negotiating in the us vs. hk

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Negotiating in the United States and Hong Kong Author(s): Catherine H. Tinsley and Madan M. Pillutla Source: Journal of International Business Studies, Vol. 29, No. 4 (4th Qtr., 1998), pp. 711-727Published by: Palgrave Macmillan JournalsStable URL: http://www.jstor.org/stable/155406Accessed: 13-04-2015 12:57 UTC

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Negotiating in the United States

and Hong Kong

Catherine H. Tinsley* GEORGETOWN UNIVERSITY

Madan M. Pillutla** HONG KONG UNIVERSITY OF SCIENCE &TECHNOLOGY

We propose that cultural values (self-enhancement, self-transcendence, conservatism, and openness to change) provide a social environment where some negotiation strategies are selected to survive over others. These selected negotiation strategies become normative. Results from a negotiation simulation in the United States and Hong Kong indicate that U.S. negotiators are more likely to subscribe to self- interest and joint problem solving norms, and Hong Kong Chinese

N egotiation is the process by which people attempt to settle what each

shall give and take or perform and receive in a transaction between them (Rubin & Brown, 1975). Negotiation is a

negotiators are more likely to subscribe to an equality norm. Further, U.S. negotiators report more satisfaction when they maximize joint gain and Hong Kong Chinese negotiators are happier when they achieve outcome parity. The reported norms and outcome evaluations are consistent with the value profiles of the two cultures. The implications of these cultural differences are discussed in terms of expanding U.S. based negotiation theory.

critical business process, as it is neces- sary whenever people are dependent on one another for accomplishing objec- tives (Lewicki, Litterer, Minton & Saunders, 1994). National cultural1 dif-

*Catherine Tinsley (PhD Northwestern University) is an Assistant Professor of Management at the McDonough School of Business at Georgetown University. She studies how the international context influences negotiation processes and outcomes, as well as how culture influences cognitive systems and social dynamics, and the implication of these effects for international management.

**Madan Pillutla (PhD University of British Columbia) is an Assistant Professor in the Management of Organizations Department at the Hong Kong University of Science and Technology. His research interests include negotiation and decision making, with current research focusing on fairness and trust and the impact of group characteristics on decisions.

JOURNAL OF INTERNATIONAL BUSINESS STUDIES, 29, 4 (FOURTH QUARTER 1998): 711-728. 711



NEGOTIATING IN THE U.S. AND HONG KONG

ferences in negotiation behavior have been catalogued (cf., Adler, Brahm & Graham, 1992; Graham, 1983; 1985). Some researchers attribute these differences to culture (Cohen, 1991; Druckman, Benton, Ali & Bagur, 1976; Fisher, 1980; Graham, Mintu & Rogers, 1994; Weiss, 1997), while others are more skeptical of this relationship (Faure & Rubin, 1993; Zartman, 1993). Recent books for practitioners, which purport to teach techniques for negotiating in different cultures (cf., Brake, Walker & Walker, 1995; Hendon, Hendon & Herbig, 1996; Kublin, 1995; Morrison, Conaway & Borden, 1994), suggest a common understanding that culture and negotiation are correlated, and show managerial interest in model- ing and understanding this relationship.

This research aims to demonstrate a causal relationship between national culture and negotiation strategies, defined as a set of coherent behaviors designed to meet a particular objective. To demonstrate causation, we first provide a theory for how culture causes certain negotiation strategies to dominate over others. In brief, we propose that cultural values create an environ- mental context that selects some negotiation strategies over others. The negotiation strategies are selected because they "fit" with the cultural values, being more effective than other strategies. These selected strategies then become normative, as cultural members are prone to use these effective strategies more frequently. Second, we offer evidence showing that each culture's value profile can be used to predict its normative negotiation strategies, and that the use of normative negotiation strategies results in higher negotiator satisfaction than the use of non-normative strategies. Hence, culture is not merely corre-

lated with negotiation behavior; cultural values may cause the variety of negotiation strategies found internationally.

