Cultural Approaches to Negotiations: Understanding ...

International Marketing Review Cultural Approaches to Negotiations: Understanding the Japanese Brian Mark Hawrysh Judith Lynne Zaichkowsky

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International Marketing Review 7,2 28

Cultural Approaches to Negotiations: Understanding the Japanese Brian Mark Hawrysh Canadian Pacific Forest Products Limited, and


Received October 1988 Revised February 1989, April 1989

Judith Lynne Zaichkowsky Simon Fraser University, Burnaby, Canada Introduction The understanding of culture in doing business with the Japanese is of the utmost importance to sellers and buyers of goods and services (e.g. Johansson, 1986; Rosenberg and Thompson, 1986; Lazer, 1985). A vast literature on the subject has evolved with little overview or consensus on the understanding of the cultural impact on the negotiation process. Many of the empirical studies have tended to be descriptive, rather than theoretical, and hence many papers exist on "how to negotiate" with the Japanese (e.g. Graham and Herberger, 1983). This article attempts to review the literature on negotiations between Japanese and Americans and interpret the findings using an anthropological perspective. By doing so, the actual behavioural differences between cultures may be understood as learned skills, styles or habits that are taken into account before entering into negotiations. What is Culture? The concepts of behaviour and language are more or less easy to agree on. Culture, on the other hand, means different things in different contexts. Culture has been defined as the "attitudes, beliefs and values of a society" or "customs, laws and traditions of society" (cf. Ajiferuke and Boddewyn, 1970). Given the complexities of defining culture, most management studies have used country as a surrogate of culture. However, culture is not something granted only to citizens of a country or something we are born with. It is something we learn as we grow in our environment. Similar environments provide similar experiences and opportunities and hence tend to shape similar behaviours. Recently Swidler (1986) proposed that culture influences behaviour by shaping a "tool kit" of habits, skills and styles from which people construct "strategies of action" or persistent ways of ordering behaviour through time. Culture's causal significance to negotiations is not in defining ends or outcomes of action but in the process or strategy of bargaining. Therefore, once a negotiator is The authors are indebted to an anonymous reviewer for careful reading of and insightful comments on the article. We would also like to thank Jean Last for her professional preparation of the manuscript.


aware of another culture's "tool kit", he or she should be able to anticipate and understand the behaviour that takes place in the bargaining environment and respond with confidence. Some Evidence on the Role of Culture in Bargaining In their study of the social/psychological analysis of international behaviour, Sawyer and Geutzkow (1965) discussed the national character of the bargainer and maintained that different nations have different negotiation styles. Druckman et al. (1976) tested bargaining behaviour of subjects from three cultures — India, Argentina and the United States. Their study focused on intracultural bargaining behaviour in an attempt to isolate differences which could be attributable to culture alone. Culture and age/sex interactions were tested for confounding effects on bargaining behaviour. The results indicated that Indian negotiators bargained longer, were more competitive and maximised their gains relative to US and Argentinian negotiators. In a survey study of Chinese (PRC) and US executives, Tung (1982) concluded that as a determinant of the success or failure of negotiations, culture played an important but dual role. Approximately 80 per cent of the survey respondents agreed with the statement that Chinese and US executives had different negotiating styles. The study also showed that although differences in negotiation styles were perceived by executives as major causes of negotiation failure, awareness of cultural differences was not thought to be a major factor in negotiation success. Tung concluded that although an awareness of cultural differences in bargaining styles was a necessary condition for success, it was not a sufficient condition. A similar variation in style was reported by Graham and Sano (1984). They found the US and Brazilian executives were almost identical in the seven most important bargaining characteristics. The Chinese (Taiwanese) list was close to the US list with three traits in common, and quite different from the Japanese, with whom only one trait was common (winning respect and confidence). Both US and Japanese executives agree that preparation and planning skill, ability to perceive and exploit power and integrity are important negotiator traits. The remaining traits on the US list are identified as rational abilities, such as planning, thinking, intelligence and knowledge. The remaining traits on the Japanese list are thought of as more interpersonal skills such as dedication, respect, listening skill and broad perspective. Other empirical studies failed to discover major differences between cultural negotiating styles. For example Brehmer et al. (1970) found no differences between Czechoslovakia, Greece, Japan, Sweden and the US in bargaining behaviour. In a study of Mexican and US children, Madsen (1971) finds no differences between younger children in competitive/co-operative behaviour, but as the children get older, the North Americans are significantly more competitive. However, in an earlier study she also found that an urban versus rural setting accounted for more variation in bargaining behaviour than culture. In a study of Japanese and US businessmen, Harnett and Cummings (1980) found that country accounted for a 5 per cent variance in bargaining behaviour, and more variance was attributable to factors such as age and sex rather than nationality.

