A cross-cultural Study of Americans & Iranians Business Negotiation Behavior
1. Summary
In this study we focused on Americans and Iranians non-verbal negotiation behavior and business negotiation’s styles and tactics by asking 11 questions from 15 Iranians and 15 Americans subjects through questionnaires which were analyzed descriptively by Nunan model, to provide better view for Iranian business people who want to deal with American business context.
Results showed that:
* American negotiators act and dress more informal in negotiations.
* American negotiators are more on-time and results-oriented.
* Americans take much more risks, decide more individually and do not spend too much time for building relationships.
2. Introduction
Obviously, there has been little contact between Iranian and American businessmen after Islamic revolution of Iran; however business interest is an inevitable matter which makes them to sit around a table.
Due to different cultural values there has always been wrong interpretation between Iranian and American negotiators and consequently complaints for misunderstandings.
It is clear that successful business relationship will not take place unless a proper strategy is established. In other words, if we minimize conflicts we will surely achieve maximum efficiency in our plan (Martin, D., et al., 1999).
An international business negotiation is a mutual action between two or more parties trying to set boundaries in scope of their business (Weiss, S.E., 1993).
The pre-negotiation stage is the most important part of negotiation. In this stage, we try to get to know each other, to determine the issues and to prepare the negotiation process by following two principles: 1- interaction focusing on how to build trust and relationship; 2- task behaviors concentrating on the preferences and anticipations (Ghauri, P.N., 1996).
The pre-negotiation stage is a face-to-face interaction, a persuasion method and a use of tactics to establish and develop an agreement.
Franchising, compromises and following up the agreement are parts of the post- negotiation stage.
International business negotiations are typically more complicated than negotiations from the same culture because of different values and perspective of negotiators. There are also external factors which increase the complexity such as different laws and trade values (Haruthai, P.N. and Fredric, W.S., 2006).
3. Theoretical framework
Negotiators can exchange their ideas and information not only by verbal communication but also by non -verbal communication which is the major part of whole communication process.
There are many ways that we reveal ourselves nonverbally. Right explanation of non-verbal communication helps negotiators to obtain useful information from their counterpart.
Being aware of non-verbal communication tactics helps negotiators to keep secret information confidential and protect their position during negotiation process.
Non-verbal communication has several parts. The ones that have great impact on negotiation process have been described in below:
� Body language: Expressing an idea or emotion through bodily movements
� Physical condition: Attainable closeness to other negotiators
� Physical condition: Attainable closeness to other negotiators
Negotiation’s techniques and plans are largely dependent on cultures. In fact, the construction way of an agreement, negotiation’s process and policy or how to settle a decision differs in distinctive cultures (Sebenius, J. K., 2002).
4. Purpose
This report is going to provide better cross-cultural understanding of American business negotiation behavior and trying to give useful guidelines for Iranian businessmen concerning the negotiation process in the American context.
5. Methodology
This study applied questionnaires as the main source of data collection (Appendix).
The subjects of the survey were 15 Iranian and 15 American business men and women above 30 years old.
As the American participants are typically difficult to access, questionnaires were delivered to them in form of Word-formatted file and by E-mail.
The survey questionnaire consists of 11 main questions in English and Persian for American and Iranian business people to investigate the non-verbal and verbal negotiation styles and tactics of each culture.
Non-verbal communication model: In first part of this study we tried to find out different ways which Iranian and American negotiators use to interpret their non-verbal messages. Items which were focused one are:
1. Sitting pose and both sides feeling about sitting manner of each culture.
2. Frequency of keeping straight eye-contacts and both sides’ opinion about staring to each other’s eyes while negotiating.
3. Dressing manner.
4. Gift offering and interpretation of this action by each party during negotiation.
5. Punctuality and being on time in meetings and interpretation of each party from unpunctuality.
6. Promptness and strictness to coming to a conclusion.
Negotiation manners and tactics: Second part of the survey was performed to obtain information about styles and tactics both American and Iranian cultures fallow in negotiation process. In this part questions were designed to find out:
1. Negotiation’s goal: making a short term transact or a long term connection
2. Negotiation’s policy: concluding the negotiation in a way that both sides are satisfied or in a manner that one side is winner and the other party doesn’t reach to its goals.