THE INFLUENCE OF CULTURAL VALUES

Values are desirable goals that serve as guiding principles in people's lives (Rokeach, 1973). Cultural values are those that are shared across cultural group members (Kluckhohn & Stodtbeck, 1961). Although values may technically reside in the individual as part of his or her cognitive structure, these values are not merely influenced by culture, but "thoroughly culturally constituted" (Markus, Kitayama & Heiman, 1997, p. 859). Shared values represent a culture's solutions to funda- mental questions of human survival, such as coordinating social interaction (Kluckhohn & Strodtbeck, 1961; Schwartz, 1994). Cultural group members 'represent their [culture's solutions] cognitively as specific values about which they communicate' (Schwartz & Sagiv, 1995, p. 94). Through this communication and socialization that rewards conformity, new members internalize cultural values.

Members use their cultural group's values to guide their selection and justi- fication of actions (Schwartz, 1992). The primary content aspect of a value that distinguishes it from other values is the type of motivational goal it express- es (Schwartz & Bilsky, 1987). Thus, a person's values can influence his or her behavior by encouraging those behaviors that would produce desired goals. At the cultural level, shared values create a social environment that directs members to select those negotiation behaviors that "fit," that is, lead to outcomes that are socially desirable.

712 JOURNAL OF INTERNATIONAL BUSINESS STUDIES



CATHERINE H. TINSLEY AND MADAN M. PILLUTLA

Although cultural values may appear to constrain individual choice, they are functionally adaptive because they sim- plify members' behavioral decisions (Fiske & Taylor, 1991). Cultural institu- tions (such as a system of values) help people manage their complex environment by narrowing the set of acceptable behaviors that they can engage in (Malinowski, 1944). Our natural selection thesis argues that cultural values create an evaluative environment that selects negotiation strategies that lead to desired outcomes. The implications of this argument are that: i) strategies that are conceptually congruent with the cultural values will become normative; and ii) the outcomes of these strategies will be judged as more favorable. Hence, the value profiles of the U.S. and Hong Kong Chinese cultures can be used to hypothesize specific compar- isons of these cultures' negotiation norms and how negotiators from these cultures will evaluate their outcomes.

VALUE PROFILES OF THE U.S. AND HONG KONG CULTURES

Schwartz and Sagiv (1995) delineate a set of four higher-order cultural values, arrayed as two sets of opposing dimensions. The first set juxtaposes self- enhancement versus self-transcendence. This set is conceptually similar to individualism-collectivism (Parson & Shils, 1951; Kluckhohn & Strodtbeck, 1961; Hofstede, 1980; Triandis, 1983). As with recent research, self-enhancement and self-transcendence are treated as separate dimensions (Triandis, McCusker & Hui, 1990). Self-enhancement (individualism) emphasizes the pursuit of one's own success. Indivi- duals are independent, autonomous entities (Marcus & Kitayama, 1989), capable of directing their own future.

Self-enhancement is measured with values such as: Independent, choosing own goals, and capable. Self-transcendence (collectivism) emphasizes the embed- dedness of the individual (Ho, 1993), and thus socio-centric rather than egocentric values (Triandis, et al., 1990). Self-transcendence is measured with values such as: Social order, belonging, and social recognition. Previous research finds the United States higher than Hong Kong Chinese on self- enhancement, and the Hong Kong Chinese higher than the United States on self-transcendence (Schwartz, 1994). These differences are congruent with individualism-collectivism research that finds the United States extremely individualistic (Hofstede, 1980) and the Hong Kong Chinese collective (Bond, 1986; Leung, 1987, 1997).

The second set juxtaposes conservatism with openness to change. Conservatism emphasizes conformity to the status-quo, protection of the larger social order, and "preservation of the social and material environment" (Schwartz, 1994, p. 105). Tradition and security are valued, and the self may be restricted in order to preserve social harmony. Conservatism is measured with values such as: Obedient, accept- ing of my portion in life, and moderate. Openness to change emphasizes free- dom (Schwartz, 1994) and risk. An intellectual openness emphasizes an acceptance of many views and possibili- ties, and is measured with values such as: Creative, curious, and broadminded. An affective openness emphasizes emo- tional stimulation and is measured with such values as: Daring, exciting, and a varied life. Previous research finds the Hong Kong Chinese culture to be more conservative and less open to change than U.S. culture (Schwartz, 1994).