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International Marketing Review 7,2


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In general, studies reported do find some variation in bargaining behaviour due to country or culture, although the effect of culture may be less than other variables. The question becomes what is it about that country's background that causes the different behaviours and can we identify at what precise stage of the negotiation process the cultural factor is most important? Can we anticipate which "habits, styles and skills" will emerge at different stages of the negotiation process? An insight to this question might be found by reviewing the vast literature on Japanese/US bargaining studies and then examining the areas of behaviour differences in terms of an ethnographic analysis. Ethnographic analysis allows one to describe the events and customs from within the culture in order to search for patterns of behaviour. It is really the preliminary stage before theoretical analyses of the culture. People rely on common-sense reasoning to assemble ethnographic contexts of interpretation. These contexts consist of bits and pieces of information of everyday life which are brought together to form a perceptual aide for interpreting other people's talk and behaviour, objects, events and one's own behaviour (Leiter, 1985). Therefore, the ethnomethodological approach is different from just empirically measuring and reporting behaviour; it is an understanding of the meaning of the behaviour by looking at the context of the social structure. The Bargaining Process The negotiation articles concerning the Japanese included in this review are organised around Graham and Sano's (1984, 1986) four-phase linear model of the negotiation process (see Figure 1). Non-task Sounding The first stage, non-task sounding, describes the process of establishing rapport between members of negotiating teams. This stage excludes those interactions related to exchanging information regarding the "business" of the meetings. Personal relationships. Before entering serious negotiations, Japanese businessmen will spend considerable time and money entertaining foreign negotiating teams (e.g. Oh, 1984; Van Zandt, 1970). The objective of the process is to get to know their opposite member and establish a rapport built on friendship and trust. US negotiating teams who are used to getting down to business find these delays frustrating and the considerable sums spent on entertaining and gift-giving extravagant and wasteful. Earlier observations describing the emphasis that Japanese place on establishing harmonious personal relationships have been confirmed in empirical studies. In Graham's (1985a) study the Japanese negotiations are characterised by substantially more early non-task interaction. Sullivan et al.'s (1981) cross-


Cultural cultural analysis of trust and conflict resolution, and Block's (1972) survey of joint ventures in Japan offers further support for the view that a personal and Approaches to trusting relationship is an essential requirement for the Japanese partner in Negotiations successful business relationships. Status distinctions. Tsurami (1971), Jastram (1974) and Oh (1984) describe the importance of status distinctions and the effect that they have on negotiations in Japan. In the Japanese business world buyers are superior in rank and status 31 to sellers and they tend to suspect sellers of offering exaggerated levels of service at inflated prices. It is expected that sellers should display a suitably respectful attitude towards buyers in their interactions. US executives coming from a culture which typically plays down status distinction may conduct themselves in a manner the Japanese find hard to accept. Empirical evidence supports the fact that Japanese buyers do better than sellers (Graham, 1983). This status distinction accounted for 23 per cent of the variation in profit levels among Japanese dyads. Task-related Exchange of Information The second stage of the business negotiation process describes an exchange of information that defines the participants' needs and expectations. Decision making. Well over 90 per cent of all large Japanese companies and most of the smaller ones use a decision-making process called ringi(Van Zandt, 1970). The system is based on the principle that decisions are made only when a consensus is reached by the negotiating team. Proposals are circulated among the negotiating team and the affected individuals in the main office staff, for each to affix their own personal seal of approval. Without the group's approval, which takes a long time to acquire, no proposal will be accepted. What may appear to US negotiators as stalling tactics is simply the different process by which the Japanese reach a decision. Although there is much descriptive work here, no empirical results are reported. Bidding. Japanese executives were often described as "wolfish". In an early descriptive analysis of US/Japanese negotiations Jastram (1974) and Bartos (1967) described this as a characteristic of a "tough" negotiator. Graham (1985a) has confirmed these views showing that the Japanese negotiator asked for initially higher profit solutions in the simulated negotiation game. US negotiators are more apt to offer a fair price, one that is closer to the eventual solution. Survey results indicate that US executives felt some irritation towards their Japanese counterparts for their "greedy" first offers. Persuasion The third stage involves the parties' attempts to modify one another's performance expectations through the use of various persuasive tactics. US negotiators spend most of their time in the third stage of negotiations. The Japanese, on the other hand, take time to understand one another during the first two stages of negotiations so that little persuasion (in the US sense) is necessary.



