I’ve found recently that many of my informal discussions with clients, colleagues, family and friends have had a common theme to them – cultural differences. It got me thinking about why this may be.
Perhaps it feels like our world has become increasingly smaller as we engage with other people via various technological platforms, that we otherwise might not have. Or maybe it's because we have just witnessed Kamala Harris become not only the first female Vice President of the United States, but also the first person of Indian and Jamaican descent to do so.
Either way, if you’re negotiating with people from different cultures, being aware of the nuances associated with each can help you to achieve better outcomes with your negotiations. But how do we do this?
One of the most well-known and comprehensive studies of culture, and particularly how culture impacts the workplace, was conducted by Professor Geert Hofstede in the 1970’s. His research resulted in the Six Dimensions of Culture, which still ring true today. Below is a brief overview of each of the dimensions and how they relate to negotiations across cultures.
Negotiating within the Power Distance Index (PDI)
This refers to the extent of inequality that exists, and the degree to which it is accepted by everyone. If PDI is high, then society accepts that there is an unequal and hierarchical distribution of power, and that people know what their place is within such a system. Conversely, low PDI indicates that power is shared and distributed, and situations where power is unequal are not accepted.
In the context of negotiation, this dimension may influence team dynamics and how decisions are made.
Negotiating with Individualism vs Collectivism (IDV)
This reflects the ties that people have with their community. People who live in highly individualistic cultures tend to take care of themselves and their immediate family and friends. In collectivist cultures, people are loyal to the group they belong to, and responsibility for everyone’s well-being is shared.
This means that understanding how important (or not important) group harmony and group loyalty is, may impact negotiations.
Negotiating with Masculinity vs Femininity (MAS)
In a masculine culture, its society values achievement, material rewards for success and assertiveness. Generally, they are more competitive. Feminine cultures value modesty, cooperation and quality of life.
The depth of relationships, and the levels of trust that you have with the other party are aspects of negotiation that need to be considered here.
Negotiating within the Uncertainty Avoidance Index (UAI)
This relates to how comfortable people are with ambiguity and uncertainty. In countries where UAI is high, the codes of behaviour and beliefs are strong. Anything unorthodox may not be tolerated. In countries where UAI is low, attitudes tend to be more relaxed.
Understanding how to deal with ambiguity and uncertainty, creativity (or lack thereof), and driving urgency need to be considered when entering a negotiation.
Negotiating with Long Term Orientation vs Short Term Orientation (LTO)
This examines how societies maintain a link to their past, whilst dealing with the present and the future. Cultures with a long-term orientation are pragmatic and thrifty. Cultures with a short-term orientation are typically nationalistic and principled.
Aspects include the perceived power balance, persuasion and questioning techniques with regards to negotiation, and should all be explored when dealing with your counter party.
Negotiating with Indulgence vs Restraint (IVR)
Indulgent societies encourage gratification of people’s own drives and emotions. Restrained cultures suppress gratification, and there are stricter social norms and more regulation of how people behave.
Therefore, it’s important to consider our style of negotiating and how this may be perceived when dealing with IVR.
Over the coming months, we'll publish a series of blogs which will unpack each of these dimensions in greater detail and offer some suggestions as to what you should consider for each when negotiating.