National

affect on the negotiation process, negotiator affect, and negotiation outcomes have been well-documented in several other negotiation studies (Drake, 2001; George et. al., 1998;

Graham, 1983; Liu et. al., 2003). Research on these constructs typically fall under the individual differences and structural approaches to negotiation. Although some studies allude to how these constructs may influence nonverbal communication, there is a discernable gap in literature regarding this issue.

1. National Character

The first construct, national character, is undoubtedly the most well documented factor affecting cross-cultural negotiations. Numerous authors have noted the importance of national character on inter-cultural negotiations (e.g. George et. al., 1998; Gulbro et. al., 2002; Kale and Barnes, 1992). National character consists of the beliefs, assumptions,

values, and nor ms that are shared by the majority of the members of a country or cultural group (Cray and Mallory, 1998). Members from different national cultures are likely to behave differently in negotiations due to divergence in inherent assumptions, values, norms, as well as behavioral attributes.

1.1 Hofstede’s Model of National Culture

A number of cross-cultural negotiation studies draw on Hofstede’s (1980) model of national culture. This model was initially developed in terms of differences in values and beliefs regarding work goals. Hofstede’s model outlines a four-dimensional framework of uncertainty avoidance, individualism, power distance, and masculinity. These four dimensions show meaningful relationships with important demographic, geographic, economic, and political national indicators (Triandis, 1982).

Later research by Hofstede and others led to the development of a fifth dimension, long-term orientation. Research on this dimension was unique since it did not rely on survey questions developed by Western researchers. Instead, Michael Bond and several Chinese colleagues developed a new survey based on questions developed by Asian researchers reflecting Confucian values. Hofstede and Bond have related this long-term orientation to the economic growth in rising Asian economies (Walder, 1986).

Table 1 presents a segment of the percentile ranks for Hofstede’s cultural dimensions as they relate to China and the United States. These dimensions provide a general overview of the different cultural patterns of the United States and China. They further provide a better understanding of how the US and China differ in terms of Hofstede’s five cultural dimensions.

Cultural

Source: Adapted from Hofstede, Geert. 1991. Cultures and Organizations: Software of the Mind. London: McGraw-Hill

Table 1: Percentile Ranks for Hofstede’s Cultural Dimensions for the United States and China by Cultural Cluster (100 = Highest; 50 = Middle)

1.1.1 Uncertainty Avoidance

The first dimension, uncertainty avoidance, assesses the extent to which members of a society avoid risk and feel threatened by ambiguous situations. It encompasses the norms, values, and beliefs regarding a tolerance for uncertainty and ambiguity. High uncertainty avoidance cultures seek to structure social systems in a predictable and orderly manner, where rules and regulations are paramount. Me mbers of these cultures feel a great deal of stress and anxiety in the face of risk, ambiguity, and uncertainty. Commonly held norms, values, and beliefs in these societies include avoidance of conflict, intolerance for deviant people and ideas, strict adherence to laws, and an emphasis on consensus (Hofstede, 1980). Business cultures in these countries tend to have management systems and processes that espouse dependable and predictable work processes, practices, and even employees (Cullen and Parboteeah, 2005). Similarly, personnel are chosen for their potential fit with and loyalty to the organization in order to minimize interpersonal conflict and competition, reduce employee turnover, and increase predictability. High uncertainty cultures are characterized by extensive rules and procedures, as well as task-directed leaders, who give clear and explicit directions to subordinates thereby reducing ambiguity regarding job expectations.

In contrast, low uncertainty avoidance cultures socialize members to accept and handle uncertainty and ambiguity without much anxiety or discomfort. Members of these cultures prefer more flexibility and freedom. They also take relatively more risks, and show a greater tolerance for opinions and behaviors that are different from their own (Cullen and Parboteeah, 2005). Business cultures in low uncertainty avoidance cultures favor more autonomy and flexibility in the design of their organizations. They also tend to be more nondirective and person-oriented. There are typically fewer rules, regulations, and less supervision, thus giving employees more control over their work.