VOL. 29, No. 4, FOURTH QUARTER, 1998 713




Similarly, the U.S. culture has been characterized as promoting innovation, change, and experimentation (Cohen, 1991; Usunier, 1996)

A TYPOLOGY OF NEGOTIATION STRATEGIES

Most behaviors in negotiations are, aimed at maximizing utility for the negotiators (Raiffa, 1982), thus an understanding of what provides utility in a negotiation would help us identify the behaviors we expect to find in the United States and Hong Kong. Many negotiation models acknowledge that a negotiator's utility depends on both his or her own outcome and the other party's outcome (Graham, et al., 1994; Pruitt & Rubin, 1986; Raiffa, 1982; Walton & McKersie, 1965). These models tend to array negotiation strategies along two dimensions: Integration and distribution. The former dimension embodies concern for both self and other's outcomes; the latter dimension embodies concern for either self or other's outcome (Pruitt & Carnevale, 1993). Although these models acknowledge awareness of the other party's outcome, they fail to incorporate social comparison processes. Social comparison processes influence people's behavior (Adams, 1963; Homans, 1961), and some researchers suggest that this relationship may be even more pronounced in collectivist or self-transcendent cultures (Ho, 1993; Yang, 1993). Thus, a complete negotiation model must include the utility a negotiator receives from relative gain to self, compared to the other party's gain, in addition to the utility gained from absolute outcomes. For some negotiators, utility may not result from gain to self, but from relative gain to self over other party; for other negotiators utility may result from equal

gain for both parties. Social psychologists have incorporat-

ed these relative utilities in their models to explain people's preferences in interdependent situations. McClintock and his colleagues (McClintock, 1972; Messik & McClintock, 1968) suggest that individuals have relatively stable preferences for maximizing either own, other, joint, relative, or equal outcomes in interdependent interactions. These stable preferences are referred to as motivational orientations, and as in negotiation research, it is assumed that people choose behaviors that maximize the utility of their outcomes (McClintock, 1972). Because these models incorporate social comparison processes, we use this typology to clas- sify negotiation strategies. We propose that negotiation behavior will fall into five distinct categories, each defined by the utility it is attempting to maximize.

A Self-interested negotiation strategy will be aimed at maximizing a one's own gain. This might include setting high goals (Huber & Neale, 1987), and holding firm to one's own position. An Altruistic strategy will be aimed at maximizing the other party's gain. This would map onto what Pruitt and Rubin (1986) call "yielding" behavior - satisfy- ing the other party's interests. A Joint problem solving strategy will be aimed at maximizing the joint gain. This would map onto what Pruitt and Rubin (1986) call "problem solving," Graham and colleagues (1994) call "problem solving approach," or what Walton and McKersie (1965) call "integration." Previous research finds joint problem solving processes correlate to joint gain (Pruitt, 1981; Pruitt & Lewis, 1975; Weingart, Thompson, Bazerman & Carroll, 1990). Joint problem solving might include sharing information





about preferences, trading priorities, or bridging underlying interests (Bazerman & Neale, 1992; Lax & Sebenius, 1986; Pruitt & Carnevale, 1993). A Competitive strategy will be aimed at beating the other side, or maximizing the relative gain to the self. This is not the "forcing" behavior of previous models (cf., Pruitt & Rubin, 1986), because competitive behavior may not result in high absolute gain to self. Rather, a party may sacrifice gain to self to ensure the other party receives even less. This strategy would include contending tac- tics, such as bluffing or threatening, that are often found to lower both parties gains (Pruitt, 1981), but may lower one party's gains relatively more. An Equality strategy will be aimed at dis- tributing the outcomes equally between the two parties. This is similar to "compromise" (Lax & Sebenius, 1986; Pruitt & Rubin, 1986; Raiffa, 1982), or "tit for tat" (Axelrod, 1984), with explicit reference to equal concession making.

