Accompanying the myriad of benefits brought about by the global village, is an equally numerous amount of challenges and problems that modern managers must face.
The unprecedented growth of international business has resulted in an increased volume of face-to-face negotiations between members of different cultures. In order to be successful in such a diverse and complex business environment, managers must be globally aware and have a frame of reference that goes beyond a country, or even a region, and encompasses the world (Cateora, 1996). Effective negotiation skills are becoming increasingly important for today’s global managers. By some estimates, global managers spend more than half of their time negotiating (Fayweather and Kapoor, 1972, 1976; Perlmutter, 1984;
Adler, 1991). A key component of successful international negotiation is effective cross-cultural communication. This requires that negotiators understand not only the written and oral language of their counterparts, but also other components of culturally diffe rent communication styles (Cullen and Parboteeah, 2005). In particular, it requires an understanding of the more subtle, nonverbal aspects of communication. These aspects of nonverbal communication play a vital role in our understanding of the communication process (Duke, 1974).
i. Main Argument
It has been estimated that only 35 percent of the social communication among people is verbal, with the remaining 65 percent consisting of nonverbal modes of behavior
(Harrison, 1965; Birdwhistell, 1970). Effective cross-cultural communication is therefore dependent on understanding the subtle intricacies and differences in the communication styles of different cultures. This requires sensitivity to, and awareness of the potential messages contained in nonverbal behaviors. Given the importance of nonverbal aspects of communication, it is surprising how little research has been conducted on the impact of nonverbal behavior on cross-cultural negotiations. Although negotiation and nonverbal communication have been extensively researched and studied over the last few decades, very few studies have actually attempted to link these two fields together. Several negotiation theorists have mentioned the interplay of nonverbal modes of communication, albeit on a fairly cursory and superficial level (ex. Graham, 1984; Martin and Herbig, 1998;
Tung, 1982). Rather than underlining and investigating the importance of nonverbal behavior in negotiation, most theorists have typically discussed the issue as a small facet of the negotiation process. This superficial glossing of the issue has therefore emasculated the importance of nonverbal communication in cross -cultural negotiations.
ii. U.S. – China Trade and Negotiation
The increasing frequency and importance of international business between the US and China has contributed to the growing need for cross-cultural negotiation skills among today’s global managers. According to US statistics, China's export to the United States reached US$243.5 billion in 2005, accounting for 32 per cent of China's US$762 billion total exports and 14.6 per cent of US total imports. As a result, China has become the United States’ third-largest trade partner. Not only does this demonstrate the mutual dependency of these two markets, but it also underscores the importance of effective negotiation. Since effective negotiation is dependent on effective communication, both American and Chinese negotiators need to be able to understand, and accurately interpret their counterparts’ positions, perspectives, and expectations. A prerequisite of this understanding is the ability to recognize and interpret both the verbal and nonverbal aspects of communication.
iii. Motivation and Purpose
The purpose of this paper is to discuss the importance of nonverbal communication on cross -cultural negotiation processes and outcomes. Examining the broad base of literature concerning negotiation and nonverbal communication, this paper will attempt to link the critical findings of these two fields of research into a coherent and comprehensive model of cross-cultural negotiation – encompassing both verbal and nonverbal aspects of communication. The first section provides an overview of negotiation and nonverbal communication research literature. This is followed by a discussion of three categories of determinants that affect cross-cultural negotiation and nonverbal communication, particularly as they relate to U.S.-China commercial negotiations: (1) national character; (2) organizational culture; and (3) individual personality. The third section discusses the components and stages of the negotiation process, which is followed by a summary of the general strategies and tactics adopted by international negotiators. The paper will conclude with the presentation of a model that outlines key determinants of nonverbal communication, and how they impact cross-cultural negotiations.
iv. Defining Negotiation
There is ample literature on negotiation, which include contributions from various fields ranging from social psychology to communication to business management. The definition of ‘negotiation,’ however, tends to vary greatly in terms of specificity and breadth. Cohen (1980) defines negotiation as “the use of information and power to affect behavior within a web of tension.” Gulbro and Herbig (1995) define negotiation as “the process by which at least two parties try to reach an agreement on matters of mutual interest.” Fisher and Ury (1991) take a more informal approach, defining negotiation as “a basic means of getting what one wants from others and a communication designed to reach an agreement when you and the other side have some interests that are shared and others that are opposed.” Other authors such as Odell (1999) are more formal in their definition of negotiation, stating that “negotiation is a sequence of actions in which two or more parties address demands and proposals to each other for the ostensible purposes of reaching an
agreement and changing the behavior of at least one actor.”
