Impact of Culture on Negotiation Process - Essay Example

? Impact of Culture on Negotiation Process Impact of Culture on Negotiation Process Introduction This research paper would look into the impact of cultural differences between two countries on the negotiation process-taking place between two countries or two individuals belonging to different nationalities. For this purpose, the author of the paper would study the cultural differences between Australia and United Kingdom and evaluate the differences by using Hofstede’s Cultural typology. Then the paper will move on to discussing how these cultural differences might affect the negotiation process. Hofstede’s Cultural Typology Hofstede’s cultural dimension theory is beneficial in understanding cross-cultural communication processes and the influence of cultural differences. Hofstede found his theory beneficial for developing a model, which ranks one country against the other, on the basis of four dimensions of culture, i.e. power distance, individualism, masculinity/femininity and uncertainty avoidance (Hofstede, 1984). Culture Difference between United Kingdom and Australia Power Distance The society of United Kingdom is supportive of equality within the society and considers each human being or native of the country as equal. These results reflect that United Kingdom’s society has transformed from the typical old times society into a modern one, which believes that individual rights should not be limitedly granted to few fortunate individuals of the society, but fair play should prevail in every aspect of life. Australian society, on the other hand, is found to be a little bit more supportive of equality in the society, as compare to United Kingdom. Australian culture provides each individual with equal opportunities to make their lifestyles better, no matter if the individuals belong to black or white community and they immigrants or civilian of the country (Hofstede, 2012). Individualism By analyzing UK’s society utilizing Hofstede’s typology, it is found that the society is highly supportive of individualism and takes care of each other’s privacy. Individuals are empowered to take decisions about their lives, career and education on their own, and the outcome of their actions is their own responsibility. Moreover, individuals are also supported to live their life in a way, which is considered as a positive contributor towards the overall social structure of the society. When the culture of Australia was analyzed against UK’s culture on the basis of individualism, it was found that Australia’s social structure and culture design are more supportive of individualism as compare to United Kingdom (Hofstede, 2012). Masculinity/ Femininity The society of United Kingdom is highly supportive of masculinity and individuals who are highly successful, ambitious and positive are usually considered as the one who drives the society towards positive attitude. On the other hand, Australian society is also femininity oriented, where individuals’ attitude towards life and their contribution to the society are measured from how successful and ambitious they are about their career and job related performance (Hofstede, 2012). Uncertainty Avoidance In this dimension, the society of UK is found to be more supportive of positive attitude and they always perceive that the future is going to bring for them happiness and fortune. Individuals living within the society are hopeful that their present and future would bring hope. Moreover, it also implies that the social structure of UK allows its individuals to keep their plans for the future and present flexible, as it can be altered according to changing scenarios and incoming new information. This is the reason, that UK’s society is supportive of fair play and equal opportunities for every individual in the society. On the other hand, Australian society is more uncertain about the future and reflects a slightly negative attitude in their daily life practices. They are scared of what might future would bring for them and are very discrete about planning for their future and career choices. They are uncomfortable in challenging situations and develop rules and regulations as a preventive measure to turn down negative affects of what is happening in their surroundings. They are not sure about how their future would look like, and this uncertainty prevents them from making efforts to excel in their careers (Hofstede, 2012). How These Cultural Differences Might Influence Negotiation Process The differences between the cultures of UK and Australia would have a deep impact on the negotiation processes between businesses or individuals belonging to these countries. First of all, we have to understand that UK’s culture and society promotes direct communication with low context and to the point arguments. On the other hand, Australian culture promotes indirect communication during the negotiation process. Moreover, negotiation with Australian businesses or individuals would take more time because Australians are more in favor of detailed arguments with high context. Another difference between Australian and UK culture is that, the later prefers efficient exchange of information between the parties. UK’s individuals and businesses are highly conscious about the time, negotiation would take, for this reason they tend to exchange information, which is complete and authentic so that lapses do not occur in the communication process. On the other hand, even though Australian might provide or receive complete information, still they would look on gathering further information and ask repetitive questions. In this manner, there will be delays in the negotiation process which might negatively influence it (Imai & Gelfand, 2010). Another difference that might have an influence on the negotiation process between UK and Australia is that, individuals from UK are time efficient and they consider wasting time as a professional and social crime. On the other hand, Australians take much time to make decisions and prepare arguments during a negotiation process. Individuals and business from UK usually designate an individual to carry out negotiation and make decisions that are of importance. In contrast, Australians are the believers of collective decision making, and a single individual would hesitate to take a decision and assume responsibility. This dependence would cause the Australian participant in the negotiation process to waste time while