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Int. J. Business and Globalisation, Vol. 6, No. 2, 2011

Perceptions and strategies in the negotiation process: a cross-cultural examination of USA, Vietnam and Malaysia Kathryn J. Ready Department of Business Administration, Winona State University, 324D Somsen Hall, Winona, MN 55987, USA E-mail: [email protected]

Mussie T. Tessema* Department of Business Administration, Winona State University, 323F Somsen Hall, Winona, MN 55987, USA E-mail: [email protected] *Corresponding author Abstract: As part of a cross-national study (using survey data), this paper analyses the perceptions of college students regarding negotiation skills, styles and strategies across three countries: USA (n = 457), Vietnam (n = 391) and Malaysia (n = 347). This study presents and examines a number of hypotheses related to the negotiation process. The findings indicate that US students (from the West with an individualist culture) were found to have different negotiation perceptions from those of Malaysian and Vietnamese students (from Asian with a collectivist culture). The findings of this study support previous studies on cross-cultural negotiations. Managerial implications of the findings and an agenda for future research are discussed. Keywords: cross-cultural; USA; Vietnam; Malaysian; negotiation; perceptions. Reference to this paper should be made as follows: Ready, K.J. and Tessema, M.T. (2011) ‘Perceptions and strategies in the negotiation process: a cross-cultural examination of USA, Vietnam and Malaysia’, Int. J. Business and Globalisation, Vol. 6, No. 2, pp.198–216. Biographical notes: Kathryn J. Ready has a PhD in Business Administration from the University of Iowa and has published several papers on management pedagogy and strategic, cross-cultural and labour relations issues. Mussie T. Tessema has a PhD in HR Management from Tilburg University, The Netherlands and has published several papers on management related issues. Since 2007, he has been working as an Assistant Professor at Winona State University, Minnesota.

Copyright © 2011 Inderscience Enterprises Ltd.

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Introduction

Over the past few years, there has been a growing internationalisation and globalisation of businesses; this change has resulted in managers needing to better understand the cross-cultural negotiation process (e.g., Shapiro and von Glinow, 1999; Weiss, 1994; Wunderle, 2007). Cross-cultural negotiation is more complex than domestic negotiations due to the differences in national cultures and differences in political, legal, and economic systems that often separate potential business partners. These differences suggest that negotiators from different cultures have varying beliefs and perceptions about what negotiation is and how it occurs, which may influence their negotiation strategies (e.g., Kumar and Das, 2007; Mead, 2005; Volkema et al., 2004). Further, they process negotiations differently and have different preferences for conflict resolution (Lewicki et al., 2006; Buelens et al., 2008). Prestwich (2007, p.30) agrees with this view when he writes that “building our knowledge and understanding of the cross-cultural negotiation process may enhance the prospects of international success in business”. Potter and Balthazard (2000, p.10) remarks that “To build desirable relations with cultural ‘others’, be they a market, employees, a government, competitors, or strategic allies, requires a healthy respect for the other’s culture, and the values embodied therein”. Thus, the challenge is greater in cross-cultural negotiation (Bahaudin, 2007) because each party brings to the table different cultural schemata through which they interpret events (Acuff, 2006; Brett, 2001; Metcalf, 2007). Demonstrating a solid understanding of potential issues involved in cross-cultural negotiation will increase the success in avoiding barriers and failures in the international business arena. Cross-cultural negotiation skills not only affect people’s performance, satisfaction and quality of work life, but also affect their organisation. If international negotiators have effective negotiation skills, they can help their organisations gain competitive advantages in reducing costs and increasing profits. A number of studies underscored the impact of cultural difference on cross-cultural negotiation. For instance, Wunderle (2007, p.36) remarks that “negotiations across cultures often fail because little attention is given to cultural differences among nations”. Ignoring cultural differences in cross-cultural negotiation can potentially signal difficulties. “At best, cultural insensitivity can lead to an impasse; at worst, to increased hostility and competition” [Wunderle, (2007), p.36]. Over the past few years several research studies on cross-cultural negotiation have been conducted to examine perceptions, styles, and strategies of negotiation between US and Asians, particularly China, Japan and India (e.g., Adler, 2002; Bahaudin, 2007; Prestwich, 2007; Shakun, 2006). A growing literature has also emerged to address the intercultural negotiation challenge through prescriptive advice to practitioners (e.g., Ma, 2007; Prestwich, 2007; Shapiro and Von Glinow, 1999). However, there is a paucity of studies that have been conducted to explore negotiation strategies and styles specifically with the Malaysians and Vietnamese. The main objective of this study is, therefore, to better understand how Malaysian and Vietnamese negotiating styles and strategies differ from US negotiating styles and strategies. Asian markets have become appealing for foreign investors, mainly US, due to the globalisation of business. Cross-cultural differences in the negotiation process arise as the cooperation between Asians and their culturally different western partners continue to increase at an unprecedented rate.