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Aggressive persuasive tactics. Van Zandt (1970) hypothesised that US negotiators used more aggressive persuasive tactics than their Japanese counterparts. Anecdotal reports (Graham and Sano, 1984) tend to support this view, listing open disagreement and frequent use of threats, warnings and "final offer" strategies as characteristic of US negotiation behaviour. The Japanese were described as avoiding confrontation and responding to threats by changing the subject, periods of silence or withdrawal from negotiations. Contrary to this view, Graham's (1985a) experimental results show the Japanese using aggressive tactics as frequently as the US negotiators. However, in Japanese negotiations they appear to be used by buyers and in the later stages of negotiations (when all else fails). Concession and Agreement The final stage of negotiation involves reaching an agreement based on the performance intentions of the parties involved and the concessions each has made during negotiations. Concessions. According to Van Zandt (1970) US executives tend to make concessions throughout the negotiation process, settling one issue and then proceeding to the next. In contrast the Japanese tend to make fewer concessions through the earlier stages of the negotiation process, preferring to wait until the end. Graham's (1985a) laboratory results showed no tendency for the Japanese negotiators to make concessions later than the Americans. In fact, both parties were shown to make concessions consistently through the beginning, middle and later stages of the bargaining sessions. Contracts. An extension of the Japanese preference for establishing strong personal relationships along with business ties is their dislike for the formal western-style contract. In his article on selling to the Japanese, Oh (1984) describes the Japanese businessman's preference for a gentleman's agreement as the outcome of business negotiations. A gentleman's agreement is a loosely worded statement expressing mutual co-operation and trust that has developed between negotiating parties. The advantage of these agreements is that they allow a great deal of flexibility in the solution of unforeseen problems. The Japanese feel that a co-operative relationship between the parties leads to better problem solving than the more restrictive western-style contract. Henderson's study (1975) showed that Japanese businessmen do not commonly use formal detailed contracts which stress strict performance and enforcement in their own domestic business relations. If some contractual language is necessary, a phrase like the following translation is sometimes used:"Allitems not found in this contract will be deliberated upon in a spirit of honesty and trust". The Japanese do not believe that the contract can ensure the success of a venture (Peterson and Shimada, 1978). Furthermore, a truly wise person would never absolutely commit him or her self since human interactions are so indeterminate. The flexibility of not having a contract means that the Japanese would not lose face if future circumstances should change. However, contractual language requiring specific performance and penalties in case of default is


increasingly common in Japanese/American business agreements. The primary reason appears to be pressure exerted by the US partners. The Japanese would prefer to emphasise harmony and compromise rather than stressing the legalistic approach, yet such legalism is often viewed by the Japanese as necessary with respect to US demands.

Cultural Approaches to Negotiations

Outcomes as Satisfaction and Profits When the final outcomes of negotiations were measured as profits and satisfaction, there was no difference between cross-cultural negotiations of Japanese/Americans versus intracultural dyads of Japanese/Japanese or American/American (Graham, 1985b). Although no differences were found in outcomes, there were differences in process of bargaining strategies used by each group. Such process variables as representational strategies (transmission of information about oneself), impression formation accuracy (the client's utilities for various bargaining alternatives) and interpersonal attraction (e.g. like-dislike, friendly feelings) were influenced by culture and the personal extroversion (one who gains gratification from other people) of the bargainer. In a study of honesty in negotiations involving US, Japanese, Brazilian and Taiwanese businessmen, Allerheiligen et al. (1985) report on profits and satisfaction as outcomes. In general they found profit unrelated to honesty. They found the Japanese bargainers were more satisfied when they rated their own strategies as honest. In contrast, for Chinese bargainers, satisfaction is associated with the use of deceptive bargaining strategies, as are higher profits. Another intracultural study by Graham (1988) looked at dyads of business people across 12 cultures playing the same negotiating game. Each member of the dyad was assigned to be a buyer or a seller (independent variable) and individual pay-off profits were the dependent variable. The amount of variation in profit due to assigned role (buyer or seller) ranged from 0.4 per cent for mainland China dyads to 23.2 per cent for Japanese dyads. These results emphasise the importance of recognising the context of status distinction within a culture. However, these are all intracultural rather than cross-cultural contexts. We do not know exactly how important the role is when we mix two cultures, as Graham (1985b) found no difference in direct outcomes between Japanese/American dyads and dyads of the same country. It is not the culture per se that influences the negotiation outcomes, but culture influences the process. Both Japanese and Americans value high profits, good relationships, co-operation, dependability and trust in attaining a business deal. However, parties from each culture bring different sets of "tools" based on their ethnic heritage to their intercultural negotiations to form the process variables of impression formation accuracy and interpersonal attraction. Some of these "tools" are in the different styles in using verbal and non-verbal cues in communication.

