Cross-Cultural Negotiation: American vs. Japanese Styles

Introduction

In the contemporary business environment, cultural conflict has been an important impediment to the success of business negotiations. Culture is an integrated system of learned behavioral patterns shared by members of a society. Cultural behaviors do not derive from biological inheritance; rather, culture consists of shared customs, beliefs, behaviors, values, and artifacts that members of a society use to communicate with one another. Culture is transmitted from generation to generation through parental learning. The pace of globalization and economic development has led businesses to engage in cross-border transactions, where intercultural communication is critical to achieving business success (Jian-qiu, 2008).

Cultural awareness is one of the most important business tools that companies use to achieve success in negotiations. Understanding the culture of other parties is critical to enhancing success in negotiation (Adair, 2003). One of the major frustrations that businesses face in international contexts is the challenge of achieving effective cross-cultural negotiations. Many American businesses face daunting tasks in securing effective negotiations with Japanese counterparts due to the wide cultural differences between Japanese and American business leaders. Based on the problems associated with cultural conflicts, cultural awareness is an important business tool for achieving success in cross-cultural business negotiation. Cultural awareness encompasses understanding the culture of other nationals: norms acceptable in one country may not be acceptable in another. Thus, research on culture and negotiation is critical to assist business leaders in managing the increasing global threats and opportunities (Gelfand, Lun, & Lyons, 2011; Gray, 2008).

The objective of this paper is to explore the cross-cultural differences between Americans and Japanese in business negotiation. The paper also discusses the benefits that business leaders can derive from developing cultural awareness.

Cultural awareness is important because it enhances effective business communication during negotiations. Communication is very critical in business negotiations — it is the transmission of a message from one individual to another, and effective communication between two or more persons facilitates successful outcomes. One of the key factors that leads to failure in business negotiation is a lack of cultural awareness. Such lack of awareness often leads to a breakdown in communication during the negotiation process (Weiss, 2006).

Importance of Cultural Awareness in Negotiations

Multinational corporations (MNCs) often face problems in host countries when there is a significant difference between their home culture and the culture of those host countries. Lack of awareness of a host country's culture can lead to problems of acceptance, effectiveness of business operations, and implementation. The impact of cultural differences is particularly noticeable when businesses seek to embark on mergers and acquisitions. Lack of cultural awareness may frequently lead to negotiation breakdowns in those contexts. Thus, cultural awareness is very critical to achieving global business success as well as success in business negotiations.

Americans and Japanese often face a daunting task in reaching mutual agreement during business negotiations due to the wide differences between their respective cultures. American businesses need to develop effective awareness of Japanese culture before the two parties can reach a mutual agreement at the negotiating table (McCreary, 1986).

Cellich and Jain (2012) define negotiation "as a process by which two or more parties reach agreement on matters of common interest" (p. 3). Negotiation plays an important role in international business, and cultural differences between negotiators are a significant factor in its success or failure. Differences between American and Japanese cultures are among the most important factors that lead to delays in reaching mutual agreement.

Differences Between American and Japanese Culture

Americans belong to a low-context culture while Japanese belong to a high-context culture. American business leaders generally believe that the goal of negotiations is to achieve economic benefits and to reach better, quicker solutions. Japanese negotiators, on the other hand, do not place the highest priority on commercial issues. They believe in developing business relationships and cultivating long-term mutual commitments (Danciu, 2011).

The concept of time also varies significantly between the two cultures. Americans emphasize short-term achievement of business benefits, while Japanese take a longer-range perspective. American business leaders want to maximize company profits within a short time frame, whereas Japanese negotiators focus on long-term objectives — sometimes framing their vision in terms of what the company will become over the course of a century rather than within a limited number of years.

Conclusion and Negotiation Guidelines

Globalization has led an increasing number of multinational companies to engage in face-to-face negotiations to achieve business objectives. While firms consider business expansion outside national boundaries an important tool for gaining competitive market advantages, cultural differences between countries must be managed before a firm can achieve successful business negotiations. American businesses engage in international negotiations for several purposes, including mergers and acquisitions, licensing agreements, and seller-buyer relationships. The dissimilarities between American and Japanese cultures present American and Japanese business leaders with a daunting challenge in reaching timely mutual agreements.