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Cultural Intelligence in Negotiation and Settlement


Presented by M. Salman Shah, Esq. & Kevin P. Foley, Esq. of Harmonie Member Firm Reminger Co. LPA


  1. INTRODUCTION
Technology has made it possible for professionals to engage with counterparts all over the world in carrying out job functions.  This opportunity benefits businesses and firms in many ways, but also creates new challenges.  General Motors has stated in a legal filing that “cross-cultural competence is the most important new attribute for future effective performance in a global marketplace[1].”  Cultural differences between negotiating counterparts from diverse backgrounds impact outcomes of negotiations.  A negotiator who is equipped with intelligence about his or her counterpart’s cultural norms and customs is more apt for a successful outcome.

Many practitioners prepare for a negotiation by formulating their desired outcome, their bottom line, and their opening offer.  These positions are important to stake out prior to any negotiation.  Much of the modern literature on negotiation in the legal context focuses on distributive versus integrative bargaining.    Regardless of the negotiating strategy, psychological, sociological, communicational, and game theories are the primary phenomena that influence the bargaining process.[2]  A practitioner who prepares for negotiating with a diverse counterpart by studying the cultural norms of his or her counterpart will perform better in the negotiation process.  This preparation and knowledge will allow the practitioner to have greater control over the psychological, sociological, and communicational phenomena which influence the outcome of a negotiation.  A practitioner who is well-versed in Cultural Intelligence (CQ) is more likely to experience continuing success on behalf of his or clients in the context of negotiation and settlement.

  1. DEVELOPING CULTURAL INTELLIGENCE
Cultural Intelligence is an individual’s capacity to function and manage effectively in in diverse settings.[3]  There are three main components to Cultural Intelligence:

  1. Cultural Knowledge: knowledge about culture (a group’s shared values and beliefs), how cultures influences behavior, and the basic principles of cross-cultural interactions
  2. Cultural Metacognition:  reflective thinking about intercultural interactions
  3. Cross-cultural skills: having a range of culture general abilities and behaviors used to gather information, build and develop relationships, and adapt in culturally diverse environments
The three components are interrelated.  Cultural knowledge leads to cultural metacognition and the development of cross-cultural skills.  Cultural metacognition leads to further development of cultural knowledge and cross-cultural skills.  These concepts are vitally important in the contemporary business environment.   Cultural Intelligence has been linked to greater success in inter-cultural collaborations, including legal negotiations.

Cultural Intelligence can be both domestic and international in nature.  In the United States, different regions have vastly different cultures, making Cultural Intelligence important in the domestic context.  For example, an attorney based in California involved in a negotiation with an attorney based in West Virginia will encounter some of the same difficulties as an attorney based in Ohio involved in a negotiation with an attorney based in Japan.  These difficulties can be overcome by practitioners who take pro-active measures to develop Cultural Intelligence. 

Many practitioners seek to develop their Cultural Intelligence but do not know where to begin.  The most basic way a practitioner can begin to develop Cultural Intelligence in the context of a specific negotiation is to study basic characteristics of a diverse counterpart’s locality.  For example, a practitioner should study the geography, weather, political climate, basic history, and current events of where the counterpart is located. This knowledge will lead to the practitioner building stronger rapport during the dialogue which takes place during a negotiation. 

Once a practitioner has mastered the basics of cultural knowledge, he or she may begin to develop cultural metacognition.  A simple way to describe cultural metacognition is thinking about thinking; one who has high cultural metacognition frequently thinks about culture and cultural assumptions.  Studies have shown individuals with higher cultural metacognition are better at gaining trust and achieve more success in negotiations[4]. 

As a practitioner thinks more about cultural competency, his or her cultural skills will further develop to allow for more success at a diverse negotiating table.

  1. CULTURAL INTELLIGENCE FOR ATTORNEYS
This is important for attorneys.  For legal professionals, cultural competency has been defined as “the ability to adapt, work and manage successfully in new and unfamiliar cultural settings[5].”  Clients rely on attorneys for legal advice and attorneys are increasingly being asked to provide advice on transnational business transactions and disputes.  Attorneys who are involved in negotiations with foreign counterparts must be able to develop strategies that are appropriate in the relevant localities.  For an attorney to develop strategies that are appropriate in diverse settings, he or she must begin the process of developing Cultural Intelligence.  For example, in American negotiations, small talk and referring to people by their first names is appropriate.  However, in Korea, a more formal style of negotiation that emphasizes titles and avoids discussion about personal matters is favored.  A practitioner with low Cultural Intelligence may inhibit their ability to effectuate a favorable settlement with a Korean counterpart by taking too informal of an approach.

