RELATIONSHIPS BETWEEN HOFSTEDE’S CULTURAL DIMENSIONS AND NEGOTIATION STRATEGIES Negotiations between Danish and Russian companies by Daniel Solomonov BA, Aarhus University, 2007 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SOCIAL SCIENCE at School of Economics and Management Business Administration and Russian AARHUS UNIVERSITY September 2009 Supervised by Mikael Søndergaard © Daniel Solomonov, 2009
Master’s thesis Spring 2009
By Daniel Solomonov Student number 20040664
Table of Contents Abstract ............................................................................................................................................................. 5 Preface ............................................................................................................................................................... 6 1. Introduction ................................................................................................................................................... 7 1.1. Structure of the thesis ............................................................................................................................ 7 2. Review of theory on negotiation strategies and cultural dimensions........................................................... 8 2.1. Negotiation strategies ............................................................................................................................ 8 2.1.1. Demarcation .................................................................................................................................... 9 2.1.2. Distributive strategy compared to integrative strategy ................................................................ 10 2.2. Hofstede’s cultural dimensions ............................................................................................................ 10 2.2.1. Definition of culture ...................................................................................................................... 11 2.2.2. Masculinity versus femininity ........................................................................................................ 13 2.2.3. Individualism versus collectivism .................................................................................................. 13 2.2.4. Uncertainty avoidance................................................................................................................... 13 2.2.5. Power distance .............................................................................................................................. 14 2.3. Danish culture ....................................................................................................................................... 15 2.4. Russian culture ..................................................................................................................................... 15 2.5. Comparison of Denmark and Russia..................................................................................................... 17 3. State of research on international negotiation ........................................................................................... 17 3.1. Approaches and perspectives ............................................................................................................... 18 3.2. Integrative and distributive strategies in international negotiation .................................................... 20 3.3. Culture’s influence on negotiation ....................................................................................................... 20 3.3.1. Masculinity‐femininity and negotiation ........................................................................................ 21 3.3.2. Individualism‐collectivism and negotiation ................................................................................... 21 3.3.3. Uncertainty avoidance and negotiation ........................................................................................ 23 3.3.4. Power distance and negotiation .................................................................................................... 25 3.4. Descriptions of Danish negotiators ...................................................................................................... 25 3.5. Descriptions of Russian negotiators ..................................................................................................... 26 3.6. Negotiations between Danes and Russians ......................................................................................... 28 3.7. Conclusion ............................................................................................................................................ 29 4. Research question ....................................................................................................................................... 31 4.1. Research objectives .............................................................................................................................. 31 4.2. Conceptual significance ........................................................................................................................ 31 2
Master’s thesis Spring 2009
By Daniel Solomonov Student number 20040664
4.3. Potential practical application .............................................................................................................. 32 5. Hypotheses .................................................................................................................................................. 32 5.1. The masculinity‐femininity dimension and negotiation strategies ...................................................... 32 5.2. The individualism‐collectivism dimension and negotiation strategies ................................................ 33 5.3. The uncertainty avoidance dimension and negotiation strategies ...................................................... 34 5.4. The power distance dimension and negotiation strategies ................................................................. 34 5.5. General hypotheses on negotiation strategies .................................................................................... 35 6. Method ........................................................................................................................................................ 36 6.1. Perceptions ........................................................................................................................................... 36 6.2. Research fieldwork ............................................................................................................................... 37 6.3. Translation ............................................................................................................................................ 38 7. Empirical research ....................................................................................................................................... 39 7.1. Questionnaire design ............................................................................................................................ 39 7.2. Sample characteristics .......................................................................................................................... 40 7.3. Operationalization of study variables ................................................................................................... 40 7.4. Analysis of means ................................................................................................................................. 41 7.5. Statistical procedures for hypothesis testing ....................................................................................... 46 7.5.1. Pearson coefficients of correlation ............................................................................................... 47 7.5.2. Regression analysis ........................................................................................................................ 47 7.5.3. Factor analysis ............................................................................................................................... 48 7.6. Statistical analysis of the Russian sample ............................................................................................. 49 7.6.1. Hypothesis 9: Are Danes integrative negotiators? ........................................................................ 49 7.6.2. Hypothesis 1: Relationship between femininity and integrative negotiation ............................... 51 7.6.3. Hypothesis 3: Relationship between individualism and distributive negotiation ......................... 52 7.6.4. Hypothesis 5: Relationship between low uncertainty avoidance and integrative negotiation .... 54 7.6.5. Hypothesis 7: Relationship between low power distance and integrative negotiation ............... 56 7.7. Statistical analysis of the Danish sample .............................................................................................. 58 7.7.1. Hypothesis 10: Are Russians distributive negotiators? ................................................................. 59 7.7.2. Hypothesis 2: Relationship between masculinity and distributive negotiation ............................ 60 7.7.3. Hypothesis 4: Relationship between individualism and distributive negotiation ......................... 62 7.7.4. Hypothesis 6: Relationship between high uncertainty avoidance and distributive negotiation .. 64 7.7.5. Hypothesis 8: Relationship between power distance and distributive negotiation ..................... 66 7.8. Compilation of findings on Denmark and Russia .................................................................................. 68 7.9. Reliability .............................................................................................................................................. 71 3
Master’s thesis Spring 2009
By Daniel Solomonov Student number 20040664
7.10. Validity ................................................................................................................................................ 71 7.11. Generalization .................................................................................................................................... 73 7.12. Limitations .......................................................................................................................................... 73 8. Conclusions .................................................................................................................................................. 75 8.1. Summary of contributions .................................................................................................................... 76 8.2. Suggestions for further research .......................................................................................................... 76 8.3. Practical applicability ............................................................................................................................ 77 9. Bibliography ................................................................................................................................................. 78 10. List of libraries and searching engines ....................................................................................................... 81 11. List of figures ............................................................................................................................................. 81 12. List of tables ............................................................................................................................................... 81 13. Appendices ................................................................................................................................................ 