negotiators sit on the other side of the table, merely convincing them of your ability to deliver on a low-cost contract may not be enough to land you the deal. You may also have to persuade them, from the very first meeting, that your two organizations have the potential to build a rewarding relationship over the long term. On the other hand, if the other side is basically a contract deal maker, trying to build a relationship may be a waste of time and energy.

5 marks. Describe, compare, and discuss the “Negotiating attitude: Win-Lose or Win-Win?” by identifying the cultural dimension(s) affecting the goal and discussing the effects.

Salacuse (1998): Because of differences in culture, personality, or both, business persons appear to approach deal making with one of two basic attitudes: that a negotiation is either a process in which both can gain (win-win), a characteristic of a High Femininity society, or a struggle in which, of necessity, one side wins and the other side loses (win-lose), a characteristic of a High Masculinity society. Win-win negotiators see deal making as a collaborative, problem-solving process (High Femininity); win-lose negotiators view it as confrontational (High Masculinity). As you enter negotiations, it is important to know which type of negotiator is sitting across the table from you. Here too, Salacuse’s survey revealed significant differences among cultures. However, the results of Salacuse’s research are not consistent; for example, whereas 100 percent of the Japanese respondents (High Masculinity society) claimed that they approached negotiations as a win-win process, only 33% of the Spanish executives took that view.

Further complicating assessing the effects of cultural dimensions, the notion of harmony is another important social value. For example, in Japan the spirit of harmony is expressed in the virtue of wa, which underpins group structure in Japan. The objective of wa is to achieve harmonious social relationships on a horizontal basis. The Japanese believe that an individual is not self-sufficient, and that each person's life is only made meaningful and useful to the society when he or she is put in an appropriate position to perform a portion of a collective task. Harmony, therefore, stems from proper participation by individuals in group activities. This traditional team approach is reflected in the Japanese negotiation style. One distinctive characteristic of this negotiation style is the consensual decision-making process which has been adopted by Japanese companies in their business negotiations. A consensus approach in negotiation goal setting tends to favor a win-win goal.

Using Hofstede’s model discussing Individualism/Collectivism, some students stated that in High Collectivism societies members will prefer a win-win objective. However, an important aspect of Collectivism is strong support for in-group members. Collectivistic cultures are characterized by:

· Behavior as per social norms that are established for maintenance of social harmony among in-group members;

· Considering the wider in-group collective with regards to implications of their actions;

· Sharing of resources and readiness to give up personal interest keeping in mind the collective interests of the in-group;

· Favoring some in-groups (such as friends and family) over others;

· Being a part of a few in-groups that have an influence on their lives; they have an increased inclination towards conformity;

· Increased concern regarding in-group members. They show hostility or indifference toward out-group members;

· Emphasis on harmony and hierarchy within in-group;

· Regulation of behavior with the help of group norms.

One might also argue that relationship-orientated (Collectivist) cultures are typically negotiating for a positive long-term relationship (which could also include discussion of the LTO/STO dimension), and would tend to favor a win-win objective.

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