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Both Malaysia and Vietnam are among the fastest growing economies in the world; both countries have been supported in their growth by an influx of foreign direct investment (FDI) (US State Department, 2008) and represent an opportunity for significant business growth (US State Department, 2008). For example, investments from the US dramatically increased after the US-Vietnam Bilateral Trade Agreement took effect in December of 2001. Vietnam’s exports to the US (2007) totalled $10.6 billion and its imports from the US (2007) were $1.9 billion (US State Department, 2008). Recent legislation has resulted in increased business interest in Vietnam. In December 2003, the Bilateral Air Transport Agreement resulted in direct flights from Ho Chi Minh City to San Francisco. The accessibility of the Vietnamese markets with recent infrastructure developments makes it increasingly more advantageous for foreign businesses. Likewise, Malaysia has also presented opportunity for US businesses. US exports to Malaysia totalled $ 11.7 billion and US imports from Malaysia were $32.8 billion in 2007 (US State Department, 2008). Malaysia transformed its economy from 1971 through the late 1990s from relying primarily on the production and export of raw materials, into one of the world's leading trading nations in electronics and information technology (IT) goods. Malaysian success has been attributed to a development model based on private sector led growth, and was supported by the launching of the USMalaysia Free Trade Agreement on March 8, 2006.

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Literature review

Negotiation is a crucial aspect in all organisations. As international business increases, differences in values and beliefs create some challenges for cross-cultural negotiators. Culture is undoubtedly one of the most important factors that affect cross-cultural negotiation. According to Hofstede (1980, p.25), a culture is “the collective programming of the mind which distinguishes the members of one human group from another”. If cultures consist of collective programming (patterns of thinking), then the differences in collective programming could also become an important factor that affects the process and outcomes of negotiation. People from different cultures are programmed to react differently in cross-cultural negotiations (Prestwich, 2007; Kumar et al., 2005; Lewicki et al., 2007). Culture is an ingrained behavioural influence which affects the way collective groups approach, evaluate, and negotiate opportunities for international business. Cross-cultural differences are considerable, and negotiating across cultures differs dramatically from negotiating within the same culture (Brett and Okumura, 1998). Cultural background shapes values, and values in turn shape behaviours in a number of tasks including negotiation (Stark and Flaherty, 2003; Metcalf, 2007). According to Robbins and Judge (2008), the culture of negotiators greatly influences their values, which in turn affect the way they behave and act during negotiation. It is widely recognised that the expectations of managers as to how the negotiation is to proceed and how potential conflicts are to be managed are culturally variable (Kumar and Worm, 2004). A wide variety of dimensions of cultural variability have been identified by cross-cultural researchers (e.g., Hall, 1976; Hofstede, 1980; Triandis, 1995; Lewicki et al., 2006). Although the dimensions of cultural variability proposed by different researchers are not entirely independent of each other, two of the most popular conceptualisations of cultural variability are those of Hall (1976) and Hofstede (1980).

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Hall (1976) draws a distinction between high context and low context cultures. In high context cultures, the medium of communication is implicit rather than explicit. This dimension of cultural variability focuses primarily on the process by which communication occurs, rather than on the content of such communication. Hofstede (1980, 1991) identifies four dimensions of cultural variability. Hofstede’s four most commonly used dimensions are individualism-collectivism, power distance, uncertainty avoidance, and masculinity-femininity. These four dimensions of cultural variability heavily influence cross-cultural negotiation (Hofstede, 1980; Weiss, 1994; Odell, 2002; Ma, 2007). Theorists suggest that the individualism-collectivism dimension identified by Hofstede (1980) may indeed represent the most important dimension of cultural variability (Bahaudin, 2007; Tan and Lim, 2004; Triandis, 1995). In conducting this study, we used Lewicki et al.’s (2006) model of cross-cultural negotiations. The model outlines ten factors in the negotiation process that are greatly influenced by the culture of the negotiating parties as shown in Table 1. According to Lewicki et al. (2006), culturally diverse responses in a negotiation tend to fall within an identifiable range. The model depicts ten factors and their associated ranges of possible responses. The model explains how culture can influence negotiation and highlights relevant factors and conflict management styles that may impact the negotiation process. Although the ten factors are interrelated, they are useful in comparing and contrasting different aspects of cross-cultural negotiation. The ten factors are discussed briefly as follows: Table 1 No. 1

Ten ways that culture can influence negotiation Negotiation factors

Range of cultural response

Purpose of negotiation

Contract

Relationship Integrative win-lose

2

Negotiation perception

Distributive win-win

3

Personal styles/protocol

Informal

Formal

4

Communication styles

Direct, verbally

Indirect, nonverbally

5

Time sensitivity

High

Low

6

Group-oriented versus individuals

Collectivism

Individualism

7

Risk taking

High

Low

8

Form of agreements

Specific

General

9

Emotionalism

High

Low

10

Negotiators selection

Experts

Trusted associates

Source: Lewicki et al. (2006)

