Cultural Values and the Negotiation Table: Unlocking the Impact of Individualism vs. Collectivism, Hierarchy, and Uncertainty Avoidance

Negotiation, the art of reaching agreements, is not merely a transactional exchange of offers and counteroffers; it’s a complex dialect of cultural values, beliefs, and norms

Understanding how cultural values influence negotiation outcomes is essential for achieving results in the global arena. 

So, let’s take a look at the impact of cultural values such as individualism versus collectivism, hierarchy, and uncertainty avoidance on negotiation strategies and outcomes.

Individualism vs. Collectivism

Welcome to the boardroom.

On one side of the table: a U.S. company; on the other: a Japanese firm. 

While discussing a joint venture, their priorities differ, based on their individualist versus collectivist values.

The American negotiators emphasize their company’s strengths and seek to secure the best possible deal for their organization. 

The Japanese negotiators prioritize building trust, fostering mutual respect, and ensuring alignment with their company’s broader goals and values.

One of the most fundamental cultural dimensions impacting negotiation is the degree of individualism versus collectivism within a society. 

In individualistic cultures like the United States, negotiation is often approached from a competitive standpoint, with an emphasis on individual goals, autonomy, and personal achievement

Negotiators may prioritize their own interests and seek to maximize their outcomes, even at the expense of others.

Conversely, in collectivistic cultures such as Japan or China, negotiation is viewed through a communal lens, emphasizing harmony, cooperation, and group cohesion. 

Negotiators may focus on building relationships, consensus-building, and ensuring the well-being of the collective. 

In these cultures, concessions may be made to preserve group harmony and maintain long-term relationships.

Hierarchy

The boardroom, round two.

On one side: a German company; on the other: a Brazilian company.

While discussing a partnership agreement, their priorities differ based on their views of hierarchy.

The German negotiators expect a collaborative approach, with decisions made based on merit and expertise rather than hierarchical considerations. 

The Brazilian negotiators defer to senior executives and prioritize building rapport and respect for authority.

Hierarchy, or the degree of social stratification within a society, significantly influences negotiation dynamics. 

In hierarchical cultures like those found in many Asian and Latin American countries, respect for authority, status, and seniority plays a central role in negotiation interactions. 

Negotiators may defer to higher-ranking individuals, and decisions may be made by those in positions of authority.

In contrast, in egalitarian cultures such as those in Northern Europe or Australia, negotiation tends to be more egalitarian, with an emphasis on equality, meritocracy, and consensus-building. 

Negotiators may engage in open dialogue, challenge assumptions, and seek input from all stakeholders, regardless of rank or status.

Uncertainty Avoidance

The boardroom, round three.

On one side: a Swedish company; on the other: a Saudi Arabian company.

While discussing a business partnership, their priorities differ based on their level of uncertainty avoidance.

The Swedish negotiators are more open to exploring creative solutions and adapting to changing circumstances. 

The Saudi negotiators prefer clear agreements, detailed contracts, and a structured approach to minimize uncertainty and risk.

Uncertainty avoidance, or the degree to which a culture tolerates ambiguity and uncertainty, shapes negotiation outcomes. 

In cultures with high uncertainty avoidance, such as those found in many Asian and Middle Eastern countries, negotiators may prefer clear rules, detailed contracts, and predictable outcomes. 

Negotiation strategies may focus on minimizing risk and ensuring stability.

Conversely, in cultures with low uncertainty avoidance, such as those in the United States or Northern Europe, negotiators may be more comfortable with ambiguity and uncertainty. 

Negotiation approaches may be more flexible, adaptive, and open to innovative solutions, with less emphasis on rigid rules or formalities.

Come to the Negotiation Table Prepared

Cultural values – particularly individualism vs collectivism, hierarchy, and uncertainty avoidance – play a profound role in shaping negotiation outcomes, influencing everything from communication styles to decision-making processes

By understanding and respecting cultural differences, negotiators can adapt their strategies and approaches to navigate diverse cultural landscapes successfully.

Horizontal/Vertical Cultures & Advertising: Does Status, Pleasure, or Relationships Appeal to Your Culture?

The glossy page of an in-flight magazine shows an ad of a woman running while clutching a sleek new mobile phone.

Several passersby turn to watch her run past.

