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ISSUES IN

CROSSCULTURAL
NEGOTIATIO
N
DENNY
C AT H Y
SUNNY

ZAELANI (26543468)

OUTLINE
The Basics
Whats so different about China and India?
Cultural Values on Cross-Cultural Business Negotiation
Process
How to take the most out of it?
How can we learn?
References

THE BASICS
What is Culture?

Specificity
the collective programming of the mind which distinguishes
the members of one human group from another (Hofstede,
1980).
Northouse (2007) defines culture as learned beliefs, values,
rules, norms, symbols and traditions that are common to a
group of people.

Pattern
Salacuse (1999) adds; culture is the socially transmitted
behaviour patterns, norms, beliefs and values of a given
community.

THE BASICS
Culture and Negotiation

Cultural influence in negotiation styles


Culture is always an important factor to influence the business
negotiation. Due to the different lifestyle, different thinking mode
and action pattern in different cultures, there exist many different
business negotiation styles. (Zhang, 2011)

Negotiation is a part of culture


Negotiation, in turn, is a part of the human activity connected
with problem solving which is oriented towards peaceful means
of dispute resolution (Hofstede & Hofstede, 2005).

THE BASICS
Can Culture influence a negotiation?

Cultural differences may potentially hamper the success of a crosscultural negotiation.


Brett (2001): culture is a key factor affecting negotiation processes and
outcomes;
Salacause (2004): negotiation practices differ from culture to culture;
Schneider et al. (2003): a big trap in negotiation is often due to
misunderstanding the culture of other countries, especially in the rules that
they use to negotiate.

Can be detrimental (leads to deadlocks, tangible and intangible


losses).
E.g. ENRON negotiation case in India. (Salacuse, 2005)

WHATS SO DIFFERENT ABOUT CHINA AND INDIA?


Consider this!
https://www.youtube.com/watch?v=ZtbyVFLl_7U

Hofstedes
Cultural
Dimensions
Halls
Context & Time
Trompenaars
7 Cultural
Dimensions

WHATS SO DIFFERENT ABOUT CHINA AND INDIA?


Hofstedes (1983) Cultural Dimensions;

WHATS SO DIFFERENT ABOUT CHINA AND INDIA?


Hofstedes (1983) Cultural Dimensions;
Dimensions

India

China

WHATS SO DIFFERENT ABOUT CHINA AND INDIA?


Halls Context and Time;
Dimensions

India

High Context
Low Context
Monochronic
Polychronic

X
Traditionally its a High Context.

China

WHATS SO DIFFERENT ABOUT CHINA AND INDIA?


Trompenaars 7 Dimension of Culture;
Dimensions

India

China

X
Traditionally its a High Context.

X
Consensus, relationships

CULTURAL VALUES ON CROSS-CULTURAL BUSINESS NEGOTIATION PROCESS

Goal
Protoc
ol

Nature of
Agreemen
ts

Cultur
al
Values

Decision
making

Risk
propensity

Communicati
on

Time

(Brett, 2001; Hendon et al., 1996; Lewicki et al., 1999; Salacuse, 2005; Weiss, 1994)

CULTURAL VALUES ON CROSS-CULTURAL BUSINESS NEGOTIATION PROCESS

Negotiation Process
Goal

India

China

Issues

Contract

Relationship

Communication

Direct: talkative,
emotional.

Indirect: emphasis on
silence and nonverbal
communication.

Unnecessary confusion
and missunderstanding.

Time

Low sensitivity: Less


punctual.

High sensitivity:
punctuality

Meeting time.

Risk propensity

Risk taker.

Risk averse.

Protocol

Decision making
Nature of agreements

CULTURAL VALUES ON CROSS-CULTURAL BUSINESS NEGOTIATION PROCESS

Sunil is the CEO of Cyrax Biotech, a Bombay-base bioengineering


company, which attempts to expand their factory in Chengdu , China.
In doing so, Cyrax Biotech will build joint venture with Guanxi Bio, a
well-reputable generic pharmaceutical company in China.

Today is the first day those two corporations will negotiate their
future plans. Sunil is planned to meet with Guanxi representatives at
10 am. Zhang, the CEO of Guanxi, has been in the conference room
10 minutes prior the meeting time. She feels excited as she thinks
that arriving early will allow her to make conversation with her
counterpart with a hope of getting him better before. However, Sunil
is arriving late, 15 minutes past the meeting time. Knowing her

CULTURAL VALUES ON CROSS-CULTURAL BUSINESS NEGOTIATION PROCESS

Hypothetical Case 2

CULTURAL VALUES ON CROSS-CULTURAL BUSINESS NEGOTIATION PROCESS

Hypothetical Case 3

WHAT CAN WE LEARN?

HOW COULD WE TAKE THE MOST OUT OF IT?

REFERENCES
Northhouse, P.G. (2007). Leadership: Theories and practice (4 ed.). California: SAGE Publications
ltd.
Hofstede, G., & Hofstede, G.J. (2005). Cultures and organizations, software of the Mind:
Intercultural cooperation and its importance for survival (2nd ed.). New York, NY: McGrawHill.
Hofstede, G. (1980). Cultures Consequences, London: Sage Publications.
Zhang, Y. (2013). A Study of Sino-Indian Business Negotiations-from a Cross-cultural
Perspective. Journal of Asian Business Strategy, 3(10), 278-291.
Salacuse, J. (1999).Group Decision And Negotiation,8(3), 217-236. http://
dx.doi.org/10.1023/a:1008660330550
Brett, J. M . (2001). Negotiating globally: How to negotiate deals, resolve disputes and make
decisions across cultural boundaries. San Francisco: Jossey Bass.
Salacuse, J.W. (2004). The global Negotiator: Making, magaging, and mending deals around the
world. New York: Palgrave Macmillian.
Schneider, S.C., & Barsoux, J.L. (2003). Managing across cultures (2nd ed.). Harlow: PrenticeHall.
Salacuse, J.W. (2005). Negotiation: The top ten ways that culture can affect your negotiation.
Ivey Business Journals, 69(4), 1-6.
Trompenaars, F. (1996). Resolving International Conflict: Culture and Business Strategy.Business
Strategy Review,7(3), 51-68. http://dx.doi.org/10.1111/j.1467-8616.1996.tb00132.x
Hendon, D., Hendon, R.A., & Herbig, P. (1996). Cross-cultural business negotiations. Westpost,
CT: Quorum.
Weiss, S. E. (1994). Negotiating with" Romans"-part 1. Sloan Management Review, 35(2), 51-61.
Lewicki, R.J., Saunders, D.M., Minton, J.W., & Barry, B. (2002). Negotiation (4th ed.). Boston,
Mass: McGraw-Hill Irwin.

Thank you!