2.1 Purpose of negotiation Negotiating parties may view the purpose of the negotiation differently. For example, in Asian cultures the establishment of long-term relationships between the parties is more important than the actual deal; US view negotiation as a competitive process of offers and counteroffers (e.g., Foster, 1992; Harris and Moran, 2000; Kumar and Worm, 2004; Salacuse, 1998). Negotiators from Asian countries (e.g., Vietnam and Malaysia) seek sustainable business relationships rather than contracts (Prestwich, 2007; Tan and Lim,

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2004; Wunderle, 2007), whereas US negotiators consider the signing of a contract between the differing parties as their primary goal. They regard the contract as a binding agreement that outlines the rights, and obligations of the negotiating parties. This suggests that US negotiators need to invest in relationship building before conducting business if they are to successfully negotiate with Asians (Kumar et al., 2005; Salacuse, 2003). Relationships are important in Asian cultures and can lead to future negotiations. Thus, we hypothesise that: Hypothesis 1a

Due to the importance of preserving relationships, Malaysian and Vietnamese students will feel it is more important to maintain the relationship with the other party than will US students.

Hypothesis 1b

US students will feel more comfortable negotiating with acquaintances over the purchase of a vehicle than will Malaysian and Vietnamese students.

Hypothesis 1c

US students will feel more comfortable negotiating with strangers over the purchase of a vehicle than will Malaysian and Vietnamese students.

2.2 Negotiation perception Negotiators may have different perceptions about the negotiation process; some may view negotiation as integrative, while others view the process as distributive. Asian negotiators tend to favour integrative negotiations (win-win) where parties have compatible goals and can mutually gain from the final agreement; US negotiators tend to favour distributive negotiation (win-lose) where other’s goals are viewed as incompatible and only one party gains, at the expense of the other (Bahaudin, 2007; Chaney and Martin, 2004; Usunier, 2003; Walton and McKersie, 1965). For most Asian negotiators, the ideal business deal is one where everyone wins (Cullen and Parboteeah, 2005). Values such as mutuality and reciprocity point to a negotiation style which favours a win-win outcome rather than a win-lose one. In integrative negotiation, both parties work to develop a mutually satisfying decision using cooperative effort at mutual problem solving (e.g., Levinson et al., 1999; Saee, 2005) and is characteristic of most Asian negotiators (e.g., Ferraro, 2002; Salacuse, 2003). Based on the above arguments, we hypothesize that: Hypothesis 2a

US students will be more likely to assess winners and losers in the negotiation process due to their cultural backgrounds that support individualism and competition. The Malaysian and Vietnamese culture emphasise relationships and consensus building and students will have a preference for adopting an integrative approach to negotiation.

Hypothesis 2b

US students will be more likely than Malaysian and Vietnamese students to set bottom lines (reservation points) before they begin negotiations due to their preference for a competitive negotiation style.

Hypothesis 2c

Because the US negotiating style has historically been more competitive, US students will be more likely to negotiate when they perceive a higher probability of winning than Malaysian and Vietnamese students.

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2.3 Negotiation styles Negotiators may adopt different styles in interacting with their counterparts at the table. While US negotiators tend to prefer less formal sessions, Asians negotiators tend to prefer longer, more formal sessions. They insist on addressing counterparts by their titles (Salleh, 2005; Wunderle, 2007). Regardless of the negotiation style used, negotiating parties perceive that they are effective negotiators (Ready and Van, 2006). Based on the above arguments, we hypothesise that: Hypothesis 3a

Despite differences in negotiation style, students from the three sample countries (US, Malaysia and Vietnam) will feel that they are effective negotiators and their respective cultures encourage negotiation as a process.

Hypothesis 3b

Students from the three sample countries (US, Malaysia and Vietnam) will believe that they grew up in a family culture that encouraged negotiation.

2.4 Personal style Negotiators may adopt their own unique style when communicating with the other party. Observing negotiators styles can provide insight into the background and personality of the negotiators (Prestwich, 2007; Salacuse, 1998; Shakun, 2006). While the US culture values informality and equality, which leads to establishing personal and friendly relationships, Asian cultures value formality, which requires negotiators to address counterparts by titles, family names and present business cards (Abdullah, 1996; Bahaudin, 2007; Salleh, 2005; Triandis, 1995).

2.5 Communication styles This area focuses on the process by which communication occurs, rather than the content of the communication. Differences in negotiation across cultures can be explained by the context of the communication used during the process (Hall, 1976). US is a low-context culture with an emphasis on the clarity and explicitness of the message; in general, Asians tend to be high-context cultures in which meanings are derived indirectly from the context of the communication (e.g., Hall and Hall, 1990; Kitayama and Ishii, 2002; Triandis, 1995).

2.6 Time sensitivity This measure refers to how individuals relate to, manage, and schedule events. Some negotiators operate more sequentially, while others engage in different events simultaneously. US tends to view time as monochromic, sequential, and absolute; Asian cultures tend to view time as polychronic, repetitive, non-linear, and associated with other events (Lewicki et al., 2006; Wunderle, 2007).