The ad reads “Turning heads with America’s Slimmest Phone!”

Does this ad appeal to you?

Would it appeal generally to the people of your culture?

While it’s not uncommon to encounter advertisements promising to elevate a consumer’s status and leave a lasting impression on others, the role of culture in shaping the resonance of such appeals cannot be understated. 

The degree to which such advertisements motivate consumers may vary depending on the cultural context.

This study set out to explore the influence of culture on the use of persuasive appeals highlighting the allure of status benefits and various other advantages.

The Study’s Hypotheses

The study’s hypotheses stem from a nuanced consideration of cultural distinctions, particularly the contrast between horizontal cultures, which value equality, and vertical cultures, which emphasize hierarchical structures

The researchers argued that this cultural distinction offers a unique lens through which to make predictions, revealing insights not traditionally associated with broader cross-cultural differentiations between individualism and collectivism.

The delineation between vertical cultures and horizontal cultures offers a fresh perspective on the prevalence and content of advertising appeals. 

The Study

Through a comprehensive content analysis encompassing 1,211 magazine advertisements across five diverse countries (Denmark, Korea, Poland, Russia, and the United States), researchers uncovered distinct patterns in ad content that underscore the significance of this cultural distinction.

In their in-depth examination, they delved into these ad content patterns and their implications. 

They undertook a comparative analysis, pitting the predictions derived from the vertical/horizontal cultural distinction against those derived from the broader individualism-collectivism framework, ultimately subjecting these predictions to empirical testing.

Notably, the analysis revealed variations in the emphasis on status benefits and uniqueness benefits within advertisements, mirroring the countries’ categorization as vertical or horizontal cultures.

The Results

The study’s comprehensive analysis of magazine advertisements spanned several countries, each representing distinct cultural orientations, including VI (United States), HI (Denmark), and VC (Korea, Russia, Poland).

Researchers noted a distinct emphasis on status-related benefits within advertising appeals in countries aligned with VC cultures, which includes Korea, Russia, and Poland, as well as the VI culture in the United States. 

This emphasis encompassed depictions of luxury, references to prestige, impressing others, prominence, affiliations with high-status groups (e.g., ivy league graduates), endorsements by high-status individuals (e.g., celebrities), and other forms of distinction (e.g., “award-winning”). 

This focus on status benefits corresponded with the cultural profiles of these countries. 

Notably, in all VC societies examined, status benefits emerged as a dominant theme in advertising, often overshadowing appeals emphasizing pleasure, uniqueness, or relationships. 

In stark contrast, the emphasis on pleasure appeals was preferred in the HI culture of Denmark.

Uniqueness-related appeals, which included elements of differentiation, self-expression, self-reliance, and novelty, were also more prominent in HI cultures compared to VI and VC cultures. 

These appeals portrayed the product as a means of self-expression, aligning with cultural contexts emphasizing individuality, distinctiveness, and self-reliance.

Notably, although both the United States and Denmark are categorized as individualistic societies, their advertisements significantly differed in their emphasis on uniqueness and status, reflecting the nuances of their vertical and horizontal cultural values

These patterns were not anticipated by conventional analyses based on the broader individualism-collectivism classification.

As expected, the prevalence of ads emphasizing pleasure benefits largely corresponded to the individualism-collectivism orientation of the society. 

These appeals, which cater to personal hedonic goals valued in individualistic cultures, were more prevalent in individualistic societies than in collectivistic ones, with the contrast between HI and VC cultures proving particularly significant.

However, no significant differences emerged across individualistic and collectivistic cultures in regard to relationship appeals, which focused on sociability, nurturing, warmth, and belongingness. 

Overall, the study found that the conventional individualism-collectivism framework falls short in predicting the prevalence of such appeals, making the horizontal/vertical cultural distinction a valuable addition to cross-cultural theory and research.

Relational Mobility, Part II: How Easily Does Your Culture Form New Relationships…And Abandon Existing Ones?

How do you build relationships?

Do they last?

Last week, we discussed relational mobility – an aspect of the social environment that reflects how easily people of different cultures form new relationships and leave existing ones. 

The authors of six comprehensive studies encompassing both correlational and experimental designs unveiled significant findings regarding relational mobility in culture.

Let’s take a look at what they’ve found.

