Published in 1982, Howard Raiffa’s book "The Art and Science of Negotiation" constitutes the dawn of a new era with its asymmetrically prescriptive/descriptive orientation. It consolidated distinctive approaches, boosted research and overcame thinking barriers. In times of a globalized, highly interdependent world with multibillion dollar cross border M&A transactions, international business negotiations are an essential part of the global economy and shape a company’s success. This thesis describes the cultural dimensions of Hofstede and Hall and additionally Raiffa’s negotiation analysis from the perspective of distributive negotiations. A new approach for international business negotiations is introduced which should enable negotiators to deal with differences at an international stage. In order to understand if and how culture affects negotiation hypotheses are derived from theoretical grounded work. By conducting several interviews with negotiators from different cultural backgrounds, tendencies are illustrated and the question whether further empirical research is needed is answered. The interviews show that negotiations between individuals from countries with different power distance indexes often lead to non-agreements. Moreover, the interviewees think that negotiators with an individualist mindset are more likely to reach an agreement in distributive negotiations. Lastly, the interview reveals that negotiators from a country scoring high in masculinity tend to apply rather distributive than integrative negotiation styles. Further validation of the hypotheses with case stud-ies and experiments have yet to be conducted.
Table of Contents
1 Introduction
1.1 Preliminary Note
1.2 Aims and Objectives of the Thesis
1.3 Structure of the Thesis
2 Definition of Terms
2.1 Negotiation
2.2 Culture
3 Cultural Dimensions
3.1 Hofstede’s Cultural Dimensions
3.1.1 Power Distance Index (PDI)
3.1.2 Individualism vs. Collectivism (IDV)
3.1.3 Masculinity vs. Femininity (MAS)
3.1.4 Uncertainty Avoidance Index (UAI)
3.1.5 Long – term vs. Short – term Orientation (LTO)
3.2 Hall’s Cultural Dimensions
3.2.1 High- vs. Low-Context
3.2.2 Time
4 Negotiation Analysis
4.1 Preliminary Note on Negotiation Analysis
4.2 Development of Negotiation Theory
4.3 Decision Analysis
4.4 Behavioural Decision Analysis
4.4.1 Decision Traps
4.4.2 Uncertainty Anomalies
4.4.3 Choice under Uncertainty
4.5 Game Theory
4.6 Characterization of Negotiation Analysis
5 Taxonomy of Negotiations
6 Two-Party Distributive (Win-Lose) Negotiations
6.1 Interests
6.2 Best Alternative to Negotiated Agreement (BATNA)
6.3 Reservation Price
6.4 Buyer’s and Seller’s Surpluses
6.5 Zone of Possible Agreement (ZOPA)
6.6 The Dance of Concession
6.7 Buyer’s and Seller’s Exaggeration
6.8 Raiffa’s Findings concerning Distributive Negotiations
6.9 Both Parties know the Other’s Reservation Price
7 Culture and Negotiation
7.1 Preliminary Note concerning Culture and Negotiation
7.2 Prevailing Concepts
7.3 New Approach to Intercultural Negotiation
7.3.1 Pre-negotiation
7.3.2 Negotiation Process
7.3.3 Post-Negotiation
8 Hypotheses
8.1 Deriving of Hypotheses
8.2 Hypotheses
9 Interpretation of the Interviews
10 Discussion and Conclusion
11 Appendix
11.1 Appendix 1: Hofstede’s Cultural Dimensions
11.2 Appendix 2: Hall’s Cultural Dimensions
11.3 Appendix 3: Asian Disease
11.4 Appendix 4: Allais Paradox
11.5 Appendix 5: The Prisoner’s Dilemma
11.6 Appendix 6: Taxonomy
11.7 Appendix 8: Buyer’s and Seller’s Exaggeration
11.8 Appendix 9: Processual Negotiation Strategies
11.9 Appendix 10: Explanation of Hypotheses
11.10 Appendix 11: Leitfadengestütztes Experteninterview - Fragebogen
11.11 Appendix 12: Leitfadengestütztes Experteninterview – Einführung
12 Bibliography
Objectives and Core Themes
The primary objective of this thesis is to identify the effects of cultural differences on negotiation styles. It aims to bridge the gap between traditional negotiation theory and the practical challenges posed by cultural diversity in an increasingly globalized business environment. By examining theoretical frameworks and incorporating expert perspectives, the thesis seeks to provide a foundation for further empirical research in international business negotiations.
- Analysis of Hofstede’s and Hall’s cultural dimensions in the context of negotiation.
- Examination of distributive (win-lose) negotiation processes and their inherent behavioral biases.
- Development of a new conceptual approach for intercultural negotiation strategies.
- Validation of hypotheses through qualitative expert interviews with purchasing professionals.
