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DOI: http://dx.doi.org/10.20534/EJEMS-17-2-42-45
K^stutis Peleckis, Vilnius Gediminas Technical University, PhD in Economics, the Faculty of Business Management E-mail: kestutis.peleckis@vgtu.lt Valentina Peleckiene, Vilnius Gediminas Technical University, PhD in Economics, the Faculty of Business Management E-mail: valentina.peleckiene@vgtu.lt K^stutis Peleckis, Vilnius Gediminas Technical University, PhD in Management, the Faculty of Business Management
E-mail: k.peleckis@vgtu.lt
International business negotiations: context and cultural impact on negotiations
Abstract: There may happen in a variety of misunderstandings in negotiations and between the two parties of the same culture, while the process of preparing for the talks with different cultures require. The article discusses cultural dimensions, their effect on negotiations. The analysis performed the global scientific literature, cultural dimensions and presented their comparison. There are investigated international business negotiation context and cognition aspects also. Paper includes suggestions for further research of international negotiations.
Keywords: business negotiations, context of international negotiations, negotiation process, bargaining.
Various misunderstandings in negotiations may plex process of interaction between two or more com-
occur among the same culture of the negotiating par- panies, organizations, or their compounds, originating
ties also, in the case of negotiation between different from a variety of nations and seeks definition of their
cultures it is necessary to know the basic elements of mutual dependence [13]. These authors point out that
the incompatibility of the negotiating parties. In the in- negotiators tactics are influenced by several key factors:
ternational business communication can take place the negotiators trust, possession of alternatives, conflict
misperceptions of symbols of different cultures. As the background, time available, social sustainability, ethics,
negotiation process without communication is impos- etiquette, political affiliation, and cultural distance. Luo
sible, therefore, impact of culture on the international and Shenkarb [7] writes that the national negotiating
business negotiations is significant. team expresses negotiating behavior and style, result-
Culture is an important variable influencing the in- ing in geography, history, religion, and policy forms.
ternational negotiations and performance. Values and Negotiating partners, conflicts often arise because
norms which are included in culture, can affect the ne- of the differences in perception, preferences, behavioral
gotiation either stronger or weaker [2]. Some authors styles and objectives of the transaction to fail is to risk for
[6] argues that culture, accountability and group mem- each country of opportunistic behavior and private ini-
bership can determine not only approach to relation- tiatives [1]. Differences in culture, legal pluralism, mone-
ships in the negotiations and after (negotiated rates), tary factors, ideological diversity and greater uncertainty
but also likely to influence and the outcome of negotia- distinguished international business negotiations from
tions. For example, a fixed „pie" perception and overall one cultural negotiations [7]. Culture and expectations
benefit. Culture of accountability and ownership of the between cultures affects all business transactions, cul-
group may affect the negotiation process and potential ture is a factor covering business ethics [12]. It is noted
outcomes, and approach-oriented relationship contin- [12], the corporate culture is based on the time-tested
ues to mediate between culture, accountability, and the and traditional practices prevailing business practices
group outcome [6]. Intercultural negotiation is a com- and way of thinking for a long period, which lasted for
International business negotiations: context and cultural impact on negotiations
hundreds or even thousands of years, during which, and has formed a business culture in the country. Christopher and cousin [2] found that cultural values creates a negotiating rate differentials, so it is useful to find and to understand the relationship between the other country's culture and negotiation strategies. Negotiator behavior is perceived depends on the other negotiator's focus on the other side ofbehavior, ability to learn, to understand and to conduct the evaluation. Therefore, if only one of the circuit elements an error occurs, you can expect failure or misunderstanding.
In some cultures, bargaining is acceptable and even required. In other cultures, bargaining might be considered impolite or even insulting [3; 4]. Authors Larson and Seyman [4] write: "Different cultures and different religions can lead to dramatically different reactions for the same behavior, such as.: In the Jewish religion, the basic principle of truth significance is dependent on the other side — the listener. Ifwords cause misunderstanding and are confusing the other side, then it is not allowed according to Jewish religious doctrine and tradition. But if these words not disappoint the other side even if these words are lying, they are allowed".
When negotiating at international level, it is important to collect and organize information not only on the other side of the negotiations, but also on the context of the negotiations. It may be, effect legal changes, political processes, and many others important factors in a particular bargaining situation of other entities that have an influence. In the next section will be examined the context of intercultural of negotiations.
In negotiation strategy negotiating context is an important component, so without bargaining context, it would be difficult to know what the bargaining power in negotiations you should use, what tactics should be chosen.
Cross-cultural context of negotiating may be conditioned by legal environment, organizational values, cultural values. These variables must be taken into consideration, otherwise it would be difficult to understand objectives, strategies, tactics and relationships of other side of the negotiation. Cultural context conveys the picture of a whole culture that enables to understand structure of ethical decisions. In the context of culture main attention is given on: not for cultural differences, not to see whether any negotiating tactic is ethical or not — but for how negotiators see the situation and what variables they will take into account during the decisions-making process [14]. These authors notice that morality and philosophy ofculture operates the organization's values, the legal environment, and the perception of the other side. Authors point out that
the objectives of the organization, the legal environment, culture, morality and philosophy have influence for the choice and implementation of negotiating strategies. It is also emphasized that morality and philosophy of culture have an impact on ethics of monetary relations.
Authors [5] observes that environmental context consists of the political and legal pluralism, external stakeholders, cultural, and ideological differences, instability, and the various changes in foreign government control and bureaucracy, currency fluctuations and exchange conditions. All these factors have an impact for direct (immediate) context also. Direct context includes:
- the relative bargaining power of the negotiators;
- the essential needs of the negotiating parties;
- the level of negotiating conflicts;
- negotiating relationships (before and after negotiations);
- the desired outcome of the negotiations;
- direct stakeholders.
