The Impact of Cultural Elements in Cross-Cultural Business Negotiations. An Analysis of Japanese and American Negotiation Styles

Abstract

Cross-cultural negotiations are very challenging for global executives while they deal with many barriers to intercultural deal-making process. Culture affects every phase of the negotiation process. This study compares cultural differences and differences in negotiation styles between the American and Japanese executives. The main objective of this study is to examine the impact of culture on Japanese-American business negotiations and to analyze the Japanese and American executives’ mutual perception of each other.

The theoretical framework of the study is built of three chapters. The first one consists of background information on the historical development of Japanese-American business relations. It also introduces Hofstede’s perception on the term “culture” and Ghauri’s & Usunier’s perception on the role of communication in negotiation process. The second chapter consists of Mitchell’s cultural components, Hofstede’s cultural dimensions and Samovar’s model of intercultural communication. Moreover, it deals with barriers to intercultural communication and the role of stereotypes in business relations. The third chapter consists of Saner’s negotiation life cycle, Salauce’s theory about negotiation phases and basic approaches to negotiation. Furthermore, this part is dedicated to Ghauri’s theory about the role of business relationships in negotiation who claims that a good atmosphere and trust between business partners are as important as a well-prepared strategy.

The empirical part of the study contains an explorative investigation, which is a comparative, quantitative and qualitative study that consists of the comparison between negotiation styles and questionnaire that interviews professional negotiators from the Japanese and American companies, which belong to the electronics and automotive industry. In this part of the study it was found out cultural differences affect negotiation styles of the respondents, negotiation process itself. Moreover, the mutual perception has changed over the last decade.