Cross-Cultural Negotiation Skills

In an everchanging world with societies building stronger economies where international trade is necessary, cross-cultural negotiation is key when dealing with the exchange of goods and services between global business partners. To have a successful cross-cultural negotiation, one party member must understand the cultural dissonance between themselves and the other person they are trying to negotiate with (Hesselbein, 2010). Cultural dissonance is common when a high context culture communicates and/or negotiates with a low context culture. With being mindful of ethnocentrism (the belief that one culture is superior to those of other social groups), negotiation strategies are important to help establish the best solution in solving conflict between high vs low context communication (Croll, 2012). Edward T. Hall’s writings in Beyond Culture (1976) will be explored for cultural context and why it’s important to understand different perspectives for proper engagement between business partners. Furthermore, cultural communication styles through cultural analysis such as an Australian (low context) negotiating with a person with a Chinese background (high context). This will establish and highlight the importance of acculturation, adopting mannerisms such as direct and indirect communication, body language, and understanding the outcomes that a successful negotiation will implement such as intangible and tangible outcomes. This will help in creating a strong bond to form a long-term business relationship that’s harmonious and respectful, going beyond just a contract – satisfying both high and low context wants and needs.

Understanding your own culture when resolving conflict between yourself and a potential business partner with different cultural background is necessary because it allows us to alter our approach to the negotiation for the best outcome. High and low context cultures typically consist of various subgroups that define them which include language, regional community, nationality, and communication methods (Kittler, Rygl and Mackinnon, 2011). Typically, a high context culture is a culture that relies on information that is either from physical context or through a person’s engagement, with very little information being coded, transmitted, or explicit to the overall message (Khilji, 2013). Countries with high context culture tendencies usually include China, Korea, Japan and Middle Eastern/Arabic countries – with correlation to non-western/eastern societies (Kim, Pan and Park, 1998). In contrast, a low context culture is quite the opposite; where the mass of the information is invested within the code and the words chosen within the communication mean exactly what the communicator is wanting to convey (Khilji, 2013). For example, countries within low context cultures include Australia and countries which reside in North America such as United States of America – typically western societies (Kim, Pan and Park, 1998). According to Hall (1976) cultural context is the surrounding circumstances in which communication has taken place, which heavily depend on a person’s upbringing, which correlates to their own beliefs, worldviews and, perspectives. This is important when dealing with international business partners with a different cultural context to your own because understanding and using the right approach will eliminate all confusion and will result in a win-win situation because you allowed yourself to look through different sets of “cultural lenses” when interpreting other forms of communication (Groves, Feyerherm and Gu, 2014). In Beyond Culture (1976), Hall countlessly argues that the level of context is a determinant of the nature of the communication which continues to mould the appropriate behavioural actions a party member may take to successfully navigate a cross-cultural negotiation. The link between context, behaviour and communication is fundamental when associating with cross-cultural management and the concept of high and low context communication because it leads us to conclude which communication method/s and appropriate behaviours to use in the right context (Khilji, 2013). High-low context, amongst other Hofstede dimensions such as uncertainty avoidance, power distance, individualism-collectivism, and time orientation (Hofstede Insights, 2019) are all precautions necessary when properly performing a negotiation between yourself and a business associate of a different cultural background. Dealing with a cross-cultural negotiation, where we have a high vs low culture context, Hall emphasises that people when communicating with different cultural backgrounds should focus on relating to one another, especially when creating such things as social bonds, social harmony, commitment, and communication (Khilji, 2013).

For this assignment, I have identified my own cultural communication profile as low context culture because I have been raised within a western society which has built upon my norms and beliefs within my country of origin – Australia. According to Hofstede’s model of cultural dimensions, Australian culture heavily relies on individualism, has a low power distance, low long-term orientation, and high indulgence (Hofstede Insights, 2019). These are important factors to the communication within Australian business environments because you can observe employees forming loose personal ties with each other, indulging in activities reflecting optimism, tendencies to work alone, display distributed power within the workplace, and working towards quick and fast solutions for the present, not the future (Ugrin, Pearson and Nickle, 2018). Personally, these cultural dimensions do affect my everyday communications and the way I deal with negotiations within my own workplace and throughout the university. For example, employees within my workplace, including myself, have extrovert tendencies and work towards our own goals for self-satisfaction, whilst management is quite cooperative when listening and understanding issues and suggested resolutions. Independent workplaces are quite prevalent within Australia and is a common occurrence because of the culture that has been formed (Kim, Pan and Park, 1998). Communication within my own workplace is quite forward and direct, especially when interacting with my employers whom don’t rely heavily on body language, display of emotions, and tone, pitch and pace of their voice. These factors contrast heavily to a work environment which would display a high context culture. For this assignment, the high context culture at which I will be examining would be a Chinese business counterpart with all their employees having the same mindset. China within Hofstede’s model of cultural dimensions shows a heavy contrast to Australia. China is a collective society with high power distance levels, high long-term orientation, and low indulgence (Hofstede Insights, 2019). These are important factors to consider when understanding cross cultural differences when trying to communicate with one another. Chinese culture has several defining factors including the importance of status relationships, focusing on the long term and on the relationship between parties, maintaining harmony, making decisions through consensus, discussing items holistically, and an understanding that the creation of a contract is simply the beginning and furthering of the relationship (Fells, 2016). The contrast between Australian culture (low context) and Chinese culture (high context) is an important factor to consider when designing a negotiation strategy to resolve conflict of the opposing party member because known communication methods must be altered to have a successful and harmonious business relationship.

