Multicultural Context of Business Negotiation – Term Paper

Executive Summary

Doing business in the twenty-first century has been easy though challenging. There has been a massive development of technology that has always propelled economic growth. From all over the globe, the demand of better services and improved quality of goods has been a priority and market has immensely expanded as compared to four decades ago. For this reason and many more, modes of doing business have expanded from a local platform to a global platform, thus creating new forms of challenges to the business men and the organizations. Among the most prominent challenges is dealing with diverse cultures especially when negotiating for new business deals. However, this has brought a challenge of developing the best and the accepted negotiation standards that are multicultural. This paper will identify some of the ways in which business negotiation in the present day is against multiculturalism by pointing out some factors that present themselves in the set international negotiation standards. Currently, businesses prefer to have some methods of communication, agreement, and how to set negotiation goals in some form of standards. These standards, however, do not show the commitment of incorporating other cultures but accepts the widely accepted codes of practices to be the negotiation standards.

1.0 Introduction

Today, businesses have become increasingly global because of a large number of international mergers and acquisitions that are continually taking place thus making people in the business world do negotiation with their partners from diverse cultures. These are cultures that are different from their own and as a result, they have to reach an agreement irrespective of the challenge. This is the agreement that will define how these two parties will work together despite the cultural difference. Among the most obvious examples, in the present world is going abroad to look for new customers and business partners. Searching for investors to expand an individual’s business or to have a start up in a new country that all results into negotiation before an agreement is reached. Both parties usually get to agree on some terms and conditions of conducting the business;(Moore ; Woodrow, 2010, p.10). However, this process of negotiating with people from diverse culture has always been considered to be against the notion of multiculturalism in so many ways. The spirit of multiculturalism more so in the business context is the embracing of the cultural diversity that exists in the community and accepting as part of the business;(Poncini, 2007, p.5). In as much as most of the global businesses in the present world is made up of a diverse workforce, the process of negotiating the business, however, is against multiculturalism. As the primary focus of this paper, it has discussed several instances in which the process of negotiation, more so by people from diverse cultures not being able to embrace the spirit of multiculturalism. The paper will, discuss some of the factors that have made the process of negotiation to be against multiculturalism.

2.0 Analysis

When business people decide to go international, they not only decide to conduct the businesses across borders but also across the diverse cultures. Culture, however, affects how individual’s think, how they communicate and even the behavior (Ghauri, 2005, p. 3). In addition to that, culture has an influence on the kind of transactions that people make and the way they negotiate. It, therefore, plays a fundamental role in the process of business negotiation as have been explained by Gelfand & Brett (2004). Taking a good example with the Chinese and Canadians, there exist two different cultures and sometimes, a barrier can come up that may stop the process of negotiation between these two people in case they are in the process of negotiation unless it is identified and solved. Ghauri (2005), therefore, explains that no matter the experience an individual has in business, the great diversity of the global culture, will always make it difficult to have a full understanding of all the culture that might be encountered in the process of negotiation. It is, therefore, important that the business executives should prepare mentally and psychologically in the best way possible to meet people with diverse cultures more so from the diverse parts of the world.

 Doing business negotiation in the twenty-first century that is the primary focus of the paper is believed not to be easy as many people might think. Guillen & Baeza (2012), explains that there are some elements that will consistently arise to complicate the process of business negotiation in an intercultural setup thus making the process not be in a multicultural context. They are the elements that create set back thus making the process of negotiation seem to be more of an individualistic culture. From time to time, these elements will present themselves as the business executives negotiate the best terms and conditions of doing business in a multicultural situation more so in cross-border business. As have been discussed below, are some of the elements that have been introduced above.

