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Research Article
Journal of Management Education
2015, Vol. 39(2) 209–243
Examining Cultural © The Author(s) 2014
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DOI: 10.1177/1052562914543273
Cross-Cultural jme.sagepub.com
Negotiation Effectiveness
Abstract
International negotiation failures are often linked to deficiencies in negotiator
cross-cultural capabilities, including limited understanding of the cultures
engaged in the transaction, an inability to communicate with persons from
different cultural backgrounds, and limited behavioral flexibility to adapt
to culturally unfamiliar contexts. Although management educators are
concerned about developing students’ cross-cultural capabilities, there exists
very little empirical research demonstrating the impact of such abilities on
negotiation performance. To address this limitation while advancing research
on the development of cross-cultural capabilities, we examined the impact
of cultural intelligence (CQ) on cross-cultural negotiation performance.
Using assessment center and consensus rating methodologies, 113 fully
employed MBA students participated in a negotiation exercise designed to
underscore key cultural differences with respect to both negotiation style
and substantive issues. Controlling for prior negotiation and international
experiences, personality (openness to change and extraversion), and
emotional intelligence, our results demonstrated that CQ predicted
negotiation performance while interest-based negotiation behaviors partially
mediated the CQ–negotiation performance relationship. CQ capabilities
facilitated negotiators’ ability to demonstrate cooperative, interest-based
Corresponding Author:
Kevin S. Groves, Graziadio School of Business and Management, Pepperdine University,
6100 Center Drive, Los Angeles, CA 90045, USA.
Email: kevin.groves@pepperdine.edu
Keywords
cultural intelligence, negotiation, interest-based negotiation, assessment
center, intercultural negotiation
Lee, et al., 2013). The researchers concluded that the cognitive CQ dimen-
sions (cognitive and metacognitive) are affected by traditional academic
classroom interventions while motivational and behavioral CQ are “more
readily affected by extensive, purposefully designed experiential learning
interventions or through an intensive direct experience with other cultures,
gained by spending a meaningful amount of time abroad” (Eisenberg, Lee, et
al., 2013, p. 616). Ahn and Ettner’s (2013) recent examination of CQ in MBA
curricula also concluded that intensive experiential activities, such as interna-
tional work experiences and obtaining a degree from a foreign country, are
the most important drivers of enhancing CQ.
Motivational CQ drives attention so that one can focus on both cultural
differences and cultural similarities while also mobilizing energy toward
adapting to unfamiliar cultural contexts. Defined by Ang and Van Dyne
(2008) as the ability to “direct(s) attention and energy toward cultural differ-
ences,” motivational CQ is the foundation of one’s self-confidence concern-
ing the ability to deal with people and situations of a different culture. This
self-efficacy effect (Ang & Van Dyne, 2008) is critically important as it
requires a high-level personal confidence to perform successfully in a cross-
cultural setting (Earley et al., 2006). Imai and Gelfand’s (2010) research on
intercultural negotiations found that integrative information sequences and
their subsequent joint outcome gains were predicted by the negotiators’ moti-
vational CQ. Most recently, Salmon et al. (2013) found evidence that motiva-
tional CQ was a significant factor in predicting the effectiveness of
manipulative mediation styles in intercultural disputes. Overall, these
research findings suggest that motivational CQ may affect the efficacy of
negotiation strategies, including manipulative, cooperative, and interest-
based behaviors, for resolving intercultural conflicts.
Behavioral CQ is the ability to act appropriately when interacting with
people and situations in an unfamiliar culture. Behavioral CQ is essentially
how one can “play a role very convincingly and consistently” (Earley et al.,
2006) in a cross-cultural setting. Such performance demands a wide range of
behaviors that can be flexibly deployed based on the situation. Behavioral
CQ consists of the ability to properly adapt both verbal and nonverbal behav-
ior (Ang & Van Dyne, 2008) in culturally unfamiliar contexts. Ang et al.
