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ScienceOfCultureNegotiations.pdf

The science of culture and negotiation Brian C Gunia1, Jeanne M Brett2 and Michele J Gelfand3

Available online at www.sciencedirect.com

ScienceDirect

Recent negotiation research has produced a groundswell of

insights about the effects of culture on negotiation. Yet, few

frameworks exist to organize the findings. This review

integrates recent research using a two-dimensional framework:

The first dimension organizes the research into that which has

taken: (1) a comparative intracultural approach, versus (2) an

intercultural approach. The second dimension organizes the

research by its emphasis on: (1) inputs into negotiation, (2)

processes of negotiating, and (3) outcomes of negotiation. This

framework helps to organize extant research and produces

novel insights about the connections between disparate

research streams, revealing both commonalities and culture-

specificities in negotiation strategy and outcomes and

suggesting that intercultural negotiations are difficult but not

insurmountable. We conclude by discussing several areas in

which more research on culture and negotiation is urgently

needed in today’s globalizing world.

Addresses 1 Carey Business School, Johns Hopkins University, USA 2 Dispute Resolution Research Center, Kellogg School of Management,

Northwestern University, USA 3 Department of Psychology, University of Maryland, USA

Corresponding author: Gunia, Brian C ([email protected])

Current Opinion in Psychology 2016, 8:78–83

This review comes from a themed issue on Culture

Edited by Michele J Gelfand and Yoshihisa Kashima

For a complete overview see the Issue and the Editorial

Available online 10th November 2015

http://dx.doi.org/10.1016/j.copsyc.2015.10.008

2352-250X/# 2015 Elsevier Ltd. All rights reserved.

Negotiations, or contexts in which individuals and groups

manage their interdependence [1], clearly transcend time

and place. Centuries ago, in the Histories (circa 400), Herodotus discussed the inherent difficulty of intercul-

tural trade encounters. In modern times, globalization has

dramatically increased intercultural negotiations in many

domains of life, including politics, business, and defense.

Historically, negotiation theory and research have been

largely a Western enterprise [2]. Understanding how

culture affects negotiation, as well as the factors that

inhibit and facilitate intercultural negotiations, is critical

for expanding negotiation science and informing practice.

In this Current Opinion, we discuss recent developments in research on culture and negotiation, using an

Current Opinion in Psychology 2016, 8:78–83

input-process-outcome framework to organize the discus-

sion (see Table 1 for a summary of our framework). Since

negotiation research focuses on explaining negotiation

outcomes, we begin with cultural similarities and differ-

ences in outcomes, then discuss the processes and inputs

that explain such variation. We then review research on

intercultural negotiations. We conclude with a discussion

of limitations and opportunities for future research.

Comparative intracultural research Much of the research on culture and negotiation is com- parative intracultural: it compares the negotiation behav- ior and outcomes of individuals from two or more nations

or cultural groups. This section reviews evidence of

cultural commonality and specificity from recent compar-

ative intracultural research (For broad historical reviews

of culture and negotiation, see [2–4]).

Outcomes

Negotiators across cultures value both relational and eco-

nomic outcomes. Theory predicts that Eastern and Middle

Eastern cultures will place a heavier emphasis on relational

outcomes than Western cultures will [5–7]. In terms of economic outcomes, empirical research has focused on

value creation (‘expanding the pie’ or joint gain) and value

claiming (‘slicing the pie’ or individual gain), showing that,

at least in structured negotiation simulations, some cul-

tures create more value than others (e.g., the U.S. vs. India;

Germany vs. China) [8 � ,9 � ], and other cultures claim more

value (e.g., Hong Kong vs. the U.S.) [10 � ]. Research also

reveals that these effects are due to the strategies nego-

tiators use [3], as detailed below.

Processes

In order to create or claim value, negotiators in all cultures

use strategies: goal-directed verbal and non-verbal beha-

viors [3]. Two types of strategy — early and sustained

information exchange about underlying interests and

priorities versus persuasion and offers, communicated

indirectly or directly — emerge globally [8 � ,11 � ]. Addi-

tionally, research has suggested that the information-

sharing strategy tends to promote value creation whereas

the persuasion and offer strategy tends to promote value

claiming, irrespective of culture [12].

Notwithstanding cultural commonalities in the basic ele-

ments of negotiation strategy, culture influences the

strategies that negotiators prototypically employ [3].

Western culture negotiators are more likely than East

and South Asians to rely on the information exchange

strategy, whereas East and south Asians are more likely to

adopt the persuasion and offer-making strategy

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Culture and negotiation Gunia, Brett and Gelfand 79

Table 1

Summary of findings.

Inputs Processes Outcomes

Intracultural Critical psychological states (i.e.,

cognitions, goals, affect) and

situational factors (i.e., negotiation

structure) affect negotiation

processes and outcomes in all

cultures.