A practitioner should contemplate the following issues when tasked with legal work involving culturally diverse parties:

  • Is direct communication preferred over refined communication?
  • How much deference is given to superiors?
  • Is decisiveness preferred over deliberation?
  • What are local customs and attitudes towards gender, age, or overt sexuality?
  • Does the society prefer options for mutual gain over winner takes all outcomes?
  • Are contracts viewed as definitive or mere guidelines? 
  • How vigorous are the concepts of privilege and confidentiality?
  • Is truth confirmed by deliberate investigation, or by live testimony under cross-examination?
  • Is oral testimony or written evidence favored?
  • Is aggressive advocacy accepted, or is it considered improper intimidation?
These questions provide a good starting point for a practitioner to develop cultural metacognition as related to legal issues.

Cultural Intelligence is important even for practitioners whose practice is limited to domestic disputes. Since 1995, LexisNexis reports 1,737 U.S. state court decisions and 4,031 federal court decisions citing to The Hague Convention, a series of treaties which are increasingly utilized in domestic litigation for various reasons, most commonly to serve process upon a party located in a foreign country[6]. The usage of The Hague Convention in domestic cases is increasing exponentially over time:

cultural-intelligence-graphic

An attorney involved in a domestic dispute who is required to serve process abroad or take evidence abroad will experience less frustration if he or she takes proactive measures to develop Cultural Intelligence.   

  1. OTHER ILLUSTRATIVE EXAMPLES
A senior recruiter for Cardinal Health, a multinational corporation with a global presence who has recruited hundreds of candidates for positions around the world was recently asked to provide her thoughts on challenges in negotiating with foreign parties.  The biggest challenges she described were dealing with different cultural norms, language barriers and translation issues, and time differences.  She specifically described her experiences in Japan, where written communications are highly scrutinized for cultural style:

“In a country like Japan, for example, cultural competency is hugely important.  During my first months of recruiting in Japan, I did not understand any of the cultural nuances and received virtually no return responses to the recruit outreach in the country I was making.  Over time, I began to learn some cultural aspects even just in terms of written communication that I began implementing and began to see more responses and openness to conversation.[7]

On another occasion, she worked with a candidate in Mexico who provided a desired salary that was high for the region and position.  In discussing the offer with the candidate, she indicated a much lower salary and he informed her he was still interested because he indicated he could become a U.S. citizen within a year or so.   The recruiter was confused because she assumed the candidate was expecting the company to sponsor his visa so that he may become a U.S. citizen.  She described how this misunderstanding was cleared:

“Luckily, I communicated all of this to the hiring manager who is fluent in both Spanish and English.  He called the candidate to double check and through speaking in Spanish together, he found that the candidates entire immediate family were US citizens and that without my company sponsoring him, he could still apply and likely gain the approval to live in the US on his own.  The location of this job was just over the US border in Mexico much closer to the US than his current role where daily cross border commute was not an option.  Thankfully this came out and we were able to move forward with an offer for the candidate.”

These narratives illustrate the importance of Cultural Intelligence in the context of negotiation. 

  1. CONCLUSION
In the contemporary business world, transnational transactions and disputes will only increase in frequency and scope.  Attorneys who are well-versed in Cultural Intelligence will achieve stronger results in their negotiation outcomes and will experience greater overall success in their practice. 


[1] Amicus Curiae Brief in Gratz v. Bollinger, 122 F. Supp. 2d 811 (E.D. Mich. 2000).

[2] Bazerman, Max H.; Curhan, Jared R.; Moore, Don A.; and Valley, Kathleen L., "Negotiation" (2000). All UNF Research. Paper 2.

[3] Ott, Dana L; Michailova, Snejina. “Cultural Intelligence: A Review and New Research Avenues” (2018). International Journal of Management Reviews. 99-119. 

[4] Chua, Roy Y.J; Morris, Michael W.; Mor, Shira.  “Collaborating across cultures: Cultural metacognition and affect-based trust in creative collaboration” (2012). Organizational Behavior and Human Decision Processes.

[5]  Sylvia Sevens. “Cultural Competency: Is There an Ethical Duty” (Jan. 2009). Oregon State Bar Bulletin.

[6] See e.g. Richardson v. Clinical Computing PLC, 2016-Ohio-8065, 69 N.E.3d 754, 2016 Ohio App. LEXIS 4926.

[7] Pelletier, Amanda.  Senior Recruiter at Cardinal Health (2018).  The views expressed in this article are her personal views and may not be representative of the views of Cardinal Health.