UNITED STATES VERSUS HONG KONG CHINESE NEGOTIATION NORMS

Because values represent a desired end state (Schwartz & Bilsky, 1987), and the above negotiation strategies are categorized based on the utility of the outcome they produce, we would expect values to influence people's use of these negotiation strategies. Moreover, we propose that cultural values, which are shared by members of a cultural group, will promote a set of negotiation strategies that also will be shared by that cultural group. We call these shared strategies, "negotiation norms." A norm is a cognitive representation, or mental model, of what people perceive or expect to be appropriate behavior (McGrath, 1984). Norms are socially shared standards for behavior, arising

from common experiences in social set- tings (Bettenhausen & Murnighan, 1985). Thus, negotiation behaviors that are generally accepted by a group and considered appropriate strategies are negotiation norms.

Self-enhancing (individualistic) values are expected to cause individuals in the culture to adopt self-interested negotiation norms, while conservatism will make it less likely that individuals would subscribe to these norms. Self- enhancement implies the culture values loose ties between its members (Triandis, 1989) and individual autono- my over relationships (Marcus & Kitayama, 1991). In individualistic cultures, goals are aligned with self (Triandis et al., 1990), and there is an emphasis on personal needs (Yang, 1993). The conceptual congruence between goals to self and personal needs (self-enhancement) and self-interested negotiation behaviors suggests these behaviors will fit well in self- enhancing cultures. On the other hand, conservatism, which emphasizes mod- eration and self-sacrifice to the mainte- nance of the collective, suggests self- interested behaviors will fit poorly in conservative cultures. Given that U.S. culture ranks higher than Hong Kong Chinese on self-enhancement, and lower on conservatism, we would expect self-interested behaviors to fit better in the U.S. culture than in that of Hong Kong.

Hi: U.S. negotiators will view self- oriented behaviors as more appropriate than will Hong Kong Chinese negotiators.

Openness to change is expected to cause high levels of the joint-problem solving strategy. Joint problem solving





requires a willingness to brainstorm creative solutions that might bridge both parties underlying interests (Pruitt & Lewis, 1975; Tutzauer & Roloff, 1988). This means parties have to be willing to invent, to create something new (Follett, 1940), rather than defer to an existing framework. Moreover, parties need to share information with the other party (Pruitt, 1981; Weingart et al., 1990), implying a willingness to take an initial risk. When joint problem solving, each side exposes some information that the other party can either use to create joint gain or simply gain to self (Lax & Sebenius, 1986), so that each side has to expose some vulnerability.

Given that the U.S. culture is more open to change than the Hong Kong Chinese culture, we expect to find more use of joint problem solving among U.S. negotiators than among Hong Kong Chinese negotiators. This prediction is consistent with previous research that finds Americans focus more on problem solving, experimenting, and integrating during negotiation than other cultural groups (Druckman et al., 1976; Fisher, 1980; Campbell et al., 1988; Cohen, 1991; Usunier, 1996; Tinsley, 1998).

H2: U.S. negotiators will view joint problem solving as more appropriate than will Hong Kong Chinese negotiators.

Self-transcendence and conservatism are expected to cause individuals in the culture to adopt equality norms. Self- transcendence is likely to heighten a negotiator's awareness of the social collective and their outcome, which might lead one to speculate a joint problem solving approach. Yet, when coupled with conservative values (which are inconsistent with the innovative quality

of joint problem solving), we think this heightened awareness of the social collective would instead translate into an equality strategy. An equality strategy offers a pro-social orientation (as opposed to the competitive approach, which is negative-social; or the self- interested and altruistic which are indi- vidually oriented), without the social disruption joint problem solving can cause (Leung, 1997; Tinsley, 1997). Equal concession making to arrive at a compromise solution is thought to promote relational harmony (Gulliver, 1979; Leung & Wu, 1990; Nader & Todd, 1978). Given that the Hong Kong Chinese culture is more conservative and self-transcendent than U.S. culture, we expect more use of an equality strategy among negotiators from Hong Kong than those from the United States. This prediction is consistent with previous research that finds Hong Kong Chinese arrive at more equal outcomes when resolving work place conflict (Leung, 1997; Tinsley & Brett, 1997).