83 13.1. Descriptive statistics on Danish culture as perceived by Russians ..................................................... 83 13.2. Descriptive statistics on Russian culture as perceived by Danes ....................................................... 84 13.3. Correlation analysis of Danish culture and negotiation (Russian sample) ......................................... 86 13.4. Correlation analysis of Russian culture and negotiation (Danish sample) ......................................... 88 13.5. Regression analysis ............................................................................................................................. 90 13.5.1. Example of bivariate regression .................................................................................................. 90 13.5.2. Example of multiple regression ................................................................................................... 91 13.6. Sample characteristics: descriptives and frequencies ........................................................................ 92 13.6.1. Russian sample ............................................................................................................................ 92 13.6.2. Danish sample ............................................................................................................................. 93 13.7. Reliability analysis ............................................................................................................................... 95 13.7.1. Russian sample ............................................................................................................................ 95 13.7.2. Danish sample ............................................................................................................................. 95 13.8. Factor analysis .................................................................................................................................... 96 13.8.1. Russian sample ............................................................................................................................ 96 13.8.2. Danish sample ........................................................................................................................... 104 13.9. Questionnaire in Danish sent to Danish respondents ...................................................................... 115 13.10. Questionnaire in Russian sent to Russian respondents ................................................................. 118 Honor statement ........................................................................................................................................... 121
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Master’s thesis Spring 2009
By Daniel Solomonov Student number 20040664
Abstract Many authors have assumed that culture influences negotiation, and much has been published on the subject of international negotiation. Surprisingly however, it is hard to find studies that purposely explain the relationships between culture and international negotiation through the findings of one of the most comprehensive studies on culture – Geert Hofstede’s dimensions of culture. In fact, only one published study by John Graham et al. has been found that addresses this, and it does not have this issue as its primary objective. This research studies Danish‐Russian intercultural negotiation – a niche where no published studies in Danish, Russian, or English could be found. This study attempts to find and describe relationships between masculinity‐femininity, individualism‐ collectivism, uncertainty avoidance, and power distance and integrative and distributive negotiation strategies in the field of Danish‐Russian intercultural negotiations. Simultaneously, this study seeks to describe differences in Danish and Russian negotiating behavior and find tendencies in use of negotiation strategies. This research is carried out by quantitative survey method. A questionnaire in two languages has been distributed to managers from Danish and Russian companies, asking them to assess the opposite party’s behavior on a Likert scale based on past experience with negotiating with the respective cultures. The data from the two samples was collected and analyzed using Pearson coefficients of correlation and factor analysis with the Varimax rotation method. This study has found positive relationships between femininity and integrative negotiation strategy, masculinity and distributive negotiation strategy, low power distance and integrative negotiation strategy, high power distance and distributive negotiation strategy, and uncertainty avoidance and integrative strategy. This study has also found evidence that Danes tend to employ integrative negotiation strategy, and Russians tend to employ distributive negotiation strategy. The results of this study add to theoretical knowledge about the relationships between Hofstede’s cultural dimensions and negotiation strategies. The results of this study also contribute to knowledge about particular behavioral variables’ relations to each other in Danish‐Russian negotiations. The findings are applicable to Danish‐Russian negotiations and potentially generalizable to all negotiations.
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Master’s thesis Spring 2009
By Daniel Solomonov Student number 20040664
Preface I emigrated to Denmark from Russia in 1999. This life experience has lead to a curiosity in the subject of culture. My education in business administration has lead to an interest in negotiation. My personal motivation for undertaking this particular research project is, on one hand, rooted in a professional interest in Danish‐Russian intercultural relations. On the other hand, I am also profoundly interested in the subject of negotiation. These two interests combined lead to a wish to research whether there are connections between particular cultural factors and use of negotiation strategy in Danish‐Russian negotiations. Because the main subject of my education is business administration, I am only interested in business negotiations between Danish and Russian representatives. As a side remark, but nonetheless and important one, I would like to state that this paper will be consis‐ tently using nationality terms. To maintain this consistency throughout the paper, I will be mentioning “Danish” first and “Russian” second. I would like to emphasize that this is not done to offend anybody, but purely as an attempt to maintain the aforementioned consistency in use of terms. As part of the agreement on questionnaire response, the participants have been assured of total anonymi‐ ty. Therefore, in this paper there will be no mention of the participants’ personal names, company names, trademarks or the like. After careful consideration, I have decided that this paper will refer to myself as “this author” or “this researcher”, and use a first person, plural, editorial “we”. It is my comprehension that an editorial “we” is a milder and less self‐centered way of making a presentation. It is also my perception that it facilitates better involvement by the reader than “I” does. I would like to thank my professor, Mikael Søndergaard, for providing insight and support throughout the duration of this project. I would also like to thank all the people who have helped me obtain the data for this research and shall remain anonymous – the secretaries and the managers at numerous Danish and Russian companies, both the ones who participated and the ones who declined. Last but not least, I would like to thank my friends, who helped immensely with their support, testing, suggestions, and proofing. Daniel Solomonov.
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Master’s thesis Spring 2009
By Daniel Solomonov Student number 20040664
1. Introduction Russia is widely described as a growing market in the media and by Danish companies. The Confederation of Danish Industry has recently published a report on the Russian market, where they state that the Russian economy has been experiencing growth rates between 6% and 8% during the past few years (DI, 2009). The current global economic crisis has negatively affected the growth of the Russian economy in 2009, but Danish exports grew in 2008 by 5,4% in 2008, from 10,5 billion DKK to 11,1 billion DKK (DI, 2009). Negotiations are essential for coming to agreements and facilitating this growth. International negotiation may be affected by a variety of environmental contexts – legal pluralism, political pluralism, currency fluctuations and foreign exchange, foreign government control and bureaucracy, instability and change, ideological differences, cultural differences, and external stakeholders (Lewicki et al., 2006, p.408). This study attempts to describe relationships between cultural differences and negotiation strategies in negotiations between Danish and Russian companies. We hope that better understanding of these relationships can facilitate more agreements, less disagreements, and ultimately more growth for both the Danish and the Russian companies.
1.1. Structure of the thesis This thesis is presented in seven main chapters. Here we outline their structure for easier navigation. Chapter 2, “Review of theory on negotiation strategies and cultural dimensions”, p.8, presents the relevant theory that forms the foundation of what we know about negotiation strategies and cultural dimensions. Chapter 3, “State of research on international negotiation”, p.17, presents the findings on the relationships between culture and negotiation, which constitutes a deeper level of theoretical knowledge. Chapter 4, “Research question”, p.31, presents the research question that this study attempts to answer, the research objectives, and answers the questions of conceptual significance and potential practical application. Chapter 5, “Hypotheses”, p.32, presents the hypotheses that this study attempts to confirm. Chapter 6, “Method”, p.36, presents the method that this study employs to achieve its objectives. Chapter 7, “Empirical research”, p.39, presents all information about how this study has been carried out, including all findings and assessments. Chapter 8, “Conclusions”, p.75, presents the main conclusions of this study, suggestions for further research, and an assessment of how the results could be used in practice. The bibliography can be found on page 78, followed by the list of libraries and searching engines (p.81), list of figures (p.81), and list of tables (p.81). The results of all statistical analyses can be found in Appendices (section 13, p.83).
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By Daniel Solomonov Student number 20040664
2. Review of theory on negotiation strategies and cultural dimensions This work spans two fields – culture and negotiation strategy. Therefore, a brief review of theories on these two subjects is in order. The review should help the reader to better understand the background for this research project, the hypotheses behind it and the subsequent analysis. The fundamental theory on negotiation strategies used in this work comes from the book entitled “Negoti‐ ation” by Lewicki, Saunders and Barry (Lewicki et al., 2006). The theoretical framework on cultural dimensions used in this work was first published in 1980 by the influential Dutch professor Geert Hofstede. The book was entitled “Culture’s consequences: International differences in work‐related values.” (Hofstede, 1980). For the sake of being as current as possible, this work will mainly reference a more recent edition, “Culture's consequences: comparing values, behaviors, institutions, and organizations across nations” (Hofstede, 2001), as well as other published articles by the professor. This chapter presents theory on negotiation strategies, Hofstede’s cultural dimensions, findings and descriptions on Danish culture and Russian culture, and a comparison of the two cultures.