In terms of negotiation, high uncertainty avoidance cultures are likely to engage in extensive preparation and planning prior to negotiations. In addition, negotiating parties from these cultures also place a greater degree of emphasis on group decision-making as a means for avoiding individual risk. As such, an individual is protected if the outcome of a decision produces less than satisfactory results. This type of behavior and approach to negotiation is characteristic of Chinese negotiators, who prefer to diffuse decision-making so that responsibility is difficult to locate. Negotiators in low uncertainty avoidance cultures such as the U.S. have comparatively more freedom in their approach to negotiations than do negotiators from high-uncertainty avoidance cultures. According to Koldau (1996), American negotiators usually prefer to handle a negotiation by themselves, taking full responsibility for the decisio ns made at the negotiation table. As a consequence, American negotiators are typically outnumbered by the Chinese negotiating team.

1.1.2 Individualism

The individualist-collectivist dimension refers to the extent to which individuals expect personal freedom versus group responsibilities. It describes the collectivity which prevails in a society, or the relationship between the individual and the group. Individualist cultures are those where members are concerned primarily with their own interests rather than those of the collective. They represent societies with very loose ties between individuals, allowing them a greater degree of freedom (Hofstede, 1980). These cultures perceive members as being unique individuals, who are responsible for themselves as well

as their nuclear family. As such, individualist cultures value people for their own achievements, status, and other unique characteristics. Translated to the business setting, these beliefs, values, and norms create an environment where employees are not emotionally dependent on organizations, and where universalistic qualification is expected (Cullen and Parboteeah, 2005). Universalistic qualification is the practice of applying the same qualifications universally across all candidates. It reflects the belief that open competition allows the most qualified individual to get the job, and that rewards should be based solely on individual performance.

Collectivist cultures, at the other extreme, view people largely through the groups to which they belong. One’s identity in collectivist cultures is dependent on group membership. Members of these cultures expect people to place the interests of their in-group above their own personal interests. In return for member loyalty, the in-group is expected to protect its members. Organizations in collectivist cultures tend to be characterized by a type of organizational paternalism, where people feel that a major reward for working is being taken care of by their organizations (Cullen and Parboteeah, 2005). This practice of organizational paternalism is reflected in a relatively high degree of loyalty and low turnover rate. This loyalty is further reinforced in reward systems, which promotes members based on seniority and age. Unlike individualist cultures, the selection process in collectivist cultures often shows favoritism toward favored groups such as family and friends. The logic behind this is that members from favored groups will show a greater sense of loyalty and responsibility to the organization. Decision-making in collectivist cultures is usually group-based. Cullen and Parboteeah (2005) present two key reasons for this phenomenon. First, since people in the organization are family members or trusted friends, privileged information flows up and down the organizational hierarchy more freely. Second, as a close-knit group, there is pressure to account for the feelings and desires of all members.

Since individualist cultures value autonomy, competition, and self-determination, negotiators from these cultures are likely to perceive negotiation competitively.

Consequently, Americans – ranked highest on Hofstede’s individualism dimension –

typically view negotiations as competitive, win -lose situations. In contrast, negotiators from collectivist cultures typically perceive negotiations from a more collaborative standpoint. This is due to the fact that collectivist cultures emphasize social duty and harmony, which tends to foster an appreciation for cooperation and an integration of needs.

Collectivist negotiators are, therefore, likely to be more inclined than individualist negotiators to share information. Gundykunst (1987) argues that collectivist negotiators should be less inclined to adopt fixed-sum errors because success is primarily a factor of maximizing group rather than individual interests and because collectivists emphasize holistic thinking. Holistic thinking refers to a simultaneous, rather than sequential, consideration of negotiation issues. This has a major impact on the negotiation process, since it leads negotiators to view the process in a more cyclical and oscillatory rather than linear manner.

1.1.3 Power Distance

Power distance involves a society’s perception of and response to inequality. It indicates a society’s tolerance for social hierarchy, and inequalities in wealth and power structures. High power distance cultures exhibit discernible class and power differentials between individuals. These cultures typically espouse the belief that inequality is fundamentally good and that everyone ha s a place. Members of these cultures believe that most people should depend on a leader, and that leaders are entitled to certain privileges.

This concern for hierarchy, inequality, and deference to superiors and elders is rooted in early socialization in the family and education systems. In the business context, organizations in high power distance cultures will commonly adopt management systems and processes that reinforce hierarchical structures, which maintain a high degree of supervision and conformity. Managers in high power distance cultures characteristically adopt an authoritarian style of management, based on the Theory X assumption that people inherently dislike work. Decision-making is centralized, enabling those at the top to make strategic decisions that perpetuate and support the hierarchy (Cullen and Parboteeah, 2005).

Such strategic decisions include reward and promotion systems based on elite associations rather than individual performance.

