Cultural elements in cross-cultural business negotiations. Study of business negotiations between Finnish and Russian.

Abstract

International business negotiations are important part of business life. Cultural differences affect international business negotiations in many ways. The main objective of this study is to describe and analyze business negotiations between Finland and Russia from cultural perspective. Aim is to find cultural differences and similarities between Finnish and Russian culture and find out how those affect business negotiations between these two countries.

The framework of the study consists of Ghauri’s (1996) international business process model and Hofstede’s (1980-2005) cultural dimensions. Ghauri’s model consists of three negotiation stages: pre-negotiation stage, face-to-face negotiation stage and post-negotiation stage. Model presents also different factors that affect those stages. Cultural factors are the most important factors for this study and those factors are emphasized by using Hofstede’s cultural dimensions and other cultural variables in addition.

The empirical part of the study consists of semistructured interviews of Finnish and Russian businessmen. Interviewees have long experience of negotiations between Finland and Russia. In empirical part it was found out that cultural differences affect all stages of negotiations. According to this study, the most important cultural factors in negotiations between Finnish and Russian are power distance, time perception and decision making, because biggest differences in negotiations occur in these cultural variables. Negotiation style between Finnish and Russian differ a lot and Russian use tougher negotiation style.