Negotiators across cultures have

different biases, goals, and levels of

trust and respond differently to the

same types of contextual influences

(accountability, team configuration,

power, communication media).

Negotiators across cultures use two

different goal-directed strategies:

direct information exchange and

persuasion/offers, with the former

promoting value creation and the

latter promoting value claiming.

Culture influences the strategies that

negotiators typically employ, with

Western cultures relying on direct

information exchange and East and

South Asians relying on persuasion/

offers, in part due to different levels

of trust.

Negotiators across cultures seek to

achieve economic outcomes as well

relational outcomes.

Culture affects the weight placed on

economic versus relational

outcomes. In structured negotiation

simulations, some cultures (e.g., US,

Germany) achieve more value

creation and others (e.g., India,

China) achieve more value claiming.

Intercultural Certain factors such as cultural

intelligence, social goals for

relationship building, concern for

face, and communication quality

encourage value creation in

intercultural negotiations. Other

factors, such as cultural distance

and hierarchical concerns hinder

value creation in intercultural

negotiations.

Negotiators use the strategy that is

normative in their cultures but some

also adapt to the counterpart’s

strategy.

Value creation is usually more

difficult in intercultural negotiations

than in one or both intracultural

comparison samples.

[8 � ,9 � ,11 � ]. The reasons have not been fully developed

theoretically or empirically, but trust, which varies with

culture [13,14], is clearly part of the explanation [8 � ,12]:

Negotiators with high trust are more likely to engage in

direct information sharing, whereas those with low trust

tend to engage in persuasion and offer-making [8 � ,9 � ,11 � ].

Moreover, there is some evidence, consistent with theory,

that East Asian negotiators prefer less direct modes of

confrontation than do Western negotiators [15,16]. For

example, Chinese negotiators show dominance less di-

rectly than Canadians by taking up additional physical

space [17]. Chinese negotiators also engage in more

informational deception than Americans to avoid overt

conflict [18]. Similarly, Easterners generally show less

comfort with anger [19 � ], apologize more often [20],

and construe aggression as including more indirect beha-

viors [21 � ]. Eastern negotiators’ behavior, however,

hinges on the group status of their counterparts, as East

Asians afford more trust to ingroup than outgroup coun-

terparts and distinguish between the mild and severe

transgressions of ingroup but not outgroup members

[22 � ].

At the same time, several recent studies suggest that

Chinese negotiators can be aggressive when deal-making.

For example, Liu and colleagues report that Chinese

negotiators place greater importance on competitive goals

and use more influence and fewer information sharing

behaviors than Americans [11 � ,23,24]. And, in an email

study, German negotiators used more information sharing

and fewer influence behaviors than Chinese negotiators

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[9 � ]. Perhaps the ingroup–outgroup status of the counter-

part, coupled with their social presence, determine

whether Chinese negotiators cooperate or compete.

Going beyond the geographic East/West distinction,

emerging research distinguishes between honor, face,

and dignity cultures [7,25], with important strategic impli-

cations. For example, the rational logic that facilitates

creativity in dignity cultures like the U.S. backfires in

honor cultures like Egypt, where creativity follows from

morally-tinged statements conveying honor [26 � ].

Finally, there is some evidence that culture may affect

the link between strategies and outcomes. For example,

the persuasion and offers strategy creates relatively more

value among Japanese negotiators [27] than American or

Indian negotiators [8 � ]. Similarly, expressions of anger are

relatively more effective for claiming value among Wes-

terners than Easterners [19 � ].

Inputs

Culture and negotiation research, like negotiation re-

search generally, has identified critical psychological

inputs (cognitions, goals, affect) and situational factors

(e.g., a negotiation’s structure) that affect negotiation

processes and outcomes. Negotiators across cultures think

about and use these psychological constructs similarly.

Although more research is needed, it seems that people in

different cultures construe dominance [17], aggression

[21 � ], and even trust [13] similarly. Although negotiators

initially adopt trust levels that are rational within their

own cultural ecology [5], negotiators across cultures may

Current Opinion in Psychology 2016, 8:78–83

80 Culture

be able to build trust [28]. Moreover, across multiple

cultures (e.g., the U.S., India, China), negotiators’ trust

and goals influence their strategies, with high trust and

cooperative goals promoting information exchange, and

low trust and competitive goals promoting persuasion and

offers [8 � ,11 � ,12]. Negotiators across cultures may also

experience similar cognitive processes and biases, which

could explain why first offers anchor final outcomes across

cultures [29].