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2.7 Group orientation versus individualism US tends to have an individualistic culture, whereas Asians tend to exhibit higher levels of concern for others (Kitayama and Ishii, 2002; Potter and Balthazard, 2002). Members of individualistic cultures tend to have loose ties among individuals and value independence focusing on individual goals. Individuals from collectivist countries tend to have stronger ties among individuals and value interdependence (Hofstede, 1980). Individualism-collectivism, as one cultural dimension, has been well validated by numerous researchers (e.g., Lewicki et al., 2006; Triandis, 1995). In individualist cultures, one opponent typically has little regard for the outcome of the other. Distributive outcomes are the norm (e.g., Triandis, 1995; Cellich and Jain, 2004). US are more likely to handle negotiation independently, and take full credit for success. In Asians culture, consensus building is a key aspect in decision-making (Ma, 2007; Salleh, 2005). Thus, we hypothesise the following: Hypothesis 4a

Due to their emphasis on relationships, Malaysian and Vietnamese students will be more likely to consider the other party’s limitations during the negotiation.

Hypothesis 4b

Due to their emphasis on relationships, Malaysian and Vietnamese students will be more likely to compromise with the other party.

Culture also affects the choice of strategy for conflict handling. Prior studies show that while an individualistic society emphasises individual rights and prefers competitive strategies for handling conflict that focus on outcome, a collective society tends to avoid conflicts and is more willing to compromise (Acuff, 2006; Friedman et al., 2000; Lewicki et al., 2006). Based on the above arguments, we hypothesise that: Hypothesis 5a

US students will feel more comfortable negotiating for their first salary than will Malaysian and Vietnamese students due to their competitive negotiating style.

Hypothesis 5b

US students will feel more comfortable negotiating for better working conditions and benefits than will Malaysian and Vietnamese students due to their competitive negotiating style.

2.8 Risk taking The propensity to take risk varies across cultures and impacts the negotiation process. Some cultures tend to be more risk taking, while others tend to be more risk averters (Hofstede, 1980). The willingness to accept risk can affect the process and outcomes of the negotiation. Negotiators with a low level of risk aversiveness will be open to new approaches and better able to tolerate uncertainties (e.g., Triandis, 1995; Salacuse, 1998).

2.9 Form of agreements The agreed upon settlement may take many different forms. While in the US, agreements are formalised and “the contract is seen as final and legally binding, and not open to renegotiation” [Mead, (2005), p.34), the agreement reached in an Asian culture may be influenced by family connections and relationships with friends (e.g., Brett and Okumura,

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1998). US negotiators tend to prefer detailed contracts that anticipate all possible circumstances (Buelens et al., 2008; Salacuse, 1998), whereas Asian negotiators tend to prefer an agreement in the form of general principles rather than detailed rules (Kumar et al., 2005; Tan and Lim, 2004).

2.10

Emotionalism

Cultural influences impact the degree to which individuals exhibit emotion when negotiating agreements. The appropriateness of displaying emotions is viewed differently across cultures (Robbins, 2008; Salacuse, 1998). While US culture tends to be more straightforward and encourage negotiators to express emotions openly, Asian cultures tend to encourage individuals to be less straightforward and hide their feelings during negotiation (Hall, 1976; Kitayama and Ishii, 2002; Prestwich, 2007).

2.11

Negotiators selection

The criteria for selection of individuals to the negotiating team vary across cultures. US tends to select negotiators on the basis of ability and experience; Asians tend to select individuals with higher status or the most senior figure or the head of a family (Abdullah, 1996; Fontaine and Richardson, 2003; Wunderle, 2007). Yet, a recent study by Ready and Van (2006) concluded that Vietnamese students indicated a greater need for negotiation skill training than do US students. In light of the above research, we hypothesise that: Hypothesis 6

2.12

Malaysian, Vietnamese and US students will feel they need to develop more skills in the negotiation process; however, Malaysian and Vietnamese students will place more importance on this due to their cultural need to preserve relationships.

Gender and negotiation

In addition to the above ten cultural dimensions that affect cross-cultural negotiation (Lewicki et al., 2006), gender tends to influence negotiation style and outcome of the negotiation process (e.g., Babcock and Laschever, 2003; Kray et al., 2001; Stuhlmacher and Walters, 1999). For instance, Babcock and Laschever (2003) found that men negotiated higher starting salaries than women. They concluded that women may feel uncomfortable using negotiation to advance their interests and are more uncomfortable on average than men. Kray et al. (2001) concluded that when stereotype threat is activated, men do better than women in negotiations. This may suggest that both the style and the outcome of negotiations are influenced by ‘gendered’ expectations and beliefs. In the light of the above studies, we hypothesise that: Hypothesis 7a

Malaysian, Vietnamese and US students will feel that men are better negotiators than women.