2.1. Negotiation strategies Negotiation can be broadly defined as the means by which people settle their differences (Luecke, 2003, p.xi). There are several common characteristics in negotiation situations (Lewicki et al., 2006, pp.6‐8): • • • • •
•
•
There are two or more parties – that is, two or more individuals, groups, or organizations. There is a conflict of needs and desires between two or more parties – that is, what one wants is not necessarily what the other wants – and the parties must search for a way to resolve conflict. The parties negotiate by choice. That is, they negotiate because they think they can get a better deal by negotiating than by simply accepting the other party’s offer. There is an expectation that both sides will modify or move away from their opening statements, requests or demands. Negotiation occurs when the parties prefer to invent their own solution for resolving the conflict, when there is no fixed or established set of rules or procedures for how to resolve the conflict, or when they choose to bypass those rules. Successful negotiation involves the management of tangibles (price or terms of agreements) and intangibles (underlying psychological motivations that may influence parties during a negotiation). For example, some of the intangibles can be: the need to win or avoid losing, the need to look good and competent to the people one represents, the need to defend an important principle, the need to pro‐ tect one’s reputation, etc. One of the key characteristics of a negotiation situation is that the parties need each other in order to achieve their preferred objectives or outcomes. That is, either they must coordinate with each other to achieve own objectives, or they choose to work together because the possible outcome is better than they can achieve on their own.
In negotiation theory there are two main strategies: distributive and integrative negotiation. They are most conveniently illustrated by means of the dual concerns model.
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Master’s thesis Spring 2009
By Daniel Solomonov Student number 20040664
Figure 1. The Dual concerns model
Substantive outcome important?
Relational outcome important?
Yes Yes
No
Collaboration (Integrative negotiation) Competition (Distributive negotiation)
No Accommodation
Avoidance
Adopted from Lewicki et al., (2006, p.107).
The dual concerns model is a contingency model of two variables – importance of substantive outcome and importance of relational outcome (Lewicki et al., 2006, p.107). That is, negotiation strategy is employed based on relative importance of these two factors to the individual negotiator. The substantive outcome of a negotiation is defined as any economic or material result, expressed in terms of money, assets, time, convenience, logistics, etc. The relational outcome is simply this: the value of continuance and quality of relationship with the other party. The assumption here is that a long‐term trusting relationship will yield better substantive outcome, if the parties are interested in the relationship. The specific situation dictates the relative importance of these two variable factors. Integrative strategy is appropriate when both substantive and relational outcomes are important. That is, the topic of negotiation is valuable, and results can be gained by managing the relationship. The suitable path is thus collaboration. Distributive strategy is appropriate when substantive outcome carries more significance than the relation‐ ship between parties. It is then pertinent to compete for substantive goals with less attention to the relationship. 2.1.1. Demarcation The question of why this work omits the two other strategies, namely accommodation and avoidance, should be explained. First of all, the chosen focus of research in this project is business negotiations on the subject of price. We assume that substantive outcome, relationships or both are always important in these negotiations, otherwise it would not make sense to meet for the purpose of negotiation. To further emphasize this point, this research will be focusing on business negotiations on the subject of price. Because settling the price is a substantive outcome, there is no reason for this work to pay further attention to accommodation and avoidance strategies. It is now necessary to elaborate on the points of difference between distributive and integrative strategy, because these carry great importance to the construct of this research.
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Master’s thesis Spring 2009
By Daniel Solomonov Student number 20040664
2.1.2. Distributive strategy compared to integrative strategy Table 1. Characteristics of main negotiation strategies Aspect Economic reasoning Competitiveness Relationships
Distributive strategy Fixed amount of resources to be divided between parties (fixed‐pie errors). Pursuit of own goals an expense those of others. Short‐term. No expectation of future work together. Motivation Maximization of own outcome. Trust and openness Secrecy and defensiveness. Low trust in other party. Needs and Concealing needs so as to not reveal weak interests points. Pursuing own interests. Predictability Unpredictable to surprise and force other side into unfavored situation. Aggressiveness Use of threats, bluffs and other hard bargaining tactics (distributive tactics). Solution search Commitment to bargaining position, use of argumentation and manipulation. Success By own gain compared to other’s loss. Enhanced measurement by bad image of the other. Key attitude I win, you lose. Adopted from (Lewicki et al., 2006, p.109).
Integrative strategy Variable amount of resources to be divided between parties. Pursuit of joint goals. Long‐term. Expectation of future collaboration. Maximization of joint outcome. Trust and openness. Active listening, exploration of alternatives for agreement. Describing needs to meet each other’s interests. Predictable and flexible to avoid souring of relation‐ ship. Honest sharing of information, promotion of respect. Commitment to interests, finding mutually satisfying solutions through logic and creativity. By joint gain. Enhanced by positive attitude and consideration of ideas. What’s the best way to meet everybody’s needs.
The two strategies represent theoretical extremes, as arguably no negotiation is purely integrative or distributive in practice. The difference between the two strategies is so great in theory that some authors distinguish between them by using different terms to describe them. Distributive strategy is often called distributive bargaining or just bargaining, which underlines the competitive or win‐lose nature of the approach (Nieuwmeijer, 1992). Conversely, integrative strategy is sometimes simply called negotiation or integrative negotiation, which emphasizes the cooperative or win‐win essence of the approach(Lewicki et al., 2006). Throughout this study, we deliberately choose to use the neutral wording “the other party or side”, instead of the more competitively charged “the opposite or opposing side”, to avoid inclination towards distributive strategy.
2.2. Hofstede’s cultural dimensions Professor Geert Hofstede conducted one of the most comprehensive studies of how values in the workplace are influenced by culture (Hofstede, 1980; Hofstede, 2001). Geert Hofstede analyzed a large data base of employee values scores collected by IBM between 1967 and 1973 covering more than 70 countries, from which he first used the 40 largest only and afterwards extended the analysis to 50 countries and 3 regions (Hofstede, 2001). Russia was not part of the original IBM survey (Hofstede, 1980). From the initial results, and later additions, Hofstede (1980) developed a model that identifies four cultural dimensions to assist in differentiating cultures: masculinity‐femininity (MAS), individualism‐collectivism (IDV), uncertainty avoidance (UAI), and power distance (PDI). Geert Hofstede later added a fifth dimension after conducting an additional international study with a survey instrument developed with Chinese employees and managers. That dimension, based on Confucian dynamism, is Long‐Term Orientation ‐ LTO and was applied to 23 countries (Hofstede, 2001).