Despite drawing from common inputs to negotiation,

cultural differences emerge in the influence of these

factors on negotiation processes and outcomes. For ex-

ample, culture may influence which biases become sa-

lient, for example, by inclining Western (vs. Eastern)

negotiators toward self-enhancing biases [5], and deter-

mining which mindset (holistic vs. analytic) individuals

use to understand the negotiable issues [30]. Additionally,

despite drawing from similar sets of goals, culture influ-

ences which goals negotiators prototypically adopt, for

example, by inclining Chinese (vs. U.S.) negotiators

toward more competitive goals [11 � ]. And despite the

universal importance of trust, negotiators prototypically

trust more in some cultures (e.g., the U.S.) than others

(e.g., India) [8 � ], possibly due to cultural differences in

generalized trust [14,31].

Finally, despite the fact that negotiators around the world

face the same types of contextual influences — including

accountability pressures [32], team versus solo configura-

tions [33 � ], varying communication media [10

� ], and

power differences [11 � ] — culture inclines negotiators

to deal with these factors differently, a view called the

‘culture-by-context’ perspective [33 � ,34 � ]. For example,

when a dominant social norm is activated, accountability

pressures make collectivists (but not individualists) more

cooperative toward ingroup counterparts [32]. Similarly,

the team context cues Taiwanese negotiators to satisfice

in service of harmony, but U.S. negotiators to challenge

each other in service of value creation [33 � ]. Additionally,

email cues Hong Kong negotiators to become more

competitive than U.S. negotiators [10 � ], and high power

cues competition among Chinese negotiators [11 � ]. Over-

all, although negotiators around the world face similar sets

of inputs, their culture inclines them to respond to many

of those inputs differently.

Intercultural research For many years, research on culture and negotiation

remained largely comparative. An exciting trend in the

literature has been the increase in studies of intercultural negotiations.

Outcomes

Much existing evidence suggests that reaching any agree-

ment, let alone a value-creating agreement, is more diffi-

cult in intercultural than intracultural negotiations. In one

Current Opinion in Psychology 2016, 8:78–83

study, for example, 60% of intercultural Israeli-Indian

negotiators failed to negotiate an agreement [35]. Similarly,

a recent survey of the literature revealed that intercultural

negotiators typically create less joint value than intracul-

tural negotiators from one or both of the negotiators’

cultures [3]. Intercultural negotiators, it appears, generally

attain worse economic outcomes than intracultural nego-

tiators because they have to overcome the underlying

differences in their culturally-normative strategies.

Processes

Negotiators bring their culturally-normative strategies to

the intercultural table [3,36], raising the question of how

negotiators adapt to each other in intercultural negotia-

tions. Several theories bear on this question: Social iden-

tity theory [37,38] would predict that intercultural

negotiations will create highly-competitive ingroup–out- group dynamics, whereas the triangle hypothesis [39]

suggests that cooperative negotiators will remain cooper-

ative unless facing a competitive opponent; then they will

become fully competitive. However, neither theory fully

accounts for the existing data. For example, Koreans

negotiating with Americans abandoned competitive strat-

egy for cooperation [40 � ]. Similarly, German negotiators

who did adopt their Chinese counterpart’s competitive

strategy also retained their culturally-normative coopera-

tive strategy [9 � ]. Thus, competition is not necessarily the

lowest common denominator in intercultural negotia-

tions, possibly due to the inputs that intercultural nego-

tiators bring to the table.

Inputs

Notwithstanding the above evidence on the generally

suboptimal outcomes of intercultural negotiators, several

input factors — sojourner or bi-cultural status, cultural

intelligence, social goals, and deep multicultural experi-

ence — do appear to facilitate value creation in intercul-

tural negotiations. For example, Korean sojourners to the

U.S. (students studying abroad), negotiating with Amer-

icans, frequently used the pronoun ‘you’ to synchronize

their behavior and thus created more value than intracul-

tural negotiators from either culture [40 � ,41]. Similarly,

dyads consisting of Chinese sojourners and Americans who

both had high cultural intelligence (CQ; an understanding

and appreciation of cultural differences) engaged in more

relationship management and generated higher joint gains

than dyads with low CQ [42 � ]. Another intercultural study

with similar samples showed that dyads with higher CQ,

but not other individual differences (e.g., international

experience, openness, extraversion, cognitive ability, emo-

tional intelligence) used more cooperative sequences and

negotiated higher joint gains [43 � ].