Hypothesis 7b

Malaysian, Vietnamese and US students will feel more comfortable negotiating with women than with men.

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Hypothesis 7c

3

Malaysian, Vietnamese and US students will believe they are more successful in negotiations with women than they are with men.

Research methodology

This study is based on a survey administered to college students enrolled in universities in three countries: the US, Vietnam and Malaysia. Three samples were used to test the hypotheses proposed in this study. The first sample consisted of 347 students from a national university in Malaysia; the second sample consisted of 391 students from a national university in Vietnam; and the third sample composed of 457 students from a midwestern university in the US. In this survey study, the respondents were asked to indicate the degree to which they agreed with 16 items related to negotiation. Responses were based on a seven-point Likert-type scale, ranging from strongly disagree (1) to strongly agree (7). Each respondent was asked to provide selected background information, including college standing, major, and gender as shown in Table 2. A single item was used to measure students’ perceptions about the skills, process and strategies of negotiation as shown in Table 3. For example, sample items included: ‘In negotiation, there is usually a winner and loser’; ‘I feel that I am an effective negotiator’; or ‘Men are better negotiators than women’. The respondents were also asked additional questions which could be answered by a simple yes or no. Malaysian and Vietnamese students completed paper surveys at universities in their respective countries, which were then manually entered into SPSS for analysis. US students completed an online survey in their business classes. The English version was translated into the Malaysian and Vietnamese language, respectively, and then back-translated to ensure the reliability of the translation. Table 2

Selected profile of sample USA

Variables Major

College standing

Gender Do you have work experience?

(n = 457)

Vietnam

Malaysia

100% (n = 391) 100%

(n = 347) 100%

Management

144

31.6

84

21.4

102

29.4

Bus. administration

87

19.1

142

36.2

119

34.3

Marketing

70

15.3

18

4.6

9

2.6 4.0

Accounting

39

9.5

28

7.2

14

Finance

33

7.2

6

1.6

16

4.6

Others

84

18.3

113

29

93

26.8

Freshman

0

0

0

0

35

10.1

Sophomore

3

.7

0

0

82

23.6

Junior

146

32.0

165

42.3

39

11.0

Senior

308

67.4

226

57.7

191

55.1

M

230

50.4

204

52.1

200

57.8

F

227

49.6

187

47.9

147

42.2

Yes

429

93.9

167

42.6

230

66.8

Perceptions and strategies in the negotiation process Table 3

Results of f-tests for US, Vietnam, and Malaysians and negotiation related items

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Results and findings

Selected demographics of the respondents for each country are provided in Table 2. Over 50% of the students responding from all three countries were management or business administration majors. In the USA, 31.6% of the respondents were management majors compared with 21.4% of the Vietnamese respondents and 29.4% of the respondents in Malaysia. Business administration majors comprised 19.1% of the respondents in the USA, compared with 36.2% of the Vietnamese respondents and 34.3% of the Malaysian respondents. Other business areas represented in the sample included marketing, accounting and finance majors. Juniors and seniors comprised the majority of the sample in all three countries. Males and females comprised roughly one half of the respondents in each country. The majority of the respondents had work experience: almost 94% of the US sample had work experience, followed by 66.2% of the Malaysian sample and 42.6% of the Vietnam. Table 3 provides the means, standard deviations, and ANOVA results of the respondents with degrees of freedom and f and p-values reported. All the means for each item in the three samples varied from 3.0 to 5.7. Table 3 also reports the results for the calculations of the alpha coefficients made to check the reliability of the variables. Alphas for the three samples were .76 (US), .73 (Malaysia) and .82 (Vietnam) and are generally considered satisfactory (Nunnally, 1979). In testing the hypotheses, we conducted a number of ANOVA tests in order to determine whether statistically significant differences in negotiation perception, style and strategy among the college students in the three sample countries could be found. For convenience purposes, we grouped the sixteen hypotheses into the following six headings: perceptions, relationships, styles, effectiveness, strategy, salary and benefits, needed skills and gender differences.

4.1 Perceptions of relationships in negotiation process Table 3 reports that Malaysian (mean = 5.2), Vietnamese (mean = 5.3), and US (mean = 5.1) students believed that maintaining relationships is important in the negotiation process. This suggests that not only Asians, like Malaysians and Vietnamese, but also US would prefer to build and maintain long-term relationships. This finding contradicts several prior studies that indicated that Asians, but not US, prefer to establish and maintain relationships (e.g., Wunderle, 2007; Potter and Balthazard, 2000). Further, respondents from all three sample countries felt comfortable negotiating with either acquaintance or strangers over the purchase of a used vehicle. However, US indicated more comfort in negotiating with either party (i.e., acquaintances or strangers) than did either the Vietnamese or Malaysian respondents. However, US students prefer to negotiate with strangers (mean = 5.5) over one time purchases of a used vehicle rather than acquaintances (mean = 4.7).