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An Analysis of Verbal and Non-verbal Cues Usedthroughoutthe Bargaining Process Avoidance of "no". As an explicit negative response, the word "no" is rarely used between Japanese individuals of relatively equal social standing. Van Zandt (1970) explains how Japanese executives will not say "no" to foreign negotiators.



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Even when the Japanese mean no, they will use a more ambiguous term (Ueda, 1974). This culturally determined behaviour has caused a number of problems for US executives. US businessmen have presented their proposals and assumed agreement had been reached only to learn that their Japanese counterpart's desire to maintain a harmonious relationship prevented him from refusing the proposal immediately. Content analysis results (Graham, 1985a) showed that US negotiators used this word nearly twice as often as their Japanese counterparts: (9.4 times per half hour as compared to 5.2). Silence. To an American, lengthy periods of silence in a conversation mean something is wrong. In contrast, periods of silence are part of Japanese conversational style. Graham (1985a) reports almost twice as many silent periods in Japanese interaction than American. Ueda (1974) and Van Zandt (1970) describe how the Japanese can unintentionally gain a bargaining advantage as a result of remaining silent. Graham and Herberger (1983) state that US executives are uncomfortable with these silent periods and many admitted to their attempts at filling the gap with conversation or yet another persuasive appeal. The US executives reported that this created situations where "we did all the talking". Eye contact. In particular, content analysis showed that Japanese managers make much less eye contact than Americans. In the US, lack of eye contact is a signal that something is amiss. American executives reported that the lack of eye contact was not only disconcerting but reduced their bargaining performance. In an experimental context, Lewis and Fry (1977) report that when a physical barrier eliminated eye contact, the outcomes of negotiations improved. This paradox can be explained in terms of the context of the relationship. When the expectations are positive, facial gaze and physical closeness may be interpreted as signs of friendship. However, in the context of an individualistic orientation, the same behaviours may be interpreted as an attempt to intimidate or dominate the relationship. They may thereby help promote a distributive bargaining strategy and reduce the likelihood of integrative agreements. Summary The specific differences in Japanese/US negotiation behaviour noted in anecdotal and descriptive works are generally confirmed in the experimental setting for the early phases of the negotiation process. Cultural differences between Japanese and Americans are found with respect to the first and second stages of decision making; namely personal relationships, status, styles of decision making and bidding. Cultural differences were not confirmed in the third and fourth stages of the negotiation process: namely persuasive tactics, concessions and outcomes. Nor is there any evidence to suggest that the goals of the negotiating parties differ, just the means to their ends. Empirical support exists to suggest that culture affects the approach to negotiation. The different styles of verbal and non-verbal communication seem to underlie all stages of the negotiation process. Ethnographic Analysis of the Socio-cultural Traits which Differ in Negotiating Behaviours Our knowledge of the nature and influence of culture on behaviour remains imperfect. However, if culture is viewed more as a style or a set of skills and