3. Agreement construction policy: writing an agreement considering important items and work on details later or setting the agreement on specific items from the beginning.
4. Requirements for making a decision: making decisions individually or collectively while negotiating.
5. Viewpoints about a signed contract: looking to a contract as a starting point of a long lasting relationship or ending point of a trade.
Nunan (1992) method of analysis was used for assessment of gathered data from questionnaires.
6. Results and Discussion
6.1. Non-verbal communication
6.1.1. Sitting Pose
Table 1. Types of sitting
Options
| Nationalities | A | B | C | D |
| Iranians | 53% | 3% | 30% | 14% |
| Americans | 42% | 24% | 14% | 20% |
A= both feet on the floor, holding knees quietly close together
B= Crossing legs by putting one ankle on the knee of the other leg
C= Crossing legs by putting one knee straightly over the other
D= other (Comfortable, place dependent sitting)
As can be seen from table 1, almost half of Iranians (53%) and Americans (42%) hold both feet on the floor. While 3% of Iranians and 24% of Americans mentioned they put one foot or ankle on other knee, choice B; 14% of surveyed Americans chose C. The number of Iranians who cross their legs by putting one knee straightly over the other was 30% of the total number. 14% percent of Iranian and 20% of Americans wrote that they sit in the way they feel comfortable or it depends on the place of meeting and who they want to work with.
Table 2. View on other party’s sitting pose
Options
| Nationalities | Impolite | Suitable | Respectful | Others |
| Iranians | 0% | 53% | 43% | 4% |
| Americans | 0% | 63% | 23% | 14% |
Table 2, shows that most of the surveyed Iranians and Americans think their sitting manner is suitable and respectful. 14% of Americans reported that their opinion varies depending on culture of their counterparts. Some American businessmen like to show friendship in later stages of negotiations by taking the advantage of unofficial body language and they feel informal body posture will create a better synergy.
6.1.2. Straight eye – contact
Table 3. Frequency of straight eye – contacts
Options
| Nationalities | Always | Frequently | Occasionally | Rarely | Never |
| Iranians | 10% | 23% | 57% | 10% | 0% |
| Americans | 33% | 67% | 0% | 0% | 0% |
From the above table it is obvious that neither Americans nor Iranians ever maintain direct eye-contacts with their counterparts.
Most of Americans look frequently in the eyes of their counterpart while majority of Iranians look occasionally into eyes of their partners.
6.1.3. Dressing manner
Table 4. Dressing manner
Formality Level
| Nationalities | Very Formal | Formal | Neutral | Casual | Very Casual |
| Iranians | 27% | 30% | 33% | 10% | 0% |
| Americans | 6% | 47% | 27% | 20% | 0% |
As it is clear from table 4, Americans and Iranians dress quite formally for business meetings; however, Iranians tend to dress more formal. None of these two nationalities dresses very casual in a negotiation meeting and about 30% of both nationalities dress depending on the situation and the place they are going to have their meeting or the knowledge they have about their counterpart.
6.1.4. Gift offering
Table 5. Offering gifts
Options
| Nationalities | Yes | No |
| Iranians | 83% | 17% |
| Americans | 76% | 24% |
From Table 5, it is obvious that majority of surveyed negotiators give gifts to their business partners.
Table 6. View on gift offering
Options
| Nationalities | Close relationship | Bribe and mistrust | Others |
| Iranians | 76% | 6% | 18% |
| Americans | 43% | 16% | 41% |
Table 6 shows that, most of Iranians and Americans think offering a gift is a good way of expressing close relationship. While a few Iranians believe that offering gifts in a business meeting may make any mistrust 16% of Americans believe giving gifts during meetings can be interpreted as a bribe. Other interpretation like time of offering the gift or gifts’ types has frequency of 18% and 41% among Iranians and Americans respectively.