Even with this wide range of definitions, most authors tend to converge on several basic characteristics of negotiation. Fowler (1986) and McCall and Warrington (1989) have pooled together an extensive array of negotiation literature in order to identify some of the basic characteristics of negotiation. First, negotiation is essentially an interaction between two or more parties. Second, each party has different interests and objectives, which prevent the achievement of an outcome – hence, the necessity of negotiation. Third, each party has a degree of power over the other’s ability to act. Finally, the parties need each other’s involvement in achieving some jointly desired outcome.
SECTION I: LITERATURE REVIEW
1. Approaches to Negotiation Research
The broad base of negotiation literature has resulted from various approaches taken by negotiation researchers and theorists. Carroll and Payne (1990) have noted that negotiation research tends to fall under four general approaches: (1) a normative or prescriptive approach, based on rational models of bargaining; (2) an individual differences approach that focuses on personality factors; (3) a cognitive or information-processing approach that highlights the role of judgmental heuristics and biases in negotiations; and (4) a structural approach grounded in sociological conceptions.
Kramer et. al. (1993) have identified a fifth approach which they term the social contextualist approach. Each of these approaches will be described briefly in the following sections.
1.1 Normative and Prescriptive Approaches
The normative approach is primarily based around game theory models, which emphasize economic rationality. Game theory models assume that negotiators are
operating with perfect rationality and perfect or near perfect knowledge of all parties. It is this assumption that has enabled the development of the prescriptive approach which prescribes procedures and user behaviors that negotiators should follow in order to optimize the negotiation (Bui, 1994; Teich, 1996). The prescriptive approach posits that in fully rational negotiations, there are certain optimal strategies that negotiators should adopt to maximize their economic gains. Sakawa and Nishizaki (1996) state that the game theory allows for formal problem analysis and the specification of well-defined solutions, which can therefore be used for an extensive evaluation of the scenarios and specific moves of the parties involved, their strategies, and the determination of the characteristics of the potential compromise solutions. In other words, the game theory constitutes a way to systematically understand the interests of the parties in order to infer the possible range of moves and countermoves that will result in a certain outcome.
Several weaknesses have been identified regarding the game-the oretic approach to negotiation research, particularly its assumptions of strict rationality and perfect information (Bazerman, 1998; Bazerman and Neale, 1991). For numerous reasons, such as cognitive limitations, biases, and bounded rationality, negotiators often deviate from optimally rational behavior. Despite some problematic assumptions, game-theoretic approaches remain useful in the prior and posterior analysis of the group decision or negotiation problems. A complete analysis of negotiations, however, must include an analysis of key factors that influence negotiator attitudes and behaviors. One such factor is the divergence between negotiators, particularly in terms of their personality. This facet of negotiation research is more thoroughly investigated in the individual differences approach.
1.2 Individual Differences Approach
The individual differences approach to negotiation research focuses on the effects of negotiator differences on negotiation. Most research in this area emphasizes individual personality factors that impact negotiation. The focus of much of this research lies in classifying individuals into types. Numerous studies have documented personality
influences on both the content and the style of dyadic interactions (Kroeger and Thuesen, 1998; Barry and Friedman, 1998; Rubin and Brown, 1975). Personality is generally defined as an individual’s consistency in behaviors and reactions to events. Negotiators tend to exert their personality traits or individual preferences during negotiations, which in turn, serve to influence the proceedings and outcomes.
Negotiator traits and preferences are conditioned by the broader social environment from which they come. The effect of individual differences and personality traits on negotiation is moderated by other factors such as national culture and context. Although the results are still inconclusive with regard to the universality of principles and the functioning of personality measures across cultures, it is still important to recognize the potential influence that personality has on the negotiation process as well as the outcomes.
As a result, the research-base concerning the impact of individual differences on negotiation continues to grow. Closely related to the individual differences approach to negotiation research is the cognitive or information processing approach.