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Master’s thesis Spring 2009
By Daniel Solomonov Student number 20040664
This research project chooses to omit LTO for several reasons. First, it is heavily based on a survey of Chinese values, which are very much different from Danish and Russian values (Hofstede, 2001). Second, neither Denmark nor Russia is included in the Index Values for the 23 countries that LTO has been applied to (Hofstede, 2001, p.356). Third, some of the connotations of LTO differences can be found in other cultural dimensions (Hofstede, 2001, p.360). For instance, “protection of one’s face” is also mentioned as an indicator for high collectivism, while “quick results expected” could be attributed to high uncertainty avoidance. These are the reasons as to why this work will focus on the four original dimensions identified by Hofstede (1980). Hofstede’s cultural dimensions have been selected for use in this research primarily because some similarities and possible connections were noticed between the dimensions and the two negotiation strategies that will be described later. Other arguments for using Hofstede’s framework is the large scope of his research, the large quantity of data collected and analyzed, and the large amount of citations that his work has entailed. Hofstede’s original framework has also been validated in many other studies. Among other theories on cultural differences, Fons Trompenaars has developed five dimensions: universal‐ ism‐particularism, individualism‐collectivism, neutral‐emotional, specific‐diffuse and achievement‐ ascription (Buelens et al., 2006, p. 608). It is not the purpose of this work to describe these dimensions. However, it would be appropriate to notice that many aspects of Trompenaars’ dimensions are similar to those of Hofstede. In fact, Hofstede himself criticized Trompenaars model for lack of content validity, lack of support for concepts by the database, and thus methodology and conclusions. (Hofstede, 1996). Another interesting cultural dimension is high‐context versus low‐context cultures, which in essence refers to indirect versus direct communication (Buelens et al., 2006, p. 605). For the purposes of this research, however, the IDV dimension by Hofstede will suffice, as he himself agrees that the high‐context versus low‐ context dimension is an aspect of collectivism versus individualism (Hofstede, 2001, p.212). The final argument for solely using Hofstede’s framework in this research project is that this work attempts to find relationships between two theoretical frameworks and analyze them. It thus seems proper to exclude all other theories to maintain focus. 2.2.1. Definition of culture There are numerous definitions of culture (Salacuse, 1998, p.222): ”Some scholars would confine the concept of culture to the realm of ideas, feelings, and thoughts. For example, one working definition offered by two experts is that "Culture is a set of shared and enduring meanings, values, and beliefs that characterize national, ethnic, and other groups and orient their behavior" (Faure and Sjostedt 1993, p.3). Others would have culture also encompass behavior patterns and institutions common to a given group or community. E. Adamson Hoebel, a noted anthropologist, defined culture as "the integrated system of learned behavior patterns which are characteristic of the members of a society and which are not the result of biological inherit‐ ance". (Hoebel 1972, p.7). While the essence of culture may reside in the mind, it must be pointed out that persons gain their understanding of their and others’ cultures primarily, if not exclusively, from observing the behavior and institutions of a particular group.” Hofstede (2001, pp.1‐5) derives his working definition of culture from the concept of mental programming, or “software of the mind”. He argues that social systems can exist not only because human behavior is not random, but to some extent predictable. He further argues that for each prediction of behavior, we take both the person and the situation into account, and that we assume that each person carries a certain 11
Master’s thesis Spring 2009
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amount of mental programming that is stable over time and leads to the same person’s showing more or less the same behavior in similar situations. He also identifies three levels of human mental programming – universal, collective, and individual. The universal mental programming is shared by all humankind and includes expressive, associative, aggressive behaviors. The collective level of mental programming is shared by some but not all. The individual level is unique, as no two people are programmed exactly alike. Hofstede argues that in empirical research we look for measurable constructs that describe mental programs, i.e. we operationalize them. The key constructs measured by Hofstede are values and culture – values are held by individuals and collectivities; culture presupposes collectivity. Values are “broad tendencies to prefer certain states of affairs over others” (Hofstede, 2001, p.5). Hofstede (2001, p.9) defines culture as: ”Collective programming of the mind that distinguishes the members of one group or category of people from another.” The “category of people” can be a nation, region, or ethnic group, women versus men (gender culture), old versus young (age group and generation culture), a social class, a profession or occupation (occupational culture), a type of business, a work organization or part of it (organizational culture), or even a family (Hofstede, 1994). Figure 2. The ”Onion Diagram”: Manifestations of culture on different levels of depth The reasons for including behavior patterns are illustrated in Figure 2 (Hofstede, 2001, p.11). At the core of mental programming lie the values that individuals and collectivities hold. Hofstede (2001, p.10) states: “The values are invisible until they become evidenced in behavior, but culture manifests itself in visible elements too. … Symbols are words, gestures, pictures and objects that carry often complex meanings recognized as such only by those who share the culture. … Heroes are persons, alive or dead, who possess characteris‐ tics that are highly prized in a culture and thus serve as models for behavior. … Rituals are collective activities that are technically unneces‐ sary to the achievement of desired ends, but that within a culture are considered socially essential, keeping the individual bound within the norms of collectivity. … (In Figure 2) symbols, heroes and rituals are subsumed under the term practices. As such, they are visible to an outside observer; their cultural meanings, however, are invisible and lie precisely and only in the ways these practices are interpreted by insiders.”