6.1.5. Time adjustment
Table 7. Being on time
| Nationalities | Always | Frequently | Occasionally | Rarely | Never |
| Iranians | 50% | 10% | 13% | 27% | 0% |
| Americans | 65% | 35% | 0% | 0% | 0% |
From Table 7 it is obvious that about half of Iranians are on time in meetings but frequency of being punctual is higher in Americans. Up to 100% of Americans attends on time in business meetings while 40% of Iranians rarely or occasionally appear on time.
Table 8. Interpretation of not being on-time
Options
| Nationalities | A | B | C | D |
| Iranians | 23% | 36% | 30% | 11% |
| Americans | 43% | 10% | 13% | 34% |
A) They are not serious on this business B) They may faced with some troubles C) They will attend with delay due to traffic D) Others
As shown on Table 8, Iranians and Americans have different ideas about unpunctuality. Most surveyed Iranians think that their counterpart has faced some troubles or will attend later due to traffic jam and they think not being on time is a common issue in big cities. When Iranian negotiators are late, most of their American counterparts think that their partners are not very interested or maybe not serious for the considered business. One of the surveyed Americans wrote that professional negotiators should not be unpunctual at all and two others explained that they believe being late is accepted but not right and moral practice.
6.1.6. Conclusion achieving time
Table 9. Conclusion achieving time
Options
| Nationalities | A | B | C |
| Iranians | 73% | 25% | 2% |
| Americans | 90% | 10% | 0% |
A= Focusing on one thing at a time B= Simultaneous events are required to get a conclusion C= having no specific style
Table 9 shows that most of Iranians and Americans focus on one issue at a time and act linearly during negotiation process but number of Iranian negotiators who think simultaneous happening of many things and involvement of many people are required for concluding a negotiation is twice more than American ones.
6.2. Negotiation’s manners and tactics
6.2.1. Negotiation’s goal
Table 10. Negotiation’s goal
Options
| Nationalities | A | B | C |
| Iranians | 20% | 73% | 7% |
| Americans | 53% | 33% | 14% |
A= Making a short term transaction B= Building a long term connection C= Others
Table 10 illustrates that most of Iranians’ want to build a long term relationship while most of Americans have preference of a short term transaction. The number of Americans who consider the nature of cooperation for decision making about short term or long term relationship is twice more than Iranians.
6.2.2. Negotiation’s policy
Table 11. Negotiation’s policy
Options
| Nationalities | A | B | C |
| Iranians | 85% | 12% | 3% |
| Americans | 77% | 23% | 0% |
A) A win-win situation, B) A win-lose situation C) Others
As it is obvious from table 11, the majority of questioned Iranians and Americans believe both parties should obtain their required advantages. Most probably due to Americans’ stronger economic and political positions, higher percentage of their negotiators looks for their own benefits. Only 3% of questioned Iranians think their counterpart’s behavior may affect their policy in the negotiation.
6.2.3. Agreement construction
Table 12. Agreement construction
Options
| Nationalities | A | B | C |
| Iranians | 83% | 10% | 7% |
| Americans | 80% | 20% | 0% |
A) Writing an agreement considering important items B) making an agreement considering all details C) Others
Table 12 shows that, the majority of Iranians and Americans make a wide-ranging principles agreement and work on details later. There are pretty large numbers of Americans who prefer to set the agreement fundamentally. 7% of surveyed Iranians believe they normally use both methods.
6.2.4. Making decisions
Table 13. Approach to making decisions
Options
| Nationalities | A | B | C |
| Iranians | 20% | 80% | 0% |
| Americans | 57% | 40% | 3% |
A) Individually, B) Collectively C) Others
Table 13 shows that most of Iranians make a decision based on a group consensus while Americans mostly makes their decisions individually. Two American believes that style of making decision depends on the organization for which they work and its management policy.
