Tension and trust in international business negotiations: American executives negotiating with Chinese executives

Abstract

The purpose of the study is to shed light on the antecedents and consequences of tension felt during international business negotiations. A total of 176 American and Chinese executives participated in simulated international business (buyer–seller) negotiations. The negotiations were videotaped, and the participants completed questionnaires. Each participant was also asked to review his/her videotaped negotiation, rate the tension felt on a videotape review form, and briefly describe the antecedents of the tension felt. The data collected were then analyzed using first a structural equations approach and then a more exploratory content analysis. Both Chinese and American executives felt tension during the negotiations. For the Chinese, greater levels of tension led to an increased likelihood of agreement, but also led to lower levels of interpersonal attraction and in turn lower trust for their American counterparts. For the Americans, tension felt decreased marginally the likelihood of an agreement, did not affect interpersonal attraction, but did have a direct negative effect on trust. A series of other cultural differences are also reported. The measure of tension felt developed in the study appears to be useful methodologically, theoretically, and practically. Journal of International Business Studies (2006) 37, 623–641. doi:10.1057/palgrave.jibs.8400215

The principle of congruity in the analysis of international business cooperation

“…Cultural dimensions have been found to impact managers' preferences and behavior towards business partners (Lee, Shenkar, & Li, 2008;Marshall & Boush, 2001), in particular during the negotiation process (e.g., Graham, Evenko, & Rajan, 1992;Lee, Yang, & Graham, 2006). …”

“…Furthermore, a number of potential sources of conflict have been identified by looking at cross-cultural business interactions as well as through comparisons across cultures. Such sources of conflict range from differences on culturally-derived or culturally-embedded values (Chen, Mannix, & Okumura, 2003;Molinsky, 2007;Tinsley & Pillutla, 1998;Tinsley, 2001) and business practices or negotiation approaches (Adler, Brahm, & Graham, 1992;Graham, 1985;Liu, Friedman, & Hong, 2012), to cognitive styles (Abramson, Lane, Nagai, & Takagi, 1993;Adler, Doktor, & Redding, 1986;Redding, 1980) and interaction behaviors (Adair, Weingart, & Brett, 2007;Adler et al, 1992;Lee et al, 2006;Liu, Chua, & Stahl, 2010). …”

The Influence of Power and Individualism-Collectivism on Negotiation Initiation

“…As a result, they are less likely to take actions that could be detrimental to self-face (i.e., self identity, respect) or other-face (i.e., a prospective counterpart's public identity). This includes the decision regarding how to engage a counterpart, preferring an indirect approach (e.g., initiating through an established network, such as a common acquaintance) over a direct approach like cold-calling (which might be favored more by an individualist) (Lee, Yang, & Graham, 2006).…”

“…For a collectivist, this means anticipating that an individualist counterpart migght appear more aggressive in his or her approach, feeling comfortable asking, if not optimizing a request. For an individualist, this suggests helping a collectivist -who might sometimes prefer avoidance -to feel more comfortable engaging, if not making a request, and recognizing that those requests may come in an indirect form (Lee et al, 2006). In some cases, these sensitivities might best be handled by an agent from the counterpart's culture.…”

An Increasing Usefulness for Managerial Communication Research on the Main Topics of Management

“…Mixed motive and multi-issue negotiation that involves both distributive and integrative bargaining is one such situation. Lee, Yang, and Graham (2006) noted that there are extra sources of tension in intercultural negotiations, including decreased trust, lack of interpersonal attractiveness, and reduced willingness to cooperate. When negotiators feel comfortable communicating with each other, there is less pressure for closure and individuals are less likely to hold onto cultural stereotypes associated with the other party, especially negative ones that lead to suboptimal negotiation outcomes (Chiu, Morris, Hong, & Menon, 2000).…”