Sogang IIAS Research Series on International Affairs Vol. 2 83 Cross-cultural Studies on the Negotiation Cultures in the Northeast Asian Countries and Western Countries : Focusing on Japan and China Se-Young Ahn Graduate School of International Studies Sogang University I. Introduction Around the world, people negotiate: the concerned parties can be government to government, company to company or government to company. Generally, negotiations between two governments such as the 1997 Korea-US automotive trade negotiations are called 'International Trade Negotiation', and in the case when the concerned parties are companies, it is called 'International Business Negotiation'. International negotiation, as explained above, can be different from domestic negotiation in many aspects; however, the biggest difference above all is that it is a cross-cultural negotiation. International negotiation is a negotiation between two parties whose cultural backgrounds are different each other. A good number of inter-cultural literatures suggest that negotiators behave differently when they are with members of their own culture 84 SE - YOUNG AHN from when with members of foreign culture. Zartman1 point out that "international negotiation exhibits both universal patterns determined by the finite possibilities of its nature and local variations determined by cultural practices and differences among its practitioners". Culture may have a great impact on international negotiation in a number of ways. Sawyer and Guetzkow were among the first to posit that negotiators' behaviors and outcomes can be influenced by situational constraints, such as inter-cultural negotiations versus intra-cultural negotiations: "The face-to-face conduct of negotiations may be influenced by behavioral discrepancies when persons of different cultural backgrounds are brought together".2 Evans also stated that intra-cultural negotiators can be more attractive to partners and achieve higher negotiation outcomes than inter-cultural negotiator.3 Nowadays, there are many kinds of culture circles existing, but the culture that has the most distinguished characteristics as a crosscultural negotiation in the aspect of international negotiation strategy are the negotiation culture of Northeast Asian countries that mainly includes Korea, China and Japan, and the Western negotiation culture mainly constituted of US and European Countries. This paper, by focusing on these two contrasting cultures, will conduct a comparative study between the Northeast Asian Countries negotiation culture and the Western negotiation culture. In the 1 2 3 Berton, P., Kimura, P. and Zartman, I. W.(ed.), "International Negotiation : Actors, Structure/Process, Values", St. Martin's Press, 1999. p.1. Sawyer, J., & Guetzkow, H. "Bargaining and Negotiation in International Relations", in Kelman, International Behaviour: A social - Psychological Analasis, p.502. Berton, P., Kimura, P. and Zartman, I. W.(ed.), "International Negotiation : Actors, Structure/Process, Values", St. Martin's Press, 1999. p.135. Cross-cultural Studies on the Negotiation Cultures in the Northeast … 85 concluding part, we will try to draw some strategic implications for Koreans in negotiating with the Japanese and the Chinese. II. Literature on Cross-cultural Negotiations and communications Edouard Herriot, a French writer, has defined culture as what remains when one has forgotten everything. 4 This paradoxical proposition captures one of the most salient properties of culture: the fact that it is not a matter of substance but a way of thinking and acting. To be more specific and focused on our topic of international negotiation, culture could be defined as "a set of shared and enduring meanings, value chains, behavior, communication pattern, and beliefs that characterize negotiators". There are a good number of researches on cultural issues in international negotiation such as; Hofstede(1980), Zartman and Berman(1984), and Faure(1995). These researches on international negotiation focusing on cultural variables or integrating cultural components in its models have developed only recently and are still largely in the making.5 Systematic comparisons between cultures are not easier than it appears to be, because behind similar words there can be very different realities. However, in this paper, we will compare and analyze the Northeast Asian negotiation culture with the Western negotiation culture according to the two distinguished theoretical framework of cross-cultural negotiation ; monochronic and 4 5 Berton, P., Kimura, P. and Zartman, I. W.(ed.), "International Negotiation : Actors, Structure/Process, Values", St. Martin's Press, 1999. p.4. Berton, P., Kimura, P. and Zartman, I. W.(ed.), "International Negotiation : Actors, Structure/Process, Values", St. Martin's Press, 1999. p. 17. 86 SE - YOUNG AHN polychronic time people theory6 and the high and low context culture theory. Mishler stated that "The greater the cultural differences, the more likely barriers to communication and misunderstandings become".7 Its prime example is the low-context culture and the high-context culture postulated by Edward Hall.8 A high-context culture uses highcontext communication patterns in which most of the information is either in the physical context or internalized in the person, while very little is in the coded, explicit, transmitted part of the message. On the other hand, a low-context culture employs low-context communication patterns - most of the information is contained in explicit codes, such as words. On the other hand, there is another framework: monochronic-time and polychronic-time people theory. The monochronic-time negotiation culture indicates the negotiation culture of the Western countries which is basically correspondent to the low-context communication pattern. A negotiator who has this kind of negotiation culture can be usually called the M-time negotiator. The polychronic negotiation culture indicates the negotiation culture of non-Western countries such as Asia, and Latin Americas which basically corresponds to the high-context communication pattern. A negotiator who has this kind of negotiation culture can be usually called the Ptime negotiator. 