6.2.5. Viewpoints about a signed contract
Table 14. Ideas about a signed agreement
Options
| Nationalities | A | B | C |
| Iranians | 20% | 52% | 28% |
| Americans | 43% | 50% | 7% |
A) Is end point of a trade B) Is start point of a relationship C) Is a general plan which may be changed
Table 14 demonstrates different views of Iranians and Americans on a signed contract. About half of Iranians and Americans believe signing a contract is start of a new relationship. However, more Americans view the situation as a sign of closing a deal. A small number of Iranians think a signed contract indicates that a deal has been closed, and quite a large number of them think it is an outline that can be revised.
7. Conclusion
Cultural differences have a major influence on different stages of a business negotiation. The greater alertness of how culture relates to the negotiation process, the more it would improve the negotiation’s result.
Although difficulties in access to American business people have restricted this survey in terms of enough number of respondents, and we had just 15 subjects from each society which we believe can lead to an improper conclusion; we are going to summarize our findings as below:
Most of Iranian and American negotiators sit in the same way during the meeting and they think their sitting posture is acceptable and even polite; however, more Americans prefer to sit informally later in negotiations and believe it can show familiarity while Iranians may interpret it as impoliteness.
Most of Iranian and American negotiators sit in the same way during the meeting and they think their sitting posture is acceptable and even polite; however, more Americans prefer to sit informally later in negotiations and believe it can show familiarity while Iranians may interpret it as impoliteness.
Although both countries’ negotiators have quite formal dressing, Americans tend to dress more casually.
Many Iranians and Americans think offering gifts to their counterparts is for making close relationship; however, a few surveyed Americans believe presenting gifts during primary stages of negotiation may be interpreted as giving a bribe.
Higher percentage of American negotiators is on time. Americans may interpret late attendance of their Iranian counterparts in meetings as unprofessionalism or impoliteness.
Although most of Iranians and Americans act sequentially and linearly in negotiation process, there are several Iranians who tend to consider several issues simultaneously or involve several people during the negotiation process; maybe due to having collectivistic culture.
Most of American negotiators are looking for effective partnership in terms of written agreement but Iranian ones try to make a long term relationship rather than a short term transaction.
Although majority of both countries’ negotiators try to obtain mutual advantageous results, American culture emphasizes more on winning over the other party as the best result. Both political and economical factors empower Americans to put pressure on their negotiating counterparts.
Most of Iranians’ decisions are made by group agreement while greater part of American negotiators act or decide independently.
Although the majority of Iranians and Americans make their agreements in general format, there are large numbers of Americans who prefer to set the agreement on specific items. Most of Americans consider a signed contract as an ultimate set of requirements that severely binds two sides.
Results showed that:
* U.S. negotiators act and dress more informal in negotiations. So Iranian negotiators should feel more comfortable in dressing and sitting pose while negotiating Americans.
* U.S. negotiators are punctual, clear, prompt and results oriented. Obviously Iranian negotiators must show punctuality and use explicit words in negotiation with Americans. They must avoid implicit negotiation which is a part of Iranian culture.
* Americans decide more individually and do not spend too much time for building relationships. It means that they don’t like to postpone the process of decision making so the negotiator should has enough information about the subject of negotiation and also must has full authority for decision making.
8. References
8. References
Graham, J.L. and Sano, Y., 1989. Smart Bargaining, Doing Business with the Japanese.
Hadizadeh, A. and Assar, P., 2008.The relationship between national culture and e-adoption: a case study of Iran. American Journal of Applied Sciences.
Haruthai, P.N. and Fredric, W.S., 2006. Dimension of success in International business negotiation. Journal intercultural communication, issue 11.
Hatami, M., 2008, Personal Interview. [How would you describe the typical American negotiator?]
Nunan, D., 1992. Research methods in language teaching. Cambridge university press.
Martin, D., Herbig, P., Howard, C. and Borstoff, P., 1999. Observations on Japanese Negotiation Style. American Business Review, Vol. 17, Issue 1, P. 65-71.