habits than a set of preferences, wants or values, then people of a culture can be thought of as picking and choosing out of their repertoire of past experiences "tools" or information that can be used for "strategies of action" (Swidler, 1986). For example, parties engaged in negotiations may have the same wants or values. They want to gain the best possible deal for themselves or their companies. They value successful, cordial outcomes. Perhaps this is why we find so little empirical evidence for differences in later stages of negotiations. However, the approach taken to get the best possible deal is dependent on the information each party has about the other and how similar the current situation is to their past experiences. That is, our reactions and behaviour are dependent on our set of styles, skills and habits. When we know the style and skill of the opponent, we can then react with confidence and understanding to the context of the situation. If we know a cultural trait is to be late, then that may be a style or a habit of the specific culture. Once we anticipate and expect that behaviour, it can be viewed as independent of the negotiating process and not affect reaction to the situation in terms of interpreting the behaviour through the US cultural context. Lateness in the USA can imply rudeness, or a power status statement, while the same behaviour in another culture may have no negative connotations. A number of authors have attempted to explain variations in negotiation behaviour using an ethnographic analysis of the "habits, styles and skills" of the parties involved. Graham (1983), Pascale (1976) and Warrington and McCall (1983) analysed differing Japanese/US approaches to (1) personal relationships, (2) status distinctions, (3) harmony, (4) face, (5) time, (6) cognitive processes, and (7) group action, in their efforts to relate cultural factors to exchange and decision processes. The first two areas may be thought of as pertaining to the non-task-related stage, and the last five might be thought of in regard to the task-related stage of the negotiation process. Personal Relations and Status Before considering personal relations it is necessary to understand the Japanese notion of the individual in society (Masaaki, 1974). The person is not an individual in the western sense. Warrington and McCall (1983) used Hall's (1959) concept of high-context cultures to describe the Japanese. High-context cultures are those in which the perception of the individual is inextricably bound to his or her relationships and the context in which they occur. Warrington explains that in Japanese culture the perception of individuals is to a great extent defined by their personal and business relationships. In contrast, western businesspeople tend to disassociate themselves and their personal relationships from business relationships. Graham (1983) suggests that the difference in the way in which Americans and Japanese view the interdependency between the individual and their personal and business relationships creates two different and sometimes conflicting styles in the exchange process. In Japan personal relationships are always subsumed within the context of business relationships". They are quite serious when they say "friendship first and business second". The Japanese concern for personal relationships should


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indicate to US businesspeople how important it is to allow sufficient time for a strong personal relationship to develop during long dealings. The importance of the non-task stage in the Japanese negotiation process becomes obvious given these requirements, for it is at this stage that the personal relationship develops. The typical US view that personal relationships have no place in business dealings creates the conflict described earlier. Oh (1984) states that earning the title "foreign friends" should be the ultimate goal of US businesspeople hoping to sell products in Japan. Once personal relationships have been established, the business relationship which follows will be a long-lasting one. This is an important point since the time-frame of Japanese business relationships is a long-term investment of at least ten years, whereas the time-frame for US business relationships is usually a short-term profit of three years (Graham and Sano, 1984). Although the relationship should be trusting, the dynamics of trust vary greatly between the two cultures. In a study of differences between Japanese and US executives, Harnett and Cummings (1980) report that the Americans were more trusting and the Japanese more suspicious in their individual personalities. The Japanese see trust as developing over time, whereas the Americans are bound to be more trusting at the outset. Americans also rate future behaviour consistent with past behaviour to be an important part of trust. The Japanese do not (Sullivan et al., 1981). The Japanese seem more willing to develop trust even in the face of unexpected, inconsistent behaviour on the part of the other party. Culturally, the Japanese believe that the individual must accommodate himself/herself to the continuous unfolding of events and therefore learn to accept the ambivalent behaviour of others. Americans, on the other hand, have a very low tolerance for this kind of ambiguity. Therefore, US managers see non-ambivalent behaviour as important to trust and Japanese managers do not. This notion of ambiguity is central to the Japanese style as it helps make tentativeness legitimate (Pascale, 1976). Here ambiguity is useful because the administrator may take the interim step of "deciding" how to proceed. The process of "proceeding" in turn generates further information. In this way the ambiguity provides a way of legitimising the loose rein that a manager permits in certain organisational situations where agreement needs time to evolve or where further insight is needed before conclusive action can be taken. One reason why Americans do not view ambiguity in the same manner is that they perceive ambiguity to be a female trait (Pascale, 1976) and perhaps a sign of weakness. In US culture, simple, straightforward confrontation is mixed with notions of masculinity. The Japanese self-concept of masculinity includes achievement, heroism, assertiveness and material success. The Japanese, with a high tolerance of ambivalent behaviour in others, view themselves as more masculine than their American counterparts (Hofstede, 1985) and perhaps do not see ambiguity as contradictory to masculinity. Status. The basis for Japanese vertical status distinctions can be sex, age, education and, in business relationships, the relative position of one's firm or company. All Japanese are acutely aware of their status relative to those with whom they interact. This is important, as knowledge of status distinction dictates not only what is said but how it is said during interpersonal interactions. In