H3: Hong Kong Chinese negotiators will view equality-oriented behaviors as more appropriate than will U.S. negotiators.

This distinction between the two pro- social negotiation strategies (joint problem solving and equality-orientation) is important because it often gets blurred when one talks about cooperation. Empirical evidence shows that joint problem solving and high joint gain result when negotiators are instructed to "be concerned with how well they did as a team" (Rubin & Brown, 1975), or when they are asked to be "interested in the needs of the other party" (Pruitt & Lewis, 1975). This evidence may lead to the incorrect conclusion that cooper-





ative instructions always lead to problem solving behaviors. We would speculate, however, that such instructions would not lead to joint problem solving unless the culture valued openness to change as well. In cultures where harmony and conformity are valued over innovation and risk, individuals who receive cooperative instructions are expected to behave in a pro-social, but non-disruptive, manner, hence to equal- ize outcomes.

H4: Pro-social instructions will lead to the goal of maximizing joint outcomes for U.S. negotiators, but to the goal of equal outcomes for Hong Kong Chinese negotiators.

CULTURE AND THE EVALUATION OF NEGOTIATION OUTCOMES

Our natural selection thesis argues that those negotiation strategies that fit with the cultural values will come to dominate because they offer a means to a desirable end state. These negotiation norms are more effective strategies, meaning they offer parties better results. On the one hand, since joint problem solving is normative in the United States, we expect that its result (high joint gain) will be perceived as a good result for U.S. negotiators. On the other hand, since an equality strategy is normative in Hong Kong, we expect that its result (equal outcomes) will be perceived as a good result for Hong Kong Chinese negotiators. This suggests the following interaction hypotheses between cultural group and satisfaction with negotiation outcomes:

H5a: The relationship between joint gain and negotiator satisfaction will be moderated by culture. Specific- ally, the relationship will be stronger

for U.S. negotiators than it will be for Hong Kong negotiators.

H5b: The relationship between equality in outcomes and negotiator satisfaction will be moderated by culture. Specifically, the relationship will be stronger for Hong Kong negotiators than it will be for U.S. negotiators.

METHOD

Participants Business students (N=153 for Hong

Kong, N=78 for the United States2) par- ticipated as one of the first exercises of the year, so that neither group had any formal negotiation instruction prior to the exercise. Although students were selected as the participants, so as to minimize variance on age, gender, and socio-economic status as has been pre- viously advocated (Mann, 1980), U.S. students were significantly older than their Hong Kong counterparts (F=345, p<.001). Thus, we entered age as a covariate in the analyses to control for its effect on people's negotiating behavior.

Procedure Snell and Rangaswamy's "Medical

Equipment" negotiation exercise was modified as a scorable negotiation with six issues. Before receiving their confi- dential role instructions as either buyers or sellers, participants completed a pre- negotiation questionnaire to measure their values and negotiation norms. Role instructions included individual payoff information for each issue, as well as one of the following instructions: (i) to be concerned with own needs (self-maximizing instructions); (ii) to do better than the other party (competitive instructions); or (iii) to





take care of the other party's needs, as well as their own (cooperative instructions). Participants were also told that they should aim to get above 3000 points, as their BATNA was 3000. The day of the negotiation, participants were randomly assigned a partner for the exercise and asked to negotiate for 40 minutes. After they reached an agreement, or after 40 minutes, participants filled out a short post-negotiation questionnaire that assessed the personal goals that they set for themselves in the exercise, and their satisfaction with the negotiation process and outcomes.

Measures Cultural Values were measured using

the Schwartz (1992) value inventory. As analyzed in later papers (1994; Schwartz & Sagiv, 1995) these values can be categorized into the following dimensions: self-enhancement (Hong Kong coefficient (x=.80; U.S. (x=.72), self- transcendence (H.K. (x=.67; U.S. (x=.69), openness to change (H.K. (x=.79; U.S. (x=.75), and conservatism (H.K. (x=.72; U.S. (x=.3 7).