4.2 Perceptions of negotiation style and strategy Malaysian and Vietnamese students are significantly more likely than US students to agree that there are winners and losers in negotiations (F(2.1190) = 110.7, p < 0.001).

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That is, US students do not agree that there are winners and losers (mean = 3.7), and Malaysian students indicated the highest level of agreement with this statement (mean = 5.1). This finding runs contrary to prior studies on negotiation style and strategy (e.g., Chaney and Martin 2004; Potter and Balthazard, 2000; Usunier, 2003) and suggests that US students are now adopting more of a win-win negotiation style. Table 3 further indicates that all of the respondents had a willingness to develop strategies by setting bottom lines before they began negotiating. However, Malaysian (mean = 5.3) and Vietnamese (mean = 5.6) students indicated significantly more willingness to employ this strategy than US students (mean = 5.1) with F(2.1191) = 3.2, p < 0.001. Table 3 also reports that there are significant differences in risk assessment between Malaysian, Vietnamese and US students. Malaysian (mean = 5.6) and Vietnamese (mean = 5.2) students indicate that they are more likely to negotiate only when they feel there is a high probability of winning. The US students (mean = 3.9) negotiate even when they may not win and will accept more risk (F(2.1187) = 172.6, p < 0.001). Table 3 reveals that respondents from the three sample countries tend to consider the other parties’ limitations during the negotiation, although Malaysian and Vietnam students indicate a significantly higher level of willingness to consider limitations than US students (F(2.1186) = 10.5, p < 0.001). The higher level of willingness demonstrated by both Malaysians and Vietnamese can be attributed to their collectivist cultural background. In addition, all groups indicated a willingness to compromise in negotiations (US mean = 5.2; Vietnamese mean = 5.4; and Malaysian mean = 5.4). However, Malaysian and Vietnamese students are more willing to compromise than are US students (F(2.1194) = 2.8, p < 0.001).

4.3 Perceived effectiveness In general, all three samples indicated that they were effective negotiators (Malaysian mean = 5.0; Vietnamese mean = 4.7; and US mean = 5.1). This finding suggests that all respondents believe that their cultures support negotiation as a process.

4.4 Perceptions of salary and benefits negotiations The results in Table 3 show that Malaysian (mean = 4.3), Vietnamese (mean = 4.6) and US (mean = 4.1) students were only slightly comfortable negotiating for their first salary. However, US students (mean = 5.1) are more comfortable negotiating for better working conditions and benefits than were Malaysian (mean = 4.4) and Vietnamese (mean = 4.8) students (F(2.1184) = 31.0, p < 0.001).

4.5 Perceptions of needed skill development Table 3 reports that although all respondents [Malaysian (mean = 5.4), Vietnamese (mean = 5.7) and US (mean = 5.1) students] perceived that they need to develop more skills in negotiating; Malaysian and Vietnamese students were in greater agreement than US students for more negotiation skill development (F(2.1190) = 5.7, p < 0.001). US may view negotiation as a more common practice in settling differences and feel more experienced with this process.

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4.6 Perceptions of gender differences in negotiation process Our finding shows that there were significant differences in perceptions regarding the three gender-related items among Malaysian, Vietnamese and US students. For instance, Malaysian students felt that men were better negotiators than women (F(2.1193) = 232.6, p < 0.001). Both US and Vietnamese students did not agree with this statement. Malaysian (mean = 4.4) and Vietnamese (mean = 4.4) students indicated significantly more comfort in negotiating with women than did US students (mean = 3.8) (F(2.1187) = 14.9, p < 0.001). Furthermore, US students (mean = 3.8) indicated that they were not more successful in negotiations with women than with men, whereas Malaysian (mean = 4.3) and Vietnamese (mean = 4.1) students felt slightly more successful (p < .001). One possible explanation is that the male dominated culture of most Asian countries could lead to the perception that men are more effective negotiators than are women.

4.7 Discussion As previously indicated, globalisation has resulted in managers working to improve their knowledge and skills in the cross-cultural negotiation process. In this study, we examined differences in perceptions of negotiation skills, styles, and strategies among the respondents of three sample countries (Malaysia, Vietnam and US). Our findings in Table 3 show that of the 16 items related to negotiation skills, styles and strategies, 14 measures revealed significant differences. These results demonstrate that cultural background influences the negotiation process and signals that the complexity of negotiations increases when the parties are from different cultures. As predicted, both Malaysian and Vietnamese students were found to be less willing to accept risk than US students. Malaysian and Vietnamese students tended to negotiate if they felt they had high probability of winning. This behaviour can be attributed to the collectivistic culture, which encourages members to be less risk seeking than an individualistic culture like the US. Wunderle (2007, p.36) remarks that “generally, most Asian negotiators seek to avoid uncertainty”. Our finding is consistent with Hofstede’s (1989) research where some cultures are willing to take more risk than others when reaching decisions and may react more quickly. This willingness or unwillingness to accept risk during the negotiation process results in different strategies and outcomes. Our results show that US students tended to favour a win-win approach (integrative negotiation) and did not view negotiation as a win-lose proposition (distributive negotiation). Most of the previous studies (e.g., Triandis, 1995; Potter and Balthazard, 2000) concluded that negotiators in Western Europe and North America tended to consider negotiation as being fundamentally distributive (win-lose); whereas negotiators in most Asian countries tended to regard negotiation as integrative. One possible explanation of our finding is that, although in the US, negotiation was previously defined as a win-lose relationship (distributive negotiation), US are changing their negotiating style and adopting more of an integrative negotiation style (Levinson et al., 1999). Another possible explanation is that US students may have limited experience in real world business negotiations and may have responded in a ‘politically correct’ way expressing the ideals of a negotiation process (i.e., we all win).

