The Role of Culture in the Negotiation Process

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IACM conference Montreal, 2006

The Role of Culture in the Negotiation Process

Marc-Antoine Vachon1 Universtité du Québec à Montréal Terri R. Lituchy2 Concordia University

Marc-Antoine Vachon is a PhD student at Université du Québec à Montréal Terri Lituchy is associate professor of management at John Molson School of Business of Concordia University. Adress correspondence to Terri R. Lituchy, Faculty of Commerce Administration, Concordia University, 1455 de Maisonneuve Boulevard West, Montreal, QC, Canada, H3G 1M8. 2

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The Role of Culture in the Negotiation Process
This paper proposes a framework where the role of culture is examined throughout the negotiation process. The outcomes of crosscultural negotiation tend to be distributive. Culture is a source of this problem. To be examined, the negotiation has to be separated in three phases: antecedent, concurrent and consequent. The role of culture differs throughout this process. It is explained by the presence of different dimensions having their proper role to play at each step: the preparation, the interaction, the agreement and the outcome. Nine cultural dimensions are included in the framework. Every link included in the negotiation process is discussed. Fifteen hypotheses are proposed to measure the influence of culture throughout the negotiation process. This paper proposes a new approach of the cultural distance, a useful way to consider culture in the preparation of negotiation and a useful set of cultural dimensions to evaluate and to adjust to during the interaction. The ultimate goal is clear: to help the managers reaching distributive outcomes in crosscultural negotiation by improving the tools to deal with a different culture.

Introduction
Finding business partners may be difficult. Finding business partners in other countries may be even more difficult. In fact, it is often considered a long term endeavour. Once a partner has been identified, the business negotiations begin. Many studies have found that negotiations are made differently throughout cultures (Adler & Graham, 1987; Clark, 1990; Lituchy, 1997; Lituchy & Dahl, 1993). Intra-national negotiations are less complex that international ones (Graham & Andrews, 1987). Internationalization of firms may cause some negotiation issues. The importance of culture in international negotiations is well known (Gannon, 2004) and could be considered as a cause of problems as such misinformation and misinterpretation (Copeland & Griggs, 1985; Tung 1982). The purpose of this paper is to explicit the influence of culture throughout the different parts of the negotiation process. 2

Negotiation is considered as a “process by which a joint decision is made by two or more parties” (Pruitt, 1981). Negotiations are needed for all types of internationalization such as cross-national mergers, licensing agreements or distribution (Graham, Mintu & Rodgers, 1994). To get reach an agreement, partners must interact and make a joint decision that will be respected. The outcome of negotiation has been a subject of interest for researchers. It could be distributive or integrative, in other words, the former means a win-lose situation and the latter a win-win situation. Lituchy (1997) examined the outcomes that would be reached in negotiations between Japanese and Americans, two different cultures. Her principal findings suggest that in cross-cultural context, if at least a partner is oriented toward distributive outcomes, it is distributive outcomes that will be reached. This should be considered seriously by managers from Anglo cultures (e.g. Australia, Canada, UK, and USA) that are considered as self-interested, competitive and aggressive (Hsu, 1983). Such attitudes might slow down their global extension. To help managers in their negotiations, a better understanding of culture’s influence is needed.

This influence has already been studied in some ways (Janosik, 1987; Graham, 1985). But the role of culture...
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