The Research

The research hypothesis of these collective studies centered on the notion that individuals residing in cultures characterized by diminished relational mobility would exhibit a heightened propensity for holistic thinking, emphasizing a broader focus on the surrounding social and physical context. 

Conversely, those in cultures marked by greater relational mobility would display more analytic thinking

To substantiate this proposition, the authors explored the disparities in relational mobility across culturally diverse regions, including the United States, Spain, Israel, Nigeria, and Morocco. 

Their findings revealed that variances in relational mobility predicted patterns of dispositional bias and the prevalence of holistic or analytic cognitive orientations.

Findings

Some of the greatest findings across these six studies are as follows:

  • Firstly, individuals in cultures characterized by higher relational mobility exhibited narrower attention spans towards their surrounding context and displayed increased dispositional biases. This was in stark contrast to individuals in cultures with lower relational mobility.
  • Secondly, the authors identified that relational mobility acted as a mediator, explaining the differences observed between these cultural groups in terms of cognitive tendencies.
  • Thirdly, the role of locus of control was explored as a mechanism underlying these within-culture effects. It was evident that individuals in high relational mobility environments tended to perceive greater control over their surroundings, particularly within the social realm.
  • Lastly, relational mobility exhibited a unique predictive power in elucidating why certain cultures leaned towards analytic or holistic cognitive orientations compared to other cultural constructs.

Relational Mobility Shapes Cognitive Behaviors

The degree of relational mobility in an environment, shaped by various factors like subsistence styles, historical threats, or sociopolitical systems, influences individuals’ proximal incentives and shapes their cognitive behaviors

In contexts with lower relational mobility, interdependence and adherence to social norms tend to dominate, driving individuals toward holistic thinking. 

Conversely, higher relational mobility settings foster independence and cultural looseness, encouraging analytic cognitive tendencies.

This research sheds light on how the degree of relational mobility in a society can profoundly impact the way people think, highlighting the interchange between socioecological factors and cognitive tendencies across diverse cultures.

Relational Mobility, Part I: How Easily Does Your Culture Form New Relationships…And Abandon Existing Ones?

Do you find that you make friends easily?

How keen are you to keep them?

In some environments, people are inclined to maintain lifelong bonds with a select few, fostering enduring connections

Conversely, in certain social milieus, relationships and group affiliations form and dissolve with greater ease.

Here are a few examples of these contrasting communities.

Enduring Connections

The Japanese tradition of lifetime employment led many post-World War II businessmen to anticipate unwavering allegiance to their companies throughout their careers. 

Similarly, those residing in rural or secluded communities often take great pains to avoid being ostracized from established social networks, as alternative companions are relatively scarce in these close-knit societies.

While such contexts offer fewer chances to forge new relationships, they reciprocate with steadfast and dependable existing social ties.

Dissolving Connections

Those communities whose relationships dissolve with greater ease are frequently goal-oriented.

These transient social connections often arise out of mutual convenience, rendering them less stable and dependable. 

Take, for instance, professions like investment banking or consulting, particularly in countries like the United States, where these roles are frequently regarded as temporary due to demanding workloads or rigorous criteria for retention and advancement. 

Moreover, metropolitan areas characterized by reduced social constraints enable individuals to establish fresh connections and sever old ones without incurring significant social repercussions.

This all has to do with a culture’s relational mobility.

Relational Mobility

Relational mobility is an aspect of the social environment that reflects how easily people can form new relationships and leave existing ones.

Making friends at the drop of a hat is something that is as much cultural as it is a personality trait.

So is abandoning them at will.

The definition of friendship also differs across cultures, as we’ve discussed in a previous post.

Next week, we’ll take a look at a scientific study that dissects relational mobility and see how culture comes into play.

How Does Personal Control & Relationship Strain Affect Well-Being in Independent/Interdependent Cultures

Do you feel personal control contributes most to your health and well-being?

How does relational strain come into play?

To investigate the relationship between culture and well-being, a cross-cultural survey was conducted, focusing on two hypotheses and the two very different cultures of Japan and America

The Hypotheses

The first hypothesis suggests that individuals are influenced by the predominant cultural norms of either independence (emphasizing personal control) in the United States or interdependence (emphasizing relational harmony) in Japan.