Reproduced from (Hofstede, 2001, p.11)
For the purpose of this study we define culture as “values, beliefs, and learned behavior patterns, held and exhibited by members of a society”. This is because we would like to examine perceived behavior and
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values as manifestations of culture and compare them to perceived negotiation behavior. We assume that values, beliefs, and behaviors are measurable constructs that can help predict future behavior. We now proceed to describe the four cultural dimensions that are used in this study. 2.2.2. Masculinity versus femininity Masculinity versus its opposite, femininity, refers to the distribution of roles between the sexes, which is a fundamental issue for any society (Hofstede, 2001, p.279). The issue is what implications the biological differences between the sexes have for the social gender roles. Hofstede’s studies on the importance of work goals show that women attach more importance to social goals such as relationships, helping others, and the physical environment, and that men attach more importance to ego goals such as career and money (Hofstede, 2001, p.279). These differences were found to differ across countries as well as occupa‐ tions. Every society recognizes many behaviors as more suitable to females or males, which is mediated by cultural norms and traditions (Hofstede, 2001, p.280). Hofstede (1994, p.3), summarizes the main findings on this dimension. Women’s values differ less among societies than men’s values; men’s values from one country to another contain a dimension from very assertive and competitive and maximally different from women’s values on the one side, to modest and caring and similar to women’s values on the other. The assertive side has been called “masculine” and the modest, caring side “feminine”. The women in feminine countries have the same modest, caring values as the men; in the masculine countries they are somewhat assertive and competitive, but not as much as the men. Japan, Austria, Venezuela, Italy, and Switzerland show the highest scores on the masculinity, while Sweden, Norway, Netherlands, Denmark, and Costa Rica exhibit the highest scores on femininity (i.e. low on masculinity) (Hofstede, 2001, p.286). 2.2.3. Individualism versus collectivism The individual versus collectivism dimension describes the relationship between the individual and the collectivity in a given society (Hofstede, 2001, p.209). This dimension refers to the degree to which individuals are integrated into groups (Hofstede, 1994). The individualist societies are the ones where individuals are supposed to look after themselves and their immediate family. The collectivist societies are the ones where people are integrated in cohesive groups that protect them. In the individualist societies, the “me‐first” attitude prevails, and sacrifices for the good of the group are not common. In the collectivist societies people identify with the group, and thus the “group‐first” attitude is most common, as are sacrifices for the group. Hofstede (1994) cautions that “collectivism” in this cultural dimension sense has no political meaning, and that it refers to the group, not to the state. The issue addressed by this dimension is, again, a fundamental one, regarding all societies in the world (Hofstede, 1994). According to the individualism index values exhibit (Hofstede, 2001, p.215), United States, Australia, Great Britain, Canada, and Netherlands are the most individualistic cultures, while Guatemala, Ecuador, Panama, Venezuela, and Colombia are the most collectivistic (i.e. low individualism). 2.2.4. Uncertainty avoidance The uncertainty avoidance dimension deals with the way cultures deal with uncertainty (Hofstede, 1994). Uncertainty about the future is a fundamental issue in life, and people learn to cope with it by various 13
Master’s thesis Spring 2009
By Daniel Solomonov Student number 20040664
means. This dimension deals with a society’s tolerance for uncertainty and ambiguity, and indicates to what extent a culture programs its members to feel either uncomfortable or comfortable in unstructured situations (Hofstede, 1994). Hofstede (1994) summarizes the differences of unstructured versus structured situations. Unstructured situations are novel, unknown, surprising and different from usual. Uncertainty avoiding cultures try to minimize the possibility of such situations by strict laws and rules, safety and security measures, and on the philosophical and religious level by a belief in absolute truth: “there can only be one truth and we have it”. People in uncertainty avoiding countries are also more emotional, and motivated by inner nervous energy. The opposite type, uncertainty accepting cultures, are more tolerant of opinions different from what they are used to; they try to have as few rules as possible, and on the philosophical and religious level they are relativist and allow many currents to flow side by side. People within these cultures are more phlegmatic and contemplative, and not expected by their environment to express emotions. The highest scores on the uncertainty avoidance dimensions are shown by Greece, Portugal, Guatemala, Uruguay, and Belgium, while Singapore, Jamaica, Denmark, Sweden, and Hong Kong score the lowest (Hofstede, 2001, p.151). 2.2.5. Power distance The power distance dimension of culture refers to the extent to which the less powerful members of organizations, institutions and society accept and expect that power is distributed unequally (Hofstede, 1994). The power distance index measures the relative degree of inequality in cultures. This degree of inequality is measured as seen from below, not from above. This suggests that a society’s level of inequality is endorsed by the followers as much as by the leaders. The definition of power distance used by Hofstede (2001, p.83) is: “The power distance between a boss B and a subordinate S in a hierarchy is the difference between the extent to which B can determine the behavior of S and the extent to which S can determine the behavior of B.”. Power and inequality are fundamental facts of any society, which influence many aspects of life. National elites in high power distance cultures hold relatively authoritarian values, while in low power distance cultures they show relatively unauthoritarian values (Hofstede, 2001, p.96). Between high and low power distance culture there are considerable differences with regard to norms on power, status, hierarchy, equality of people and their rights (Hofstede, 2001, p.98). Hofstede (1994) states that people’s behavior in the work situation is strongly affected by their previous experiences in the family and in school: the fears of the boss are projections of the experiences with the father, or mother, and the teachers. Thus, the power distance dimension influences life on different societal levels: in the family, at school, in the work organiza‐ tion (Hofstede, 2001, p.107). In order to understand power distance between superiors, colleagues and subordinates in a culture, we have to understand the nature of power distance in families and schools in that culture. The highest power distance cultures are Malaysia, Guatemala, Panama, Philippines, and Mexico, and the lowest scores are shown by Austria, Israel, Denmark, New Zealand, and Ireland (Hofstede, 2001, p.87).
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2.3. Danish culture Assessment of cultural differences of countries in Hofstede’s study is done by ranking countries on an index. There are two sets of values in the index tables – actual values and values controlling for average age of respondents. For simplicity, this work will use the actual values. Table 2. Index value scores for Denmark. Index value Masculinity/Femininity 8 Individualism/Collectivism 74 Uncertainty Avoidance 23 Power Distance 18 Adopted from (Hofstede, 2001).
Rank 50 9 51 51
Ranking is based on the total of 50 countries and 3 regions. The scores are generally between 0 and 100, low values being closest to 0, and high values being closest to 100. Hofstede’s findings show that Denmark scores very low on power distance, uncertainty avoidance, and masculinity, and scores very high on individualism. It is very interesting to note that the Danish scores are extremely polarizing, which makes Danish culture a very intriguing culture for the purpose of this research. We now present a description of Danish culture according to the descriptions of the cultural dimensions by Hofstede – taken from the tables with summaries of societal norms (2001, pp.98, 161, 227, 299). The low power distance means, according to Hofstede, that Danish society norms are egalitarian and unaccepting of inequality. People are supposed to have equal rights, while hierarchy means an inequality of roles, not people. The low uncertainty avoidance should mean, according to Hofstede, that Danish culture is accepting of uncertainty and ambiguity. It also should mean that the Danish people are open to change, innovation and risk‐taking. Individualism should result in people believing in their own ability to influence their life, their superiors and the world. The individualism society norm is to expect each individual to take care of him‐ or herself, emphasizing individual initiative and achievement. Individuals are self‐oriented and value the importance of private life. Low power distance should result in the societal norms of importance of quality of life and people, relationships, and gender equality. People should work in order to live, not live in order to work. People also value cooperation at work and relationships with superiors. We have not been able to find studies that validate Hofstede’s findings on Danish culture, so we do not have a more comprehensive description of Danish culture to present here. We have, however, found a description of Danish negotiation behavior (section 3.4, p.25).
