SPONSORS

SPONSORS

What are the Cultural Impacts on a Contract Negotiation?

 

STUDENT PAPER

By Marie Lanvin

SKEMA Business School

Paris, France

 



ABSTRACT

With the globalization, it is often needed to work in international environment, thus to negotiate with people who have different cultural backgrounds. And these differences cannot be ignored, because of their impacts. So, the aim of this paper is to show the cultural influences on the negotiation, and what can be done to improve our way to negotiate. Therefore, the different behaviors that we can adopt during a negotiation were analyzed and compared thanks to the Dominance method. At the end of this study, the suggestion is to do an important pre-work before international negotiations to understand the other culture better and adapt our dialogue. This could be the solution to a better communication and better results in terms of outcomes at the end of the negotiation.

Key words: Culture, backgrounds, contract, impact, negotiation, conflict, understanding, differences, communication

INTRODUCTION

1. Cultural differences have impacts on our lives every day. It is obviously the case in international negotiation too. These differences and the backgrounds of the parties in the negotiation can be a barrier or an asset. But people often don’t have enough or have bad knowledge of cultural differences, and they don’t know how to manage them well. In the negotiation of a contract, we should be aware of those differences to build strong relationships and to have a productive dialogue. Moreover, being aware of these differences means being able to take advantage of the negotiation and eventually to lead it.

1.1  Culture and Contract negotiation:

Hoefstede shew that the culture influences “how people think, communicate and behave”[1]. And Salacuse defines it as “composed of the socially transmitted behavior patterns, attitudes, norms and values of a given community”[2]. So, cultural differences have an impact on how people communicate and on their attitudes when they are with people from other communities.

A common definition of a contract is “a voluntary, deliberate and legally binding agreement between two or more competent parties.”[3] And a negotiation consists in a “bargaining process between two or more parties (each with its own aims) seeking to discover a common ground and reach an agreement to settle a matter of mutual concern”[4]. So, the negotiation of a contract is based on a good communication to be effective and mutual understanding.

1.2  So, the aim of this paper is to ask some questions about the cultural impacts on a project contract. The J.W. Salacuse’s research will help to understand the cultural differences that we can identify in international negotiations. Then we will go further to think about the impacts that they have, to finally prove that a good understanding of these differences offers a significant improvement on contract negotiations.

OPPORTUNITY OF THIS PAPER

To summarize, the objective of this paper is to answer the following questions:

1) What impacts have cultural differences on contract negotiations for projects?

2) How can we improve international contract negotiations?

More…

To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected]



About the Author


Marie Lanvin

SKEMA Business School
Paris, France




Marie Lanvin
is a MSc student in SKEMA Business School, majoring in Project and Programme Management & Business Development (PPMBD). She did an exchange with the University of Sherbrooke (Canada), and with North Carolina State University, Raleigh (USA). In 2016, she worked for a French SME, as event project manager. In 2017, she assisted a startup CEO to develop his business. She can be contacted at [email protected].