The best approach to this situation as a low context culture negotiating with a high context culture is the use of acculturation – adjusting to another culture by adopting certain values, symbols and/or behaviour that is necessary for the situation (Fells, 2016). Without this technique, going in to a cross cultural negotiation without adapting or willing to compromise will occur in miscommunication and pose an outcome that both parties won’t be satisfied with (Richardson and Smith, 2007). I’d need to always remember and reassure myself about not being ignorant and to not show signs of ethnocentrism because these display negative connotations which may lead to such things as social issues, oppression, and discrimination which will inevitably cut social ties with my business partner (Croll, 2012). To avoid these types of conflicts, I’ll need to find the best approach and use acculturation, eliminating any possibility of ethnocentrism being present. Firstly, to have a successful win-win situation and resolve any conflict, the best style for a multicultural situation is to adapt a problem-solving negotiation technique. This establishes common ground between both parties, eliminates confusion, takes on a broader view to understand the breadth of the situation, and negotiates on a step-by-step basis (Fells, 2016).

If my understanding of high context culture is correct, I would need to adapt to a collective mindset, which includes the use of indirect communication, an emphasis on body language, and focusing more on intangible outcomes (Kellogg School of Management, 2015). High context cultures have a preference of face-to-face communication at which they rely on components such as body language and social context, whereas low context cultures rely on online communication such as emails and phone calls with a more direct approach (Richardson and Smith, 2007). The most important aspect of resolving conflict in a cross-cultural negotiation is how I approach the situation physically followed by my mentality after the fact. I’d begin by paying attention to non-verbal cues which include eye contact, facial expression, physical distance, and the overall tension in the room (Steers, Nardon and Sánchez-Runde, 2018). This technique is considered ‘cultural perspective taking’, where cross-cultural negotiators benefit from seeing each other’s perspectives, allowing them to understand what the other person values most (Lee, Adair and Seo, 2011). For example, Chinese business partners approach a negotiation with a focus on altruism with negotiation techniques that offer and persuade rather than using a direct approach of sharing information (Lee, Adair and Seo, 2011). ‘Cultural perspective taking’ gives me better insight for the negotiation and resolves any conflict between myself and my business partner, helping me understand that intangible outcomes are a priority for my counterpart, whilst eventually satisfying my own needs of tangible outcomes which includes a contract/deal at the end of the negotiation (Fells, 2016). The two main intangible outcomes I’d need to focus on is our relationship and harmony towards each other – trying to avoid any conflict and embarrassment (Steers, Nardon and Sánchez-Runde, 2018). These are easily obtained if I adapt to my business partners norms, using acculturation as my motivation.

Observing and analysing my business partner is an important factor of this negotiation because it helps me understand if we are equals, or if they are a person of power to my position. If this were the case, I’d need to treat them differently within a hierarchical situation because they would be my superior and people of power need to be shown more levels of respect within a high context culture, where I’d be expected to accept their level of power and listen more carefully to their wants and needs over my own (Ugrin, Pearson and Nickle, 2018). However, with China having a low score in individualism, working together collectively, we’d need to form a strong long-term commitment to each other where both parties work together to get the best outcome from the negotiation, taking on responsibility for one another and allowing us to have a solid basis for any future negotiations (Ugrin, Pearson and Nickle, 2018). Showing signs of respect to my counterpart, I’d need to alter my language, body language, mannerisms, and only refer to them with signs of respect with harmonious undertones to have a successful relationship with a strong bond and emphasis on trust (Kellogg School of Management, 2015). Throughout the negotiation, I’d need to implement trust building exercises and the intention of forming a strong personal ongoing relationship with my Chinese counterpart, so they’d understand my wants and needs for a long-term profitable goal with limited risks and serious conflict (Steers, Nardon and Sánchez-Runde, 2018). This ideology is common within Chinese culture and is referred to as ‘Guanxi’, the fundamental and complex concept of connections between business partners (Yang, 2015). My best approach to this situation is to conform and adapt to Chinese business etiquette which correlates with most high context cultures. Certain factors I’d need to take into consideration when displaying proper Chinese etiquette is altering my own normalities, including greeting alterations of the common handshake to a bow or a slight nod as a sign of respect, with a change of my own dialect using such common Mandarin phrases as nĭ hăo (hello) and xièxie (thank you) (Yang, 2015). Small alterations of my own etiquette can massively change the effectiveness of a cross-cultural negotiation and achieve what is needed in a comfortable environment for both members.

Cross cultural negotiation skills are important when communicating with global business partners with a different style of communication to your own. My own Australian low context culture contrasts heavily with a business partner from a high context culture such as China, emphasising my need to adapt and adjust to their wants and needs to have a successful win-win situation from our negotiation. Various methods used to resolve conflict with my partner includes the use of indirect communication, body language alteration, forming a strong long-term relationship, and adapting to Chinese etiquette.