3.0 Negotiating Goals

This forms the primary purpose of any international business negotiation process as each party has a goal to accomplish in the process of having an agreement. However, negotiation from diverse cultures may tend to have and view the purpose of negotiation differently. For the people making deals on behalf of the companies or businesses from some particular cultures, the primary goal of business negotiation is in the form of a signed contract between the two groups. However, for some cultures, they tend to believe that the primary goal of negotiation is the creation of a business relationship and not the signed contract. Even though a written contract also shows the relationship, these cultures dispute the kind of relationship it creates as it is viewed not to be permanent but only interested in the meeting of the individual’s demands and not doing a long-lasting kind of business. It, therefore, presents that sometime, negotiation in business comes against multiculturalism as it fails to depict the unity in the process of negotiation irrespective of the diversity that exists. In a comparison between the Asians and the North Americans culture, most of the Asian business executives and companies believe in creating a relationship in business rather than having a contract that is signed. This, however, is opposed by the most of North Americans who view the process of negotiation to be ultimately created through a signed contract that as well creates a relationship (Starkey et al.,;2010,p.43).

For the Asian business executives, their primary argument is, in a business environment where each party needs to know one another thoroughly, a signed contract is not the best way to go as they feel that the aim will look to be merely driven by special interests either of the business or the individual behind the signing of the contract. They, therefore, prefer a developed relationship to the signed form of contract that is not professional as they believe.

;Despite all these, most businesses in the present world are informed of signed contracts something that has been seen to be sidelining the Asian community. As one way of embracing multiculturalism, business in the present world would also be accepting the other side of building a relationship at the international levels. However, presently its not happening as most businesses go the contract way.

4.0 Personal Style

Personal style is primarily focusing on how the negotiator talks to others, how the person uses the titles, how they dress and how they interact with the other parties;(Katz, 2006, p. 20). However, like other elements, culture has a fundamental role to play especially in creating of influence on how the person dresses, speaks and interacts. This therefore, will come a long way in the manner in which these people will negotiate and how it creates effects on the other parties. Within the international standards of negotiations, there are only two forms of personal style that are either considered to be formal or informal. However, the present day of the business world has become to be too formal and has in a way not appreciated the informal personal style that instead is considered to be inferior. A negotiator who possesses formal style will always insist on addressing their counterparts using their titles and will at all cost avoid personal anecdotes and will desist from questions that can be considered to be private to touch on the family life. This is different from a negotiator with an informal personal style who will start on the first name basis and will quickly seek to develop a personal, friendly relationship with the other team members. In some instances, this persona will take off their jackets and roll up their sleeves in the middle of deal making process. To such personalities, their culture allows this, and it is the best way of doing a business and developing trust. Making people around you feel free and even open up for personal discussion at some point.

However, what must remain clear is that each culture has its formalities and the meaning that they create. It is, therefore, not in vain that these personalities have to behave in such a manner. Creating a comparison between the Americans and the Germans, American negotiators will tend to be informal as compared to the Germans who are official. Forcing the international negotiation process to be formal is a way of oppressing personalities whose culture supports the informal negotiation process. For the unofficial negotiators, they believe in an environment where people feel free as they get best opportunity of knowing one another. It is for this reason that the current negotiation style that has been upgraded to be formal interferes with the culture of multiculturalism that incorporates diverse culture. Instead, it sidelines other cultures when it comes to the personal style.

5.0 Form of Agreement

Whether the goal of the negotiator is to have a contract or relationship, all the negotiated transactions in nearly all the cases, the will reach an agreement;(Maude, 2014, p.50). However, like other elements, culture has an upper hand in creating a remarkable influence. Either written or unwritten agreement, the culture will affect the decision made by the negotiators. Comparing Americans to the Chinese, when it comes to making business deals, they will prefer detailed contracts that anticipate all the possible situations not minding how unlikely they are. This, however, is opposed by the Chinese, who do not prefer a detailed contract but form of general principles. The difference in the two culture is the main contributor of the divergent opinions. For the Americans, believe that any deal is a contract, and an individual must refer to the contract when handling new situations that arise. The Chinese on the other hand believe that a deal is a relationship between parties. In the case of any unclear circumstance that arises, it is upon the parties to sit down and look for the best solutions to the problem. To them, having a detailed contract only shows a lack of confidence in the stability of the relationship. The Chinese therefore, calls for the full trust of the parties who are engaging themselves into a contract and not showing a lack of confidence by having detailed contract that covers nearly all the uncertainties.

The current international negotiation style that has been left to be informed of detailed contract, therefore, fails to depict the spirit of multiculturalism. Just like other elements that have been discussed, it fails to meet the demands of the cultures that believe in a relationship contract and gives the upper hand to those cultures that supports the contract relationship. Not only the Chinese but also most of the Asian business negotiators believes in a relationship agreement as have been explained by Dawson (2012).

