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QUESTION; discuss the impact on culture on negotiations citing relevant examples.
INTRODUCTION;
Alternative Dispute Resolution is a structured negotiation process under which the parties to a dispute negotiate their own settlement with the help of an intermediary who is a neutral person and trained in the techniques of ADR. The various strategies involved in ADR include negotiation, conciliation, mediation, mini-trial/early neutral evaluation, court annexed ADR and arbitration.^1
Negotiation is the oldest and most common means of alternative dispute resolution. According to Black's Law Dictionary 2 , negotiation is "a consensual bargaining process in which the parties attempt to reach agreement on a disputed or potentially disputed matter. The result is usually a mutually acceptable agreement. It is also a bilateral or multilateral process in which parties who differs over a particular issue attempt to reach an agreement or compromise over that issue through communication.^3 Negotiation is a form Alternative Dispute Resolution where parties who have a dispute discuss it with a view to finding a mutually acceptable solution. Alternative dispute resolution ("ADR") is a device intended to solve disputes, out of court or by non-judicial devices that as an alternative to ordinary or traditional types of dispute settlement procedures.^4
According to the Uganda National Culture Policy^5 Culture concerns itself with socially transmitted behavior patterns, arts, beliefs, institutions, and all other products of human work and thought. Culture includes intangible and tangible heritage, which is varied, complex, and in constant evolution.
Therefore Culture is defined differently according to the research field where it is being studied. In terms of an organization, Hofstede (1984 )^6 defines culture as the collective programming of the mind which distinguishes one group from another. In the construction industry, culture is about characteristics of the industry, approaches to construction, competence of people, and the goals, values and strategies of the organizations they work in.^7 It is not uncommon, for private corporate suits to be settled by direct negotiations between the companies, or with the government, as in the instance of a telecommunication antitrust case
(^1) Hon. Justice G. W. M. Kiryabwire: Alternative Dispute Resolution – A catalyst in Commercial Development: A case study from Uganda; in Uganda Living Law Journal , Vol. 3: No. 2 December 2005, at p. 145 2
3 Black’s Law Dictionary 9th edition page 1136 ID. HY ARN ed. dictionary of conflict resolution 1991, 314 (^4) International law 6th edition by Malcom N. Shaw at page 1132 (^5) Uganda National Culture Policy Ministry of Gender, Labour and Social Development December 2006 (^6) Hofstede (1984) Cultural dimension theory (^7) 2009) Impacts of cultural differences on project success ın construction
after more than twelve years.^8 The major disputes involving the price and supply of Uranium between Westinghouse and certain utilities have been settled by direct negotiations and the withdrawal of court suits.^9
Having defined culture and Negotiation under ADR t his discussion will attempt to relate it to a cultural perspective and its dimensions will be discussed in this essay. Culture plays a significant role in negotiations, influencing how parties perceive, approach, and ultimately resolves disputes. Here are some impacts of culture on negotiations, along with relevant examples. The impacts of culture on negotiations are as discussed below;
Communication Styles And Languages; Different cultures have distinct communication styles, which can influence how contract terms are communicated and interpreted. For instance, some cultures may value direct communication, while others may prioritize indirect communication mostly in Asian countries. Some cultures prioritize politeness and diplomacy, even in negotiations, which leads to the use of euphemisms or vague language to convey disagreement or difficult topics, which might not be immediately apparent to those from more direct cultures.
In some cultures, respect for authority and hierarchy is crucial, which affects how contract terms are communicated. To navigate these challenges, it's important to conduct intercultural communication training, involve individuals familiar with both cultures, and strive for clear and unambiguous language in contracts. By understanding and respecting these communication style differences, parties can improve the effectiveness of contract negotiations in an international context.^10
Decision-Making Processes; Cultural differences influence how decisions are made within negotiation settings. Some cultures prioritize consensus-building and group decision-making, while others emphasize individual authority and autonomy. Hypothetically, in negotiations involving a Middle Eastern company, decisions may be made collectively by a group of stakeholders, including senior executives, family members, and advisors. In contrast, negotiations with a Western company may involve decisions made by a single decision-maker or a small executive team. The Pepsi-Cola Company v. The Coca-Cola Company^11 , is a landmark case, Pepsi sued Coca-Cola for false advertising, alleging that Coca-Cola's marketing campaign misled consumers about the taste preferences of blind taste-test participants. The case ultimately went to negotiation to resolve the dispute outside of court. The impact of Culture is noted when the negotiation process in this case is influenced by the cultural backgrounds of the parties involved. Both Pepsi and Coca-Cola are multinational corporations with operations in various countries, each with its own cultural norms and communication
(^8) Telecommunications Regulation Today and Tomorrow (E.M. Noam ed. 1983) (^9) Westing house Elec. Co. v. Kerr-McGee Co., 580 F.2d 1311 (^10) Gopa Nair ;How cultural differences impacts contract drafting and negotiation Published, 24th Oct, 2023 (^11) Pepsi-Cola Company v. The Coca-Cola Company (1985)
thorough understanding of all aspects of an agreement. Understanding the negotiation pace preferences of different cultures helps build trust, respect, and a higher likelihood of successful agreements in cross-cultural business contexts.