The second hypothesis proposes that individuals attain well-being and health by aligning with the cultural mandates of their respective societies. 

Ethnocentricity & Previous Studies

Previous studies, predominantly conducted in North America, have consistently found that personal control and mastery are strong predictors of well-being and health (Lachman and Weaver, 1998; Schneiderman et al., 2001). 

However, this may be a somewhat ethnocentric view.

The present research, utilizing diverse age groups from both the United States and Japan, reveals that the impact of these factors is contingent on cultural context

While biological factors certainly play a role in health, this survey highlights the significant influence of culture-specific psychological variables, such as personal control and relational harmony or strain, on various health outcomes.

The Results

Consistent with the first hypothesis, it was found that Americans who felt their personal control was compromised and Japanese individuals experiencing strained relationships reported higher levels of perceived constraint.

As expected, the study revealed that the strongest predictor of well-being and health in the United States was personal control, whereas in Japan, the absence of relational strain played a significant role.

The data revealed relatively small but statistically significant effects of relational harmony or relational strain on wellbeing and health among Americans. 

The overall results highlight the existence of culturally distinct pathways to achieving positive life outcomes.

In the United States, personal control emerges as a crucial factor, whereas in Japan, the absence of relational strain is key. 

These findings underscore the influence of cultural values on individual well-being and emphasize the importance of understanding cultural nuances when studying and promoting positive life outcomes.

Social & Cultural Capital, Part 1: How to Benefit from Each in the Workplace

Your success on the job often relies on the type of capital you possess. 

We’ve been discussing social and cultural capital over the past few weeks, and these two types of capital are what matter at work. 

To review, social capital is all about the strength of relationships and connections within a group, whereas cultural capital is the shared values and goals that bring a group together.

Social capital can help you achieve more or reach objectives more easily at work. 

In this post, we’ll take a closer look at social capital and see how to assess and build upon it.

Assessing Your Social Capital

Maybe you don’t even know where you stand with your social capital.

After all, it’s not exactly something tangible that you can measure.

The following questions might help you identify where you’re at with your social capital:

  • Do I carry influence? What is my reputation like? Do others see me as strong or weak, reliable or flakey, positive or negative? Do they want to work with me?
  • How strong are my relationships within my team and without? Do I build connections with others across departments? Do I network?
  • Do I build strategic and enduring relationships or just transactional ones?
  • Do I have the energy and influence to mobilize resources and colleagues to support and achieve my goals? 
  • Do I keep abreast of important news and developments within my workplace and industry?

Improving your social capital can enhance your job performance, satisfaction, and career prospects. 

To do so, networking with peers and colleagues in your industry, cultivating relationships based on mutual interests and values, and offering help and support to others are paramount to banking more social capital. 

Aggregate Benefits

Not only does social capital improve individual success and potential, but the entire workplace improves.

Successful workplaces cultivate social structures in which everyone benefits.

This happens through social intercourse, empathy, fellowship, compassion, consideration, and most importantly, trust.

If the social structure benefits only a small group within the workplace, the organization’s aggregate benefits from their social capital decrease.

It feeds into a negative company culture, in which trust is lost, along with the sense of community.

When none of these things are there, those in the social structure can’t rely on each other and cooperation and society collapses.

If you look at your workplace and you cannot identify its values, then that’s a problem.

It means you’ll have a hard time personally building social capital there…as will the workplace, itself.

Building your cultural capital, which relates to your knowledge, skills, and understanding of cultural norms and practices, is also important for career success.

We’ll talk more about that next week.

Does Individualism Corrode Social Capital? Find Out Here

Would you require more social capital and cultural capital to succeed in an individualist country? Or less?

Do you think the individualist system or the collectivist system is more conducive to social cohesion?

There is a debate among theorists about whether individualism poses a threat to a society’s cohesion and communal association or whether it aids the development of social solidarity and cooperation

Some argue that the growth of individuality, autonomy, and self-sufficiency is essential for a healthy society, while others argue that excessive individualism undermines social ties and leads to a breakdown of community.

This study by Anu Realo and Jüri Allik suggests the opposite is true. 

Let’s take a look.

Individualism-Collectivism & Social Capital

Social capital and individualism-collectivism (IC) are two important constructs that have been studied extensively in the social sciences. 