Negotiation Norms were measured with items drawn from existing litera- ture that addressed our five focal norms:

TABLE 1 FACTOR LOADING OF ITEMS MEASURING NEGOTIATION NORMS

Competitive Equality Self-interest Problem-Solving Altruistic Go 50-50 with the other party to reach an agreement -.07371 .82247 - .02658 -.01676 .05602

Give in if the other party meets you half way .03036 .81386 -.15463 -.14368 .04182 Meet the other party at the mid- point of the bargaining range -.06528 .76848 -.04902 -.07690 .06494 Set high goals for your own outcome .16331 .09804 .59765 .23563 -.10380

Satisfy your own needs .25005 .04963 .58588 .16851 -.02043 Make strong arguments to support your position .00531 -.17821 .76507 .05313 -.05618 Be firm in pursuing your position -.03768 -.20670 .73410 .01636 -.00138 Bluff or give misleading information .78862 .01458 .01648 .19398 -.16747 Resist making concessions to the other party .62087 .15397 .18376 .00238 -.12175 Threaten the other party that you may walk from the deal .66282 -.25851 .24849 -.02761 .27034 Threaten to withdraw a previous offer .72653 -.18946 -.05566 -.13261 .27102 Ask the other party to explain their needs & interest -.08613 -.16146 .10234 .66857 -.10753 Ask the other party for proposals .05945 -.10797 .15827 .71816 .04743 Use the other party's ideas to generate a proposal .35774 -.10779 .12692 .65824 -.00771 Blend your ideas with other party's creating a novel agreement -.09850 .09307 .04095 .62040 .21282 Yield to the other party's demands .03516 .12008 -.20089 -.11216 .77916

Satisfy the other party's needs .01381 .05717 .03944 .28321 .78594

Eigenvalue 3.42 2.04 1.84 1.60 1.14 Percentage of variance explained 20.1 12.0 10.8 9.4 6.7





joint problem solving, self-interested, equality, altruistic, and competitive (Pruitt & Rubin, 1986; Brett et al., 1998; Weingart et al., 1990). Participants were asked to rate the appropriateness of particular negotiation behaviors on a 5-point Likert scale. Although many items had been validated across cultures, a factor analysis was run to assess the factor structure. Significant loadings of items on intended constructs, and non-significant cross-loadings, offers evidence for convergent and dis- criminant validity for these measures (Joreskog & Sorbom, 1989). These items and their factor structure are shown in Table 1.

Outcomes are the total outcomes for the negotiators across all six issues. Participants were assigned a total of 3000 (their BATNA) in cases where they did not reach an agreement. In addition we measured individual negotiators satisfaction with the negotiation. The 12 items used to measure this construct included items about satisfaction with own outcomes, projections of how satisfied the other party was with their outcome, and participants' affective feel- ings about the negotiation process (coefficient ox = .87 for the whole sample; Hong Kong coefficient x=.83; U.S. x=.91).

RESULTS

To control for any cultural differences in response style, values, norms, and outcome scale, items were standardized for each cultural group (Leung & Bond, 1989). We used these standardized variables for all of the tests we report below. A comparison of the self-reported values confirmed that the value profiles in our sample of negotiators were consistent with previous research. Americans were significantly higher on

self-enhancement (individualism) and openness to change, while the Hong Kong Chinese were significantly higher on self-transcendence (collectivism) and conservatism.3

We used a series of ANOVA's to test our hypotheses of cultural differences in negotiation norms, with cultural group as the independent variable, norms as the dependent variables, and age as a co-variate. Results revealed significant differences for culture, as hypothesized. U.S. participants rated self-interested and joint problem solving behaviors as significantly more appropriate than their Hong Kong Chinese counterparts, supporting hypotheses 1 and 2. Hong Kong Chinese participants rated equality behaviors as significantly more appropriate than their U.S. counterparts, supporting hypothesis 3. There were no significant differences on the altruism or competitive norms. Moreover, there was no significant effect for age, sug- gesting that age did not affect negotiation behavior for this sample. Table 2 shows the means, F statistics, and effect sizes for each of the norms by cultural group.

