Negotiation researchers have reached many fascinating discoveries about how people negotiate, such as uncovering flaws in our decision making and identifying useful persuasion techniques. But a great deal of this research has been conducted in Western cultures, and particularly the United States, leaving open the question of whether the results—and the advice they inspire—apply across national borders. If not, those seeking international negotiation strategies could be led astray.
Two studies that have tested conventional negotiation wisdom in other cultures have reached some surprising conclusions about managing cultural differences. We describe each study with the goal of helping you identify tailored international negotiation strategies.
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Should You Team Up?
To conduct an effective negotiation, two (or more) heads are better than one, most researchers have found. In several studies conducted in the United States, teams were better than solo negotiators at exchanging information with counterparts and making accurate judgments, and teams also achieved better outcomes for everyone involved.
The tendency of teams to outperform solo negotiators has been attributed to several factors, including the high economic goals that teams set for themselves, their heightened sense of competition, and members’ tendency to challenge one another’s views.
It may also be important that team members monitor one another’s behavior, while individuals often negotiate unobserved by others in their organizations. Monitoring tends to amplify the social norms, or behavioral expectations, that are salient in a given situation. In the individualistic culture of the United States, for example, the social norm that predominates in economic situations such as negotiation is self-interest. Thus, members of U.S. negotiating teams may have a strong incentive to show one another that they are advancing the group’s interests.
By contrast, in collectivistic East Asian cultures, group harmony is generally a more salient social norm than self-interest. University of Maryland professor Michele Gelfand and her colleagues set out to determine if this difference affects the negotiation performance of teams.
They compared the outcomes of individual negotiators and negotiating teams in both the United States and Taiwan in a two-party negotiation simulation. In two experiments, U.S. teams and solo negotiators achieved similar outcomes, a finding that diverges from other past research, perhaps because the negotiating exercise was easier than exercises used in prior research, Gelfand and her colleagues theorized. Meanwhile, Taiwanese teams performed significantly worse than Taiwanese solo negotiators. Taiwanese teams appear to have sacrificed value because of a desire to maintain harmony.
The results suggest that in international business negotiation, the question of whether to negotiate alone or as part of a team is far from straightforward. When determining your international negotiation strategies, keep in mind that negotiators operating in cultures where harmony is a stronger norm than self-interest might find advantages to going it alone.
Does the Endowment Effect Transfer Across Cultures?
Simply owning an object causes us to value it more than if we did not own it. This phenomenon, know as the endowment effect, can create trouble for sellers in negotiations. Take the case of home sellers who set unrealistic asking prices and then watch their homes sit on the market for months or years.
The endowment effect is so robust it has even been found in young children and chimpanzees. Yet for many years, the effect was studied only in Western cultures.
In their international negotiation research, William W. Maddux of the INSEAD business school in France and his colleagues discovered that the endowment effect was stronger among self-described white and European Americans than among Asians and East Asians. Specifically, the Westerners set significantly higher selling prices for the mug or box of chocolates they had just been given than the Easterners did.
The researchers tied this finding regarding culture and negotiation to the Western tendency to place special value on objects related to oneself. Western cultures tend to value independence and the self more highly than Eastern cultures do. By contrast, Eastern cultures tend to place more value on interdependence and to be associated with self-criticism.
Maddux and his team theorize that a lower susceptibility to the endowment effect could explain why East Asian consumers tend to be faster to adopt new technologies (and abandon old ones) than Western consumers. In terms of international negotiation strategies, the study provides evidence that cultural differences may affect the degree to which negotiators are susceptible to the endowment effect and to overvaluing what they own.
What other international negotiation strategies have you identified in your own dealings with negotiators from other cultures?
