Multicultural Negotiation Strategies Between the United States Germany and Japan

One common truism in the world of business is that mergers often fail. The task of negotiating a company merger with two other multinational companies is thus a daunting one. There are many reasons which cause mergers to fail, but one of the most common is that of miscommunication between the multiple entities.

The fact that one of the nations is from Germany and the other is Japanese may further complicate matters, given that Japan is a traditionally high-context culture, where the content of what one says is less important than the manner and to whom one says it; speech also tends to be much more indirect. In contrast, Germany, similar to that of the United States, tends to be a very low-context culture where the explicit meaning of what a speaker conveys is all-important.

Issues Negotiating in a Diverse Cultural Environment What is perceived as an obstacle or a difficulty by an individual from one cultural context may not be perceived as such by someone from a different context. From the perspective of an American from a low-context culture, the ability to negotiate based upon explicit meanings is often seen as a great benefit.

In contrast, Japanese negotiators have often complained that Americans are difficult to deal with in negotiating situations because of the heterogeneous nature of the culture, which can make it difficult to read negotiator’s signals (LeBaron, 2003). This suggests that Japanese negotiators were always looking for subtle, subtextual messages as well as reflects a different demographic composition between the two nations. Even when negotiating with Germany, excessive bluntness that may be seen as admirable and trustworthy in one culture may be viewed with suspicion in another.

Culture can even affect the manner in which the negotiation is carried out. For example, societies such as Japan are often referred to as polychronic cultures, where start and end times of meetings are fluidly observed, and there is often a great deal of importance placed upon the socializing aspects of meetings which take place after hours (LeBaron, 2003). Disagreements are not verbalized openly.

In fact, it might be considered impolite to bring up challenges directly, which can frustrate the opposite negotiating party, who feels as though they are being forced to read minds (LeBaron, 2003). There is also often a clear hierarchy in terms of who can give definitive answers, and even if a member of the party is enthusiastic, he or she may not actually be representative of the final decision-maker. In contrast, individuals from monochronic cultures like the United States and Germany prefer to begin and end meetings on time.

Characteristically, they prefer formally-scheduled breaks versus after-hours socializing and wish to have a clear agenda, rather than to take a long period of time to establish the positive character of the opposite party. They prefer to have recorded meetings with minutes (LeBaron, 2003). They also often allow all members of the party to articulate opinions with less explicit hierarchy (LeBaron, 2003). It should be noted that although this is the preferred method of negotiation in the United States, there is no singular strategy which is always superior.

Rather, custom tends to dictate what specific parties prefer and are familiar with. Instead, a good idea in a multicultural setting is to make all of the parties aware of the fact that they may have different negotiating strategies and to set specific terms for the negotiation process. Even if there will still be variations between the different cultural representative groups, heightened awareness will ensure that there is less chance that members of the negotiating parties will take offense or misinterpret what others are saying.

There should also be an equitable schedule that is mutually satisfying to all parties concerned, one which ideally bridges the differences and expectations of how the negotiations will proceed. Issues Which May Influence Negotiations Particularly in low-context cultures, negotiations are often viewed as a means to an end. For high-context cultures, the negotiation may be entered into with the expectation of merely feeling out the other party to determine if he or she is worth doing business with.

In the absence of immediate agreement, this can create frustrations and conflicts for the representative of the low-context culture. Additionally, given that the proposed negotiation involves a suggested merger, many of the issues which may arise during any negotiation of a merger may further stymie dialogue and discussion. The idea of a merger, particularly if one party is much stronger or dominant than the other, is often innately uncomfortable to at least some members of the formerly independent organizations.

Mergers provoke unrest because they can take the form of uncomfortable blends of two corporate cultures, even when they are not occurring between multinational entities. “ In the absence of a clear statement of what the merged company will stand for, how the organisation will operate, what it will feel like, and what will be different compared to how things are today,” the parties involved may be resistant and feel that the stresses of undergoing the merger are not worth their while (Siegenthaler, 2010, par.2).

Also, if the emerging corporate culture of the newly-merged entity as well as the negotiating strategy seems to emphasize the culture and outlook of one entity exclusively, the members of the other entity may feel threatened and attempt to renege upon the agreement. If this is not possible outright, then there may be acts of passive resistance by lower-level members who fear losing their jobs, such as a refusal to comply with orders, missing deadlines, and other methods of generating roadblocks to a seamlessly-operating new organization.

Negotiating Strategy In the face of so many potential roadblocks, it is absolutely critical that the involved parties avoid falling into the trap of regarding negotiation as a zero-sum game, in which there can only be one winner. Instead, collaboration rather than comprise is preferred. A compromise takes place where members of the negotiation all give something up, to get to an agreement. With collaboration, a new agreement is generated that is ideally equally beneficial to all members of the origination.

As noted by Kilman (2012), the principle of compromise is founded upon the notion of generating synergies between the two parties, including new ideas and new ways of working together. “By using the collaborating mode under the right conditions…it’s possible to achieve total need satisfaction for both of them” (Kilman, 2012, par. 4).

Given that the two merged entities will have to work with one another in the future, this is yet another reason to emphasize collaboration, given that viewing disagreements within a merged organized context as zero-sum games is unlikely to generate harmony. Not all disagreements will result in excessive costs or burdens, and finding the most mutually agreeable solution possible is always preferable, unless it is unduly unfair to a third party.

For example, if the German firm wishes to have greater security in case one or both members of the negotiation do not honor their promises, “a contingent agreement—negotiated ‘if, then’ promises aimed at reducing risk about future uncertainty” may quiet their fears (Shonk, 2018, par.3). This example also shows how ignoring the needs of the other party is seldom effective. Instead, they must be addressed head-on, else they will simply erupt and cause further issues at a future date.

Dynamics of Multiparty Negotiations The science of game theory was originally generated to deal with the conflicts which can occur during multiparty negotiations, which can be fraught with the potential for conflict. The greatest danger is when two of the parties forge alliances with one another to the exclusion of the other entity to share information or spread misinformation to leverage an advantage.

Given that two of the negotiating parties, that of Germany and the United States, come from more similar cultural frameworks and may have a higher innate level of trust of one another, this may be a temptation. It also may be enticing for the Japanese firm not to trust the two Western firms because of cultural barriers. The simple presence of multiple parties also generates a proliferation of potential new strategies and can breed mistrust.

For example, one firm may be concerned about the other two firms pairing off and refusing in the end to merge, despite protracted and expensive negotiations. Or there may be concerns about different entities joining together to negotiate a more favorable result. This is why it is particularly important to maintain a transparent negotiating environment. Frequent meetings and frequent communication through email, phone calls, and virtual conference calls better ensures that no two parties will engage in outside meetings.

It also reduces the risk of fears, gossip, and suspicion affecting the final result. Multicultural Workplaces Once merged, the cultural work of forging.