To test hypothesis 4, we classified participants' self-stated negotiation goals for the exercise, by culture, under each set of instructions (self-maximizing, competitive, cooperative). Table 3 shows the classification pattern that supports hypothesis 4. Hong Kong Chinese negotiators were significantly more likely to interpret cooperative instructions (consider the needs of the other party as well as your own) as meaning that they should strive for equality, whereas almost all U.S. negotiators interpreted these instructions to strive for joint gain (chi-square = 51.04, df=6, p<.001).





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To test hypotheses 5a and 5b, we cre- ated two outcome indices: i) the dyadic sum, which was the addition of both parties' total points; and ii) the dyadic difference, which was the difference between the two parties' total points. Culture is a dummy variable (US = 1, Hong Kong = 2). According to Baron and Kenny (1986), the test for modera- tion should include a term for the direct effect of the predictor (dyadic sum and dyadic difference), a term for the direct effect of the moderator (culture), and the interaction term (i.e., product of the two terms). The moderator hypothesis is supported if the interaction term is significant. Following Aiken and West's (1991) recommendation that we use standardized variables when faced with multicollinearity, we used standardized predictors and outcome variables in the moderator analyses (where, of course, multicollinearity is inevitable given that one of the variables is a product of the two others that are entered in the equa- tion).

Culture interacted with dyad sum (13 =

-1.98, p <. 001) and with dyad difference (,B = -.218, p < .004) in predicting negotiator satisfaction. A sub-group analysis revealed that dyad sum was positively related to satisfaction for U.S. negotiators (,B = .46, p <. 001) and not significantly related to satisfaction for Hong Kong negotiators (1B = -.02, p <.82 ), supporting hypothesis 5a. Dyad difference was negatively related to satisfaction for Hong Kong negotiators (,B = - .28, p <.001), and not significantly related to satisfaction for U.S. negotiators (,B =.12, p <.35), supporting hypothesis 5b.

DISCUSSION AND IMPLICATIONS

Cultural groups develop different negotiation strategies that are conceptually consistent with their shared cultur-

al values. Negotiators from the U.S. culture espouse significantly higher levels of self-interested and joint problem solving norms, while their Hong Kong Chinese counterparts espouse significantly higher levels of an equality norm. These differences were anticipated from each culture's value profile. There were no significant differences on either the altruism or competitive norm, which might be expected because the value profiles of the cultures studied were conceptually orthogonal to both competitive and altruistic strategies. The overall pattern of results (finding both cross-cultural similarities and differences) suggests results were not simply due to methodological error (Brett et al., 1997). We note one limitation here- low alphas on negotiation strategies that are non-normative for a country (self- interested and problem solving in Hong Kong and altruistic strategies in the U.S.). Since low alphas indicate random error, this makes systematic cultural differences harder to detect, meaning our resulting differences in self-interested and problem solving strategies may be a conservative estimate of the true differences. The pattern of the reliability coefficients may in fact support our hypotheses of normative and non-normative strategies across cultures; low alphas for non-normative strategies may indicate that the set of behaviors that makes up a particular negotiation strategy does not "hang together" as well when that strategy is not prevalent in the culture.

Cultural groups not only develop different negotiation norms, but they also interpret negotiation instructions in ways that are congruent with their norms and cultural values. The pro- social instruction to cooperate with the other party translates into two very dif-





ferent orientations, depending on the cultural context. In the U.S. culture that values openness to change and espouses a joint problem-solving norm, this instruction translates into maximizing joint outcome. In the Hong Kong Chinese culture that values conservatism and espouses an equality norm, this instruction translates into ensuring parties have equal outcomes. This distinction explains previous findings that show collectivist Hong Kong Chinese display surprisingly few integrative or problem solving behaviors (Leung, 1997; Tinsley, 1997).4 A presumption that collectivism leads to joint problem solving may stem from the theory that collectivism is associated with cooperation (Earley, 1989; Wagner, 1995), and empirical results that link cooperative instructions to joint problem solving (Pruitt & Lewis, 1975; Rubin & Brown, 1975; Schultz & Pruitt, 1978; Weingart, Bennett & Brett, 1993). However, these empirical results are primarily derived from studies of U.S. participants who espouse openness to change. Without this value, cooperative instructions are more likely to lead to equality, since this strategy is also pro-social, but does not require innovation.