Additionally, a focus on social goals (relationship-build-

ing) rather than task goals (the negotiable issues) facili-

tated the development of skills integral to intercultural

negotiation performance like information integration and

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Culture and negotiation Gunia, Brett and Gelfand 81

cultural intelligence [44]. Likewise, concern for face facili-

tated mental model convergence between Chinese sojour-

ners and American negotiators, but need for closure

inhibited convergence [34 � ]. Similarly, the clarity, respon-

siveness, and comfort of communications strongly influ-

ences outcomes like value creation and claiming, as well as

satisfaction, in intercultural U.S. and Chinese (sojourner)

negotiations [45]. Studies of intercultural negotiations

among students studying in France, China, and the U.S.,

in turn, reveal that both breadth and depth of multicultural

experience can influence negotiation outcomes: Whereas

breadth (diversity of cultures visited) helps intracultural

negotiators understand their own culture, depth (level of

immersion in cultures visited) helps intercultural negotia-

tors understand and communicate across cultures [42 � ].

At the same time, other inputs — greater cultural dis-

tance and hierarchical concerns, the type of communica-

tion medium, and cultural perspective-taking — may

undermine value creation in intercultural negotiations.

In a study of intercultural bank loans, for example, greater

cultural distance between the bank’s and borrower’s

nations on the World Values Survey’s (2005) tradition-

al/secular and survival/self-expression dimensions was

associated with higher interest rates, more guarantee

requirements, and smaller loans [46]. Only protracted

interaction reduced these effects. The email medium,

too, may exacerbate difficulties in intercultural negotia-

tions. Hong Kong Chinese negotiators using email made

more aggressive opening offers and claimed more value

than their intercultural U.S. counterparts, or than nego-

tiators from either culture operating intraculturally and

face-to-face [10 � ]. Finally, Canadian negotiators primed

to engage in cultural perspective-taking, defined as con-

sidering the other negotiator’s culturally-normative strat-

egy, claimed more value than those primed with standard

perspective-taking, defined as considering the counter-

part’s alternatives and interests [47]. The authors sug-

gested that, whereas standard perspective-taking built

trust and rapport, cultural perspective-taking accentuated

intercultural differences and encouraged negotiators to

exploit them. In sum, input factors that may have little

effect on intracultural negotiations may influence strategy

and outcomes in intercultural negotiations.

Conclusion and future directions This review of the culture and negotiation literature

found both cultural commonalities and cultural specifi-

cities. Although empirical research testing theory and

documenting the effects of culture on negotiation is

growing, the literature has some important limitations.

First, many intercultural studies contrast American stu-

dents with international students who are sojourners in

the U.S. Although convenient, these samples may mask

the complexity and difficulty of intercultural negotiations

in which neither negotiator has experience in the other’s

culture. Second, research on culture and negotiation

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tends to rely on the methodology of one-shot laboratory

experiments. Despite benefitting from random assign-

ment and experimental control, lab studies are not ideally

suited to understanding trust dynamics in non-Western

cultures, where relationships develop slowly. Third, the

research is heavily influenced by ethical norms embodied

in the U.S.’s Foreign Corrupt Practices Act, which, for

example, discourages ‘go-between’ third parties that bro-

ker deals and may get paid by both sides. In many

countries, however, third parties serve as important

intermediaries to facilitate negotiations [48]. We need

more diverse research paradigms, both lab and field, to

address the complexity of negotiation across cultures.

Another challenge is expanding the theoretical scope of

culture and negotiation research beyond the dominant

focus on individualism-collectivism. Recent papers and

conference submissions suggest that research is tackling

this challenge: More nuanced frameworks like honor-dig-

nity-face are both psychologically-based and geographical-

ly-broad, extending predictions to Latin America, the

Middle East, North Africa, and South Asia [7,21 � ,26 � ].

Cultural tightness-looseness and holistic versus analytic

mindset also bring needed nuance into cultural differences

that seem to impact negotiation strategy and outcomes [3].

Finally, psychology-based culture and negotiation re-

search has focused only limited attention on one of the

biggest challenges facing negotiators around the world:

finding peace between parties with deep and long-stand-

ing differences. As this review attests, research has been

dominated by studies of deal-making rather than disput-

ing (for exceptions: [21 � ,49,50]). Understanding the strat-

egies that mediators [49,50] and increasingly computer

agents (programs that update their strategy depending on

the counterpart’s behavior) [51] use in intercultural dis-

putes is critically important. By joining their disciplinary

colleagues in anthropology, political science, and sociolo-

gy, psychologists studying culture and negotiation could

help to build a multidisciplinary research agenda geared

toward understanding the human behaviors contributing

to extreme forms of conflict, like terrorism [52]. This

focus would build on our quickly-expanding knowledge

base about culture and negotiation to promote sustainable

peace across cultures.

Conflict of interest statement Nothing declared.

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Current Opinion in Psychology 2016, 8:78–83

  • The science of culture and negotiation
    • Comparative intracultural research
      • Outcomes
      • Processes
      • Inputs
    • Intercultural research
      • Outcomes
      • Processes
      • Inputs
    • Conclusion and future directions
    • Conflict of interest statement
    • References and recommended reading