6 7 8 Geoffrey Hilton, "Business Communication", Helsinki School of Economics And Business Administration, Oct. 1999. Mishler, A. L., "Personal Contact in International Exchanges", in Kelman, International Behavior: A Social -Psychological Analysis (pp.550-561), New York: Holt, Rinehart and Winston, 1965. Hall, E. T., "Beyond Culture", New York, Anchor Press, 1976, p.79. Cross-cultural Studies on the Negotiation Cultures in the Northeast … 87 III. Comparative Studies on the Negotiation Cultures in the Northeast Asian Countries and the Western Countries The differences between the North-East Asian Countries negotiation culture and the Western negotiation culture are summarized in table 1. 1. Differences in the modes of communication The biggest difference between these two negotiation cultures is revealed in the mode of communication. First of all, while the communication method of the North-East Asian Countries negotiation culture tends to be "implicit", "indirect", "ambiguous", and is in a "monologue form", the communication mode of the Western negotiation culture is "explicit", "direct", "clear", and is in a "dialogue form". In the Northeast Asian countries that have Confucian culture such as China, Korea, and Japan, people tend to convey their messages in an implicit and indirect way. Expressing one's thoughts too clearly and explicitly can be accepted as indecent and can also be seen as rude to the other person.9 9 For example, in case of visiting someone at dinnertime, when the host asks the visitor "Did you have dinner yet?", the visitor is supposed to say that "Oh, I'm okay" even though he did not eat his dinner yet, in the Asian P-time negotiation culture. At this moment, if the host is one of those P-time people, he knows that the visitor is saving his face and usually he asks again and again to have him share the dinner table. But the problem occurs when the host is a M-time person. In his view, when he asked Did you have dinner yet, the visitor answered It's OK. This is neither a yes nor a no and it becomes ambiguous whether the visitor has had his dinner. In this case, if the Western M-time person interprets It's OK as a yes, the Asian visitor will be watching the host family having their dinner with an empty stomach. 88 SE - YOUNG AHN [Table 1] Differences between North-East Asian Countries negotiation culture (p-time people) and Western negotiation culture (mtime people) North-East Asian Countries negotiation Western negotiation culture culture (M-time People) (P-time People) China, Korea, Japan, Southeast Asian USA, Europe countries, Mideast coutries Region communication - implicit - indirect - One-sided communication (monologue, lecture form) - explicit - direct - Two-way communication (dialogue, discussion form) non-verbal behaviour - ambiguity - silence, bowing rather than eye contact - control of emotional expressions, gestures Value chain of negotiator - relation orientated - saving-face is important - entertaining is important - inter-dependent Timecommitment - Flexible time plans according to situation Planning - Plans easily changed if needed Communication - listening mode method - respect rather than compliments - clearness - natural eye-contact is important - free emotional expressions, gestures - output orientated (separates relationships and outputs) - economical rationality is important - independent culture - Time plans in accordance with the schedule - Tries not to change the original plans if possible - speaking mode - full of compliments The second characteristic of the North-East Asian Countries negotiation culture is that their communication mode is 'nonconfrontational', whereas the Western one is 'confrontational'. It means that the North-East Asian Countries negotiators are not really inclined to directly say something which might hurt the other parties. The biggest mistake that a Western negotiator makes in negotiating with the Japanese mostly comes from the differences of this communication modes. For example, when a Western negotiator demands for something in the negotiation with the Japanese government, the Japanese rarely say No or even use a negative expression. He would only say an indirect and implicit message such Cross-cultural Studies on the Negotiation Cultures in the Northeast … 89 as "We will consider it" or "We will deliver it to the related ministry". How the Western negotiator will understand the Japanese expression is the problem. Western negotiators who have lots of experience in negotiating with the Japanese know that these expressions of the Japanese negotiators are close to a indirect refusal. This is also true in negotiating with Chinese and Koreans, although there could be some differences in its extent. According to the study of D. Tannen, the biggest difference between the Japanese communication mode and the American one is the meaning of 'Yes'. Generally the Japanese people say 'yes' when they understand while American people say yes when they agree. The next vivid difference in communication modes is the conversation method at the negotiation table. Western M-Time people use dialogue which is a mutual kind of communication, meanwhile the North-East Asian P-Time people use monologue which is like a onesided lecture. Westerners clearly assert their intentions (sometimes even aggressively) and exchange opinions and ideas by blanketing the other parties with language and questions. Usually they tend to ask a lot of