taking guidance from the group about a particular decision (Brett, 2000). One positive aspect of Australian culture is that it promotes risk taking, but within limits. An Australian business or individual would make a decision by taking time, but they would also take time in implementing decisions and ideas generated during the negotiation, because they would want to carry out a pilot test or understand the implication of such decisions in advance. If the results are positive, only then an Australian business or individual would implement the outcome of the negotiation. On the other hand, individuals and businesses from UK believe on getting down to performing tasks as soon as the negotiating team decides about them (Danciu, 2011). Even if the negotiation process is concluded successfully between Australian and UK business or individual, the cultural differences would reflect on the type of ties they would want to enter. An individual or business from UK would prefer to enter into a written and signed contract before forming a bond with Australian counterparts. This is because, UK’s culture promotes risk management pertaining to bonds with another entity, and thus the contract would be beneficial to avoid any future discrepancies. In contrast, individual or business from Australia would seek to develop the same bond by entering into an emotional and practical relationship. Contracts would not be the most preferred mode of forming a bond and a simple agreement or disagreement would be enough to conclude the negotiating process. If at any stage, any involved party violates the contract or rules of relationship, UK’s culture would require the individual or business to fulfill the demands of the contract in case if the contract is violated. On the other hand, Australian individual or business would prefer to renegotiate the deal or contract and try to sort out the issues before going to court of law (Michelle, 2003). Another major difference between Australian and UK culture, which might have an impact on negotiation processes is the format of contract developed to conclude negotiations. Individuals belonging to UK would prefer to include contingency plans and risk management schedule in the contract. On contrary, Australian counterparts would seek to develop contingencies and risk management schedule from time to time, as issues emerge. In this manner, UK’s cultural trait is more favorable as time to time contingency planning would lead to wasting precious time and increase the destruction or damage caused by the issues emerging (Miron & Jolene, 2002). Negotiation might also get influenced by the time duration of contract, developed after negotiation process. Individuals from UK focus on short-term goals and would want to work on a single agenda at a time. Individuals from Australia would want to focus on long-term foals and prefers to discuss all issues in one sitting, i.e. in one negotiation meeting. The adverse affect of long sightedness and resolving issues at one time is that, it would reduce the efficiency of decisions made to resolve issues and the negotiating team would not be able to put forward concrete conclusion from the negotiation process. The major difference can also be understood from the focused-outcome of the negotiation process. Individuals from UK would want to earn profit by implicating the decisions made in the negotiation process; whereas, Australian counterparts would see the outcomes and decisions made in the negotiation process, increasing their share of the market and improve the future outlook of the business (John, 2008). The UK’s government would not want to take an active role in the negotiation between business and individuals of UK and Australia; this is because UK’s culture is supportive of individualism and empowers entities to make decision base don their personal judgment and experience. On the other hand, Australian would take keen interest and participate eagerly in a cross border negotiation process with UK’s business or individual (Edward, 1981). Lastly, the focus of the negotiation process would also differentiate due to variation in cultural background of the participants in the process. The individuals from UK would mean to carry out negotiation to work in favor of business. This implies that individuals from UK would complete the negotiation process and not focus on developing relationships with Australian business or individual. On the contrary, the individual from Australia would seek to develop a bond of friendship with his/her English counterpart and use that relationship to work in the improvement of business conditions for involved parties (Salacuse, 1999). After evaluating the cultural differences and their impact on the negotiation process between an Australian and English entity, the author is able to draw conclusion, which will be stated in the next section of the paper. Conclusion It can be asserted that cultural differences negatively influence that the negotiation process. This is because each participating entity would have a different approach towards the agenda of the negotiation process. Similarly, each entity would have a different perspective about the results that they want to achieve from the negotiation process. Reference List Brett, J. M. (2000). Culture and Negotiation. International Journal Of Psychology , 35 (2), 97-104. Danciu, V. (2011). International Business Negotition Under the Impact of Cultural Distance. The Romanian Economic Journal , 42 (1), 175-95. Edward, H. T. (1981). Beyond Culture. NY: Anchor. Hofstede, G. (2012). Cultural Differences: Australia and United Kingdom. Retrieved December 6, 2013, from The Hofstede Centre: http://geert-hofstede.com/united-kingdom.html Hofstede, G. (1984). Culture's Consequences: International Differences in Work-Related Values . NY: Sage. Imai, L., & Gelfand, M. J. (2010). The culturally intelligent negotiator: The impact of cultural intelligence (CQ) on negotiation sequences and outcomes. Journl of Behavior and Human Decision Processes , 1 (1), 1-16. John, H. (2008). Cultural Differences in Business Communication. Pittsburgh: Carnegie Mellon University . Michelle, B. (2003). Culture Based Negotiation Styles. Boulder: University of Colorado. Miron, L., & Jolene, K. (2002). Intercultural Competence: Impersonal Communication Across Cultures. NY: Allyn and Bacon. Salacuse, J. W. (1999). Intercultural negotiation in international business. Group Decision and Negotiation , 8 (1), 217-36. Read More