Corporate Cultures ; Negotiators likely had to address issues such as creative control, leadership structure, and integration strategies while respecting the unique identities and values of both companies.^17 In Disney's Acquisition of Pixar Animation Studios (2006 ) Disney's acquisition of Pixar Animation Studios involved complex negotiations between the two companies' executives, including Steve Jobs (Pixar) and Bob Iger (Disney). The acquisition transformed Disney's animation division and solidified Pixar's role within the company. The negotiation process in this case was influenced by the distinct corporate cultures of Disney and Pixar. Disney, a traditional entertainment conglomerate, and Pixar, a pioneering animation studio known for its creative and innovative culture, had to navigate cultural differences and align their visions for the future.
Time orientation ; Attitudes to time vary among cultures. Negotiators from western cultures such as Americans may believe that engaging in small talk at the beginning of a new negotiation relationship is a waste of time. Whereas, negotiators from relationship-oriented cultures such as Chinese, may use such conversation to consolidate knowledge about the extent to which the other party is to be trusted. The Chinese prefer slower negotiations, while the Americans, believe that time is money and are in the hurry to conclude the deal and this reflects their contrasting views on the purpose of a negotiation. The Americans try to reduce the formalities and get the contrast signed while the Chinese invest time in pre-negotiating processes to get to know their potential business partner and determine if there is the possibility of a long term business relationship. Thus an attempt to shorten the process might be viewed as efforts to conceal something which leads to mistrust.^18
Tribal Values and Cultural Relations ; In Uganda where a high percentage of land is customary owned, not much can be achieved on land without the involvement of cultural/clan leaders. However, more efforts are needed to enable cultural and traditional leaders understand basics of equity and inclusion, democracy, human rights and mediation concepts. Societies that deem cultural relations to be important would seek solutions which are more cooperative and would maintain relations. Tania Sourdin notes that in modern society at a domestic level less importance has been placed on cooperative relations as most relations are one-off.^19
(^17) Richard G.Shell Inthe book of Negotiation Strategies for Reasonable people (^18) Sandefur, J., & Siddiqi, B. (2013, May). Delivering justice to the poor: theory and experimental evidence from Liberia. In World Bank Workshop on African Political 19 Lan Yuan LIM ‘Impact of Cultural differences on dispute resolution ‘AUSTRALIAN DISPUTE RESOLUTION JOURNAL 7 (3) August 1996: p.197-204 7 ADRJ 197
Ethical and Moral Considerations : Cultural differences in ethical values and moral norms can impact negotiations, especially when dealing with topics such as bribery, intellectual property, and confidentiality. Cultural differences in ethics and morals require careful consideration and sensitivity to ensure that contract negotiations proceed smoothly, ethically, and in a manner that respects the values and expectations of all parties involved.
Contractual Interpretation : Cultural nuances can affect how contract terms are interpreted. Legal concepts and language may not have direct equivalents in other languages or legal systems, leading to potential misunderstandings. These nuances stem from differences in language, legal systems, social norms, and business practices across cultures. Parties should be aware of these differences and use clear, unambiguous language.
Uncertainty Avoidance ; the uncertainty avoidance index is defined by the level of tolerance for uncertainty and ambiguity the members of a society have. Countries that have a high index number, such as Japan, Costa Rica, and France, are incredibly intolerant of ambiguity. They have strict codes of behavior, laws, and guidelines. Lower-indexed countries, such as India, Sweden, and the United States show acceptance of differing ideas, and their societies tend to have fewer regulations. Germany, for example, has a high level of uncertainty avoidance.