the USA things are different. Status distinctions affect how we behave in almost the opposite way from the Japanese way. In the USA individuals often go out of their way to establish interpersonal equality. There is little distinction between roles and relatively fewer rules for defining what is appropriate behaviour. These differences in the Japanese and US interpersonal relationship have a considerable impact on business negotiations. Graham and Herberger (1983) suggest that in Japan the relative status of the participants of a buyer-seller exchange process was the single most important factor in explaining negotiation outcomes. Buyers have a superior rank to sellers in Japan (Oh, 1984), and results from negotiating games indicated that buyers achieved consistently higher profit levels than sellers. The US seller expects to be treated more as an equal and acts accordingly. The Japanese buyer is likely to view the rather brash behaviour in a lower status seller as inappropriate and lacking in respect. The Japanese buyer is often made to feel uncomfortable in this situation and as a result often refuses to deal with the American salesperson.


Harmony Contrasting the western view of the rational world, the Japanese perception of reality suggests that a unique order presides over all life. The essence of human knowledge is the understanding of this order and the pursuit of human beings is to maintain the harmony or balance in life. The Japanese desire to maintain harmony affects all aspects of their lives, including social and business interactions. Japanse negotiators maintain harmony by avoiding strong emotional displays, use of the word "no" and aggressive bargaining tactics. Emotional display. When challenged, Japanese executives will not argue or even discuss the point. They remain silent. Graham and Herberger (1983) and Hideo (1975) trace the social custom of subduing outward emotional expressions of anger or frustration back to Buddhist influences. Graham suggests that Japanese businessmen are following an old tradition of tatamae (truthful) and honne (true mind). It is important for the Japanese to be polite and communicate tatamae while reserving the possibly offending thoughts to honne. Arguments and overt expressions of frustration or anger are considered detrimental to the spirit of friendship that should surround any interpersonal interaction. Oh (1984) suggests that the desire to maintain harmonious interpersonal relations supersedes honest expression of feelings. The use of no. The Japanese businessman's avoidance of the word "no" is another example of how their concern for maintaining a friendly co-operative spirit of harmony affects exchange behaviours. Unless they receive an explicit "no" from the Japanese, Americans are apt to carry their persuasive appeals too far, alienating themselves from their Japanese counterparts. Strong emotions and aggressive bargaining. In Japan, outward display of anger or frustration is a major character flaw and not appropriate behaviour. Their proverb tanki wa sonki or "a short temper means a lost spirit" illustrates how the Japanese feel. Aggressive bargaining tactics are seen in the same way as overt emotional displays by the Japanese. Graham's (1983) study showed

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that bold use of bargaining power such as "final offer" strategies are viewed by the Japanese as crude attempts at persuasion and are often met by withdrawal from formal negotiations. The Japanese live as well as negotiate by the proverb No aru taka wa tsume wo kakusu or "An able hawk hides its talons". Face The Japanese have developed sensitive feelings of pride. Wounding or a threat of wounding this pride threatens the harmony of personal relations. In negotiations between Japanese, face is all-important (Van Zandt, 1970); winning at the bargaining table is unacceptable if it involves loss of face for either party. Americans, however, regard this sensitivity as a sign of weakness. Instead, Americans tend to admire the tough, thick-skinned business executive. As a result, tactics employed in the exchange process to gain advantage by exploiting weakness or faults of opponents, quite acceptable in American boardrooms, are seen as disruptive to the proper spirit of negotiation in Japan. Such tactics are not used by the Japanese and are resented when employed by Americans. Time The concept of harmony is significant in terms of how the Japanese view time. Hideo (1975) states that, in the US, time in its simplest form is viewed as a linear concept. In Taoist-influenced cultures, time travels in a circle. The linear concept of time emphasises ordering events and adherence to schedules as a means to accomplish objectives. The Japanese, because of their circular perception of time, stress end results and are less concerned about how long the process takes. In applying these conceptual differences to the negotiation process, Warrington and McCall (1983) explain that Americans seem to have some notion of what is an acceptable length of time for bargaining and decision making. The Japanese are far less concerned about adhering to some acceptable time schedule, instead preferring to focus on the end result, allowing agreements to evolve over time. Given the differing cultural perceptions of time it becomes apparent how US complaints of delays in negotiations and wasted time would not be understood by the Japanese mind. Cognitive Processes Japanese thinking emphasises the concrete and the particular rather than the universal. It lacks abstract thought and is concerned with maintaining balance and harmony. The Japanese assimilate information in "lumps" and their approach to problem solving is holistic. The Japanese tend to look at problems as "a total system". The result is that the Japanese are uncomfortable with the American custom of reaching agreement through a series of stages. This difference in cognitive processes, Graham (1983) claims, is a cause of some of the conflict between Japanese and US bargaining styles. The Japanese negotiators want to understand every detail of the bargaining situation; a complete grasp of the whole system is required before any concessions or decisions are made. The contrasting American style of problem solving requires the bargaining situation to be broken down into a series of sub-issues. Each issue is discussed,