1.3 Cognitive or Information-Processing Approach
This approach to negotiation research highlights the role of judgmental heuristics and biases in negotiations. It focuses analysis on the cognitive processes among decision makers – namely the perception and interpretation leading to the construction of representations and the use of heuristics. Heuristics are simple, efficient rules of thumb which enable people to make decisions and solve problems in complex situations or situations involving incomplete information. Problems are typically interpreted and categorized through references to pre-existing knowledge structures and judgmental heuristics.
The cognitive approach to negotiation research has formed the foundation for structural problem representations. This has not only provided a means to reduce structural uncertainty in negotiations, but it has also enabled decision-makers to connect opportunities to needs so that they correspond to potential decision outcomes. There are
several well-documented techniques for utilizing cognitive maps as a tool to account for unexplained variance in data (Huff and Fletcher, 1990). One such technique, involving schemas, is based on the assumption that past experience structures our interpretation of events and guides our behavior. Schemas are abstract cognitive structures that contain knowledge about a given type of target or stimuli (Fiske and Taylor, 1991). These schemas are said to guide and structure the perception and interpretation of new information, such that new information is processed in ways that are congruent with a person’s preexisting schemas (Abelson, 1981; Fiske and Taylor, 1991; Rumelhart and Ortony, 1977). As a process-oriented tool, this technique can be used to help negotiators better understand their own assumptions about a problem, the perspectives of the other parties, and the ways that others perceive their position.
Individuals are limited in their cognitive ability to process vast amounts of information, which requires them to reduce complex inferential tasks into simpler operations. By focusing on the systematic biases in negotiators judgments, the cognitive approach attributes discrepancies from rationality to human limitations in information processing capacity. Several studies have documented various biases which lead negotiators to deviate from optimally rational behavior (Dawes, 1998; Pinker, 1997;
Bazerman and Neale, 1991). It is these biases that tend to ca use negotiators to make decisions that are inconsistent, inefficient, and based on normatively irrelevant information.
As such, knowledge of these biases plays an integral role in the negotiation process, particularly in terms of how they affect negotiator behaviors and attitudes.
In spite of all the insightful information provided by the cognitive approach to negotiation research, many authors criticize this approach for ignoring a number of other factors that are critical in negotiation – such as context, negotiator personality, and culture (Greenhalgh and Chapman, 1995). Several authors have also noted the difficulty in applying and integrating cognitive maps in actual negotiation situations. This is due to the fact that these maps are typically both user and context specific, which exclude them from generic application across a wide range of situations. The structural approach to negotiation research focuses attention on situational factors that influence the negotiation
process.
1.4 Structural Approach
The structural approach to negotiation research focuses on the situational and structural variables that define the context of the negotiation. These are the variables that negotiators inherit and normally cannot influence in the short-term – includin g the presence of constituencies, parties’ incentives and payoffs, power distribution, deadlines, the number of people on each side, setting, the nature of the issue, and interpersonal dynamics and mood. Several studies have been conducted on the various impacts that contextual factors have on negotiation and negotiator affect (Druckman, 1967; Axelrod and May, 1968; Marwell and Schmitt, 1972).
The growing body of research linking negotiators’ behaviors and outcomes to situational contexts and constraints suggests that there is a significant amount of validity in this approach. Despite the importance of recognizing situational variables and their influence on negotiations, it is important to also recognize that situational variables are not the only factors that affect the negotiation process or outcome. Furthermore, the diversity of contextual conditions having the potential to influence negotiations – coupled with the fact that most situational variables are context specific – makes it very difficult to draw definite conclusions on the impact of any particular factor. Consideration of contextual conditions should therefore be regarded as a part of a broader range of variables that influence negotiations. Another important variable that has a strong influence on negotiation is the social environment surrounding the negotiation. Further investigation into this area can be seen in the social contextualist approach to negotiation research.
1.5 Social Contextualist Approach
Kramer et. al. (1993) contend that it is important to take into consideration the impact of the social environment, within which negotiations are embedded. More specifically, they argue that there is a need to consider negotiation within the context of
preexisting social ties and relations. Other authors such as Pruitt (1981) also allude to the importance of the social side of negotiation. Most laboratory research on negotiation consciously try to minimize or control information regarding preexisting social relational variables in order to minimize their impact on decision-making (Greenhalgh, 1987).