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Our finding demonstrates that respondents from all three sample countries focus on the process and maintaining the relationship with the parties to the negotiation. Contrary to previous research (Bahaudin, 2007; Hendon and Hendon, 1990; Wunderle, 2007) which has not focused on the maintenance of relationships by US students, US, like Malaysians and Vietnamese, are interested in establishing and maintaining long-term relationships. The vast majority of the previous studies suggested that the individualistic negotiator is more concerned with preserving individual rights and attributes, whereas the collectivist negotiator is more concerned with preserving relationships (e.g., Acuff, 2006; Osman-Gani and Tan, 2002; Wafa and Tee, 1997). Business is contractual in much of Europe and North America. Personal relationships are seen as biased as they can cloud objectivity and lead to complications. In much of Asia, business is personal. Partnerships will only be made with those they know, trust and feel comfortable with. Our finding supports research that has underscored that parties may sacrifice their own preferences in order to preserve the relationship that can lead to future negotiations (e.g., Wunderle, 2007; Tan and Lim, 2004). Survey results show that Malaysians and Vietnamese are more willing to compromise than US. This is consistent with most previous studies (Friedman et al., 2000; Salleh, 2005). As previously indicated, while a collective society tends to avoid conflicts and works to resolve minor issues before they become serious; an individualistic culture tends to prefer competitive strategies for handling conflict that focus on outcome (Salleh, 2005; Friedman et al., 2000; Salacuse, 2003). Asian cultures tend to encourage people to be more willing to compromise. This is because they want to focus on the process and maintain the relationship. To the Asians, achieving their negotiation goals is vital, although their values in preserving harmony and respect for elders take precedence in the negotiation process. They are less confrontational and avoid any position whose withdrawal would bring about loss of face (e.g., Salacuse, 1998; Bahaudin, 2007). Triandis (1995) remarks that in the US culture open conflict is considered as a good way of resolving problems, unlike in Asia where open conflict is almost always avoided. Thus, one can argue that the expectations of managers as to how the negotiation is to proceed and how potential conflicts are to be managed are culturally variable (e.g., Acuff, 2006; Cellich and Jain, 2004; Kumar et al., 2005). Respondents from the three sample countries felt only slightly comfortable negotiating for their first salary. However, the US students felt more comfortable negotiating for benefits. A possible explanation is the rising cost of benefits in the US, which in turn makes benefits an important part of the overall compensation package. At present, the cost of benefits (including healthcare cost) consists of 40% of the overall compensation package (Robbins and Judge, 2008). This may suggest that, if recruiters and hiring managers are to effectively negotiate salary and benefits of new graduates, they need to understand how graduates negotiate salary and benefits in their first job. Our finding also indicates that US students are significantly more likely than Malaysian and Vietnamese students to indicate that they grew up in a family culture that encouraged negotiation. This demonstrates the competitive nature of the US culture. This finding is also consistent with previous studies showing that in low context cultures and highly individualistic societies, negotiators focus more on results (e.g., Buelens et al. 2008; Triandis, 1995). With regard to gender and negotiation, an interesting finding is that, while Malaysian and Vietnamese students believed that men are better negotiators than women, US

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students have higher disagreement in this belief. This finding may be mainly due to the male dominant culture in many Asian countries, which in turn leads to the perceptions that men are superior in making and negotiating decisions. This may also suggest that Asians tend to believe less in gender equality than US. Prior research indicates that there were differences in the style and outcomes of negotiation between men and women. However, the difference was not significant (e.g., Gneezy et al., 2001; Stuhlmacher and Walters, 1999; Tanggaard and Bloksgaard, 2008; Walter et al., 1998). For instance, according to Stuhlmacher and Walters (1999), men tend to negotiate better outcomes than women. Walter et al. (1998) concluded that women behave more cooperatively in negotiation than men. Gneezy et al. (2001) concluded that women may shy away from competition, especially competition with men. Differences in negotiation outcomes between men and women are mainly due to differences in perceptions, behaviours, and contextual factors. The stereotype of women as agreeable, social, pleasant, and other-oriented may affect negotiation. The findings suggest that in cross-cultural negotiation, we need to expect different perceptions of the negotiation process and misinterpretations of the other’s behaviour (e.g., Ma, 2008; Weiss, 1994; Wunderle, 2007; Yudice, 2003). Negotiating has always been challenging, but it is even more complex and difficult when there is a cross-cultural negotiation due to different cultural schemata through which they interpret events (Acuff, 2006; Metcalf, 2007). However, having a good understanding of cultural nuances will increase the success in avoiding barriers and failures in the international business arena. In negotiation, mutual understanding is a prerequisite for successful negotiations. This is more important if the cultural background of the parties is different (e.g., Foster, 1992; Potter and Balthazard, 2000). It must be noted that the ten cultural variables included in Lewicki et al.’s (2006) model are very interrelated and interdependent. Nevertheless, we found them useful for comparing and understanding negotiation styles, perceptions and strategies employed by the respondents from the three sample countries.