concessions are made and an agreement is reached. The final agreement is a sum of several concessions. Group Action The Japanese prefer a tight social framework where family groups are interdependent and "loyal, whereas the American preference is for a society where individuals look after themselves (Hofstede, 1985). This is in harmony with the Japanese emphasis on co-operation in business dealings where both sides are expected to work together for common interests. This preference for the group rather than individual action may be partially attributable to the feeling of obligation to the world and all living things for one's success. This belief is based on the premise that an individual's good fortune is attributable to the assistance and joint efforts of others. Van Zandt (1970) suggests that the Japanese consensus approach to decision making has its foundation in their preference for group action. In negotiating with the Japanese it is important to remember that it is not sufficient to convince just one person, the whole group must be won over. The US emphasis on independent action often means they are outnumbered at the bargaining table as well as making it difficult for them to appreciate the strategic advantage of group appeals rather than individual ones. Summary This ethnographic approach appears to have considerable merit in that it provides a reasonable and plausible explanation of why cultural variations in exchange behaviour occur. It is an improvement over the purely descriptive approach of reporting areas that differ in bargaining behaviour as there is some attempt made to explain the why of the relationship between culture and observed behaviour. One has the feeling that there has not been a great deal of culturespecific research on negotiations since there is such a heavy reliance on work by Graham. The knowledge of the different styles, habits and skills of each culture based on ethnographic information is invaluable in understanding a strategy of action in a different culture. The cross-cultural analysis of negotiation behaviours provides the opportunity for US executives to re-examine traditional business philosophies and practices and look to other cultures for improvements. Management can reach into the other cultures' "tool kit" of styles, skills and habits. Consider the American company which develops a "family business song" or sends employees to school to learn to be better managers. These are customs or habits taken from another culture, hence we are "learning" a Japanese style. Understanding Other Cultures In predicting culture's causal significance to strategies of action, Swidler (1986) differentiates between settled and unsettled cultures. If cultures are very settled there is great continuity in their behaviour in that they naturally know how to act. Hence by studying the habits, skills and styles of other settled cultures, the understanding of the development of the "strategies of action" or behaviour


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may become apparent and the individual now may cross cultures and perhaps select "information or tools" to understand better or take similar "strategies of action" in bargaining behaviour with that culture. Japanese businessmen who live in the United States can negotiate like Americans (Graham and Sano, 1984) because they understand and can anticipate behaviour. The United States is a settled culture and common cultural experience may refine the skills, habits and styles for common strategies of action. Japan is a settled culture and the Japanese can perhaps be classified as predictable or fairly set in their customs and habits of time, group action, face, harmony, status distinction and personal relations. On the other hand, Americans should not expect the same predictability from mainland China. There are more or less settled cultural periods and entire societies in certain historical periods can be involved in constructing new strategies of action (Swidler, 1986). China (PRC) and the Soviet Union are both unsettled cultures in that they are going through a social transformation of ideologies. In this period, people are learning new ways of organising individual and collective action, practising unfamiliar habits until they become familiar and over time they will formulate, flesh out, and put into practice new habits of action (Swidler, 1986). Hence the currently fast-changing China may be more difficult to understand since their "tool kit" of styles, habits and skills in negotiating behaviour is still being created and transformed. To understand Japan may not be to understand China. Identifying the Chinese "toolkit" of styles, skills and habits that guide their strategies of action in negotiations may be extremely difficult since they are trying to transform themselves from a Third World technology to one of a leading nation almost overnight. They are formulating new skills and styles and testing them in each new negotiation. Hence studies of negotiation behaviour involving unsettled cultures may be subject to great variation over time. As Sheng (1979) states, the Chinese are on a steep learning curve in international business and invitations for criticism and suggestions at the end of bargaining sessions should be taken as a sincere wish rather than just polite form. Implications forNewResearch Greater emphasis should be placed on investigating not only culture-negotiation processes but also the more complex culture-negotiation process-outcome relationship (e.g. Graham, 1985b). The few experimental studies do not generally support the notion that cultural factors influence the persuasive tactics, concessions or outcomes of the negotiation. However, in most of the experimental contexts, interpersonal negotiations are now studied rather than interorganisational negotiations. Researchers have not set up controlled experiments to capture the complexity of intergroup negotiations. Most business deals involve groups of representatives from each company. The behaviour of individuals may be very different in group settings. This distinction may be critical in evaluating the relevance and importance of the research findings. Second, individuals may also behave differently when bargaining on behalf of their company rather than for themselves. Most of the experimental settings


