Cross-Cultural Negotiation Styles in BRIC Countries

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A cross-cultural comparison of international business negotiation styles in China and the UK
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Abstract
The study focused on conducting a cross cultural comparison of the international business
negotiation styles adopted by financial sector firms in China and the UK. The study was guided
by objectives such as the establishment of the influence of culture on negotiation styles, the
evaluation of the different negotiation styles adopted by the firms in the UK and China, and the
evaluation of the differences and similarities of the negotiation styles of the UK and Chinese
firms operating in the financial services sector. The study employed the use of a descriptive
research design in order to evaluate these issues in a comprehensive manner. The data was
collected through secondary sources and data analysis was carried out through the use of content
analysis. The study reveals that culture influences negotiation styles in a significant manner and
concludes that the negotiation styles of the UK and Chinese firms operating in the financial
services sector differ significantly due to the differences in the cultures of the two countries.

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Table of Contents
Abstract............................................................................................................................................1
Chapter One: Introduction...............................................................................................................4
1.1 Overview of the Topic......................................................................................................4
1.2 Problem Statement............................................................................................................6
1.3 Aim and Objectives...........................................................................................................8
1.4 Research Questions...........................................................................................................8
1.5 Relevance of the Study.....................................................................................................9
1.6 Scope and Limitations of the Study..................................................................................9
1.7 Dissertation Structure and Contents..................................................................................9
Chapter Two: Research Methodology...........................................................................................10
2.1 Introduction.....................................................................................................................10
2.2 Research Philosophy.......................................................................................................10
2.3 Research Approach.........................................................................................................12
2.4 Research Choices............................................................................................................15
2.5 Research Strategy............................................................................................................18
2.6 Target Population............................................................................................................19
2.7 Data Collection Procedures.............................................................................................20
2.8 Data Analysis..................................................................................................................21
2.9 Ethical considerations.....................................................................................................21

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Chapter Three: Literature Review.................................................................................................23
3.1 Introduction.....................................................................................................................23
3.2 Theoretical Review.........................................................................................................23
3.2.1 Culture in International Business Context...............................................................23
2.2.2 Hofstede’s Cultural Dimensions Theory.................................................................25
3.2.3 Hall’s Cultural Dimensions.....................................................................................29
3.2.4 Business Negotiation Styles....................................................................................34
3.2.5 Culture and Business Negotiations..........................................................................36
3.2.6 Financial Services Sectors in China and UK...........................................................37
Chapter Four: Data Analysis and Findings....................................................................................39
4.1 Introduction.....................................................................................................................39
4.2 Business Negotiating Styles of UK and China Financial Services Institutions?............40
4.3 Similarities and Differences in the Negotiation Process of Chinese and UK People.....44
4.4 Influence of Culture on Negotiation Styles.....................................................................46
Chapter Five：Conclusions and Recommendations.....................................................................48
5.1 Introduction.....................................................................................................................48
5.2 Conclusions of the Study................................................................................................50
5.3 Recommendations of the Study......................................................................................51
5.4 Objective linking:................................................................................................................52

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5.4 Future scope of the study.....................................................................................................55
References......................................................................................................................................57

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Chapter One: Introduction
1.1 Overview of the Topic
According to Shi and Wang (2011), today, businesses continue to expand their operations to
international locations as a result of the modernisation of the business environment due to the
continued spread of globalisation and technology. Martin and Nakayama (2013) notes that this
need to expand operations to international locations has resulted in the need for organisations to
engage in negotiations with foreign business partners, and this has therefore increased the
importance of the cultural aspect of business negotiations in terms of how it impacts the styles of
negotiations. Soriano (2014) also points out that there is need for the management of
multinational companies to understand that there exist cultural differences between different
countries, and thus have the necessary skills and competence to interact and negotiate with such
business partners. According to Martin and Nakayama (2013) some of the common scenarios of
negotiations include during mergers or acquisitions, during the search and selection of
appropriate suppliers, sourcing of funds for particular projects, as well as the negotiations for the
terms under which a particular project should be implemented. This ensures that the organisation
is able to achieve the best terms and thus give them an advantage when it comes to the
achievement of their internationalisation goals. Soriano (2011) further adds that this is due to the
fact that these cultural differences also lead to different styles of negotiations and this can affect
the multinational businesses if they do not learn the cultural practices of the host countries as
well as the negotiation styles in the new country.
In a study carried out by Liu and Wilson (2011), it was revealed that there are major differences
in terms of the cultures of different countries as was identified by Hofstede (2001) in his cultural
studies, and this can affect the business negotiation styles of managers in each of the countries.

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Further, the study reveals that since business negotiations are critical when it comes to the
establishment of businesses in foreign locations through the use of the different entry modes such
as mergers and acquisitions, it is important for the managers to accord this aspect a lot of
importance as a clear understanding of the same will increase their chances of getting out of
negotiations having achieved their objectives. Martin and Nakayama (2013) also support this
idea and note that most of the conflicts that occur in international business particularly when it
comes to business negotiations are usually linked to the ignorance and inconsideration of the
cultural differences that exist among the parties to the negotiations as a result of their different
country and cultural backgrounds.
Further, Imai and Gelfand (2010), also add that the global business environment is characterised
by a situation where the lack of knowledge of the cultural differences that exist between different
countries by the managers is likely to lead to negative impacts in their international negotiations.
This can lead to the inability of a business to achieve the goals of their internationalisation as
well as the overall goals of the business. Liu and Wilson (2011) therefore argue that it is
important for the management of multinational corporations to understand the cultural
differences between their country and the host country so as to ensure they can communicate in
an effective manner when it comes to engaging in the various negotiations, and this plays a
critical role in reducing the level of conflict that may arise in such situations.
Lick and Hoo (2016) also argued that all businesses even local ones go through the process of
negotiating whether with partners, customers, or suppliers of domestic companies during their
development and expansion process in the international environment. This therefore raises the
issue of the need for a clear understanding of the different styles of negotiations and the role that
the cultural differences play in the same. In a study carried out by Gunia et al. (2012), it was

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revealed that a clear understanding of the cultural differences and their influence on negotiation
styles plays a critical role in ensuring that the business managers emerge with the best results or
terms in the negotiations.
1.2 Problem Statement
International business is usually concerned with the carrying out of business activities across
national borders through the various forms which can involve exporting or producing in the
foreign country. Yu and Heng (2011) reveal that such business activities brings about a cross
cultural environment in the business and this may affect the operations of the business in a
negative manner in case where it is not effectively managed. One of the challenges that
management and employees in such organisations usually face is in the form of communication
since this is usually affected in a significant manner by the cultural differences. In this regard,
Przytuła, et al. (2015) note that it is important for the management of organisations to understand
the differences in communication patterns in different cultures, for example when it comes to the
negotiation styles as this might help them carry out these crucial activities in an effective
manner, leading to the achievement of the goals and objectives of the internalisation process.
Further, the managers of companies, projects, or businesses that have operations in more than
one country usually tend to find themselves in a situation where they meet partners with different
negotiation styles due to their cross cultural backgrounds. In such cases, the success of the
management in executing their duties is largely dependent on their ability to understand these
differences and put them into consideration during the negotiation process. According to Jiang
(2013), the different negotiation styles exhibited by different individuals in different countries
are mainly as a result of the cultural differences that exist in the different countries, and the
implication is that each different culture has a different negotiation style among its people.