Excerpt from the book
Anchoring Effect
“[…] [F]ew phenomena are easier to demonstrate and harder to explain than the so-called anchoring effect, […]” (Starck & Mussweiler 1997, p. 437). It is defined as the assimilation of a numeric value to a standard which was established beforehand (Mussweiler et al. 2000). Likewise, an anchor is described as the initial position, which influences people’s perception regarding the negotiation object (Bazerman & Neale 1992) and arises from incomplete information involving some kind of uncertainty (Mussweiler & Galinsky 2002; Kahneman & Tversky 2000).
In the case people are confronted with comparisons, it will affect their decision. Kahneman and Tversky proved this effect by means of a survey in which they asked participants whether the percentage of African nations in the United Nations is lower or higher in comparison to a specific number (the anchor). The anchor was chosen randomly, but the results were surprising. People with a high anchor estimated that 45% of African nations are represented in the UN, whereas participants who received a low anchor thought that only 25% of African nations are in the UN. Similar studies were conducted which confirmed that the anchoring is a robust effect across various settings (Mussweiler & Galinsky 2002). In addition to this, the anchoring effect has more influence on the final agreement than the concessionary behaviour (Mussweiler et al. 2000) This effect is enhanced when the issue at hand is uncertain, something that applies to most negotiation settings (Bazerman & Neale 1992). Mussweiler and Galinsky argue that anchoring has a particularly high influence on the initial offer, as a result the buyer has an advantage over the seller if one makes the first offer and vice versa (Galinsky & Mussweiler 2001).
Summary of Chapters
Introduction: Provides the motivation for the study, highlighting the importance of negotiation and cultural awareness in global business and setting the thesis objectives.
Definition of Terms: Clarifies fundamental concepts, defining negotiation as an interactive process and culture as a complex, learned, and dynamic phenomenon.
Cultural Dimensions: Examines Hofstede’s and Hall’s models to provide a framework for distinguishing negotiation styles based on societal patterns.
Negotiation Analysis: Reviews the evolution of negotiation theory, focusing on behavioral decision-making and cognitive biases that affect rational outcomes.
Taxonomy of Negotiations: Categorizes negotiations based on various attributes to simplify the complexity of different business scenarios.
Two-Party Distributive (Win-Lose) Negotiations: Details the mechanics of distributive negotiations, covering key concepts like BATNA, reservation price, and ZOPA.
Culture and Negotiation: Explores the intersection of culture and negotiation, proposing a new three-stage approach for effective intercultural interaction.
Hypotheses: Derives and presents seven specific hypotheses connecting cultural dimensions and cognitive biases to negotiation performance.
Interpretation of the Interviews: Discusses findings from qualitative expert interviews, gauging the validity of the proposed hypotheses.
Discussion and Conclusion: Synthesizes the overall findings, acknowledges research limitations, and suggests directions for future empirical studies.
Key Words
Negotiation, Culture, Hofstede, Hall, Distributive Negotiation, ZOPA, BATNA, Decision Analysis, Cognitive Biases, Anchoring Effect, Intercultural Negotiation, Rationality, Prospect Theory, Globalization, Business Management.
Frequently Asked Questions
What is the core focus of this thesis?
The thesis explores how cultural differences impact negotiation styles, specifically within distributive, win-lose negotiation scenarios in an international business context.
Which theoretical models does the author rely on?
The work utilizes Geert Hofstede’s cultural dimensions, Edward T. Hall’s context and time concepts, and Howard Raiffa’s negotiation analysis.
What is the main goal of the research?
The goal is to identify possible interfaces between culture and negotiation, derive testable hypotheses, and propose a new approach to intercultural negotiation.
Which scientific method is employed?
The research is based on a literature review and qualitative expert interviews with purchasing managers from multinational organizations.
What does the main body cover?
The main body covers definitions, cultural dimensions, the evolution of negotiation theory, detailed distributive negotiation concepts, and a framework for intercultural strategy.
What defines the research's character?
It is characterized by an asymmetrically prescriptive and descriptive orientation, aiming to offer practical insights rather than pure ivory-tower theory.
Why are cognitive biases important in this study?
Cognitive biases, such as the anchoring effect, are crucial because they demonstrate why human negotiators often deviate from rational behavior, a tendency potentially influenced by culture.
How is the "Cultural Onion" used in this study?
The "Cultural Onion" is used as a metaphor to show that values are the deepest, most entrenched layers of culture, which are significantly harder to change than visible practices or symbols.
- Arbeit zitieren
- Niklas Dahlen (Autor:in), 2014, Cultural Impact on Models of Negotiation using the Example of Distributive Negotiations, München, GRIN Verlag, https://www.grin.com/document/280270
