Business Negotiation: a Cross Cultural Perspective from Collectivism and Individualism
Business Negotiation: A Cross Cultural Perspective from Collectivism and Individualism
Introduction
Business negotiation can be defined as "a process in which two or more entities come together to discuss common and conflicting interests in order to reach an agreement of mutual benefit" (Harris and Moran, 1987, p.55). As we know the international business negotiations are significantly increased accompany with the ever-increasing interdependent relationships due to globalization. According to Graham et al(1994) these interdependent relationships are set up through trade and commercial activities, such as mergers and acquisitions, investments, and supply chain management , and these transactions are always started through various forms of negotiations.
Despite the intention of negotiating parties is to reach mutual benefits, it cannot be easily achieved in real-life situation. Tung(1988) claimed negotiation failure rates keep at alarmingly high levels. In many cases the failure of business negotiation is resulted from misinformation and misinterpretation of cultural idiosyncrasies (Graham et al, 1994). Metcalf et al (2007) confirmed that cultural factors can confound, stretch, and frustrate negotiations. The attached case is a very good evidence of failure resulted from misinformation and misinterpretation across cultures. The American sales manager negotiated in different ways with her inter-organisational partners from Japanese culture in order to satisfy the requirement of its multimillion-dollar order of its American customer; however the outcome is they lost the contract because they could not respond actively to satisfy the customer. And the misinformation and misinterpretation between the American sales manager and her Japanese partners is the main cause of failure.
In line with the emerging importance on international business negotiation, it becomes apparent that the international business negotiation has obtained considerable attention from
Introduction
Business negotiation can be defined as "a process in which two or more entities come together to discuss common and conflicting interests in order to reach an agreement of mutual benefit" (Harris and Moran, 1987, p.55). As we know the international business negotiations are significantly increased accompany with the ever-increasing interdependent relationships due to globalization. According to Graham et al(1994) these interdependent relationships are set up through trade and commercial activities, such as mergers and acquisitions, investments, and supply chain management , and these transactions are always started through various forms of negotiations.
Despite the intention of negotiating parties is to reach mutual benefits, it cannot be easily achieved in real-life situation. Tung(1988) claimed negotiation failure rates keep at alarmingly high levels. In many cases the failure of business negotiation is resulted from misinformation and misinterpretation of cultural idiosyncrasies (Graham et al, 1994). Metcalf et al (2007) confirmed that cultural factors can confound, stretch, and frustrate negotiations. The attached case is a very good evidence of failure resulted from misinformation and misinterpretation across cultures. The American sales manager negotiated in different ways with her inter-organisational partners from Japanese culture in order to satisfy the requirement of its multimillion-dollar order of its American customer; however the outcome is they lost the contract because they could not respond actively to satisfy the customer. And the misinformation and misinterpretation between the American sales manager and her Japanese partners is the main cause of failure.
In line with the emerging importance on international business negotiation, it becomes apparent that the international business negotiation has obtained considerable attention from
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