Finally, a culture's normative strategies lead to more negotiator satisfaction. Negotiators from the U.S. culture feel more satisfied with their outcomes when they maximize joint gain. Negotiators from the Hong Kong culture feel more satisfied with their outcomes when they maximize the parity between both parties' outcomes. These findings suggest that prescriptions from U.S. research to expand the pie (Pruitt, 1981; Raiffa, 1982; Bazerman & Neale, 1992; Fisher, Ury & Patton, 1991) may be culturally bounded. It is possible that in other cultural contexts maximizing joint

gain is not necessarily the most optimal outcome, at least not when it comes at the expense of equal outcomes. One modification to expanding the pie might be to both maximize joint gain, and then divide the joint gain equally. However, this prescription discounts several negotiation findings. First, integration (creating joint gain) and distribution are intimately linked in the same behaviors (Lax & Sebenius, 1986) so that treating these processes as separable is not sim- ple. Second, when dyads do attempt to integrate first and then distribute equally, arguments over what constitutes an equal division can erupt because both parties can show ego-centric interpretations of which equality principle is most valid (Thompson & Lowenstein, 1991; Zartman et al., 1990). Parties may argue whether an equal outcome is defined by equal benefit in the final agreement (Pruitt & Carnevale, 1993), equal excess above their BATNA (Komorita & Kravitz, 1979), equal concessions from their initial positions (Raiffa, 1982), or equal concessions from aspiration levels (Tietz & Weber, 1978). Future research might focus on what types of equality are most important in different cultural contexts. Our results also suggest that we might expand our definition of an optimal outcome, beyond dyadic total points (Tinsley, 1997). Some researchers include subjective outcome measures (Dwyer & Walker, 1981; Graham et al., 1994), as we have done, which can assist us in refining our definition of an optimal outcome.

Finally, our results suggest that cultural values create an environment in which some negotiation strategies are selected to survive over others. These strategies are selected and become normative because they offer an outcome





that is socially desirable. Hence, we find joint gain to be correlated with higher utility in the U.S. culture, and equal outcomes to be correlated with higher utility in Hong Kong culture. These interactions are consistent with the thesis that cultural context causes the variety of negotiation behavior found internationally. We should note that we have used the nature of a dyad's outcome are a proxy for the negotiation strategies used. We may infer the process (for example, joint problem solving) from the outcome (level of dyadic gain), but obviously our thesis would receive stronger support if we directly demonstrated that strategy interacts with culture to give outcomes that are evaluated more highly. Future research could record negotiations in an attempt to measure negotiation strategies.

CONCLUSION Cultural context promotes some nego-

tiation strategies over others. Cultural group members are the operating agents for culture. They internalize cultural values that inform their utilities for a negotiated outcome. Through experi- ence, members learn the association between strategies and outcomes, and learn to choose those strategies that give high utility. Strategies that fit with the culture's values become normative, as using these strategies results in higher satisfaction. In our data, U.S. negotiators espoused higher self-interested and joint problem solving norms, and rated joint gain as more satisfactory, while Hong Kong Chinese negotiators espoused higher equality norms and rated equal gain as more satisfactory. Hence, we suggest U.S. negotiation prescriptions should be refined for applica- tion internationally.

NOTES

1. We consider national cultures when we use the word culture. However, we recognize that other cultural groups exist both below the national level and above it.

2. We sampled across nations, since nation is a good first approximation of national culture. However, we tested for cultural values to assure that our national group sample conformed to our theoretical cultural group. As well, all students from other national cultures were excluded from analyses.

3. All these differences are significant. We do not report means and sig- nificance tests because our intent in this analysis is to confirm that the cultural values reported by our sample are not different from those reported in other studies. The specifics of these analyses are available upon request.

4. Note, however, Graham (1996) found Hong Kong Chinese to be better at joint profits and worse at equality than Americans. These discrepancies high- light the value of replication research, and the need for meta-analysis.

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