studying bargaining behaviour deal with individuals bargaining for themselves for short-term gain. Persuasion, concessions and outcomes might show greater intercultural differences when studied using teams from each country, collectively bargaining for their company with long-term profits being the key outcome. Another interesting area to research would be the amount of "bias" that exists in the cross-cultural perception in the non-task and task-related areas. The degree to which the sides are accurate in their assessment of personal relationships, importance of status, and strategies of decision making might certainly be related to the variations in the negotiation process. Studies in which subjects rate themselves, rate their opponents, and rate how they think their opponents perceive them, would supply information on how far apart the sides see themselves. This information would be invaluable in knowing how to correct misperceptions of social behaviour. References Ajiferuke, M. and Boddewyn, J. (1970), "Culture and Other Explanatory Variables in Comparative Management Studies", Academy of Management Journal, Vol. 42, June, pp. 153-63. Allerheiligen, R., Graham, J.L. and Lin, C.Y. (1985), "Honesty in Interorganisational Negotiations in the United States, Japan, Brazil and the Republic of China", Journal of Macromarketing, Vol. 5 No. 2, pp. 4-16. Bartos, 0. (1967), "How Predictable are Negotiations?" Journal of Conflict Resolution, Vol. 11 No. 4, pp. 483-96. Block, Z. (1972), "Joint Venturing in Japan", The Conference Board Record, pp. 32-6. Brehmer, B., Azuma, H., Hammond, K.R., Kostron, L. and Varonos, D. (1970), "A Cross-national Comparison of Cognitive Conflict", Journal of Cross Cultural Psychology, Vol. 1, Spring, pp. 5-20. Druckman, D., Benton, A., Ali, F. and Bagur, J.S. (1976), "Cultural Differences in Bargaining Behaviour", Journal of Conflict Resolution, Vol. 20 No. 3, pp. 413-49. Graham, J.L. (1983), "Brazilian, Japanese and American Business Negotiations", Journal of International Business Studies, Spring-Summer, pp. 47-61. Graham, J.L. (1985a), "The Influence of Culture on the Process of Business Negotiations: An Exploratory Study", Journal of International Business Studies, Spring, pp. 81-95. Graham, J.L. (1985b), "Cross-cultural Marketing Negotiations: A Laboratory Experiment", Marketing Science, Vol. 4 No. 2, Spring, pp. 130-46. Graham, J.L. (1988), "Deference Given the Buyer: Variations across Twelve Cultures", in Contractor, F.J. and Lorange, P. (Eds.), Co-operative Strategies in International Business Studies, Lexington Books, Lexington, MA, Spring, pp. 473-85. Graham, J.L. and Herberger, R.A. Jr (1983), "Negotiations Abroad — Don't Shoot from the Hip", Harvard Business Review, July-August, pp. 160-8. Graham, J.L. and Sano, Y. (1984), Smart Bargaining: Doing Business with the Japanese, Ballinger Publishing, Cambridge, MA. Graham, J.L. and Sano, Y. (1986), "Across the Negotiation Table from the Japanese", International Marketing Review, Vol. 3 No. 3, Autumn, pp. 58-71. Hall, E.T. (1959), The Silent Language, Doubleday, New York. Harnett, O.L. and Cummings, L.L. (1980), Bargaining Behaviour — An International Study, Dave Publication, Houston, TX. Henderson, 0. (1975), Foreign Enterprise in Japan, University of North Carolina Press, Chapel Hill, NC.


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