questions, react quickly and analyze their thoughts aloud. On the contrary, the North-East Asian negotiators have a strong tendency to lecture on the subject based on the prepared data, and then wait for the other persons response afterwards. This is because in Korea, China and Japan, the Confucian culture they share was not open for discussions. Especially, if one seriously disputes on other person's opinions, people tend to think that it is offensive and that the other person has lost face. They try to understand what is needed without asking. Also, they think that leaving the other parties in peace and 90 SE - YOUNG AHN giving them time is very important for a successful negotiation. For example, it is quite common for the Japanese audience to not ask questions, in case that the presenter or the counterpart may not be able to answer in public.10 Japanese, Korean, and Chinese negotiators think that listening to the partners' opinions is very important. They are in a listening mode. They think that keenly listening to the partners story and letting him have a chance to think is the best way for everyone. In contradiction, the Western M-time people think that accurately conveying the message is very important. They are in a speaking mode. They energetically speak for their thoughts and only after then listen to what the other person has to say. The Western negotiator is generous with compliments. They always say excellent or wonderful after a statement or opinion, but it should not be understood as an agreement. Northeast Asian negotiator takes indirectly shown respect as more important than the actual language of compliments. They feel that a light bow or offering the top seat is more respectful. The problem here occurs when the Western M-time person, doing negotiation with the Northeast Asian negotiators, who is used to the complimenting culture, compliments a certain individual in the opposite team. When it comes to the language capability of the North-East Asian negotiators, Japanese and Korean are the negotiators that suffer the 10 If Japanese audiences have any questions during a conference, they usually ask about it after the conference in private. Cross-cultural Studies on the Negotiation Cultures in the Northeast … 91 most in international negotiation tables with language problems. This aggravates the difficulty of cross-cultural communication in the international negotiation table with Westerners.11 2. Non-verbal behavior The next important difference is non-verbal behavior at the international negotiation table. 12 Non-verbal behavior includes emotional expression, smile, gesture, hug, jiggling feet, silence, eye contact, and so on. Argentines and Russians express trust and strong negotiation volition by tightly hugging each other at the beginning of the negotiation. Western M-time people are used to naturally revealing their feelings or using gestures. They tend to use strong gestures such as waving hands or leaning back. However, the North-East Asian P-Time negotiators rarely reveal their feelings or use big gestures like waving. They think that it is unrefined manners, and also that these kinds of actions will not play a positive role for them as it will disclose some kind of information. It is very interesting that for North-East Asian negotiators, particularly the Chinese - silence plays an important part in negotiation as a non-verbal behavior, while Westerners are not accustomed to such kind of tactics. As a rule, there are two reasons for the North-East Asian negotiators to become suddenly silent. The first 11 12 Interpreters are used to minimize these negotiation language problems, but it is not easy to express their intentions because of the limitations of using an interpreter itself. When you are not good at the language in international negotiation, it is better to use an interpreter. An interpreter can let you closely observe the opponent with time to spare at the negotiation table. Many North-East Asian negotiators feel psychologically trapped by the problem of negotiation language and tend to neglect or be not accustomed to non-verbal behaviors. However, in the real international negotiation table, the effective use of the non-verbal behaviors greatly influences the success of the negotiation. 92 SE - YOUNG AHN is when he is thinking about his strategies, and the second is when he is intentionally using silence as a negotiation tactic. According to the study results, even expert negotiators feel anxious when the counterpart suddenly becomes silent. This is especially true in cases where he is negotiating in a disadvantageous position; most negotiators become garrulous and talkative . If the facing negotiator becomes more talkative because of anxiety, he is bound to expose some of the confidential information of his side and is more likely to become the loser in the negotiation. Experienced negotiators should capture the meanings of these nonverbal behaviors and capitalize on his advantages. If the negotiating opponent shows an unusual non-verbal behavior, it should be seen as a sending-message, which is very crucial in capturing the real intention or strategy of the counterpart. For example, if a negotiator suddenly smiles, jiggles his legs, or has an unnatural eye contact amid the negotiation, it is a kind of sending-message that he has lost his composure and feels anxious. An interesting non-verbal behavior is the form of eye contact. Western M-time people think 'natural eye contact' is very important not only at the negotiation table, but also in everyday life. If the other negotiator avoids eye contact in a negotiation, they will think of it as playing dirty tricks or that the counterpart has no intentions of a serious negotiation. But for the North-East Asian negotiators, eye contact is of little concern. They even think that it is rude