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Cultural Determinants in Negotiations among Germans and Chinese – An empirical Analysis

Cultural Determinants in Negotiations among Germans and Chinese – An empirical Analysis

 

 

 

Art der Uni-Arbeit: Diplomarbeit

Fachrichtung: BWL

Autor/-in: Jonathan Speichinger

 

 

Conclusion

This work has scrutinized the cultural determinants influencing the Chinese and German negotiation style. Building on this framework it has set out a pioneering attempt to analyze the culturally related behavior during negotiations in two empirical experiments. The analyzed dimensions set a framework that provided a structure to better conduct the analysis and made the given data source more comparable. The results were presented through testing the five hypotheses with regard to the five dimensions.

 

To achieve this goal, initially a theoretical introduction to the concepts of negotiation, bargaining and culture and insights into practical key concepts applied in bargaining scenarios, were provided in chapter two. The chapter further continued by characterizing the two cultures concerned with respect to the IBM research conducted by Hofstede in 1970. The characterization of the German and Chinese culture was then directed towards culturally-related behavior in bargaining situations on the basis of five crucial dimensions relevant in negotiations in chapter 2.3.2. The dimensions were put together as a combination of Salacuse’s (2003) negotiation factors paired with negotiation behavior related factors constituted by other researchers (Katz (2007), Thompson (2005), Luecke (2003), Baumhackl (2006), Smyser (2003)) and five respective hypotheses were deployed. In the following chapter, I presented the methodology, summary of the experiment and analyzed two experiments with the goal to test the hypotheses. The results show that both cultures display different behaviors coherent to the theoretical findings on the one hand. On the other hand, some behavioral characteristics have not been identified. The bargaining and negotiation-related characteristics show that the Chinese and Germans are both tenacious with regard to their style, argumentation and reasoning. The important aspect is that the cultures rely on different foci and show difficulties in reciprocal adaptation. The Chinese act collectivistic, relationship-orientated and try to be psychologically persuasive. The Germans did not put a lot of effort in setting up their own schedule as the research suggested. The Chinese on the other hand acted in accordance to the findings and utilized time strategically. Furthermore, I found evidence for the application of stratagems by the Chinese. This is displayed by the skillful and shrewd behavior during negotiations, thus reflecting their cultural background and the Confucian virtues which are deeply rooted in the Chinese education and philosophy.

The Germans were more focused on the contract. The straightforward behavior and necessity for logic and rationality is evident throughout both experiments. Consequently, hypothesis one was confirmed.

The attitudes of both cultures led to different strategic approaches regarding the argumentation, but the proposals were similar. Whereas the Chinese focused their argumentation on cooperation, effort and willingness to compromise, the Germans argued with regard to fairness, potential and their essentiality to reach an agreement. On top of that it was evident that the Chinese in the strong position favored haggling. Therefore, hypothesis two was partly confirmed. I recommend using a larger sample to identify how the negotiation behavior is affected by the unequal money endowment in the beginning and to observe whether the proposed offers follow a similar pattern.

Distinct differences in the communication styles have led to a deceleration of the negotiation pace and created misunderstandings during the negotiations. The behavior is in line with the findings about culturally-related communication styles. Whereas the Germans applied a direct and factual style, the Chinese used a subtle and intuitive style. Due to the findings, hypothesis four has been confirmed.

The dimension relationship had a greater effect on the argumentation, attitude and in- group behavior of the Chinese. Throughout the protocols they revealed relationship- motivated behavior, which is rooted in the collectivistic cultural background. The Germans on the other hand did not show affiliation towards relationship matters and focused more on their own position and goals. Hence, hypothesis four has been confirmed.

The last hypothesis was not confirmed, since the agreement process itself did not have a great impact on finding an acceptable result. All teams acted consensually and the whole team jointly prepared their respective leaders’ argumentations and strategies. The difference in their bargaining behavior and attitudes towards the negotiation raised the crucial difficulties in finding an acceptable agreement.

The findings revealed interesting and different approaches between the Chinese and German cultures. The culturally-related behavior has been investigated and four deployed hypotheses were confirmed, one was partly confirmed and one was not confirmed. Within the cultures the approaches and bargaining behavior were similar. Hence, the anticipated culturally-related behavior was predominantly verified. Yet, a greater sample covering intercultural bargaining scenarios between Chinese and Germans can help to determine if the behavior follows a certain pattern under the provided circumstances.

 

Limitations

The experiment is focused on observing culturally-related behavior in bargaining situations. The participants participated on a voluntary basis, with the commonality of being German or Chinese doctoral students. The participation did not depend on gender, age, negotiation experience or negotiation training. Therefore, the behavior can be closely related to the respective cultural heritage.

However, the arguments applied and proposals offered by the strong German and Chinese group due to starting position are probably culture independent and the result of the nature of bargaining processes itself. The strong teams argue they were stronger in the pre-test and should therefore gain more of the ‘Fixed Pie’. Both strong teams started by offering the PS. The weak teams’ approach was to separate the additional gain from the starting endowment and put forward the offer of an ES. Further the weak teams argued that if they cannot reach an agreement at their terms the loss of money would be greater for the strong team.

Furthermore, it is noteworthy that certain behavior like persistency and aggressiveness by the Germans for example or the intuitive communication style applied by the Chinese is difficult to subsume for both cultures within this bargaining experiment. This is also linked to the different starting positions and different individuals involved in the experiment. Still a culturally related behavioral pattern can be observed for both cultures, but the execution of this behavior has to be investigated with a larger sample. The analysis should concentrate on behavioral patterns of Chinese and Germans related to different power (money) endowment.  The simplified bargaining scenario disregards determining factors like concerns about law, market competition, product-obsolescence, governmentally and politically established trading barriers. Furthermore, the negotiation may be influenced by numerous factors besides culture, including personality, personal condition, and business experience for example. This is hard to capture within this experimental framework and the focus is set on general, culturally-related behavior.

Hence, it is difficult to provide insights into behaviorism which is fully resilient with respect to everyday and business situations. Thus, it can be precarious to assume that the findings in this study provide a prediction or policy formation in business.

The list of critical variables seems unlimited which makes it important to evaluate abstraction and build a model to reduce these difficulties to a manageable proportion. Besides, the results from the IBM research by Hofstede only represent Western Germany, since Hofstede didn’t include countries under state socialism (for example Eastern Germany) in his study. It seems feasible to update the findings about German culture involving the whole country.

 

 

 

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  • Cultural Determinants in Negotiations among Germans and Chinese – An empirical Analysis
  • 2020-12-30 05:14:53
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