Does Cultural Factors Affect the Negotiations Process?

Organizational Behavior

From a cultural perspective, Chinese businesspeople are known to be difficult to negotiate with.  Their main objective is to seek the best bargain and maximize their organization’s utility.  Although this statement may sound stereotypical, there is a level of truth to this.  This negotiation style is something engrained in to Chinese business culture.   As globalization continues to have an immediate impact on businesses and organizations, we must understand the impact of cultural differences in negotiating style.  Before I proceed with this blog and this topic, I am cautioning you that some of my findings are indeed generalizations about an entire culture.  These generalizations are only helpful to an extent, and depend largely on contextual factors. So, let’s begin by defining negotiation as an instrumental process in business.  “This is a process by which the involved parties or group resolve matters of dispute by holding discussions and coming to an agreement which can be mutually agreed by them. It also refers to coming to closing a business deal or bargaining on some product.”[1]  From a micro prospective, we engage in negotiations with our classmates each semester about a term project or at our jobs with our coworkers about shift changes.  We go through our whole lives engaging in some form of negotiations.  Therefore, as we enter the workforce in the coming years, we will be presented with many opportunities to apply our own personal negotiation style with others.  These individuals may hold a completely different “set of shared and enduring meanings, values, and beliefs that characterize[s] national, ethnic, and other groups and orient their behavior.”[2]  For our purpose as OB students and as open-minded scholars, we must analyze cultural differences as they relate to negotiation.  As a result we will gain a better understanding of our counterparts and avoid passing negative judgments, and progress in the negotiation process.

Based on my research finding, I found Michelle LeBaron’s article on “Culture-Based Negotiation Styles” to be most practical.  LeBaron identifies cultural factors in which negotiators should be aware of.  Some of the main issues with culture and negotiation style may be observed in space orientation, power distance, time orientation for meetings, masculine and feminine roles, and a series of non-verbal communication which sets the undertone for the meeting.  She begins with Time Orientations and distinguishes polychronic and monochronic cultures.  Negotiators from polychronic cultures tend to be more concerned with the flexibility of time, allows breaks when appropriate, and are comfortable with a high flow of information.  In monochronic cultures, negotiators should prefer prompt beginnings and endings with schedule breaks.  They tend to deal with one agenda at a time and rely on specific, detailed, and explicit communication.  One of the easiest signals to identify is Space Orientation, the distance between the speaker and listener.  In North America, personal space is much larger than in European countries.  Asian and Middle Eastern cultures tend to discourage touching outside of intimate situations.  For managers/negotiators, it is important for them to be aware of these norms, in order to help them avoid an uncomfortable situation.  Closely related to notions of space is Nonverbal Communication.  Maintaining eye contact and facial expressions such as a smile are more frequent in Canada and United States. Conversely, in Asian and Eastern European countries, eye contact is less frequent if there is a difference in power distance.  Lastly, Masculine and Feminine roles refers to the degree to which socially prescribed roles operate for men and women.  A study conducted by Geert Hofstede identifies “the degree to which a culture values assertiveness or nurturing and social support.”[3]  This is important for negotiators because certain countries with a high degree of feminism will value cooperation, nurture, and relationship solidarity.  Cultures which values masculinity will prefer to a more direct, self-assertive, and task oriented approach to negotiations.

Based on my past and present work experience in China and Canada, I can see the vast differences culture can have on business negotiations.  In China, the negotiation process was often done informally.  Negotiations could take place at restaurants, on business trips, or even at a coffee shop.  Face to face interaction and building long term relationships was more important than having a contract signed in a set period of time.

In order to be successful in negotiations, an individual must set their own culture and tradition aside and remember that there is no official standard of human behavior when it comes to culture and negotiations.


[1]  Salacuse, J. The Top Ten Ways Culture Affects Negotiating Style. Retrieved May 29, 2011, from http://www.gevim.co.il/image/users/89301/ftp/my_files/Culture-Based%20Negotiation%20Styles.pdf

[2]  LeBaron, M. Cultural based negotiation styles. Retrieved May 29, 2011, from http://www.gevim.co.il/image/users/89301/ftp/my_files/Culture-Based%20Negotiation%20Styles.pdf

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6 thoughts on “Does Cultural Factors Affect the Negotiations Process?

  1. Hey Ray,

    Good job, I do believe that culture plays a part in negotiations and I think many large companies have learned that in the recent past and have worked to ensure that they are aware of the different cultures when having dealings outside of their immediate areas of business. I do also agree with the last part, that a mutual culture can be set but when there is an imbalance with decision making power I feel respecting another’s cultural values plays an important role.

    1. Thanks for the comment Renit

      You’ve made some great points.
      Garnering respect should be a top priority for any organization, and understanding other’s cultural values will give them a better reputation and avoid stereotyping.

  2. I remember taking International Business class and our teacher telling us that it is very important to understand the culture before opening up any kind of business in a country. There have been many situations of miscommunication where the baby food bottles with a picture of baby were not accepted as food for the babies. Therefore, even while negotiating we need to know the other party very well before placing any offer on their table. You have clearly explained this by using your own experiences as an example, the difference between negotiations in China and in Canada and I believe it is the same for India. Their way of doing business is unique as well and we as entrepreneurs need to understand these differences before entering any job market.

    1. Thanks Jas.

      I too remember hearing that baby food bottle story and many other marketing mishaps in other countries.
      It’s great that the students of our generation understands the implications of culture. We must continue to learn about others and avoid being a prisoner of our own culture. It’s extremely naive to think that “people are pretty much the same everywhere.”

  3. Ray,

    This was an extremely interesting blog for me to read and I have a significant personal interest in multiculturalism and international business. I really liked how you outlined the Chinese vs. North American cultural difference relating them to the terminology we have learned in previous marketing courses.

    I think that it is crucial in today’s society to learn and understand as much as you can about another culture – especially if you are conducting business with them. If the communication is smooth, it makes the world a better place, as your actions are likely acknowledged by them and resonate positively with the other people present.

    However, the best point of your entire blog was the conclusion when you stated “In order to be successful in negotiations, an individual must set their own culture and tradition aside and remember that there is no official standard of human behavior when it comes to culture and negotiations.” Excellent point. And the key to the future success of international business. One must put their culture aside and focus on the business at hand otherwise the optimal outcome will be in jeapordy because of cultural factors.

    Take care,
    David D.

  4. Ray,
    Due to globalization do you think many negotiation styles will be integrated among each other? Since business is becoming so much more global successful business people will adapt and take cues from many different negotiation styles they are exposed to, thus creating a unique set of negotiation skills for the individual. Many organizations are offering cross- cultural training: http://www.global-integration.com/what_we_do/cross_cultural_success.html. Although beneficial, i think the most vital component to negotiation success across cultures is immersion and time.

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