1

Cultural Differences in Bargaining

and Negotiation
Meina Liu
George Washington University, USA

As globalization continues to bring members of different cultures into contact with

each other, the study of culture and negotiation has gained increasing prominence
since the 1980s. Numerous books and articles have been written about the complexities
of negotiating across cultures by scholars from various disciplines, ranging from
­context‐rich, thick descriptions of negotiations within a culture to comparative analyses
of negotiation processes across cultures. Although cross‐cultural negotiation research
continues to expand our understanding of culture’s influence on negotiation, it has
evolved much more slowly than the mainstream negotiation theory and research. This
entry reviews current trends in research on culture and negotiation, followed by
­directions for future research.
Generally speaking, as negotiation theory and research have shifted from a traditional
economic perspective that focuses primarily on strategies and outcomes to a social
­cognition approach that explores the influence of negotiator cognition on negotiation
performance, cross‐cultural negotiation research has undergone a similar shift. Gelfand
and Dyer (2000) reviewed 20 years of research on culture and negotiation and ­concluded
that researchers followed one or both of the implicit models: The influence of culture
on negotiation tactics and outcomes (Model 1) and/or the interaction between culture
and proximal situational conditions on negotiation outcomes (Model 2). For example,
a great many studies in the 1980s and 1990s compared the use of competitive and coop-
erative bargaining tactics and their associations with negotiation outcomes across
national cultures and bargaining roles. Although such research advances the development
of a cultural perspective on negotiation, there is an abundance of conflicting findings in
the literature that compromises its generalizability. Because culture is largely defined as
geographical locations, such research is unable to provide any theoretical explanation
for observed cultural differences. The psychological processes (e.g., motives, emotions)
that are involved in negotiation in different cultures are largely ignored. In response to
these pitfalls, Gelfand and Dyer described a third model that focuses on culture’s
influence on negotiators’ psychological states and how culture moderates the influence
of psychological states on negotiation outcomes to provide a more complex account of
culture’s effects in negotiation. For example, several studies conducted in the late 1990s
demonstrated that members of different cultures have different cognitive schemas
about conflict and negotiation, which have important consequences for negotiation

The International Encyclopedia of Interpersonal Communication, First Edition.

Edited by Charles R. Berger and Michael E. Roloff.
© 2016 John Wiley & Sons, Inc. Published 2016 by John Wiley & Sons, Inc.
DOI:10.1002/9781118540190.wbeic0124
2