2.4. Russian culture Russia was not part of the original IBM survey (Hofstede, 1980). However, values for Russia and some other countries were estimated by Hofstede and presented in a table named “Index score estimates for countries not in the IBM set” (Hofstede, 2001, p.502), which are included in Table 3, p.16. It should be noted that these estimates were calculated based on data collected before the year 1993 (Hofstede, 1993). This may be historically significant because of the fall of the Soviet Union in 1991 and the installment of the democratic system. This work will therefore present index scores for Russia calculated by other research‐ ers. In 1994, A small‐scale study using Hofstede's methodology for 55 experienced participants from the Moscow Advanced Commercial School was published by a French management consultant (Bollinger,
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1994). Although the sample size of the study makes it hard to use for making assumptions, it is very useful to highlight the development of cultural change in Russia. In the year 2000, professor Naumov from Moscow State University published results of an empirical study entitled “Measuring Russian culture using Hofstede’s dimensions” (Naumov, 2000). In the study, he measured Hofstede’s cultural dimensions on 250 Russians using Hofstede’s methodology. Data was collected between October 1995 and June 1996. The respondents included managers and professionals, as well as students and faculty members of several business schools. In 2008, a new study by Naumov using data collected in 2006, was published on the website of the Economic Faculty of Moscow State University on the occasion of the IX International Conference on the history of management thought and business (Naumov & Petrovskaja, 2008). This study compared results from 1996 to results from 2006 and presents analysis from the historical perspective. The data sample of this study was 321 respondents. The demographic characteristics of both Naumov samples showed fairly even distribution across factors such as age, job tenure, occupation, region, number of subordinates. The actual measured index values were markedly different than Hofstede’s estimates. Table 3. Index value scores for Russia Researcher, reference, year of data Hofstede’s estimates Bollinger Naumov (2000), Naumov & Petrovskaja collection (2001, p.502)* (1994), 1989 1996** (2008), 2006*** Masculinity/Femininity 36 28 55 (18) 48 (2) Individualism/Collectivism 39 26 41 (20) 36 (2) Uncertainty Avoidance 95 92 68 (15) 70 (2) Power Distance 93 76 40 (17) 33 (2) *Based on the description of data sources (Hofstede, 2001, p.502), the estimates were made using data from 1988 or earlier to 1998. **Numbers in parentheses are data to compute the confidence interval in which 50% of respondents’ answers fall. For example, the 50% confidence interval for uncertainty avoidance is 53 to 83 (68+ or ‐15) (Naumov, 2000). ***Data in parentheses shows the confidence interval in which 95% of respondents’ answers fall. (Naumov & Petrovskaja, 2008).
The asterisk notes show that the level of confidence in Naumov’s 1996 results is quite uncertain. However, combined with his 2006 results, which were claimed to possess a higher confidence interval, his work gives rise to some very interesting thought on the dynamics of evolvement of national culture in Russia. In the first Naumov study (2000), the index values showed little difference across demographic categories. The only difference was that younger and less experienced people reported the highest levels of masculini‐ ty. Naumov (2000) explains that this group had limited experience in the welfare system and collectivist ideology promoted by the former communist regime, and had been exposed from an early age to Western market‐oriented and social values. Because this study measures perceptions, it is worthy to note two interesting findings based on the difference in individualism‐collectivism and power distance scores between Hofstede’s estimate and Naumov’s actual values (Naumov & Petrovskaja, 2008). Russia is often characterized as a collectivistic country, as evidenced by Hofstede’s (2001, p.502) estimates. In Naumov’s study, respondents mostly agreed with the statement that it is important for an individual to be accepted by the members of his or her group. At the same time there was consensus that the individual does not have to give up his or her own interests and goals for the success of the group. Naumov argued that when the value of collectivism is estimated, one has to take into account how the group and its value are perceived in the culture. The Russian perception of the value of the group lies in the group’s ability to provide protection to the members of the group. Naumov & Petrovskaja (2008, p.6) argued that Russian collectivism is primarily directed at receiving protection through the group and not at achieving collective 16
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goals. Furthermore, the members of the group may hold individualistic values, not being ready to sacrifice own interests for the interests of the group, but ready to comply with the norms of group behavior (Naumov & Petrovskaja, 2008, p.6). The fall in UAI and PDI is explained by Naumov & Petrovskaja (2008, pp.6‐7) through the fact of increasing implementation of Western management theory within organizations. However, it has to be noted that respondents strongly agreed with the statement that the manager needs to be powerful and authoritarian. The fall in PDI may be interpreted as the change in manifestation of culture on the surface, while the deeper layers of culture change more slowly, in this case the perception of the ideal manager. The main point of this extensive description and analysis of the evolution of Russian cultural values is that we should take into account the recent changes in Russian values when we make assumptions and hypotheses.
2.5. Comparison of Denmark and Russia We finalize Chapter 2 on negotiation strategies and cultural differences by comparing the scores for the two countries that this study focuses on. As Table 4 illustrates, Russia is a more masculine and more collectivistic culture than Denmark. Russia scores much higher on uncertainty avoidance than Denmark does. Also, even though our review of cultural change in Russia has shown that power distance has fallen, we assume that power distance in Russia is still higher than in Denmark. Table 4. Comparison of country scores for Denmark and Russia Researcher Masculinity/Femininity Individualism/Collectivism Uncertainty Avoidance Power Distance
Denmark Hofstede (2001) 8 74 23 18
Russia Hofstede’s estimates (2001) 36 39 95 93
Russia Naumov & Petrovskaja(2008) 48 36 70 33
The next chapter presents relevant findings on a deeper level – combining knowledge about negotiation and culture – that is, knowledge about how people from different cultures negotiate, which role culture plays in international negotiation, and how Danes and Russians negotiate.
3. State of research on international negotiation This chapter presents an overview of the state of research in the field of international negotiation. The main focus is the interaction between culture and negotiation. For the purpose defining this study’s approach and method, it is necessary to highlight the existing approaches to international negotiation research and the methods employed. Also, it is necessary to describe the research perspectives on international negotiation. Furthermore, because this project focuses on connecting the Hofstede dimen‐ sions to negotiation behavior, an overview of studies on the subject will be presented. Because it is imperative for this particular research project to focus on the context of Danish‐Russian negotiations, we will describe the findings on Denmark, Russia, and the interaction between the two cultures. Moreover, this chapter presents relevant findings on other aspects of international negotiation.