The negotiation process and the final results are influenced both by environmental context and direct (immediate) context.
The negotiators from different cultures (countries) are using different negotiation strategies and communication patterns within the country and between countries [5], those authors report two types of contexts that affect the negotiations: the environmental context in which the negotiator has no impact over or supervise; the immediate context in which the negotiator is affecting context, and may have little control over.
In the negotiations between business entities is relevant pre-negotiation phase. In this phase, it is necessary to determine the context of the negotiations. In interna-tional/intercultural negotiations to do so is even more difficult. Context of the negotiations often consists of previous experience with the other negotiating party, its competitors, partners, suppliers, and other stakeholders. The business relationships appear between businesses of different countries In the globalization process. But it is not easy without negotiating experience to see the context of negotiations in international negotiations.
In this case information about the other negotiating party must be collected and analyzed. It can be done by asking subjects related to the other negotiating party, gathering information on Web search sites, analyzing company performance and experience. There is also required to explore the expertise, experience and so on about the negotiators of the other party. In preparation for international negotiations must be taken into account the fact that the negotiator may not
be necessarily representative of the same country and culture. Negotiating parties can hire a representative/expert from another side of negotiating, to help during the negotiations. Therefore, before the negotiations this must taken into account. Also it can be beneficial to hire expert from another country for the possibility to learn more about the context of the negotiations prevailing in the market of that country/region.
As regards the experience in the market is difficult enough to know for new businesses about their own and other business context. This can take a lot of time, so in this situation without the expert assistance it would be difficult to achieve effective results in the negotiations.
The scientific literature does not sufficiently investigated the effects of the process of cross-cultural negotiating to the final results of negotiations. Intercultural negotiation plays a significant role in the cultural dimension. They may have a negative influence on negotiating communication understanding differently various cultural values, symbols, patterns and so on. It is necessary to foresee these elements in the preparation of negotiating strategies in the negotiations at transnational level.
There are necessary to provide for potential cross-cultural incompatibilities in the intercultural negotia-
tions, previously getting acquainted with different cultures and to foresee measures to prevent or solve them. In order to prepare for negotiations it is necessary also to develop an effective negotiating team whose analytical work and capacities contribute to the achievement the highest outcome of the negotiations. This is particularly important in the context of preparing for intercultural negotiations, which require an understanding of another culture, another language, possession of legal knowledge, knowledge of the negotiation context and so on.
In forming the strategy of negotiations it is needed to get acquainted with the negotiating context. When planning the international business talks, preparation is usually more complex than between the subjects of the same country or regional negotiations. The analysis of the global scientific literature revealed a lack of research on the impact of cross-cultural context of the negotiations to the negotiation process and outcome.
Further investigations must be done by exploring the international negotiations, team building and preparation for the negotiation issues and their impact on the negotiation process and the end result. There is also a need to investigate the formation process of the negotiation team in an international context of the negotiations.
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Analysis of cultural dimension in international business negotiations
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DOI: http://dx.doi.org/10.20534/EJEMS-17-2-45-49
Peleckis Kçstutis, Vilnius Gediminas Technical University, PhD in Management, the Faculty of Business Management
E-mail: k.peleckis@vgtu.lt
Analysis of cultural dimension in international business negotiations
Abstract: Context of the negotiations at the international level is faced with the differences between various cultures: a long-term attitude towards communication, the power placement, the uncertainties avoiding, emotional differences between the negotiating parties and others. These and other differences in cross-cultural dimensions can influence the process ofnegotiations between the representatives ofdifferent cultures in the negotiations.
Keywords: business negotiations, cultural dimension of negotiation, context of international negotiations, the knowledge of the negotiating parties incompatibility.
Context of the negotiations at the international lev- thinking that distinguishes members of one group from
el is faced with the differences between various cultures: a long-term attitude towards communication, the power placement, the uncertainties avoiding, emotional differences between the negotiating parties and others. These and other differences in cross-cultural dimensions can influence the process of negotiations between the representatives of different cultures. May vary understanding of various symbols or actions in different cultures. Impact of negotiation strategies for the final results are significant, therefore, in the preparation phase of negotiations it is necessary to examine the cultural dimensions of the other party. In special literature are observed that for the negotiating team during negotiations with other cultures is needed to adapt. Therefore, it is necessary not only to get acquainted with other's cultural dimensions, but also with the existing differences, which may arise difficulties in communicating. One should also to predict potential cross-cultural conflicts, misunderstandings and the measures to prevent them. Therefore, in the article are analyzed cultural dimensions described in the world literature. In scientific literature can be found a lot of the concepts of culture and they are very different. So in the article will be presented contributions of several authors.
Culture is a set of beliefs and values [9], Hosted By [9] write that culture is the collective programming of
the other in terms of values forms, beliefs, assumptions, expectations, perceptions and behavior. Cultural values are desired practice and cultural practice of people, show people's perception of everything what is being done in their countries [8]. It can be argued that culture is a set of shared attitudes, values, goals, and practices, according to which described institution, organization or group affects all aspects of society and human life [8]. Culture is defined as a constellation of slightly interconnected values, practices and norms, by which are shared related group of people of a certain nation [9]. Culture consists of a set of values and practices that have been developed and maintained from generation to generation [8]. Culture reflects the values and thinking patterns, feelings, emotions, and behavior of identifiable groups. Though many nations have a modern and civilized-developed infrastructure, culture shows how human civilization interacts among each other [9]. That author states that the primary cultural values are transmitted by educational process of children of that culture members, in the process of socialization, education, and religion. There are also secondary factors which influence ethical behavior, they cover the differences in the laws between nations, adopted in human resource management systems, organizational cultures, and professional cultures, and codes of conduct [9].