5

Implications and future research direction

This study found a number of differences in negotiation style and strategies between US students on the one hand, and Malaysian and Vietnamese students, on the other hand. Such differences could have both theoretical and practical implications for cross-cultural negotiations in general, and US, Malaysian and Vietnamese managers in particular. The increasingly global business environment requires managers to approach the negotiation process from the global business person's point of view. Culture affects the range of strategies that negotiators develop as well as the tactics implemented. Since negotiation practices (strategies and style) differ from country to country, understanding the culture of counterparts is a prerequisite for successful cross-cultural negotiation. If cross-cultural negotiations are to succeed, negotiators need to have a good understanding of the counterparts’ culture and cross-cultural negotiation skills. Cross-cultural negotiation is complex due, in part, to different values, beliefs and backgrounds of the participants. More information about cross-cultural differences in negotiation is needed. To avoid misunderstanding, cross-cultural negotiators need to learn, understand, and accommodate culture differences, especially during the process of negotiation. “As negotiators understand that their counterparts may see things very differently than they do, they will

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be less likely to make negative judgments and more likely to make progress” [LeBaron quoted by Wunderle, (2007), p.36]. “An understanding of the counterparts’ customs and business practices will smooth the way to fruitful negotiations” [Kumar and Worm, (2004), p.314]. In addition, cross-cultural negotiators need to have good cross-cultural negotiation skills. In an increasingly competitive, dynamic and ambiguous business environment, cross-cultural negotiation skills are critically vital to the success and survival of companies. Adler (2002, p.179) argues that “negotiating effectively cross-culturally is one of the single most important global business skills”. One way of improving cross-cultural negotiation is to undertake some cross-cultural training to help improve the outcome of negotiation (Bahaudin, 2007; Salacuse, 2003; Sebenius, 2002; Wunderle, 2007). Cross-cultural negotiation skills would help participants tailor their approach to the negotiations in a way that maximises the potential of a positive outcome. Ineffective negotiation skills may result in lost business, poor working relations and unfavourable contract discussions with overseas clients, partner or suppliers. The ability to adapt negotiating skills to those of the local market is now, more than ever before, crucial (e.g., Shapiro and Von Glinow, 1999; Tan and Lim, 2004). Hofstede (1989, p.201) concludes that “for success in international negotiations, it is important that parties acquire an insight into the range of cultural values they are going to meet in the negotiations”. Cross-cultural negotiators should recognise that each country and culture is different and, as a result, different business and negotiation skills are required (Kumar et al., 2005; Potter and Balthazard, 2000; Tan and Lim, 2004; Triandis, 199). This study concludes that cross-cultural negotiations are more complex than domestic negotiations mainly due to the added dimension of cultural diversity. However, having a good understanding of different issues of negotiation will increase the success in avoiding barriers and failures in the international business arena. Hence, the growth of international business has created an important need to more fully understand cross-cultural differences in the perceptions and methods of the negotiation process. The present study extends previous research on cross-cultural negotiation by providing a qualitative and quantitative assessment of perceptions of college students from three sample countries (US, Malaysia and Vietnam). This study provides some understandings about perceptions of negotiation and negotiation skills. This study demonstrates how cultural differences affect issues in negotiation. Hence, it can be seen as adding to the literature on cross-cultural negotiation. Unlike most prior research, this study empirically tested negotiation related issues by taking a larger sample size (N = 1195). While this study is an important step in understanding the impact of culture on negotiation, it also leaves some questions open for future research. First, the study used the perceptions of college students from three sample countries (US, Malaysia and Vietnam) on different negotiation related issues. College students have limited work experience and negotiation participation. The findings may not be generalisable to the whole population (Buelens et al. 2008). Hence, future research should be directed at examining the perceptions of managers who have been engaged in real business negotiations. Second, the measurement of perceptions and negotiation skills was based on single items, which were created from relevant literature. Single items may not fully capture the concepts and may not yield precise results. Future research should try to replicate the current study in other Asian countries (collectivist culture) before generalising the findings. Third, future research could be aimed at conducting a

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longitudinal study across countries to evaluate significant changes of college students’ perceptions of negotiation after actual business negotiations are conducted.

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