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3.1. Approaches and perspectives Culture is one of several factors in environmental context that may influence international negotiation (Phatak & Habib, 1996). The other factors, as identified by Salacuse (1988), are international economics, political and legal pluralism, foreign governments and bureaucracies, instability and ideology. Because this paper is focusing on culture in negotiations, we will not go deeper into the other factors. This research uses studies that could be found using the libraries and searching engines listed on page 81 in the List of libraries and searching engines. We mention this here, because the reader should know on which basis we make statements in the following text about scarcity of available research. Given the popularity of Hofstede’s findings, it is surprising to notice that few studies have research the relationships between the dimensions and international negotiation. No studies could be found testing the applicability of all of the dimensions to negotiation in either intracultural or intercultural context. As mentioned in the abstract, only one study addressing these issues has been found – “Explorations of negotiation behaviors in ten foreign cultures using a model developed in the United States” by John Graham et al. (1994), and their primary objective was to test the universality of a problem‐solving model of business negotiations, i.e. the theory on negotiation strategies (2.1, p.8). This understanding has been formed by own exploration and search for knowledge, and a summary by Jean‐Claude Usunier (Hofstede & Usunier, 2003, p.153). We are therefore forced to base this research on the few findings available, Hofstede’s untested sugges‐ tions to how the cultural dimensions might influence negotiation (Hofstede, 2001, pp.435‐36), and use related research. There is general consensus among scholars about making the assumption that culture does influence negotiating behavior (Graham, 1985; Salacuse, 1998; Hofstede & Usunier, 2003). Some authors, however, argue that other factors, like buyer‐seller roles and norms of negotiation can moderate effects of culture (Cai et al., 2000). Some authors, for instance, Brett et al. (1998) do not find any particular link between cultural values or norms and negotiation outcome (in the case of their research, joint gains). In any case, we should avoid making the assumption that any factor, that is important in negotiation and shows diversity across cultures, is determined by culture. Although we do not elaborate on the other factors that may influence international negotiation, we should keep them in mind. Much of the research in the field focuses on intracultural negotiations, i.e. negotiations within cultures and makes country‐by‐country comparisons (Graham et al., 1994; Adair et al., 2004; Graham et al., 1992; Roemer et al., 1999; Salacuse, 1988). These studies are useful to understand how different cultures negotiate, because they are able to use relatively large samples, which allows for generalization. The other approach to international negotiation research is to focus on intercultural negotiations – that is, negotia‐ tions between cultures (Cai et al., 2000; Gelfand & Christakopoulou, 1999). These studies use small sample sizes due to practical difficulties of conducting such studies, their findings are limited in scope, and the number of intercultural studies relative to the intracultural is low. Drake (2001, p.317), describes the state of research on intercultural negotiation: “Theoretical understanding of intercultural negotiation remains limited (Cai & Drake 1997), because it is extrapolated from intracultural, country‐by‐country comparisons (e.g. Graham & Sano, 1989; Harris & Moran, 1991). Cross‐cultural comparisons carry two related assumptions: Culture directly affects negotiating behavior (Graham 1985; Pye 1982; Rubin & Sander 1991) and domestic nego‐
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tiating behaviors correspond with those used internationally, so that success is achieved through adapting to a host (e.g. Brett et al., 1998).” Cai, Wilson & Drake (2000) conducted a simulation study with 80 international students negotiating a previously designed task and completing a questionnaire that measured individualism. They state (Cai et al., 2000, p.592): “To complicate matters, scholars have historically assumed that culture influences negotiating be‐ havior (Graham 1985; Pye 1982), recent research suggests that buyer‐seller roles and norms of negotiation can moderate effects of culture (Cai, 1998; Drake, 1995) and that intercultural contexts bring about significantly different negotiation processes than intracultural contexts (Adler & Gra‐ ham, 1989). Thus, our challenge is to isolate the effects of culture from those of structure or context when assessing integrative outcomes.” Both intracultural and intercultural studies work with the two main perspectives on negotiation, which can be defined as outcome and process perspectives (Lewicki et al., 2006). The outcome perspective deals mostly with the gains achieved by the parties in negotiation. A common measure of negotiation outcome is profits or gains. Studies choose to focus either on joint gains (Adair et al., 2004; Brett et al., 1998) or individual gains and partner satisfaction (Graham et al., 1994; Graham et al., 1992). The outcome perspec‐ tive allows to measure outcomes and simultaneously make a connection to negotiation strategies. In theory, high joint gains mean integrative strategy, while low joint gains mean distributive strategy (Lewicki et al., 2006, p.109). The process perspective deals with behavioral factors in negotiation, such as relation‐ ship management, information exchange, distributive tactics, communication patterns, etc. (Adair et al., 2004; Brett et al., 1998; Salacuse, 1988). Some studies use both perspectives (Adair et al., 2004). The most common methods of conducting studies on culture’s influence on negotiation are: simulation of pre‐designed negotiation activity (Graham et al., 1994) and questionnaire to measure attitudes and perceptions (Salacuse, 1998) or both (Cai et al., 2000). An interesting question here is the degree of applicability of intracultural findings to intercultural negotia‐ tions. Rather, the question is whether negotiating behavior changes in intercultural negotiations as opposed to intracultural. The advice by many theorists has been to “When in Rome, act as the Romans do” and modify one’s strategy to be consistent with behavior that occurs in that culture (Lewicki et al., 2006). The thought is that understanding how other cultures negotiate should help negotiators to adjust to each other’s strategies (Brett et al., 1998). However, Lewicki et al. (2006) point out that negotiators may not be able to modify their approach effectively, and even if they do that does not necessarily mean better outcome. Furthermore, there is possibility of overuse of theoretical assumptions about the other party, and therefore risk of confusion. Some research does suggest that negotiators may negotiate differently interculturally than intraculturally (Adler & Graham, 1989). Adair et al. (2001) found that it is more difficult to negotiate high joint gains in intercultural negotiation (U.S. – Japan) than in intracultural (within U.S. and within Japan). Some research finds that thorough understanding of how the other party negotiates intraculturally might not help in negotiating with that party interculturally (Drake, 1995). Further complicating matters, the quantity of studies on intercultural compared to intracultural negotiation is quite low, their scope is quite narrow, and the findings are limited, while the subject is very complex.
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3.2. Integrative and distributive strategies in international negotiation As described in the previous section, one of the directions that research on international negotiation has taken is studying integrative outcomes and processes, which is usually done by assessing profits. Graham et al. (1994) reasoned that negotiation theory emphasizing a PSA‐approach (problem‐solving approach, i.e. integrative strategy) versus a distributive approach had been thoroughly based on American practice. They conducted a simulation intracultural study of negotiating behavior within 11 cultural groups (American and 10 other cultures). There were 700 participants from executive education programs or graduate business courses with minimum 2 years of business experience. They tested several hypotheses relating negotiators’ roles (buyer/seller), partners’ problem‐solving approach, negotiator’s PSA, and negotiator attractiveness to negotiation outcomes – partners’ satisfaction and negotiators’ individual profits. Regarding the universality of the American model, which also is used in this work, they found that it works well in one aspect – negotiators' attractiveness positively influences partners' satisfaction in all eleven cultures. In seven cases, relationships worked in the opposite way than hypothesized based upon American theories and previous findings. All in all, of the 60 relationships studied (6 hypotheses multiplied by 10 foreign cultures), 36 were proved to be consistent with the American findings, 7 were different, and in 17 cases, no relationships were found. In the American group, however, relationships were found. The conclusions were that the American model is not universal, and one should take culture into account. Regarding Hofstede’s dimensions, Graham et al. (1994) found that participants from high‐PDI cultures were more likely to make higher profits as buyers than sellers. Participants from high‐IDV cultures made higher individual profits and behaved more individualistically (stated to be the opposite of problem‐solving). Participants from high‐MAS cultures experienced higher satisfaction than others. These findings seem to be in line with the cultural dimension characteristics provided by Hofstede (2001). While Graham et al. (1994) provide some insight into the differences between how different cultures negotiate, they do not examine how different cultures negotiate with each other. Their findings, however, are useful for this research, because they suggest that culture and negotiation should be studied simulta‐ neously, and also because they support some aspects of Hofstede’s framework. Adair et al. (2004) and Brett et al. (1998) used simulations of buyer‐seller negotiations for their research and measured cultural values, norms and joint gains in a negotiation situation involving people from 6 cultures (France, Russia, Japan, Hong Kong, Brazil, and USA). They found that hierarchical cultures in comparison to egalitarian cultures were more likely to accept norms for distributive tactics. They also reported that U.S. and Japanese negotiators achieved highest joint gains, while Russian and Hong Kong negotiators achieved lowest joint gains. The authors attribute this to a direct relationship between sharing and exchange of information and joint gains. U.S. and Japanese negotiators were more likely to share information (U.S. used direct exchange, while Japanese indirect) than Russian and Hong Kong negotiators. Russians were focused on power and positioning, while Hong Kong negotiators were not sharing enough information to achieve joint gains.
