Negotiating Across Cultures Depends on Trust: A Psychologist's Perspective

Foundations

CONTRIBUTOR / Jeanne Brett

DEWITT W. BUCHANAN, JR., PROFESSOR OF DISPUTE RESOLUTION AND ORGANIZATIONS
PROFESSOR OF MANAGEMENT & ORGANIZATIONS
DIRECTOR OF DISPUTE RESOLUTION RESEARCH CENTER
KELLOGG SCHOOL OF MANAGEMENT / Negotiations

Negotiators who trust use a vulnerable sharing strategy that allows them to develop swift trust and negotiate high-quality agreements, but what allows negotiating parties to show the vulnerability that builds swift trust? Research suggests that culture plays a key role. In the West, parties assume that their negotiating partner is professional and trustworthy, which creates a safe space for the vulnerability and builds a cooperative spirit. By contrast, cultural norms in East Asia lead to a much more aggressive negotiating style driven by competition rather than cooperation.

Transcript

I study culture and negotiation strategy, and trust is a very important concept for researchers like me. We define trust pretty much the way people in other disciplines define trust — with an emphasis on benevolence and integrity.

What we find is that negotiators who trust use strategy in a way that allows them to negotiate high-quality agreements. What they do is they share a little information about their own interests and priorities and they ask for information from their counterpart about their counterpart’s interest and priorities.

Now, an interest in negotiation — that concept — refers to the reason underlying why negotiators are asking for what they want. So, it’s the reason why you’re asking for what you’re asking: why do you want that? It answers the “why” question.

Priorities refer to — what issues are more important — and what issues are less important. Negotiators who trust and share information about interests and priorities as well as, learn about the interests and priorities of their counterpart are able to trade things off and create high-quality agreements.

But of course to do that, you have to make yourself a little vulnerable because you’re sharing information that the other party could take advantage of. And so, the key question in our research: who trusts and why?

BUMPER: Trust across Cultures

And one answer to that question is culture. I’d like you to take a look at the chart that plots World Values Survey trust data by regions of the world.

The World Values Survey is run by a group of scholars that collect data from a representative sample of about a thousand people within a nation, ages 18 to 80.

And they come back every two or three years.

Their trust question is, “Most people could be trusted—yes or no?” And so, what you see in the chart is the percentage, averaged by nation, of people who say, “We can trust other people.”

Before we look too carefully at the data in the chart, there are two things we need to address. One is, this is a single-issue question. And behavioral scholars like myself don’t like single-issue questions; they worry about reliability.

But because we have data from these nations, collected with this exact same question over many, many different years, you can look at the reliability across time.

And when you look at the reliability of the trust question, it’s over .90 on average across time. So, the question is reliable.

The other potential threat to validity of this question is that people in different cultures interpret trust differently when they ask the question, “Can people in your culture be trusted?”

But again, scholars have looked at this question. They ask people, “What do you believe in? What do you believe trust means?” and they get consistently the same answer over and over again — integrity and benevolence.

So, if we take a look at the data, you might infer — from seeing that trust is relatively high in the West and in East Asia, and relatively low in South Asia and in the Middle East and in Latin America — that East Asians and Westerners are going to be using a lot of strategy that shares information, and people in Latin America and in the Middle East and South Asia aren’t.

And you’d only be half right.

It turns out that the research on negotiation in the West shows a lot of information sharing and, a lot of cooperative behavior, but we don’t see the same thing in East Asia.

And the question again is, why?

BUMPER: Swift Trust

It turns out, in the West, negotiators seem to use something that we call “swift trust.” And the idea of swift trust was coined by some researchers: Meyerson, Weick and Kramer.

And they were studying film crews. They looked at film crews and they said, “These are people who come together to do a highly interdependent job. They frequently don’t know each other — maybe by reputation, but they haven’t worked together in the past.

But they come together and they coalesce very rapidly and they are very cooperative. And why does that happen?” these researchers asked.
And they said, “It happens because they assume the other is a professional. They assume that the other is trustworthy.”

And as soon as you signal that you think someone else is trustworthy, that has two or three implications. One is, they would have to be a cad not to follow up and step up to your expectations of trust.

But the other is, you’re signaling something about yourself — that you’re willing to make yourself vulnerable to the other party and believe that they are trustworthy.

In negotiation research, we see very much the same thing in our North American and Northern European data. Negotiators come to the table and make the assumption that the counterpart is trustworthy.

And they then go in and ask questions, get a little information about those very important interests and priorities, offer a little information in return. And in that counterpoint–point–counterpoint, they begin to justify the assumption of trust that they made in the first place and they begin to solidify that trust because they have behavior that they see of the other party.

BUMPER: Trust and Social Sanctions

So, let’s take a look at the data from East Asia. In study after study, we consistently find East Asians are extremely competitive in negotiation. And this, of course, is not what we would expect, looking at the trust data.

A really good answer to the question of why the East Asians do not seem to act in a trustworthy fashion in negotiation was given by Toshio Yamagishi, a Japanese psychologist.

He was studying social dilemmas. Now, a social dilemma is a multiparty prisoner’s dilemma. It’s a commons problem in economics.

The tension in a social dilemma is that if all the parties cooperate, everyone shares a larger piece of the pie, a larger set of resources. If, however, everyone competes, they share a smaller set of resources.

