Let's make a deal: cross-cultural negotiation etiquette

Understanding cultural communication can mean the difference between a successful or failed negotiation.

In China, leaving a little food on your plate at the end of a meal is a respectful gesture indicating that enough was provided. The same gesture in Jordan, however, sends a grave insult to the host.

According to recent research by Kellogg School Professors William Maddux and Adam Galinsky, living abroad, soaking in such cultural differences and adjusting to their meanings enhances creativity and may effectively lessen friction that can arise in cross-cultural negotiations.

In their paper, "Cultural barriers and mental borders: Multicultural experience enhances creativity," the authors show how people approach problems and how international living experiences affect open-mindedness in creating solutions. Maddux, who is visiting assistant professor of management and organizations, says international negotiations demand innovation.

"In different cultures, people behave differently, and to reach a successful deal, you have to understand and appreciate those differences as well as the cultural values that underlie them," says Maddux, a postdoctoral fellow at the Kellogg Dispute Resolution Research Center.

In one aspect of their research, the professors presented a group of Kellogg students with a measurement of creativity, the Duncker candle exercise. Participants considered an illustration of an intact, unlit taper candle, a book of matches and a box of tacks, all placed on a table. Challenged to create a way in which any or all of these items might be used to prevent wax dripping onto the floor when the candle is lit, each person was directed to pitch a solution independently.

The "correct answer" for the exercise has the cardboard box emptied of tacks and then fastened to the wall with the tacks.  Next, the lit candle is placed inside the box, which will serve two functions: a holder for the candle and a receptacle to contain the wax drippings.

Maddux and Galinsky found that 54 percent of the students successfully considered alternative functions for the objects in the picture to arrive at the correct answer.  Notably, all participants who had lived abroad for a minimum of 26 months were successful in the challenge. (The specific country of residence did not impact the findings.)

While function - the underlying contextual meaning of a gesture - is indeed a critical consideration of the research, its counterpart, form - the displayed gesture itself - is equally significant, explains Galinsky. He uses a metaphor to illustrate how the two come together.

"Imagine you are standing on the edge of a balcony overlooking a group of people. You see people on stage bowing, and you see others applauding [at the end of a performance.] To appreciate what is going on, you need to understand each form and then you need to know its function," Galinsky says.

Similarly, in cross-cultural negotiations, as people with different backgrounds displaying a variety of behaviors and cultural nuances converge, form and function are integral to the entire process.

"When I teach negotiations, I ask people to describe their most rewarding or frustrating cross-cultural negotiations experience. We found that, of the frustrating experiences, most were misinterpretations of form and function," says the associate professor of management and organizations. "Fortunately, just as Kellogg study groups are diverse and afford students opportunities to consider their peers' global perspectives, putting oneself in another culture for a significant amount of time can have an enduring effect on creativity."

Without understanding form and function, barriers can arise even from subtle differences in behavior, according to David Shreni '07, who, in his role as an investment banker at Goldman Sachs before enrolling at Kellogg, took part in several cross-cultural negotiations. Shreni says stepping outside his own cultural perspective to appreciate the sometimes unspoken communications affecting his clients' negotiations was critical for success.  Residing in Belgium and Latin America facilitated his sensitivity to various cultural practices, he adds.
"Our role was to work with the negotiating parties to provide them with the right background information so they could understand why a party in another part of the world was behaving a particular way," he says.

In one instance, Goldman Sachs was involved in restructuring a Latin American energy company. A variety of stakeholders resided in Latin America, and their resources were in Brazil where the country's population depended on those resources; as a result, the investment bank and stakeholders had differing interests, calling for extended negotiations.

"There were clearly certain behaviors that could have been misinterpreted. For instance, a high level of detailed progression at times was significant to the deal, while at other times, it was used as a stall tactic," Shreni recalls.  Other cues revealing what stakeholders considered important were conveyed through the physical presence of key players for different issues and phases of the negotiation, he says.

To enable his class to interpret behaviors like those, which frequently occur in cross-cultural negotiations, Maddux facilitates a role-playing exercise. He divides students into two groups, with both instructed to behave in particular ways while conducting negotiations. Although both groups want an agreement, one group is deferential, quiet and polite; the other is extroverted, providing context for discussion on surface behaviors and the dozens of meanings they represent in various cultures.

"Americans tend to view quiet negotiation behavior as a reflection of disinterest, while other cultures may view the same behavior as introspective and polite," says Maddux, adding that one of the most surprising and enriching experiences of his life was the "invaluable" cultural perspective he gained during his four-year residence in Japan, where he met his wife.

Such experiences have helped shape the insights of "Cultural barriers and mental borders," which has been submitted for publication. Galinsky hopes its findings will motivate readers to ask probing questions about the nature of cultural intelligence and how to develop it.  A simple step, he says, is expressing interest in other cultures and practices.

"It's OK to ask questions, as long as it's with enthusiasm and respect. I think most people are eager to talk about their cultures and provide insights as to why things are done a particular way," he says. In addition, Galinsky urges those in academic and professional roles to take up an international address for a while, if possible.

"Seize opportunities to gain experiences in other cultures," he says, acknowledging that adjustment periods call for patience.  "Sometimes diverse ideas may seem incompatible, but with experience you learn to synthesize them into a creative integration."

Romi Herron (c) 2005 Kellogg School of Management at Northwestern University. Reprinted with permission.