to stare at the other person's eyes.13 13 They would rather convey their messages through appropriate silence and bowing. Even though they are the same Northeast Asian countries, the Chinese do not bow whereas Koreans and Japanese do. Cross-cultural Studies on the Negotiation Cultures in the Northeast … 93 3. Value-chains of the Negotiator According to professor Fisher and Ury at Harvard University, the most important thing in a negotiation is separating the problem from the people.14 The most important value-chain for the Western M-time negotiator is the pending problem of the immediate outcome and the economic rationale at the negotiation. Therefore, the long acquaintance or relationship with the other opposing negotiator should not affect the development of the negotiation; they separate relationship from negotiation. Actually, the American negotiators do want to maintain good relationships with the Korean or the Japanese negotiators; however, once they sit at the negotiation table, they disregard the existing personal relationships and downright pursue economic outcomes in a rational way. On the contrary, the Asian P-time negotiator, no matter how pending the subject of negotiation is, regards the relationship and saving faces as highly important. Whether it is a political negotiation or a business negotiation, they think that maintaining a good relationship on the long term with the other person is a benefit for all of them at the table. For example, when a buyer who had a long-term business relationship asks for a transaction that has no economical profits, the North-East Asian negotiators will accept the transaction if it is needed to maintain the good relationship with him. Also, if a negotiation partner who worked with him for a long time asks for an implicit favor saying 'please save my face this time', he will, in most of cases, say yes. This consent is based on the implicit agreement of 'If I save your face this time, you will save mine some other day, in the 14 Fisher, R. and Ury W., "Getting to Yes : Negotiating Agreement Without Giving In", Penguin Book, 1991.(1991) mentioned above, p.11. 94 SE - YOUNG AHN Northeast Asian negotiation culture. For these reasons, international negotiations with Asian P-time negotiator is a kind of gradual process of building credibility or good relationship. So, initial meetings are mainly focused on getting to know each other and building credibility between partners. When doing negotiation with the Japanese or the Chinese people, there is almost always a dinner party. It is important to note that in the broad sense, all this is part of the negotiation to show trust and to get a good relationship. For the Western negotiators, who separate the relationship from the negotiation output, this entertainment culture is of little concern and meaning. In some sense, it seems unproductive and inefficient. Meals can be done at the negotiation table with a sandwich, but the pending issue must be closely examined and discussed. Even if a relationship forms between the Western negotiators and Northeast Asian negotiators through dinners or drinks, the American and European negotiators will think it as a different thing from the negotiation issue. Many Northeast Asian negotiators who do negotiation with American negotiators invite the Americans to a dinner with a P-time way of thinking, believe that they may have formed a relationship, expect a soft negotiation table the next day, of course, which will not be, and are disappointed. In doing negotiations with the Chinese or the Japanese, the dinner carries almost the same level of importance as the negotiation itself. In most cases, the official negotiation itself may not make a lot of progress in the beginning, and only after forming a credible relationship through dinners the poor progress will suddenly become rapid. The last difference in the negotiators value chain is whether he is Cross-cultural Studies on the Negotiation Cultures in the Northeast … 95 "inter-dependent" or "independent". the Western M-time negotiator says what "I" think under independent thinking. But, the Asian P-time negotiator, who has an inter-dependent way of thinking, says what "we" think. To smoothly develop the negotiation with Northeast Asian countries, it is needed to persuade the whole negotiation team and not just the certain negotiator in front of him. 4. Time commitment, Job concentration and planning Western M-time people work in accordance with the given schedule and are very punctual. They have a clear sense of working hours and tend to concentrate on the negotiation at the negotiation table. Also they do not like changing the plans of the beginning. However, the Ptime people give weight to the situation of each minute and are relatively flexible in planning. Therefore, they easily change the original negotiation date, place, and specific plans if it is needed. Also, the negotiation can be done not only at the official negotiation table, but also during dinner or playing golf. These differences among the negotiation cultures can easily bring about misunderstandings between the Asian P-time negotiator and Western M-time negotiator. First of all, in the Westerners eyes, the Asian negotiators who don't seem to concentrate on their ongoing job, can be interpreted as not being serious and can seem to be disorientated. But, as explained above, the Asian P-time negotiators do not seriously stick to the job in a highly concentrated like the Westerners. The next problem occurs when the Northeast Asian negotiators delay the planned date several times. The Asian P-time negotiator who do not take punctuality seriously tend to think delaying the date once or twice is not that serious. But in the Westerners point 96 SE - YOUNG AHN of view, the partner's delay is seen as either delaying the date out of real