What it means is, for you, if you compete and the rest of us cooperate, you do really well, but we do very poorly. And what Yamagishi found is that his Japanese students in a social dilemma situation would cooperate as long as there were sanctions for failure to cooperate, or competition.

When he removed the sanctions, the Japanese students competed like crazy. Yamagishi then repeated his research in the United States with American students.

And he found, first of all, that the American students were much higher trusting than the Japanese were and that they would cooperate in both the situation where there were sanctions, but they would also cooperate pretty much at the same level in situations in which there were no sanctions.

So, Yamagishi explained his results by looking at Japanese society. And what he described Japanese society as is a society that’s very tightly controlled by social norms, by social monitoring and by social sanctioning.

And he said what happened then in his research is that when monitoring and sanctioning was missing in the situation of a social dilemma, the Japanese students competed.

But he described the United States culture as much looser in terms of norms, monitoring, and sanctioning.

And he said, “Look, the Americans have an internal moral compass that directs them to be cooperative. They don’t need and don’t expect the external controls that are characteristic of the Japanese society.”

If we take a look a look again at the trust chart and look at the Middle East and South Asia and look at Latin America, we see pretty uniformly low trust. And that would predict that we would have a lot of difficulty in negotiations — not a lot of information sharing, not a lot of high-quality agreements.

There’s much more limited negotiation data in the Middle East, South Asia and Latin America. But it shows not a lot of cooperation and not a lot of trust, at least in the Middle East and in South Asia.

But the Latin American data are more interesting. The Latin American data show much more complexity.

For example, in some data that I have from Brazil — in fact, I’ve collected data from Brazilian managers several different times over the past 10 years — I get a lot of cooperation, a lot of information sharing and really high-quality outcomes.

In some Spanish data, we saw that when the Spanish were negotiating with each other, they weren’t sharing information and they got low-quality outcomes; compared to the US negotiators, when they’re negotiating with each other and using more information sharing, they got higher-quality outcomes. You see that difference in trust.

But what was interesting, in the next part of the data, is when the Spanish were negotiating with the Americans. And there, the Americans continued to share information, ask for information and the Spanish started to do that too.

And they got a lot more insight about what was important, more and less important, to their counterparts, and they negotiated much better deals in the intercultural negotiations with the Americans than they did in the intracultural negotiations with other Spanish counterparts.

So, looking at all this data, my research team concluded that trust isn’t enough to explain the relationship between culture and negotiation strategy. Taking our cue from Yamagishi’s research, we turn to some more recent work in cultural psychology by Michele Gelfand.

BUMPER: Cultural Tightness and Looseness

Michele Gelfand studies a concept that she calls “cultural tightness–cultural looseness.” And it’s very similar to the way Yamagishi described Japanese culture versus American culture.

A tight culture, according to Michele Gelfand, is one where there are strong social norms and there is monitoring of social norms, there is sanctioning of failure to conform to social norms.

And maybe it would help to have a little story to explain what that might look like if you’ve never been in Japan or East Asia.

One of my executive education students said, “I’ve got a story, professor.” He said,

“My wife and I were living in Japan. I was an expat working for an American company over there. And we decided we wanted that full cultural experience, so we rented a house in a Japanese community, not an expat community.”

And he said, “Our first major challenge was figuring out how to properly sort our recyclables because it’s very strict in Japan.”

And he said, “We tried really hard to get everything in the right bag. And then the recycle truck was coming the next night, and we would put everything out where it was supposed to be. And then we would see our neighbors coming out of their homes, going through our recycle bags and re-sorting it so that it was correct.”

The neighbors thought it was important for the neighborhood that the recycling be done appropriately. So, here’s a very strong set of norms, monitoring and sanctioning.

They didn’t really sanction directly this expat couple, but the expat couple was sufficiently embarrassed that they kept working on getting their recycling right.

So, Michele Gelfand and her colleagues collected cultural tightness — looseness data from participants all around the world —these were mostly teachers and university students.

They asked a series of questions about how culture operated, and how tight those norms were as well as how much sanctioning and monitoring was going on.

So, you see in this chart how those same countries fall out on cultural tightness–looseness. These are all the same nations that we show in the trust scale. And what do you see?

We see that Western culture is a loose culture (that’s no surprise), East Asian culture is a tight culture (that’s no surprise) and the Middle East and South Asia are also a tight culture, but those interesting Latin Americans are a loose culture.

So, what we have in Latin America, and maybe the way to explain what we see in the negotiation data in Latin American, is that Latin Americans live in a loose culture.

That means they can’t assume on a day-in, day-out basis and they can’t predict other people’s behavior. They don’t have expectations the way the tight-culture East Asians or Middle Easterners do.

What they have to do is navigate a loose culture and navigate a low-trust, loose culture. What do they do? They certainly don’t engage in swift trust — that assumption that everyone else is trustworthy.

What they do is they build slow trust; their focus is on building relationships. And they do all the things — getting to know you as a person, learning about your family and finding commonalities in interests in sports and in interests in food — to get a relationship going with you that has nothing to do with a negotiation.

But if they can build a common path with you personally, they build a relationship to be able to negotiate cooperatively.

And so, my colleagues and I think that there’s more to culture and negotiation strategy than just trust. It’s that interface between trust and cultural tightness–looseness that accounts for how negotiators in different parts of the world use strategy.