strategies and outcomes. In addition, the same motivational orientation was thought to
produce different effects on tactics in different bargaining contexts for members of
­different cultures. The third model was therefore intended to provide theoretical expla-
nations for observed cross‐cultural differences as well as to understand what is universal
(etic) and culture‐specific (emic) about negotiation theories developed in Western
contexts.
Whereas Gelfand and Dyer (2000) delineated the different stages of cross‐cultural
negotiation research, Brett and Crotty (2008) classified it into two categories: research
following a cultural dimensions approach and research following a dynamic con-
structivist approach. In the dimensional approach, culture is conceptualized as a set of
general, stable characteristics that distinguish one social group from another. Value
dimensions such as those proposed by Hofstede (2001) and Schwartz (1994) served as
the theoretical foundation for this approach. At the individual level, researchers
­measure individuals’ cultural values and utilize value differences to explain differences
in negotiation behaviors. For example, cultural values of social conservatism, self‐
enhancement, and openness to change, as well as individualism versus collectivism
were found to mediate the effect of national culture on participants’ preferred conflict
management styles (Morris et al., 1998). The face negotiation theory that explains
culture’s effect on conflict management through the lenses of self-construals and
face concerns is another example (Oetzel & Ting‐Toomey, 2003). At the cultural
group level, researchers typically use previous research documenting cultural values
(e.g., Hofstede’s country scores) to explain national culture differences in negotiation.
Research has documented cultural differences in a wide range of negotiation aspects,
such as negotiator cognition, negotiation norms, negotiation strategy, negotiation
­outcomes, and communication styles in negotiation.
However, this approach has received several criticisms. At the individual level,
there is surprisingly little published research using cultural values to explain
observed behavioral differences due to both conceptual and methodological issues.
Concep­tually, culture is a group‐level construct; many cultural dimensions (e.g.,
Hofstede’s ­individualism–collectivism dimension) capture the central tendency
among a group of people and are used to explain group differences. Therefore,
many believe, Hofstede himself included, that the individual‐level conceptualiza-
tion of culture is simply wrong. Methodologically, the scales are criticized for
­lacking validity. At the cultural group level, researchers are criticized for generating
hypotheses about cultural differences without empirically testing the connections
between cultural values and behavior (see Oyserman, Coon, & Kemmelmeier,
2002). The cultural group analysis is also criticized for treating national cultures
as unitary and static, ignoring individual and contextual differences and unable to
resolve the conflicting findings that abound in the literature.
In the dynamic constructivist approach, cultural differences are not traced to a single
source; rather culture is defined as a loose network of domain‐specific knowledge struc-
tures that are activated in ways peculiar to the situation (Hong, Morris, Chiu, & Benet‐
Hong, 2000). In other words, this approach assumes that people develop domain‐specific
theories or beliefs to make sense of the world; however, the influence of such knowledge
on individuals depends on whether this knowledge becomes accessible in a particular
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context. Therefore, this approach recognizes that cultures are not unitary, but encom-
pass tensions between contradictory values, norms, and even ideologies, and that the
social context may prompt negotiators to use different knowledge structures, and thus
different cognitions, motivations, and behaviors even within the same culture. As com-
pared with the dimensional approach that has had a long tradition in the social scientific
research about culture, the dynamic constructivist approach is a new trend that began to
guide cross‐cultural negotiation research in the early 2000s. Researchers following this
trend are no longer satisfied with understanding culture’s main effect on negotiation
processes and outcomes, but are concerned with how culture interacts with context or
individual differences or both to activate knowledge structures that direct behavior.
For example, Gelfand and Realo (1999) explored whether culture’s normative
influence on negotiators’ psychological states, behaviors, and outcomes is more or less
pronounced when negotiators are held accountable for their behaviors. They manipu-
lated participants’ accountability (high or low) in two laboratory studies and measured
both their negotiation behaviors and cultural values. The studies showed that whereas
accountability led to competitive behavior for negotiators who scored high in individ-
ualism (American participants), it led to cooperative behavior for negotiators who
scored high in collectivism (Asian and Estonian participants). High accountability is
therefore a social context that activates normative knowledge structures and makes
cultural differences more salient than in other contexts. Fu and colleagues (Fu et al.,
2007) examined how culture’s influence on negotiation is more or less pronounced for
individuals who vary in a dispositional attribute: need for closure (NFC). Their studies
showed that high NFC individuals were motivated to adhere to cultural norms to a
greater extent than low NFC individuals. For example, Chinese high‐NFC participants
favored relationally connected third parties, whereas US high‐NFC participants favored
relationally unconnected third parties for dispute resolution, yet the cultural difference
was not significant for low NFC individuals in the two cultures. Likewise, cultural
­differences in information‐seeking behaviors (relevant to investigative vs. concilitative
approaches) as well as preferred allocation norms were also moderated by NFC.
The studies following the dynamic constructivist approach, therefore, seek to i­ dentify
contextual and individual factors that amplify cultural effects by producing culturally
normative behaviors. In doing so, they provide theoretical explanations for what
appeared to be conflicting findings in the prior literature. This approach, however, also
received several criticisms. Despite its theoretical rigor, there is not much research
­following this trend, partly because it is a relatively new conceptualization of culture’s
effects, and partly because this approach is less parsimonious: It does not provide one
simple solution (e.g., cultural values) to account for culture’s effect and it has the same
measurement problems as those that plague the dimensional approach. In addition,
scholars have noted that some social cognition principles that activate knowledge struc-
tures in one culture may not have a common meaning in a different culture (Morris &
Fu, 2001). Nevertheless, the dynamic constructivist approach ­illuminates some new
questions that have not been amenable to analyses following the dimensional approach
and represents a viable future direction for cross‐cultural negotiation research.
Despite the increasing volume of research on culture and negotiation, much of our
knowledge is based on cross‐cultural comparisons of intracultural negotiations, rather
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than investigations of intercultural interactions involving members of different cultural

groups. Research generally found intercultural negotiation outcomes to be poorer than
intracultural negotiation outcomes. Some scholars propose that negotiators’ cultural
intelligence may help to overcome the challenges of intercultural negotiations (Brett &
Crotty, 2008). Others propose that negotiators’ mental models may serve as a viable
framework for understanding how negotiators from different cultures adapt to each
other’s differences and navigate intercultural interactions (Liu & Dale, 2009). To date,
little empirical work has been conducted to pursue these directions.
New areas of negotiation research are primarily investigated using samples from the
United States and northern Europe. For example, a growing body of research has exam-
ined the role of emotion in negotiation since the 1980s, yet only two decades later did
researchers begin to investigate such processes across national borders. Future research
on culture and negotiation should stay synchronized with new emerging areas of nego-
tiation research and increase our theoretical understanding of intercultural negotiation
processes.