As we outlined in a previous post, social capital refers to the networks, norms, and trust that facilitate coordination and cooperation among individuals and groups.

We’ve also extensively discussed IC – the degree to which people prioritize their own goals and interests versus those of the group.

Despite the seemingly contradictory nature of individualism and social ties, research on the relationship between social capital and IC suggests that there is a positive association between the two constructs. 

Individualism & Trust

Countries with higher levels of social capital are more individualistic, which suggests that independence and freedom to pursue one’s personal goals are of value to social capital. 

This is because social capital is based on trust, and trust is more likely to form in societies that value individual autonomy and self-determination.

Those societies in which trust is limited to only nuclear family or kinship have lower levels of social capital. 

Social capital is not evenly distributed within societies and can vary depending on the size of social networks and the degree of trust within them.

Social Capital Not at Odds with Individualism

To put it simply, social capital and individualism are not necessarily at odds. 

Instead, promoting social capital through policies that strengthen relationships and trust – such as investments in education, infrastructure, and community development – can help to build stronger communities, even in societies that value individual autonomy.

3 Different Types of Social Capital: Bridging, Bonding, & Linking

Networking.

That’s what everyone advises you to do in order to advance your career.

Why?

Because it brings you social capital. It allows you to build interpersonal relationships, trust, and ultimately (you hope) reciprocity.

But when we’re talking in terms of society at large, what is “social capital”?

Stick with this post, and you’ll learn the general term along with three different types of social capital.

Social Capital, Defined

Oxford Languages defines social capital as:

“the networks of relationships among people who live and work in a particular society, enabling that society to function effectively.”

Social capital is the net gain of human interaction and can be either tangible or intangible.

The outcome might include job opportunities (as described above via networking), favors, or new ideas.

When a group shares values or resources, they can work more effectively together toward a joint mission.

Three Types of Social Capital

There are three different types of social capital: bonding, bridging, and linking.

Bonding Social Capital – this social capital occurs between groups of people or individuals with shared characteristics – like age, hobbies, politics, etc.

This strongest type of social capital develops into close relationships based on shared bonds. Friends, family members, neighbors, church members – all of these groups may result in bonding social capital. These strong connections lead to helping between the individuals or groups, as one is more likely to go the extra mile for someone they know well and feel bonded with. 

For example, who are you more likely to help move? A friend or a stranger? Even a friend of a friend is pushing it.

Bridging Social Capital – this social capital occurs horizontally between socioeconomic groups of the same level. The “bridge” in this instance is a person or acquaintance that might connect two groups or individuals.

For example, Snoop Dogg was asked to appear as a guest on Martha Stewart’s show in 2008. Though they share a similar level of celebrity socioeconomic status, the pair likely would never have met had an intermediary not “bridged” their initial contact. They became fast friends and remain so to this day. 

Linking Social Capital– this social capital occurs vertically between varied socioeconomic groups. The “communities” of similar socioeconomic groups – or individuals in said groups – reach across socioeconomic barriers to build relationships and leverage resources. For example, a pop star may get involved in a music club in an underprivileged community.

Reaching across ‘social boundaries’ through linking benefits both parties, as new contacts and ties are developed. For instance, the CEO of a large company may be introduced to lower-level staff and, in getting to know them, they may better understand their day-to-day and develop more effective work practices. The lower-level staff may also make connections upward, providing them a vertical bridge.

Over the next few weeks, we’ll be exploring social capital and how it develops and differs across cultures.

Holistic vs. Analytic Thinking in Culture

How would you describe your living room?

Would you say it’s a space to commune with your family and entertain your friends? Would you describe it as a welcoming area to offer your guests food and drink?

Or would you list its working parts? Would you explain that it has two sofas, a coffee table, an entertainment center, and a 65″ flat-screen TV?

If you’d describe your living room the former way, you’re thinking holistically; if you’d describe it the latter way, you’re thinking analytically. 

Last week, we discussed how cross-cultural research might take a more positive approach to cultural differences.

In seeking out the positive, researchers took a look at Hyun-Jung Lee’s interview with renowned cognitive social psychologist, Richard Nisbett, who authored The Geography of Thought.

In the paper, Nisbett analyzes these two dominant cultural thinking styles – holistic and analytic thinking – and outlines some pros and cons of each.