3.3. Culture’s influence on negotiation Salacuse (1998) conducted a study in which 197 respondents with various occupations from the USA (41); the UK (17); France (10); Germany (11); Spain (19); Mexico (12); Argentina (26); Brazil (9); Nigeria (15); India (9); China (11); and Japan (11) were asked to assess their own negotiating behavior in 10 categories. This 20
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section provides an overview of Salacuse’s identified aspects of culture’s influence on negotiation, contrasts them with Hofstede’s cultural index scores, and supplements them with other findings. Salacuse’s study is chosen for this, because it is probably the most comprehensive exploratory study relating culture and negotiation that we could find. The results of this study may be biased to some degree, because the respondents answered questions about themselves (Paulhus & John, 1998). Also, the sample size was quite small considering the number of countries surveyed. Nonetheless, the patterns in responses to each question may be connected to Hofstede’s findings, and the relative percentages may be useful to this research. Salacuse (1998), however, did not present such an analysis, which is why we will attempt to perform it and then compare it to other findings on Hofstede’s dimensions in international negotiation. Therefore, throughout this section, tables are presented. These tables contrast the findings by Salacuse (1998) in percentages to findings by Hofstede (2001) in index values. The percentages for Nigeria and China by Salacuse are compared to index values for West Africa and Hong Kong by Hofstede respectively. 3.3.1. Masculinityfemininity and negotiation According to Hofstede (2001), masculinity affects the need for ego‐boosting behavior and the sympathy for the strong and the tendency to resolve conflicts by use of authority. He reasoned that feminine cultures are more inclined to resolve conflicts through compromise and cooperation. This researcher could not find much research relating the importance of the masculinity‐femininity dimension to negotiations. However, much has been written on gender roles in negotiation (Lewicki et al., 2006, p.376). According to Lewicki et al. (2006, p.377), Kolb and Coolidge have concluded that women are more aware of the complete relationship among the negotiating parties and are more likely to perceive negotiation as part of the larger context, rather than focus only on the issues at hand. Also, Kolb and Coolidge argue that women tend not to draw strict boundaries between negotiating and other aspects of their relationships to other people, but rather see negotiation as part of the relationships. Furthermore, Lewicki et al. (2006, p.378) mention that Kolb and Coolidge have found that women are more likely to seek empowerment where there is “interaction among all parties in the relationship to build connection and enhance everyone’s power”, while men use power to achieve own goals or to force the other party to capitulate to their point of view. Lewicki et al. (2006, p.378) assert that women’s conceptualization of power may make them more comfortable than men with integrative negotiation, although the fit is not perfect. Also, Lewicki et al. (2006, p.378) write that women are more likely to use dialogue for problem solving, while men use dialogue to convince the other party that their position is the correct one, or to support various tactics to win points during the discussion. These accounts are in line with the masculine, assertive, competitive nature and the feminine, caring, collaborating nature, upon which the concept of the masculinity‐femininity dimension is built. As we also recall, the assertive and competitive behavior is associated with distributive strategy, while collaborating and relationship‐oriented behavior is associated with integrative strategy. Although Lewicki et al. (2006) do not explicitly state that men are inclined to negotiate distributively, while women are more inclined to use integrative strategy, we use this inference to construct hypotheses later. 3.3.2. Individualismcollectivism and negotiation This section examines studies on the influence of individualism‐collectivism on negotiation. We also present a table that compiles several possibly related factors that have been identified by Salacuse (1998) and contrast them to index values calculated by Hofstede (2001).
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Table 5. Aspects of culture’s influence on negotiations and Hofstede’s index values Negotiating goals: contract or relationship? Contract (%) Spain France Brazil IDV
Japan
USA
Germany UK
Nigeria Argentina China
Mexico India
74
70
67
55
54
54
47
47
46
45
42
33
51
71
38
46
91
67
89
20
46
25
30
48
Negotiating attitude: win‐win or win‐lose? Win‐win (%) Japan China IDV
Argentina France India USA
UK
Mexico Germany
Nigeria Brazil
Spain
100
82
81
80
78
71
59
50
55
47
44
37
46
25
46
71
48
91
89
30
67
20
38
51
Japan France China
UK
Brazil India
Germany USA
Argentina Spain
Mexico Nigeria
27
20
18
12
11
11
9
5
4
0
0
0
46
71
25
89
38
48
57
91
46
51
30
20
Communication style: direct or indirect? Indirect (%) IDV
Adopted from Salacuse (1988) and Hofstede (2001).
Negotiation goals of contract or relationship may relate to the individualism‐collectivism dimension (Hofstede, 2001, p.215). The distribution of percentages suggests that the relatively more individualistic countries generally prefer the contract to the relationship, while the relatively collectivistic countries prefer relationships. The contract is associated with the substantive goals, which are relatively more important to distributive negotiators, while the relative importance of the relationship is a sign of integrative strategy. The negotiating attitude question (win‐win or win‐lose) is fundamental to the negotiation strategy and the basis for choice between integrative and distributive negotiation. It is a very complex issue, and the comparison illustrates that, across cultures, it is difficult to make assumptions using the individualism dimension. However, some studies have found that collectivistic cultures tend to negotiate integratively (win‐win) (Gelfand & Christakopoulou, 1999; Cai et al., 2000). The question about the difference in direct or indirect communication, also described as high‐context and low‐context communication, is attributed by Hofstede (2001, p.227) to the individualism dimension, asserting that high individualists tend to communicate more directly than high collectivists. The quick comparison of study results in the table does not seem to support that notion. Hofstede (2001) predicted the following possible effects of the IDV dimension on intercultural negotiation. Collectivism should affect the need for stable relationship between negotiators, and replacement of a person could therefore take time. Hofstede also expected mediators to have an important role in maintain‐ ing relationships. Relationships, according to Figure 1. The Dual concerns model, p. 9, are the key compo‐ nent in integrative negotiation. Cai, Wilson & Drake (2000) conducted a simulation study with 80 international students. The students negotiated a previously designed task in pairs (dyads) and completed a questionnaire that measured individualism. They found that the dyads’ summed collectivism was associated significantly with joint profits (r=.38, p