SEE ALSO: Emotion and Negotiation; Identity Negotiation Theory; Negotiation

Sequences; Uncertainty and Anxiety in Intercultural Encounters

References

Brett, J. M., & Crotty, S. (2008). Culture and negotiation. In P. B. Smith, M. F. Peterson, &
D. C. Thomas (Eds.), Handbook of cross‐cultural management research (pp. 269–283).
Thousand Oaks, CA: Sage. doi: 10.4135/9781412982764.n16
Fu, H., Morris, M. W., Lee, S., et al. (2007). Epistemic motives and cultural conformity: Need for
closure, culture, and context as determinants of conflict judgments. Journal of Personality and
Social Psychology, 92, 191–207. doi: 10.1037/0022‐3514.92.2.191
Gelfand, M. J., & Dyer, N. (2000). A cultural perspective on negotiation: Progress, pitfalls,
and prospects. Applied Psychology: An International Review, 49, 62–99. doi: 10.1111/
1464‐0597.00006
Gelfand, M. J., & Realo, A. (1999). Individualism–collectivism and accountability in intergroup
negotiations. Journal of Applied Psychology, 84, 721–736. doi: 10.1037/0021‐9010.84.5.721
Hofstede, G. (2001). Culture’s consequences: Comparing values, behaviors, institutions, and
­organizations across nations. Thousand Oaks, CA: Sage.
Hong, Y. Y., Morris, M., Chiu, C. Y., & Benet‐Martínez, V. (2000). Multicultural minds: A dynamic
constructivist approach to culture and cognition. American Psychologist, 55, 709–720.
doi: 10.1037/0003‐066X.55.7.709
Liu, L. A., & Dale, C. (2009). Using mental models to study cross‐cultural interactions. In
C. Nakata (Ed.), Beyond Hofstede: Culture frameworks for global marketing and management
(pp. 222–246). London, UK: Palgrave Macmillan.
Morris, M. W., & Fu, H. Y. (2001). How does culture influence conflict resolution? A dynamic
constructivist analysis. Social Cognition, 19, 324–349. doi: 10.1521/soco.19.3.324.21475
Morris, M., Williams, K., Leung, K., et al. (1998). Conflict management style: Accounting for
cross national differences. Journal of International Business Studies, 29, 729–747. doi: 10.1057/
palgrave.jibs.8490050
Oetzel, J. G., & Ting‐Toomey, S. (2003). Face concerns in interpersonal conflict: A cross‐cultural
empirical test of the face‐negotiation theory. Communication Research, 30, 599–624. doi:
10.1177/0093650203257841
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Oyserman, D., Coon, H. M., & Kemmelmeier, M. (2002). Rethinking individualism and collec-
tivism: Evaluation of theoretical assumptions and meta‐analyses. Psychological Bulletin, 128,
3–72. doi: 10.1037/0033‐2909.128.1.3
Schwartz, S. (1994). Beyond individualism/collectivism: New cultural dimensions of values. In
H. C. Triandis, U. Kim, & G. Yoon (Eds.), Individualism and collectivism (pp. 85–117).
London, UK: Sage.

Further reading

Brett, J. M. (2001). Negotiating globally: How to negotiate deals, resolve disputes, and make
decisions across cultural boundaries. San Francisco, CA: Jossey‐Bass.
Cai, D. A., & Drake, L. E. (1998). The business of business negotiation: Intercultural perspec-
tives. In M. E. Roloff (Ed.), Communication yearbook 21 (pp. 153–189). Newbury Park,
CA: Sage.
Gelfand, M. J., & Brett, J. M. (Eds). (2004). The handbook of negotiation and culture. Stanford,
CA: Stanford University Press.
Liu, M. (2009). The intrapersonal and interpersonal effects of anger on negotiation performance:
A cross‐cultural investigation. Human Communication Research, 35, 148–169. doi:
10.1111/j.1468‐2958.2008.01342.x
Weiss, S. E. (2006). International business negotiation in a globalizing world: Reflections on the
contributions and future of a (sub)field. International Negotiation, 11, 287–316. doi:
10.1163/157180606778968371

Meina Liu is associate professor of communication at the George Washington

University, USA. Her current research spans interpersonal, intercultural, and organi­
zational communication and investigates the influence of culture, emotion, and social
cognition on negotiators’ interaction patterns and negotiation outcomes. Her work has
appeared in journal outlets including Human Communication Research, Communication
Research, Human Relations, Journal of Cross‐Cultural Psychology, Journal of International
and Intercultural Communication, Negotiation and Conflict Management Research,
among others.