1. Chinese Journal of International Law (2006) 5 (3): 807-810. doi: 10.

1093/chinesejil/jml042 First published online: October 10, 2006

Cultural Differences and Their Impact: Some Brief Comments

1. Talal A. Al-Emadi* and 2. Maryam A. Al-Asmakh Next Section

Abstract
This short note highlights and comments on some main arguments in the literature on cultural differences and their impact on international life and transnational dealings and supports the argument that the impact of culture should be analysed on the basis of two levels of culture, i.e. national and organizational. Previous SectionNext Section

I. Introduction
Cultural differences are said to have substantial impact on international life and transnational dealings. This is especially true with the negotiation of translational agreements. The parties often spend a great deal of time to reach an agreement. They more often than not also return to the negotiation table, probably spending more time re-negotiating their original agreement. One obvious reason is that those agreements are usually concluded between parties belonging to different cultures, and, therefore, each party might perceive the basis of making business in different ways. On this issue, the literature abounds.1 Here, we would like to only highlight some main lines of argument in this body of literature and to argue that it is unsuitable to use the categorization of Eastern, Asian or Western countries to conceptualize culture.2 We think that categorizing countries into Western, Eastern and Asian is too

simplistic and fails to explain the relationship between culture and negotiation. A major problem with this categorization lies in its assumption that culture within each category is homogenous. This assumption overlooks the fact that within each category, there exist different countries with different national cultures. It has been argued that it is improper to assume that each category shares a similar culture, given that countries within each category are likely to have different geographical locations, historical developments and stages of economic development.3 Instead, the impact of culture should be analysed on the basis of two levels of culture, i.e. national and organizational. Previous SectionNext Section

II. National Level of Culture

The idea that each country has its own distinct national culture that explains the attitudes and values of its members has not been considered in the literature of cultural differences in relation to negotiating transnational agreements. One of the main theoretical frameworks used to explain variations in social behaviours across countries is that of Hofstede.4 Hofstede defines culture as the collective programming of the mind which distinguishes the members of one group from another.5 On the basis of a survey conducted around 1967 and 1973 within IBM subsidiaries in 66 countries, Hofstede identifies four dimensions along which countries could be positioned: power distance, individualism, uncertainty avoidance and masculinity.6 An important contribution of the model lies in its ability to consider the importance of countries or national culture in explaining attitudes and values. Nevertheless, there is considerable evidence in the literature to suggest that Hofstede's approach is too narrow to capture the richness of the unique relationship between culture and human practice. It is claimed that Hofstede's approach has turned into a cage which restricts the development of a more comprehensive approach to understanding the role of culture in behaviour.7 Furthermore, Chanchani and MacGregor8 argue that the universal reliance and acceptance of Hofstede's definition of culture has overlooked the richness of the constructs of culture. Most importantly, Hofstede's framework assumes one level of culture, that is, national culture. We argue that Hofstede's failure to consider the impact

of different levels of culture within a country arises from his assertion that culture is homogeneous within national boundaries. Such an assumption is rejected, rightly, by Gernon and Wallace9 and by Goodwin and Goodwin, who argue that it is dangerous to draw conclusions based on national culture, without considering differences within a nation such as those arising from the organizations and individuals. Previous SectionNext Section

III. Organizational Level of Culture

It is widely accepted that culture can be organization-specific, referred to as the shared meanings or assumptions, beliefs, and understandings held by a particular group or mini-societies.10 There are two different approaches in considering the impact of organizational culture on the values and attitudes of members in the society. The first approach regards culture within an organization as homogenous with a uniform set of values derived from common basis of management and motivation.11 Advocates of this approach argue that a unifying organizational culture motivates a common basis of action.12 Nevertheless, the problem with this approach lies in its portrayal of culture as consistent within the organization where members are expected to share a similar viewpoint.13 This approach fails to consider that those members who come from different backgrounds have different viewpoints and are expected to bring in different local cultures to the organization. Therefore, the second approach argues for a heterogeneous organizational culture, one that portrays organizational culture as a mix of various local cultures each with their own distinctive values.14 This approach accepts that there is a dominant organizational culture, while admitting that various other local cultures may exist within the organization.15 This is based on the view that the attributes of people, not the organizational structure, are the fundamental determinants of organizational behaviour.16 It is argued that organizations should be viewed as containing patterned behaviour of interdependent parts including interdependent people.17 This means that on the one hand, within the organization, there are many types of people with different kind of competencies.18 On the other hand, organizational culture

exists when people with different competencies share many common organizational attributes.19 This approach of organizational culture is favoured, given that it considers the organization as composing people who come from different backgrounds (e.g. lawyers, managers and executives) and therefore exert different local cultures within a given organization. Previous SectionNext Section

IV. Conclusion
The analysis of the impact of culture should move beyond the relatively simplistic categorization of Eastern, Asian or Western countries. Instead, researchers should utilize the conceptualization of culture at its two levels, i.e. national and organizational, in order to understand the behaviours across cultures. It is essential to note that each of these cultural levels does not operate separately. Instead, a collective notion of culture that is based on the interaction between national and organizational cultures should be considered in analysing the role of culture in international life and transnational dealings. Previous Section

Footnotes

Lecturer in law at Qatar University, LLB Qatar, LLM Harvard, and a candidate for the DPhil Degree at the University of Oxford (email: t.alemadi@qu.edu.qa)

See generally Paul Kuruk, Renegotiating Transnational Investment Agreements: Lessons for Developing Countries from the Ghana-Valco Experience, Fall Michigan JIL (1991), 43; Jeswald Salacus, Renegotiation International Business Transactions: The Continuing Struggle of Life Against Form (2001) 35 IL 1514; Muthucumaraswamy Sornarajah, The Settlement of Foreign Investment Disputes (2000); L Pye, Chinese Negotiation Style: Commercial Approaches and Cultural Principles (1992), 33; Jeswald Salacus, Renegotiating International Project Agreements, April Fordham ILJ (2001), 1319; RC Ciricillo et al., International Negotiation: A

Cultural Perspective, in: The ABA Guide to International Business Negotiations: A Comparison of Cross-Culture Issues and Successful Approaches (2000), 3756; Jeswald Salacus, Ten Ways that Culture Affects Negotiation: Some Survey Results, 14 NJ (1998), 221; J. Gernandt and B. Johanson, International Business Negotiation in Sweden, in: The ABA Guide to International Business Negotiations: a Comparison of Cross-Culture Issues and Successful Approaches (2000), 641652; P. Lansing, M. Wechsellblatt, Doing Business in Japan: The Importance of the Unwritten Law, 17 The International Lawyer (1983), 6744; K. Mills, Cultural Differences and Ethnic in International Dispute Resolution: An Arbitrator/Mediator's Perspective, 3 Transnational Dispute Management (2006); R Fisher et al., Getting To Yes: Negotiating Without Giving In (1997); Jeswald Salacus Making Global Deals: What Every Executive Should Know About Negotiating Abroad (1991); Guy Oliver Faure and Jeffrey Z. Rubin Culture and Negotiation (1993); and Stefan Kroll, The Renegotiating and Adaptation of Investment Contracts, in: Norbert Horn (ed.), Arbitrating Foreign Investment Disputes (2004), 425470.