Determining the choice of international business negotiation strategies: The role of culture

Abstract

While prior research has shown that choice of international business negotiation strategy (i.e. integrative strategy vs. distributive strategy) varies substantially across countries, little is known about the impact of cultural values on the choice of international business negotiation strategy. Therefore, the purpose of this thesis is to investigate the role of culture in determining the choice of international business negotiation strategy. The theoretical framework of this thesis is developed by integrating the Hofstede’s four dimensions of cultural values (i.e. Power distance, Individualism vs. collectivism, masculinity vs. femininity, and uncertainty avoidance) and international business negotiation strategies (i.e. integrative vs. distributive negotiation strategy). Using survey data from 226 international business negotiators emanating from three culturally different countries: Pakistan, Germany, and Finland, and using multiple regression analysis, integrating results are found. The results reveal that in particular power distance, masculinity, and uncertainty avoidance negatively relate to the choice of integrative negotiation strategy. Further contrary to expectations, it is found that collectivism also negatively relates to the choice of integrative negotiation strategy. Considering that prior research has taken countries as a proxy for cultures, the findings of current thesis contribute to our understanding about the role of culture values in choice of international business negotiation strategy.