(2007) showed that behavioral CQ and motivational CQ are positively asso-
ciated with one’s cultural adjustment, well-being, and task performance.
with high motivational CQ, which is conceptually consistent with key aspects
of cognitive motivation, are more likely to demonstrate the requisite drive,
curiosity, and cognitive attention to exercise IBN behaviors in cross-cultural
negotiation contexts. An individual’s attraction to and willingness to sustain
effort in a culturally unfamiliar context is likely associated with the ability to
actively search for relevant information, propose and critically evaluate alter-
native scenarios, and integrate more diverse information into decision mak-
ing, all of which are fundamental IBN behaviors (Fisher & Ury, 1991).
In addition to cognitive complexity and cognitive motivation, other
research streams suggest that individuals with behavioral flexibility are more
likely to demonstrate IBN behaviors. A problem-solving orientation was seen
to have had a positive effect on dyads reaching a more integrative solution by
encouraging heuristic trial and error and inhibiting behavior that would lead
to a more distributive solution (Pruitt & Lewis, 1975). This trial-and-error
approach indicated behavioral flexibility on the part of the negotiators who
were able to achieve integrative solutions. Behavioral flexibility is conceptu-
ally consistent with behavioral CQ, which taps one’s ability to use a broad
range of verbal and nonverbal behaviors that are appropriate for varied cul-
tural contexts (Van Dyne et al., 2008). Similarly, prior research has demon-
strated that behavioral “mimicry” improves the joint gains of the party that
invokes subtle mimicry behavior (Maddux, Mullen, & Galinsky, 2007).
Mimicry requires negotiators to be attentive to the behaviors of counterparts
so that they can make in-the-moment adjustments to their own behaviors.
Based on the research reviewed above, we offer the following hypotheses:
Method
Sample
A total of 113 fully employed MBA students, each representing a different
organization, participated in this study. The reported ethnic background of
the sample was as follows: 43% Hispanic/Latin American (n = 49), 28%
Asian American (n = 32), 15% Multiethnic (n = 17), 5% Caucasian (n = 6),
4% African American (n = 5), and 3.5% Native Hawaiian/Other Pacific
Islander (n = 4). The reported nationality was as follows: 40% United States
(n = 45), 17% China (n = 19), 13% Mexico (n = 15), 6% Philippines (n = 7),
Procedure
Participant Recruitment. The participants were recruited from the part-time
MBA program at a medium-sized public university in Southwestern United
States. The participants were fully employed MBA students enrolled in three
sections of a “Managerial Skills” course taught by the first author over the
course of three consecutive academic quarters. The three sections consisted
of 36, 38, and 39 students (113 overall), respectively. The learning objectives
of the course centered on the assessment and development of a series of man-
agement skills, including performance feedback, conflict mediation, devel-
oping teams, and negotiation. During the first week of the course, students
were asked to complete an online survey that measured CQ and a series of
demographic, work background, and psychometric questions. During the
first 3 weeks of the course, students were also asked to participate in an
assessment center negotiation exercise that would elicit important feedback
on their negotiation skills in a cross-cultural context. As detailed below, all
students completed the negotiation exercise prior to the delivery of any
course content or learning activities addressing negotiation skills. The course
content and learning activities addressing negotiation skills was delivered
during the final 2 weeks of the term. No part of the course addressed CQ,
leading diverse teams, or other topical areas related to cross-cultural skills.
and pilot tested with the 10 mock negotiation exercises conducted during the
training session for the AAA Hotel negotiator role. The seven behavioral
items were assessed according to the frequency of behaviors demonstrated
during the exercise (1 = not at all, 2 = rarely, 3 = occasionally, 4 = fairly
often, and 5 = very frequently). After the assessor panel conducted consensus
ratings (described in detail below) of each individual item as part of the asses-
sor training session, we conducted an internal reliability test of the seven-
item scale. The resulting Cronbach alpha of .83 for the pilot test demonstrated
support for the internal reliability of the scale.