Low power distance countries de -emphasize inequalities, and strive toward maintaining a relative equity in the distribution of power, status, and wealth (Kale and Barnes, 1992). Organizations in low power distance countries commonly adopt a more participative leadership style, based on the Theory Y assumption that people inherently like work. This leadership style is reflected in a more decentralized, and flat pyramidal structure of organizational design. Evaluation and rewards are based primarily on performance, and remuneration reflects a relatively smaller wage difference between management and worker.

Divergent attitudes relating to power and inequality have a major impact on negotiations. The American preference for interpersonal equality in human relations is in stark contrast to the high value that the Chinese place on role differences and status distinctions. In China, status generally determines the specific role each person is expected to play, which affects the communication style and behaviors that each member of the negotiating team adopts. The conflicting perspectives regarding status distinctions between the Chinese and American negotiators commonly lead to misunderstanding and misinterpretations. The lack of recognition of status differentials by Americans may make Chinese negotiators feel uncomfortable, and perhaps even offended. This will have a negative affect not only on the negotiation process, but also on the outcome of the negotiation.

1.1.4 Masculinity

Masculinity pertains to the extent to which societies hold values and role expectations traditionally regarded as predominantly masculine or feminine. Masculine cultures place a greater emphasis on achievement motivation, self -reliance, and material wealth. These societies typically distinguish between gender roles – where men are expected to be more assertive, decisive, and dominant. In masculine cultures, work typically takes precedence over other duties including familial ones. In such cultures, recognition on the job is considered a prime motivator, encouraging members to work longer hours. Managers are expected to act decisively and avoid the appearance of intuitive

decision-making, which is often regarded as feminine (Cullen and Parboteeah, 2005).

Organizations in these cultures clearly define jobs by gender, with men holding jobs that are associated with long-term careers and women holding jobs associated with relatively short-term employment. Several factors, however, may be eroding traditional views of masculinity, particularly the growing incidence of delayed childbirth and s maller families, as well as the pressure for dual-career earnings and changing national cultural values.

In low masculinity cultures, or feminine cultures, the emphasis is placed on quality of life, interdependence, and relationships. Work typically has less centrality, with members adopting a more short-term, job-oriented attitude rather than a long-term, career-oriented one. Organizations in low masculinity cultures tend to distribute rewards based on job performance – independent of gender and persona l relationships. Unlike masculine cultures, low masculinity cultures take on a more intuitive decision-making approach, in addition to a more participative leadership style.

Herbig and Kramer (1991) suggest that high masculinity cultures tend to be more deal-focused, whereas low masculinity cultures tend to be more relationship-focused. They note that Americans tend to be more deal-focused, which makes them relatively more open to doing business with strangers since they perceive business as being predominately separate from their private lives. Chinese negotiators, however, are much more relationship-focused, preferring to get to know their business partners first – in order to establish a basis for trust and friendship. The different emphasis that Americans and Chinese place on the deal and relationship aspects of the negotiation has a major affect on the expectations and goals of each party.

1.1.5 Long-term Orientation

Long-term orientation, also known as Confucian dynamism, refers to the time orientation of a culture – whether short-term or long-term. This time perspective addresses the balance between short-term satisfaction and rewards with long-term opportunity and

rewards. In long-term oriented cultures, members are more sensitive to social relationships and value synthesis. Value synthesis refers to the practice of taking apparently conflicting points of view and logic and seeking ways to reconcile them into practical solutions and general consensus. In this respect, tong-term cultures value security and stability.

Organizations in these cultures tend to base selection of candidates’ on “fit” with the organization, in terms of personal and background characteristics (Cullen and Parboteeah, 2005). As such, most organizations are willing to trade initial weaknesses in work-related skills for long-term commitment to the organization. These organizations typically view training as an investment in long-term employment skills. Leaders in these organizations focus on developing social obligations and relationships, which is assumed to lead to long-term success and growth. This type of managerial approach is comparatively more supportive of entrepreneurial activity, since it is willing to trade short-term profits for long-term opportunities and rewards.

Short-term oriented cultures stress personal steadfastness and deep respect for traditional values. By focusing on the past and present, these cultures generally focus on immediate rewards rather than long-term opportunities. Organizations in short-term oriented cultures therefore focus on immediate, usable skills – since there is no guarantee or assurance of a return on any investment in employee training and socialization (Cullen and Parboteeah, 2005). Rewards are perceived in the short-term, focusing on pay and rapid promotion. Decision-making is predominantly based on a logical analysis of the current situation – the objective being short-term, measurable success. As a result, organizations in short-term oriented cultures are designed and managed to purposefully respond to immediate pressures from the environment.