Tetlock (1985) states that in experimental research on decision-making, subjects in the typical laboratory study “function in a social vacuum in which they do not need to worry about the interpers onal consequences of their conduct.” This, however, is not a realistic representation of most decision-making and negotiation situations in today’s global economy.
Traditional models, which posit that decision makers are “strangers, with no shared histor y, who meet, interact strategically in their self -interest … and who will never meet again” (Hoffman et. al. 1991), seem overly simplistic and dubious given today’s interconnected business environment. In the current hypercompetitive global economy, long lasting relationships between suppliers, distributors, and customers have become key drivers of success and viability. As such, decision-making typically occurs in a social context whereby social identity and interpersonal accountability influence negotiator decision-making (Kramer et. al., 1993). Social identity refers to the extent that a negotiator identifies with, or is attracted to, a particular group. Kramer et. al. (1993) argue that when a distinctive personal identity is salient, negotiators will adopt relatively self-interested orientations, focusing attention primarily on their own outcomes. However, if social identity is salient, then negotiators are more likely to express greater concern for the outcomes obtained by the other negotiating party. Furthermore, when negotiators feel accountable to others, they are more likely to be concerned not only about objective outcomes or payoffs, but also how those outcomes are “perceived and evaluated by those to whom they feel accountable” (Kramer et. al., 1993).
Social identity and interpersonal accountability may serve to constrain the potential self-interested behavior of negotiators. In other words, the expectation of future interaction between parties tends to increase cooperation during negotiations, since longer-term issues such as reputation, trust, and harmony are brought to bear on short-term decision-making
(Kramer et. al., 1993). As a result, social contextualist factors are important considerations in negotiations, particularly when dealing with parties that greatly value social identity, or when future interactions are expected.
2. Negotiation Research Approaches and Nonverbal Communication
Although all five approaches to negotiation research have been widely applied in various settings from laboratories to field studies, there exists virtually no research directly linking any of these approaches to the field of nonverbal communication. Each of these approaches displays a suspicious gap in research pertaining to the nonverbal components of communication. The normative and prescriptive approaches, which purport that negotiators are fully rational and have perfect or near perfect information, assume that communicated messages are unambiguous and clear. Since nonverbal modes of communication have various interpretations depending on the situation and the relationship between the interactants, they tend to be overlooked in both the normative and prescriptive approaches to negotiation research. Instead, these approaches primarily focus on the verbal side of communication, largely ignoring the nonverbal side.
The individual differences and cognitive approaches to negotiation research indirectly incorporate nonverbal components of communication into their research. The latter approach, the cognitive appr oach, does this by focusing analysis on the use of judgmental heuristics that are used to interpret specific issues and behaviors. The former approach focuses on individual personality differences that influence the content and style of negotiations. However, these approaches to negotiation research do not directly analyze the impact of nonverbal communication. This is a fairly significant omission given the critical insights that can be gauged about negotiators’ cognitive perceptions and attitudes – simply by recognizing nonverbal cues. Kirch (1979) notes that “nonverbal communication occurs to a greater extent beneath the level of awareness,” which suggest that nonverbal communication is essentially a cognitive process. The lack of research linking human cognition to nonverbal communication is therefore, a major oversight in this domain of negotiation research.
The structural approach to negotiation is primarily concerned with the influence of contextual factors on negotiation proceedings. However, this preoccupation with the predominantly tangible or visible aspects of negotiation creates a problematic oversight of critical intangible aspects. In particular, studies in this area largely ignore the importance of nonverbal communication in negotiations. This creates a potential caveat in the portrayal of the negotiation process, since nonverbal cues play such an important role in the communication process.
3. Cross-Cultural Negotiation Research
Cross-cultural negotiation research thus far has focused on two general areas:
intra -cultural negotiations and inter-cultural negotiations. Intra-cultural negotiations are those that occur between parties from the same culture, whereas inter-cultural negotiations are those that occur between parties from different cultures. Studies on the latter area tend to focus on the difficulties arising in cross-cultural negotiations due to cultural differences.
intra -cultural negotiations and inter-cultural negotiations. Intra-cultural negotiations are those that occur between parties from the same culture, whereas inter-cultural negotiations are those that occur between parties from different cultures. Studies on the latter area tend to focus on the difficulties arising in cross-cultural negotiations due to cultural differences.