External influences in the cross‐cultural negotiation process
| Published date | 01 June 1997 |
| Date | 01 June 1997 |
| DOI | https://doi.org/10.1108/02635579710173248 |
| Pages | 158-168 |
| Author | Paul Herbig |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
[ 158 ]
Industrial Management &
Data Systems
97/4 [1997] 158–168
© MCB University Press
[ISSN 0263-5577]
External influences in the cross-cultural negotiation
process
Paul Herbig
Graduate School of International Trade and Business Administration, Texas A&M
International University, Laredo, Texas, USA
Robert Gulbro
Athens State College, Athens, Alabama, USA
Internationalization, the
buzzword of the 1980s, has
become the necessity for
firms to survive in the 1990s.
Contact with foreign firms is a
given for US businesses. With
this contact comes the issue
of cross-cultural negotiations.
How do US businesses pre-
pare themselves and conduct
such negotiations? Examines
the use of external agents,
translators, bicultural bro-
kers, and prenegotiating
briefers/experts in the cross-
cultural negotiation process
and looks at those factors
which relate to success or
failure in cross-cultural
negotiations.
Introduction
The impact of international business to US
companies has been considerably understated.
With two-way international trade in goods and
services amounting to well over one trillion
dollars and over 20 per cent of the US GDP in
1992, no part of the economy is sacrosanct and
can avoid the international dimension. Over
70 per cent of US firms are actively competing
against foreign-based firms. If a US firm is not
competing against a foreign firm, chances are
it is either being supplied by or selling to for-
eign-based firms. Foreign direct investment in
the US has reached over $400 billion and con-
tinues to increase year by year. In the decade
of the 1990s, the only firms that will be exempt
from dealing with foreign entities, either US-
based affiliates or foreign customers, suppli-
ers, or competitors will be those firms that are
out of business or are going out of business.
At the forefront of international business
opportunities are the agreements between
firms. Agreements are the most important
international documents that must be negoti-
ated between firms of different nationalities.
Since implementation has become increas-
ingly difficult and complex, cross-cultural
negotiations have begun to take on an increas-
ing importance to the globalizing firm. Every
sale or purchase has its negotiation aspect and
every negotiation presents opportunities and
dangers for both parties. International negoti-
ations are fast becoming a fact of life for a
growing number of US-based firms. Failure to
negotiate effectively can undo careful prior
planning; operating across national cultures
often magnifies negotiation problems.
Cross-cultural negotiations
When two people communicate, they rarely
talk about precisely the same subject, for effec-
tive meaning is flavoured by each person’s own
cognitive world and cultural conditioning.
When negotiating internationally, this trans-
lates into anticipating culturally-related ideas
that are most likely to be understood by a
person of a given culture. Discussions are
frequently impeded because the two sides
seem to be pursuing different paths of logic; in
any cross-cultural context, the potential for
misunderstanding and talking past each other
is great.
Members of one culture may focus on differ-
ent aspects of an agreement (i.e. legal, finan-
cial) than do members of another culture (per-
sonal, relationships). The implementation of a
business agreement may be stressed in one
culture, while the range and prevention of
practical problems emphasized in another
culture. In some cultures, the attention of
people is directed more towards the specific
details of the agreement (documenting the
agreement), while other cultures focus on how
the promises can be kept (process and imple-
mentation). Americans negotiate a contract;
the Japanese negotiate a personal relation-
ship. Cultures force people to view and value
differently the many social interactions inher-
ent in fashioning an agreement.
Negotiation is the process by which at least
two parties try to reach an agreement on mat-
ters of mutual interest. The negotiation
process proceeds as an interplay of perception,
information processing and reaction, all of
which turn on images of reality (accurate or
not), on implicit assumptions regarding the
issue being negotiated and on an underlying
matrix of conventional wisdom, beliefs and
social expectations. This becomes more appar-
ent when the negotiation process is interna-
tional, when cultural differences must be
bridged. Negotiations involve two dimensions:
a matter of substance and the process. The
latter is rarely a matter of relevance when
negotiations are conducted within the same
cultural setting. Only when dealing with
someone from another country with a differ-
ent cultural background does the process
usually becomes a critical barrier to
substance; in such settings process the first
needs to be established before substantive
negotiations can commence.
When one takes the seemingly simple
process of negotiations into a cross-cultural
context, it becomes even more complex and
complications tend to grow exponentially. It is
naive indeed to venture into international
negotiation with the belief that “after all people
are pretty much alike everywhere and behave
much as we do”. Even if they wear the same
clothes you do, speak English as well as (or
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