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Business Negotiation
Japan VS United StatesIntroduction:
Undertaking any business requires a number of skills. These would normally involve negotiation which is defined as a voluntary process by which the involved parties could reach an agreement on common business matters (Cellich and Jain 2004). One of the main purposes of such a process is to enhance the elements of the business at hand; to gain a better deal than simply accepting or rejecting what the other party has already offered. However, according to Alder (1991) regardless of cultural differences, the negotiation process involves business communications, exchanging information and decision making. However, the area of business negotiation is the focus of this paper, as issues relating to the effect of culture on business negotiation process will be evaluated and critically discussed; focusing on the case of Japan and United State, where the negotiation styles in these countries are briefly examined.
Culture aspects of business negotiation: American culture VS Japanese Culture:
Greet Hofestede (1994), after extensive research found five dimensions of culture which are relevant to the international business. These are power distance, uncertainty avoidance, individualism versus collectivism, and masculinity. The majority of authors who wrote about business negotiation tried to analyze and to test theses dimensions to understand the relationship between them and business negotiation.
Power Distance: Japan has a higher power distance when compared with the united state according to Hofetede’s cultural dimension. Equality, a horizontal relationship, is strongly valued in the United States but it is less important in Japan (Graham and Sano 1985). Therefore it seems that when conducting a business negotiation with a Japanese, the first thing to do is to find out their position. In order to indentify who has the higher social status and where could they fit within the people involved in the negotiation. In high power distance societies like Japan, people occupying senior positions are more likely to use their position power in negotiating.
Individualism versus collectivism: individualism represents the extant to which a country emphasizes the role of individuals rather than the collective contribution of the group. In individualistic societies people feel little need for dependency on each other such as the united state as it shows high rating in individualism unlike Japan which has very low rating of individualism and they are considered more dependent on group contribution rather than that of the individual (Cellich and Jain 2004). However Americans can be more self-centred and individual goals are mostly emphasized.
People from individualistic cultures tend to make just a little different between in-group and out-group communication. They prefer clarity in their conversations to communicate more effectively and come in general directly to the point .In business they try to improve their connections and to gain more value out of them, not for establishing a good relationship but just to be involved in a calculative way .
Whereas in collectivism culture like most Asian country people focus on the harmony and loyalty within a company. Also In such cultures direct confrontation is always avoided as such expressions or phrases are used to describe a disagreement or negative statement, saying no would destroys the harmony of the group (Hofstede 1994). From this dimension the negotiation can be different between Japan and united state where the negotiator should determine whether the culture of the party emphasize the individual or the group.
Some authors found that Hofetede’s cultural dimensions are based on predictions as they influence on the negotiation process. Tinsley and Brett (1997) argued that hofested’s cultural dimensions lack predictive power and cannot be used to predict negotiation behaviour in isolation of negotiation variables related to process.
Hall (1959) identified the concepts of high-context and low-context to categorize differences in communication styles. High context culture refers to the amount of information that is given in communication. In low context culture that include Anglo American countries, people tend to use direct language unlike high context culture that include Asian countries like Japan people use indirect language. That difference between high context culture and low context culture also can influence in business negotiation.
American negotiation style vs. Japanese negotiation style:
Generally there are four stages in business negotiation process these are Non-task sounding; task related exchanging information; persuasion; concession and agreement. However, where the negotiation process here would reflect the negotiation style in both countries where according to Graham and Sano (1984), Japanese spend more time in stage one and two than Americans. Japanese spend more time in building relationship compared to the Americans. They make a great effort in the beginning to establish a harmonious relationship. The typical Japanese negotiation may involve a series of non-task interactions and even they would to give a gift. Alternatively, Graham et al also points out that the exchanging information is the main part of the negotiation for the Japanese, where they are expected to ask so many question while offering little information and ambiguous responses. However, this is often looked down at by Americans, who would present as much information as possible and expect negotiations to be straightforward, at the same time, the Japanese put more weight on their trust of the other party rather than on the information provided.
Furthermore, the Americans tend to spend the most time in the third stage of negotiation- persuasion; they consider this as most important stage of the negotiation process whereas this stage is not as important for the Japanese.
In conclusion, Hofstede’s cultural dimensions did not give an accurate image about any of these cultures as they play a role in making a difference in business negotiation. It is obvious there is not only one culture in the United States or Japan. It seems to me that Hofestede’s cultural dimensions and its role on the negotiation process are based on predictions. Tinsley, Curhan and Kwak (1999) stated that there is much between country variance in negotiation behaviour and outcomes that is not explained by broad cultural dimensions.
In order to carry out a successful negotiation at the international level, both parties should be aware of the cultural differences of the other side. Such lack of knowledge will conclude the negotiation with wasted efforts and misunderstanding.
Future studies:
Based on the current body of knowledge a suggested study for future research would be to examine the impact of globalization on the Japanese negotiation system. As globalization broke the barriers between developed countries and created a new world with more similarities than differences, such study would present how the Japanese and the American model of negotiation have adapted to the new global market.
Alder, N. J. (1991). International dimension of Organization Behavior, Belmant, CA, Wadswoth
Cellich, C., Jain, S. (2004) Global Business Negotiation: A Practical Guide, Thomson, USA.
Ghauri, P.N., Usunier, J.C.(2003) International Business Negation 2nd Edition, Elsevier.
Graham, J. L., Sano, Y. (1984) Smart Bargaining Doing Business with the Japanese, Ballinger Pub. Co. USA
Hofestede, G. (1994) Culture and Organization, Mc Graw Hill, USA.
Hall, E. T. (1959) Silent of Language, Doubleday , USA.
Tinsley, C. H. Brett, J. (1997). Managing Workplace Conflict: A comparison of conflict frames and outcomes in the US and Hong Kong paper was presented at the annual meeting of the academy of management, Boston
Tinsley, C.H., Curhan J. J. and Kwak R.S. (1999) Adopting a Dual Lens Approach for Examining the Dilemma of Differences. International Business Negotiations, Volume 4, Issue 1, Pages 1-97.