Essay on "Cross Culture Negotiation"

Essay 7 pages (2443 words) Sources: 13

[EXCERPT] . . . .

Cross-Cultural Negotiation

In the contemporary business environment, cultural conflict has been an important impediment to the success of business negotiations. Culture is an integrated system of learned behavioral pattern of member of society. Cultural behaviors are not from the biological inheritance, culture is a shared customs, beliefs, behaviors, values and artifacts that member of a society used to communicate to one another. Culture is transmitted from generation to generation through parent learning. Pace of globalization and economic development has made businesses to engage in the cross-border transactions, where inter-cultural communication is critical to achieve business success. (Jian-qiu, 2008). However, cultural awareness is one of the most important business tools that businesses use to achieve a success in business negotiations. Understanding the culture of other people is critical in enhancing success in negotiation. (Adair, 2003). One of the major frustrations that businesses face in the international business is the problem of achieving effective cross-cultural negotiations. Many American businesses face daunting tasks in securing effective business negotiations with Japanese due to the wide cultural difference between Japanese and American business leaders. Based on the problem associated with cultural conflicts, cultural awareness is an important business tool to achieve success in cross-cultural business negotiation. Cultural awareness encompasses understanding the culture of other nationals. Acceptable norm in one country may not be acceptable in another country. Thus, a research on culture and negotiations is critical to assist business leaders to manage the increasing global threats and opportunities. (Gelfand, Lun, & Lyons, 2011, Gray, 2008).

Objective of this paper is to explore the cross-cultural difference between American and Japanese in negotiation. The paper discusses the benefits that business leaders could derive from understanding of the cultural awareness in the next section.

Importance of Cultural Awareness in Negotiations

Cultural awareness is important because it enhances the effective business communication during business negotiations. Communication is very critical in business negotiations. Communication is the transmission of message from one individual to the other. Effective communication between two or more persons enhances business negotiation. One of the factors that lead to the failure in business negotiation is lack of cultural awareness. The cultural awareness encompasses lack of understanding of the culture of other party in negotiations which often leads to the breakdown in communication during the negotiation process. (Weiss, 2006). MNCs (multinational corporations) often face problems in the host countries when there is a significant difference between national culture and the culture of the host countries. Lack of awareness of the culture of the host countries could lead to the problem of acceptance, effectiveness of business operations, and implementation. The impact of cultural differences is particularly noticeable when businesses want to embark on merger and acquisition. Lack of cultural awareness may often lead to the breakdown in negotiation when businesses intend to embark on merger and acquisitions. Thus, cultural awareness is very critical to achieve global business success as well as achieving success in business negotiation.

American and Japanese often face a daunting task to reach a mutual agreement during business negotiation due to a wide difference between the American and Japanese cultures. American businesses need to have effective awareness of Japanese culture before the two nationals could reach a mutual agreement in negotiations. (McCreary, 1986).

Difference between American and Japanese Culture

Cellich and Jain (2012) define negotiation "as a process by which two or more parties reach agreement on matters of common interest." (P 3). Negotiation plays important roles in the international business, and the differences between cultures of negotiators play important roles in the success of business negotiation. Differences between American and Japanese cultures are among the important factors that lead to the delay in reaching mutual agreement during negotiations. Americans belong to the low context culture while Japanese belong to the high context culture. American business leaders generally believe that the goal of negotiations is to achieve economic benefits as well as achieving better and quicker solution. On the other hand, Japanese does not put high importance on the commercial issue during negotiation. Japanese believes in developing business relationship as well as developing long-term mutual relationships. (Danciu, 2011).

The concept of time also varies from culture to culture. American emphasizes on short-term in achieving the business benefits. On the other hand, Japanese believes in the long-term range. American business leaders will like to maximize the company profits within the short time frame. On the other hand, Japanese believes in achieving long-term objectives. They base their negotiation on what the company will become in 100 years rather than what the company will achieve within limited years.

Information Provision in Negotiation Style

One of the fundamental differences between Japanese and American culture is the style each culture provides information. The subtle differences between Japanese and American cultures start with the information exchange. While American lays emphasizes on information availability and transparency, Japanese business leaders seem least willing to give out information. More importantly, Japanese believe in using indirect language in expressing themselves. Indirectness is very critical to maintain harmony during the business relationships in Japan. While Japanese businessmen may have a strong opinion to deliver, they prefer to deliver the information indirectly. Japanese use indirect way to give out information to avoid offense. Thus, they use softened phrases and roundabout statement to deliver information. On the other hand, American believes in using direct statement when given out the information. Generally, American business leaders believe that Japanese spend more than enough time when exchanging information. Typically, Japanese do not think that American collaboration during negotiation is sufficient. Japanese interprets American collaboration as aggressiveness since American standard of assertiveness is stronger than what Japanese could consider reasonable. (Chang, 2006).

Social statues

Japanese put highest priority on social status than American. Adachi (1997) argues that Japanese society is a strong vertical society where the hierarchical systems are most valued. On the other hand, equality, and a horizontal relationship is most valued in the American society. American emphasizes on the equality of power, however, equality is less important in Japanese society because equality is less adherent to hierarchical norm. Equality is highly valued among Americans, and Americans lay emphasis on equality of power, however, Japanese view power in the context of hierarchy. (Huang, 2011).

Jian-qiu (2008) argues that American put high esteem in equality, and this is often reflected during the business negotiations. Americans believe that both sides should get profits and the purpose of negotiation is to achieve win-win agreement in the negotiation table. However, Japanese put more emphasis on hierarchy, they believe that a buyer in business is higher than a seller and buyer should enjoy more power than seller in business.

When Japanese decides to conduct a business negotiation, "the first thing that they do is to find out their position. They want to know who has the higher social status and where they themselves need to fit in among the people involved in the negotiation. The relative power relationship is first determined by the size of the companies. If the companies have a similar status, they move on to see who has the higher title, and they want to know who is older." (Adachi 1997, P 21).

Typically, Japanese do not feel comfortable in term of equal power; they do not accept the concept of equality between parties in business transactions.

Conflict, competitive

Conflicts always arise between American and Japanese business leaders during negotiation due to the differences in cultures. One of the conflicts that arise between American and Japanese is the issue of time management. Japanese spends much time during negotiations trying to get as much information as possible about the other parties. However, American will like to use little time in reaching the negotiation deal. Chang (2006) argues that American value time, and American believes that the sooner they reach agreement the better. While American believes that deal is a deal, Japanese would like to use negotiation to establish long-term relationships with other parties. However, American believes in quick negotiation.

Japanese makes negotiations more ambiguous because they do not want to jeopardize business relationships with other parties. Japanese believes that it is not necessary to reach an agreement during the first negotiation discussion. On the other hand, American considers Japanese negotiation style as ambiguous and dishonest. American expects Japanese to be straightforward during the negotiation deal. However, Japanese put more weight on the trust they should have on the other party rather than the information on the table. Perceived difference between American and Japanese lies in difference in American and Japanese culture during the negotiation deal.

Chang (2006) argues that the biggest difference between American and Japanese during negotiation is that American is preoccupied with the articles in the negotiation. On the other hand, Japanese considers the articles in the negotiation to be less important, they consider that the long-term relationship between them and other parties is the utmost important. Adair (2003) argues that cultural conflicts arise between Japanese and American because of difference in goals, communication styles, and negotiation outcome. Kumar, (1999) points out that… READ MORE

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