change in circumstances or playing a dirty trick, and can sometimes bring about misunderstandings of the situation. IV. Remarks and Implications on the negotiation strategy of Korea with Japan and China This article tried to trace the differences between the Western Mtime and the North Eastern P-time negotiation cultures. From our research we uncovered the existence of important differences between these two kind of negotiation cultures. If the biggest obstacle in international negotiation is the difference between the negotiation culture as examined above, Korea, belonging to the P-time negotiation culture, has the advantageous position to the Western countries when dealing with Japan and China. However, it is interesting to note that, even if these three countries are in the same negotiation culture boundary, Japan, China and Korea have similarities and differences in the negotiation culture amongst themselves. In this view, the policy issues that we should consider in negotiating with Japan and China, whether it is an international trade negotiation or an international business negotiation, are as follows. Firstly, of the several issues laid out above, the Korean negotiation culture is similar to that of Japan in some ways, and similar to that of China in some other ways. For example, in the part of entertaining culture, the Korean negotiation culture is more similar to that of China than Japan, and in the aspects of time commitment and planning, the Korean culture is more similar to that of Japan than China. Therefore, Korea should closely analyze the differences in the negotiation culture of Korea, Japan and China and devise an efficient negotiation strategy. Cross-cultural Studies on the Negotiation Cultures in the Northeast … 97 Secondly, an interesting thing is that the notion of P-time people and M-time people is only relatively true in the three countries of Northeast Asia. That is to say, in the aspect of job concentration, the Japanese are M-time people against the Chinese. In the Chinese negotiator's eyes, the Japanese people act as Westerners when the Japanese stress punctuality or show high job concentration . In the more individual sense, Korean negotiators have a more M-time tendency than the Japanese, because they express their opinions more freely.15 The Chinese people have even more M-time tendency than the Japanese who are very cautious in speaking. Therefore, when we negotiate with the Chinese or the Japanese, we should reflect these relativity in the negotiation culture and use a more flexible negotiation strategy. Thirdly, in negotiating with Chinese or Japanese who are typical Ptime negotiators, a formation of a good relationship is very important. This does not only indicate the relationship between the countries, but also the personal relationships between the concerned negotiators. The Chinese negotiators especially are sensitive in relationships, the so called "Kwangshi". The Japanese are more Westernized than the Chinese, but they also think that relationships are important compared to the Western M-time people. Korea should not use the Western type sandwich negotiation strategy when dealing with China or Japan. Korea should focus on building the friendship with the Chinese or the Japanese over a long period. In addition, Korean negotiators should not forget that in negotiating with them, a large part of the result can 15 It has been empirically found that in the negotiations between the Korean government and the Japanese government, the Japanese negotiators have more strong sense of order than Korea negotiators, which refrains the former from freely expressing their own opinion, especially in front of their supervisors or their team. 98 SE - YOUNG AHN come from the evening entertainment rather than the stiff daytime negotiation. The negotiation will develop slowly compared to that of the Western M-time people, but the progress will be done faster once the trust is built. To prepare for this, the government should train many negotiators who have formed a good relationship with the two countries through various bilateral activities such as 'the Korea-China and Korea-Japan Business Councils', and etc. Last of all, considering that Korea's bargaining power is influential to the each and every international negotiation, what is Korea's international negotiation power like versus to that of China and Japan? This is not an easy question to answer. Normally, a country's bargaining power is determined by that country's national strength and the bilateral relationship between the related two countries. A good example is the US government pressing hard on Korea with higher national bargaining power based on the Super 301 trade regulation in Korea-America trade negotiations. In this sense of view, considering the dominance of Japanese economy in comparison with Korea, it can be said that Korea's bargaining power is lower than that of Japan. However, the differences in the bargaining power is greatly lower than that compared with America, where we are tightly connected with the US in terms of national security. For China, nothing can be said flatly. In scattered business negotiations, we can have substantial bargaining power over China, because Korean companies are likely to have advanced technology and marketing power. But we should not fail to notice that China has already started to grow into one of the global economic powers. Its prime example is 'the 2000 Korea-China Garlic Trade Dispute'. Confronted by China's fierce reaction, the Korean government had to Cross-cultural Studies on the Negotiation Cultures in the Northeast … 99 hold back her trade restriction aimed at imported Chinese garlic. It clearly showed the fragile bargaining power of Korean government over the Chinese government. 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