Measures
Negotiation Performance. A panel of three assessors observed each of the
video-recorded negotiations and conducted group consensus ratings using the
negotiation performance assessment instrument (see the appendix). To limit
the effects of assessor fatigue, the panel conducted assessments for no more
than six exercises in a single session. The assessor panel conducted consen-
sus ratings of each negotiation performance item: (a) number of voting seats
on the 8-person executive board to be controlled by AAA Hotel, (b) manage-
ment of AAA Hotel properties, and (c) management incentives for AAA
Hotel property managers.
Control Variables
Emotional Intelligence. Emotional intelligence was measured by Wong and
Law’s (2002) 16-item, self-report measure based on the Mayer and Salovey
(1997) model of EQ. EQ was included as a control variable to more readily
demonstrate the incremental validity of CQ in a cross-cultural performance
context beyond the effects of a competing competency. Earley and Ang’s
(2003) seminal work on CQ asserts that EQ competencies should not transfer
across nationalities because a person’s ability to anticipate and react to the
affective states of work colleagues differs considerably across cultures. Con-
sistent with prior research that assessed the predictive validity of CQ beyond
the effects of EQ in cross-cultural performance contexts (e.g., Crowne, 2013;
Groves & Feyerherm, 2011; Rockstuhl et al., 2011), and specifically cross-
cultural negotiation (Imai & Gelfand, 2010), the present study included EQ
as a control variable for hypothesis testing. The measure includes the follow-
ing four-item subscales: self-emotion appraisal (“I have a good understand-
ing of my own emotions”; α = .88), others’ emotion appraisal (“I am sensitive
to the feelings and emotions of others”; α = .84), use of emotion (“I am a
self-motivated person”; α = .90), and regulation of emotion (“I have good
control of my own emotions”; α = .91). Respondents completed the scales
according to a 7-point scale (1 = strongly disagree; 7 = strongly agree). Over-
all, the EQ scale demonstrated strong internal reliability (α = .92). The means
of the four subscales were calculated and then averaged to produce an overall
EQ mean (M = 5.36, SD = 1.00).
Results
Preliminary Analyses
Potential Interactive Effects of Ethnicity and Nationality. Given the potential for
participant ethnic background and/or nationality to significantly interact with
the study’s key variables, we tested for any significant differences between
the major ethnic backgrounds or major nationalities across IBN behaviors
and negotiation performance. Tukey’s honestly significant difference (HSD)
test identified no significant differences across the major ethnic backgrounds
(Hispanic/Latin American, Asian American, Multiethnic, Caucasian, African
American, Native Hawaiian/Other Pacific Islander) for IBN or negotiation
performance. Similarly, Tukey’s HSD test again revealed no significant dif-
ferences between the main nationalities represented in the sample (United
States, China, Mexico, Philippines, El Salvador, Saudi Arabia, Vietnam, and
Armenia) for IBN or negotiation performance.
Hypothesis Testing
The following section includes the results of hypothesis tests using hierar-
chical regression analyses. We chose this analysis approach in lieu of SEM
given the considerable research on the impact of sample size, indicators, and
factor loadings on SEM results. Barrett (2007), Bentler (2007), and Wolf
et al. (2013) indicate the significant challenges of using SEM analyses on
small sample sizes, as Bentler (2007) cautions about samples of less than
100 while Barrett (2007) asserts that “SEM analyses based on samples of
less than 200 should simply be rejected outright . . . unless the population
from which the sample is hypothesized to be drawn is itself small or restricted
in size” (p. 820). Furthermore, Wolf et al. (2013) assert that mediation mod-
els with smaller direct effects require larger sample sizes to achieve accept-
able statistical power. Given the relatively small sample size in the present
study as well as the expectation of relatively modest effect sizes in light of
the current state of research on CQ competencies and cross-cultural negotia-
tion performance, we chose to use hierarchical regression analysis for
hypothesis testing.
Table 1 presents the means, standard deviations, and correlation coeffi-
cients among the primary study variables. Openness to experience, extraver-
sion, and EQ demonstrated significant positive relationships with Overall
CQ (range of r = .30 to r = .49) and the CQ dimensions (range of r = .21 to
r = .48). Cultural intelligence was associated with both IBN behavior (r =
.35, p < .01) and negotiation performance (r = .49, p < .01). The CQ sub-
scales were moderately correlated with one another (r = .21, p < .05 to r =
.45, p < .01). Finally, IBN behaviors were related to negotiation performance
(r = .48, p < .01).
