THE EFFECTS OF CULTURE IN COMPUTER-MEDIATED NEGOTIATIONS

ABSTRACT The paper explores the impact of culture on anonymous inter- and intra-cultural negotiations conducted via the Internet using a Web-based negotiation support system (NSS). In e-negotiations, technology acts as a moderator in the relationship between culture and negotiation behavior. This implies that patterns of cultural impact on negotiations can be different from face-to-face negotiations. Communication technology reduces the transmission of social cues and increases the importance of explicit communication. Thus, cultural dimensions such as power distance, which rely on social cues, are reduced in their impact, while the impact of communication-related dimensions of cultures such as high vs. low context is amplified by the system. The empirical analysis of these effects is based on a set of bilateral negotiations involving 1366 participants carried out with the Web-based NSS Inspire. It indicates a significant influence of culture, particularly regarding negotiators' expectations. We also found significant cultural differences with regard to communication patterns emerging during the negotiation process and outcomes of negotiations. Our results also indicate that as the negotiation process progresses, individual differences between negotiators, including their approach to problem solving, become more important than their cultural characteristics. INTRODUCTION Information technology and in particular the Internet are creating a new situation for international negotiations. Geographically dispersed parties can get into direct contact and enter sophisticated negotiations (Kappeler 1996; Studemeister 1998). This new technology allows individuals and organizations from different cultures to negotiate with each other, without being aware of their partner's nationality or culture. One could argue that in the impersonal world of electronic information exchange, the importance of cultural differences diminishes. Furthermore, the use of English as lingua franca could further reduce any cultural impact on negotiations. This paper approaches these issues from an empirical point of view and presents the results of a large set of experiments conducted with the use of Web-based negotiation support systems (NSS). The focus of the study is to determine if a cultural influence can still be detected in negotiations that are carried out anonymously, via a technical medium. The influence of culture on negotiations has been studied using various methods, including case studies, laboratory and classroom experiments, and recently, experiments involving remote groups. Case studies of real-life negotiations allow for direct assessment of all the facets of sometimes very complex negotiations (Gulliver 1979; Walker 1990; Faure and Rubin 1993). They provide rich material at the cost of the comparability of the results across negotiation problems and cultures. In contrast, laboratory and classroom experiments allow for a significant level of control over the problem and the environment in which it is solved (Graham 1985; Adler and Graham 1989; Roth 1995; Graham and Mintu-Wimsatt 1997) but the authenticity of the task suffers. Many experiments compare negotiations conducted in culture X with negotiations conducted in culture Y (Adler, Graham and Gehrke 1987; Graham, Mintu and Rogers 1994). Classroom experiments are typically brief and they are either repeated in different countries (Roth 1995) or involve both local and foreign students (Graham 1985; Adler and Graham 1989). Thus, they do not directly model international and inter-cultural negotiations (Drake 1995). Only in a few studies, intra-cultural negotiations are compared with cross-cultural ones (Adler and Graham 1989; Brett 1998). Experimental studies often use face-to-face negotiations. This setting allows for natural and rich communication, but it also introduces a bias since the subjects know the culture of their opponents and may try to modify their behavior to attune to their counterparts. …