Negotiation behavior is typically influenced by the degree of emphasis placed on establishing long-term relationships between parties. While China ranked the highest on Hofstede’s long-term orientation dimension, the U.S. ranked fairly low, comparatively.

Since the Chinese are significantly more long-term oriented, they will typically invest more time and effort into the rapport and relationship building activities of a negotiation.

Consequently, the Chinese negotiation process tends to be extremely time consuming, thus

requiring patience and diligence from their counterparts. Americans, on the other hand, tend to focus more on short-term goals and immediate profitability. This short-term orientation is reflected in the Western perception that ‘time is money,’ which typically leads American negotiators to try to accelerate the negotiation process. This attempt to rush the process is perceived negatively by the Chinese, who regard it as either impatience or insincerity on the part of the Americans (Tung, 1982).

1.2 National Character and Cross-Cultural Negotiation

Hofstede’s unparalleled and expansive study found uniqueness and cultural differences in the behavior between cultures. According to Hofstede, the construct of

“national character” describes a pattern of enduring personality characteristics found among a large number of persons conditioned by similar background, education, and life experiences. These ‘national culture differences’ ha ve been extensively catalogued in cross-cultural negotiation research (e.g. Adler et. al., 1992; Graham, 1983, 1985; Cohen, 1991; Weiss, 1997). Several studies have suggested that people from different cultures approach negotiation differently, due to differences in their perceptions, attitudes, and expectations of the decision-making situation that are conditioned by the characteristics of their national culture (Ting-Toomey, 1988; Tse et. al, 1994; George et. al., 1998). These studies have pointed to a potential existence of a causal relationship between national culture and the process, strategy selection, and outcome of cross-cultural negotiations.

Gulbro et. al. (2002) contend that since these groupings help explain behavior then perhaps these attributes may also be extended to explain and categorize the negotiating behavior of people from various cultures.

1.3 Cultural Divergence: China & the United States

Numerous researchers hypothesize that cultural similarity increases harmony, therefore reducing friction in cross-cultural negotiations (Shenkar, 2001; House et. al., 2002). The logic behind this hypothesis is that culturally similar negotiators are more likely to share the same attitudes, values, beliefs, knowledge, management systems, leadership

styles, and behavioral norms (Lasserre, 1999; Kogut and Singh, 1989). In addition, similarities typically facilitate and enhance the ability to communicate, cooperate, integrate knowledge, and develop trust (Killing, 1983). Evidence supporting this hypothesis can be seen in the high rate of failure in inter-cultural negotiations between highly divergent cultures (Herbig and Kramer, 1991). Likewise, several authors have documented numerous difficulties faced by American negotiators when dealing with Chinese counterparts (e.g. Tung, 1982; Woo and Prud'homme, 1999; Ting-Toomey, 1992). Given the fact that the US and China differ quite extensively on virtually all of Hofstede’s national culture dimensions; it is highly probable that cultural divergence is a key factor behind the difficulties faced by their respective negotiators.

1.4 Face Management and Context

Aside from Hofstede’s cultural dimensions, two distinct differences between China and the U.S. are readily apparent. The first relates to the issue of face management and the second relates to differences in communicating styles regarding context. The first issue, face management, points to an important divergence between the American and Chinese cultures. Face, according to Goffman (1967), is “the positive social value a person effectively claims for himself by the line others assume he has taken during a particular contact.” In other words, ‘face’ is the public manifestation of one’s self that results from the undertaking of ‘face-work’ – which includes all communication designed to create, support, or challenge a particular line (Holtgraves, 1992). Although concerns with face, and the linguistic strategies for managing face, are universal, cultures tend to perceive face-work and face -threatening issues differently (Holtgraves, 1991). This discrepancy of perceptions is readily apparent in negotiations between Chinese and Americans.

Numerous studies have documented the Chinese preoccupation with face in all facets of social and business life (e.g. Tung, 1982; Tse et. al., 1994; Tinsley and Pillutla,

Numerous studies have documented the Chinese preoccupation with face in all facets of social and business life (e.g. Tung, 1982; Tse et. al., 1994; Tinsley and Pillutla,