Before we get to his analysis, let’s take a closer look at these two thinking styles.

Holistic Thinking

The holistic thinking style is characteristic of East Asian cultures.

This thinking style perceives everything as interconnected.

It sees the whole, and specifically the relationships between objects.

The style of thinking relates to the broader philosophy of East Asian cultures with their focus on balance, harmony, and cyclical change.

Holistic thinking also blends with the values of these cultures, which are collectivist in nature.

The understanding of the world as an interconnected whole has its benefits, as we will discuss shortly.

Analytic Thinking

As you may have guessed, the analytic thinking style is characteristic of Western cultures.

Analytic thinking identifies separate objects and categorizes them according to their attributes.

This style of thinking relates to the broader philosophy of Western cultures with their focus on individualism and personal motivations

Analytic thinking corresponds to the values of Western cultures, which are individualist in nature.

The understanding of the world’s moving pieces in isolation is valuable as well, as Nisbett will explain.

Nisbett’s Analysis

In Hyun-Jung Lee’s interview, Nisbett examines each thinking style.

He notes that holistic thinking allows one to notice a great depth of the physical world and context, enabling one to accept contradictions.

Whereas analytic thinking is more black-and-white, holistic thinking allows shades of grey.

Due to the lack of universalistic rules in this style of thinking, however, Nisbett concludes that one is more vulnerable to potential abuse.

As for analytic thinking, it is scientific.

This logical type of thinking has given the world all of the advantages of modern science and technology, taking us leaps and bounds.

However, its “hyper”-logicizing can give way to disconnecting from the phenomenon itself. 

Rather than suggesting that one thinking style is better than the other, Nisbett concludes that the best thinking lies in between these two ways of thought.

It’s the attempt to understand the different cognitive and intellectual styles that can help us improve our own method of reasoning.

Nature’s Timeline: Polychrons and Time Perception

A new factory opened up in Alaska, and several Inuits were hired on to work.

To alert everyone to the workday schedule, a whistle would ring throughout the factory.

When it was time for lunch, the whistle. Before a fifteen-minute break, whistle. When the workday was over, whistle.

By the end of the week, every single Inuit had quit. They could not abide by this angry whistle.

Their culture is not run according to a rigid schedule but rather by the tides. 

The tides are what dictate human activities, particularly harvesting mussels in the ice sheets when the tide is low.

So to the Inuits, time and human activity are determined by nature…not by man and his whistle. 

Last week, we talked about how monochrons value time as something tangible.

But for polychrons, time is valued on a whole different scale.

Polychronic Time

Consider a race track.

Several horses run on the same track at different speeds, each in their own lane.

This is similar to how polychrons view time.

Often, in a polychron’s mind, there are several simultaneous lanes on the same track: different tasks, running at the same time on their own lanes.

One lane has a work agenda, with tasks approximately scheduled.

Another has a personal agenda, with relationships being of equal import as work.

There is a push-and-pull between various mental lanes in a polychron’s timeline track.

Polychrons and Agendas

Polychrons view human relationships and quality time as more important than cost-priority issues.

If you attend a meeting in a country with a polychronic time perception, like Mexico or India, for example, you should not expect the meeting’s agenda to start on time.

Instead, what you should expect is to partake in a long period of socializing before the meeting even starts, usually over tea or coffee. 

This is to build rapport and start off on the right foot.

Before modern industrialization, this is how many European countries perceived time too.  

Running a tight ship, schedule-wise, was not so essential to the bottom line, whereas personal interaction was commonplace and just as important as the agenda.

You can still see this in the cultures of southern European countries, like Italy or Spain.

Polychrons and Deadlines/Appointments

There is no deadline obsession in polychronic cultures. 

Due to not prioritizing deadlines, other scheduled tasks are then delayed as well.

Those who expect something done in polychronic cultures take these delays easier than a monochron might. They are not put off or annoyed by the delays, because they accept this is how things go.

Though a task might go over the scheduled time in a polychronic culture, it will usually be completed…just within its own time.

Appointment times too are an approximation.

Although everyone will be seen, it likely won’t be as per schedule.

Polychron vs. Monochron

Considering these vastly different perceptions of time, you can see why polychronic and monochronic cultures might butt heads when it comes to business matters.

Next week, we’ll talk more about how to bridge the divide.