Gift-giving; is a way of socializing and showing respect in some cultures. In other cultures, it may be seen as offensive, or it may even be illegal to exchange gifts. Western cultures do not like to exchange gifts because it could be seen as bribery. Some Eastern cultures place such a high importance on gift-giving that a certain color of wrapping paper could deem the entire gift as disrespectful.^20 In most East Asian cultures, negotiators will reject the gift upon first introduction. This is to avoid being perceived as greedy or impatient. Thus, when giving a gift to an East Asian negotiator, it is important to offer the gift more than once. When offered a gift by an East Asian negotiator, it is important to follow the same behavior and reject the gift at first. It is also important to say “thank you” after they accept the gift.^21
Attitude; Culture to culture, attitudes towards negotiating can differ greatly. In certain cultures, negotiation is viewed as a collaborative method that prioritizes forming bonds and achieving mutually beneficial outcomes. Others might take a more assertive and competitive stance. To adapt and promote fruitful talks, it is crucial to comprehend these opposing viewpoints. In the North Sea Continental Shelf Case as per ICJ Reports^22 the court held that parties are under an obligation to enter into negotiation with a view of arriving at an agreement and not merely to go through a formal process of negotiation with a sort of prior condition. In Ford Pinto Litigation^23 the Ford Motor Company faced litigation over safety
(^20) Hurn, B. J. (2007). The influence of culture on international business negotiations. Industrial and Commercial
Training, 39(7), 354-360. 21
22 Ciolli, C. (2017, December 8). The Dos and Don'ts of Gift-Giving Around the World. AFAR. 23 North Sea Continental Shelf Case as per ICJ Reports, 1969, pp. Ford Pinto Litigation (1970)
Protocol; Cultures differ in the degree to which protocol, or the formality of the relations between the two negotiating parties, is important. A familiar communication style is quite common; first names are used, for example, while titles are ignored. Contrast this with other cultures. Many European countries are very formal, and not using the proper title when addressing someone is considered insulting^28.
Affective versus Neutral ; Cultural norms shape the negotiation strategies and tactics employed by parties. These strategies may include concession-making, face-saving techniques, and relationship-building efforts. Affective versus Neutral, in an affective culture people do not object to a display of emotions. Affective cultures may interpret the less explicit signals of a neutral culture as less important. In a neutral culture, it is incorrect to express feelings overtly. Neutral cultures may think the louder signals of an affective culture too excited, and over- emotional. In neutral cultures, showing excess emotions may erode the power to interest people. Dilemmas arising include detached or enthusiastic, long pauses or frequent interruptions and professional or engaged dialogues. For example, in USA compared to East Asia, the culture tends more towards being affective.^29 For instance, negotiations between a Chinese company and a USA company, the Chinese negotiators may use the "win-win" approach, emphasizing mutual benefit and cooperation. They may also employ strategies such as "saving face" to preserve dignity and respect. In contrast, the UAS negotiators may focus on legalistic arguments and seek to maximize their own interests.
In conclusion , culture is a key aspect that needs to be observed by a good negotiator in a bargain. Therefore, a negotiator who is willing to work away has bargaining power and this is gained through knowing who you are, and who your negotiation counterpart is and this pertains to culture. Culture profoundly affects negotiations, influencing communication, decisionmaking, conflict resolution attitudes, and negotiation strategies. Recognizing and understanding cultural differences is essential for negotiators to navigate complexities, build trust, and achieve mutually beneficial outcomes in negotiations.
REFERENCES;
- Black’s Law Dictionary 9th edition page 1136.
- Uganda National Culture Policy Ministry of Gender, Labour and Social Development December 2006.
- Journal of Economics and Behavioural studies Vol. 4 No.5, pp. 297-306 May 2012.
- Gannon, 2001 the Impact of Culture on Business Negotiations Nadia L.
- Gonzalez Grand Valley State University. Gopa Nair; How cultural differences impacts contract drafting and negotiation Published, 24th Oct, 2023.
(^28) Hofstede (1984) Cultural dimension theory (^29) Trompenaars et al. 1999
- How to negotiate deals, resolve disputes, and make decisions across cultural boundaries by Jeanne M. Brett Khan, M. A., & Ebner, N. (Eds.). (2019).
- Palgrave handbook of cross-cultural business negotiation. Cham, Switzerland: Springer International Publishing.
- International law 6th edition by Malcom N. Shaw at page 1132.
- International law 6th edition by Malcom N. Shaw Hofstede (1984).
- Cultural dimension theory (2009) Impacts of cultural differences on project success ın construction Hofstede (1984).
- Cultural dimension theory Richard G.Shell Inthe book of Negotiation Strategies for Reasonable people Telecommunications Regulation Today and Tomorrow (E.M. Noam ed. 1983).
- Westing house Elec. Co. v. Kerr-McGee Co., 580 F.2d 1311.
- Peter Condliffe, Conflict Management A Practical Guide(Fifth edition,2016) 452.