Sebenius, J. K., 2002.”The Hidden Challenge of Cross-Border Negotiations,” Harvard Business Review, p. 76-89.
Shmuel, B., 2006, Iran: cultural values, self images and negotiation behavior. The interdisciplinary center of Herzliya.
Shoukohi, H.,2008. Personal Interview. [How would you describe the typical American negotiator?]
Simintiras, A.C. and Thomas, A.H., 1998. Cross-Cultural Sales Negotiations. International Marketing Review, Vol. 15, Issue 1, P. 10-28.
Thompson, L., 1998. The Mind and Heart of the Negotiator, P. 10.
Usunier, J.C. ,1996. Cultural Aspects of International Business Negotiations. International Business Negotiations, p:93-118.
Weiss, S.E., 1993. Analysis of Complex Negotiations in International Business. The RBC Perspective, Organization Science, Vol. 4, Issue 2, P. 270.
9. Appendix- questionnaire
Cross-cultural Business Negotiation Survey
We are studying MBA program in Linkoping University, Sweden and are going to make a research on Iranians and Americans cross-cultural business negotiation behaviors for our negotiation course. This questionnaire has been prepared for the data collection in this survey so that your answers certainly would help us to gain valuable perception of Iranian – American business negotiation practices.
Please kindly give your answers honestly and be confident enough that the answers will be kept extremely confidential.
Thank you very much in advance for your cooperation.
Please fill the blank spaces:
Name & Family name ————————-
Date of Birth—————————————–
Gender———————————————
Company’s name———————————
Business field————————————
Please circle your choice or sort by numbers in ranking questions:
A. Non verbal communication manner
1.
1.1. How do you often sit during the negotiations?
A) Hold both feet on the floor with knees quietly close together
B) Crossing legs by placing one foot or ankle on the other knee
C) Crossing legs by placing one knee straightly over the other
D) Others (please specify): ————————————————
1.2. How do you evaluate your sitting posture?
A) Impolite
B) Suitable
C) Respectful
D) Others (please specify): ————————————————–
2. How often do you look directly to your counterpart’s eye during negotiations?
A) Always
B) Frequently
C) Occasionally
D) Rarely
E) Never
3. How do you describe your dressing manner in meetings?
Very formal: ___1___:___2___:___3___:___4___:___5___: Very casual
4.
4.1. Do you ever offer gifts to your counterparts? If yes, please proceed on answering question 4.2.
A) Yes
B) No
4.2. You think offering a gift is a signal of:
A) Making close relationship
B) Bribe and mistrust
C) Other (please specify): ————————————————————————
5
5.1. How often aren’t you on time?
Always: __1___:___2___:___3___:___4___:___5___: Never
5.2. What do you think when your Iranian counterparts come to the meeting late?
A) They are not serious about this business
B) They have faced some troubles
C) They will come later maybe due to traffic jam
D) Others (please specify): ———————————————————————–
6. Which policy do you often prefer in negotiations?
A) Focusing on one thing at a time
B) Simultaneous events are required to get a conclusion
C) Others (please specify): ———————————————————————-
B. Negotiation styles and tactics
7. The goal you set for a negotiation is:
A) Making a short term transaction
B) Building a long term connection
C) Others (please specify): ——————————————————————–
8. You think a negotiation is:
A) A win-win situation
B) A win-lose situation
C) Others (please specify): ——————————————————————-
9. What is your common approach to construct an agreement?
A) Writing an agreement considering important items
B) Making an agreement considering all details
C) Others (please specify): —————————————————————–
10. How do you make a decision in a business meeting?
A) Individually
B) Collectively
C) Others (please specify): —————————————————————–
11. You think signing a contract:
A) is an ending point of a trade
B) is a starting point of a relationship
C) is a general plan which may be changed
D) Others (please specify): —————————————————————–
Some expressions used in the questionnaire:
* Win-win situation: Both sides’ win situation
* Win-lose situation: One side win at the other’s cost