Professional Documents
Culture Documents
Firms conducting business in different countries are working with different legal and
political systems
Political considerations may enhance or detract from business negotiations in various
countries at different times
2. International Economics
Any change in the value of a currency can significantly affect the value of the agreement
for both parties
Countries differ in the extent to which the government regulates industries and
organisations
4. Instability
Instability may take many forms: lack of resources, shortages of other goods and
services, and political instability
Challenge for international negotiators to anticipate changes accurately and with enough
lead time to adjust for their consequences
Negotiators facing unstable circumstances should include clauses in their contracts that
allow easy cancellation or neutral arbitration, and consider purchasing insurance policies
to guarantee contract provisions
5. Ideology
Negotiators from other countries do not always share the same ideology
Clashes in ideology may lead to parties disagreeing at the most fundamental level about
what is being negotiated
6. Culture
7. External Stakeholders
International negotiators can receive a great deal of promotion and guidance from their
government via the trade section of their embassy, and from other business people via
professional associations
Immediate Context:
Includes factors over which negotiators appear to have some control.
1. Relative Bargaining Power
Relative power has frequently been operationalized as the amount of equity that each side
is willing to invest in the new venture
The presumption is that the party who invests more equity has more power in the
negotiation and therefore will have more influence on the negotiation process and
outcome
2. Levels of Conflict
High conflict situations those based on ethnicity, identity, or geography are harder to
resolve
Also important is the extent to which negotiators frame the negotiation differently or
conceptualize what the negotiation concerns
4. Desired Outcomes
Tangible and intangible factors play a large role in determining the outcomes of
international negotiations
Countries often use international negotiations to achieve both domestic and international
political goals
5. Immediate Stakeholders
Include the negotiators themselves as well as the people they directly represent
Skills, abilities, and international experience of the negotiator clearly can have a large
impact on the process and outcome of international negotiations
Cross cultural comparisons are made by finding the important norms and values that
distinguish one culture from another and then understanding how these differences will
influence international negotiation.
Four Dimensions that Describe the Important Differences Among the Cultures:
1. Individualism/Collectivism
The extent to which the society is organized around individuals or the group
Negotiators from collectivist cultures will strongly depend on cultivating and sustaining a
long-term relationship, whereas negotiators from individualistic cultures may be more
likely to swap negotiators, using whatever short-term criteria seem appropriate
2. Power Distance
Describes the extent to which the less powerful members of organizations and
institutions accept and expect that power is distributed unequally
Greater power distance will be more likely to concentrate decision making at the top
Negotiators from comparatively high power distance cultures may need to seek approval
from their supervisors more frequently, and for more issues, leading to a slower
negotiation process
Cultures differed in the extent to which they held values that promoted career success or
quality of life
Increases competitiveness when negotiators from career success cultures meet
4. Uncertainty Avoidance
Indicates to what extent a culture programs its members to feel either uncomfortable or
comfortable in unstructured situations
Moderate Familiarity
High Familiarity