229
230 Journal of Management Education 39(2)
Note. N = 113.
aStandardized regression coefficients are shown.
Negotiation Performance
Note. N = 113.
aStandardized regression coefficients are shown.
Discussion
We set out to address an important gap in the cross-cultural negotiation litera-
ture by examining the impact of negotiator CQ on IBN behaviors and nego-
tiation performance. Despite the clear need for managers to possess the
ability to effectively negotiate across cultures in an increasingly global busi-
ness environment, there exists very little empirical evidence for the predic-
tors of cross-cultural negotiation effectiveness. The results of our study
demonstrate that CQ is strongly associated with negotiation performance out-
comes, while IBN behaviors partially mediate the relationship between CQ
and negotiation performance. Cultural intelligence capabilities facilitated the
negotiators’ ability to demonstrate IBN behaviors in a negotiation context
that demanded behavioral adaptation. Perhaps due to a lessening of the anxi-
ety caused by encountering an unfamiliar culture in a negotiation context,
Conclusion
This study addressed important limitations to the negotiation and CQ research
literatures by illustrating CQ as a key predictor of cross-cultural negotiation
effectiveness. Our findings demonstrate that high CQ negotiators facilitate
cross-cultural negotiation performance outcomes through IBN behaviors.
Organizations seeking to improve the outcomes of international negotiations
and better prepare their managers for an increasingly global business envi-
ronment should focus management education efforts on CQ assessment and
development.
Appendix
Behavioral Instructions for the AAA Negotiator
Behave Indirectly. You prefer to start the negotiation with a short presentation
which discusses AAA Hotels, its general goals in the market, and optimism
for the future relationship with Lambert. You are hungry for information
from the Lambert executive, but not very forthcoming with information.
After the other party has answered a question, you may respond by asking
another question, repeating the question, or just remaining silent. You may
often ask for information to be repeated in order to search for areas of agree-
ment. In your culture, it is inappropriate to promote your own positions;
rather, you prefer to listen until you hear where your positions and interests
come together with the other party. You seldom use the word “no”; rather,
you might say “that would be difficult.” You value relationships and to be
completely negative would not be relating sympathetically to the other party.
Behave Unemotionally. You value self-control and have been trained since
childhood not to show emotion. Public displays of emotion are believed to
lead to confrontation and conflict, which interfere with normal, cooperative
relationships. Do not show your frustration with or distaste of the other par-
ty’s negotiating behavior. Maintain an unemotional and impassive face and
demeanor throughout the negotiation.
Rating Scale:
0 = no agreement
1 = five AAA seats
2 = four AAA seats
Rating Scale:
0 = no agreement
1 = Lambert provides two regional representatives to AAA corporate
offices, AAA general managers report to AAA corporate offices, and no
new training for AAA managers
2 = Lambert provides two regional representatives to AAA corporate
offices, trains all AAA general managers for one month in AAA home
country, and AAA general managers report to AAA corporate offices
3 = Lambert provides two regional representatives to AAA corporate
offices, trains all AAA general managers for one month in U.S., and AAA
general managers report to AAA corporate offices
4 = Lambert provides one regional manager per 5 AAA properties, trains
all AAA general managers for one month in U.S., and all AAA general
managers report to regional managers
5 = Lambert expatriates (experienced U.S. Lambert managers)
Rating Scale:
0 = No agreement
1 = Less than 10% of managers’ pay is contingent on property
performance
2 = Between 10% and 20% of managers’ pay is contingent on property
performance
3 = Between 21% and 35% of managers’ pay is contingent on property
performance
4 = Between 36% and 50% of managers’ pay is contingent on property
performance
5 = 51% or more of managers’ pay is contingent uon property
performance
Funding
The author(s) received no financial support for the research, authorship, and/or publi-
cation of this article.
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