6.0 Team Organization

;During the process of international business negotiation, one of the most important things that must always be noted by the negotiator is how the other side of the negotiators is being organized. In as much as the international negotiation, standards require for the parties to have one leader through which all the major decisions are made, culture plays a significant role in defining the type of organization that is present in the international negotiations. Some cultures will emphasize on the individual while other culture will stress on the group leadership. In a way, these values may create an influence on the organization of each side in the negotiation process. Just like other elements, the Americans tend to have a negotiating team with one supreme leader who has been bestowed the authority to decide on all the matters. However, cultures such as the Japanese and the Chinese will require a team consensus decision making (Fang, 1999, p.200). In such situations, it is common to find Americans arriving at the negotiation table with three people and one being the leader but for the Chinese, they might come to the table with ten people and sometimes, it may be very difficult to know who the leader is.

However, as assumed by the negotiation standards that calls for a one team leader, is a way of not accepting other cultures such as the Chinese and the Japanese. As have been explained above, each cultural practice has some meaning more so to the people who practices it. The current negotiation method in which people have few representation and having things done in a faster way in the negotiation process as explained by Guillen ; Baeza (2012), only undermines multiculturalism in the business negotiation context.

7.0 Negotiation Communication Methods

Communication method during negotiation just like other factors also depicts how business negotiation is against multiculturalism. Communication is known as that means of passing meaning from the sender to the receiver. However, it is primarily affected by human culture. To some people, they believe that communication will show the culture as it carries a communitys culture. Within the business negotiation context, communication can either be direct or indirect and in both context, they are influenced by the diverse cultures as they have special meaning to the people who practices them. However, the world more so in the present century, Guillen ; Baeza (2012), explains that direct communication is the only way to conduct international business negotiations.

Direct mode of communication is mostly practiced by the Americans who allows the use of gestures, facial expressions and all the other kinds of body languages. The American culture values directness so much and so is the Israeli. For them, getting a direct response to issues during negotiation is given priority and is seen as the best way to go. This is totally different from the cultures such as the Japanese, who practices the indirect culture. For them, a business decision and responses have to pass so many channels before a final decision is made. It is the best way as all the uncertainties get delt with as people take the time to build trust and a good working relationship. Having a direct mode of communication will, therefore, mean that cultures of communication such as those of the Japanese and the Chinese become irrelevant in most of the international business negotiation tables.

8.0 Conclusion

Modern business negotiation is proving to be against Multicultural Context in so many ways especially through the methods of communication, leadership, forms of agreement and personal presentation. The standards that are being used in the present day are all sidelining other cultures and not incorporating them by having a consolidated process of conducting business negotiation process. All that is there is the only process that is accepted by the majority of the people and not some groups of communities.

9.0 List of References

Dawson, R. (2012). Secrets of Power Negotiating for the 21st Century. New York: Jaico Publishing House.

Fang, T. (1999). Chinese business Negotiating Style. Thousand Oaks, Calif: SAGE, cop.

Gelfand, M. ; Brett, M. (2004). The Handbook of Negotiation and Culture. Stanford: Stanford University Press.

Ghauri, N. (2005). International Business Negotiations. Amsterdam : Pergamon.

Guillen, M. ; Baeza, O. (2012).

Global turning points : understanding the challenges for business in the 21st century. Cambridge : Cambridge University Press.

Katz, L. (2006). Negotiating international business : the Negotiator’s Reference guide to 50 countries around the world. Charleston, S.C: Booksurge.

Maude, B. (2014). International Business Negotiation: Principles and Practice. New York: Palgrave Macmillan.

Moore, W. & Woodrow, P. (2010). Handbook of Global and Multicultural Negotiation. San Francisco, CA: Jossey-Bass.

Poncini, G. (2007). Discursive Strategies in Multicultural Business Meetings. Bern : Peter Lang.

Starkey, B., Boyer, A. & Wilkenfeld, J. (2010). International Negotiation in a Complex world. Lanham, Md: Rowman & Littlefield Publishers.