The third part of Unit 7 is cultural variations reflected in decision-making, which plays an important role in cross-cultural communication, especially communication related to business and trade contact.

As a result of globalization, the business contacts among countries grow closer, and studies on different business patterns and effective solutions bear various fruits.

According to the theory of Vincent Guy and John Mattock in their book The International Business Book, the differences between the two parties can be displayed in the Negotiation Pyramid.

                                                                             Chart I

As we can see in Chart I, the result of a business negotiation may be affected by several aspects, including negotiation patterns, timing, tactics, personalities, company features as well as cultural backgrounds, and cultural backgrounds, without any doubt, is the most critical element. And today we are going to talk about cultural differences, or in other words, cultural variations in terms of decision-making. 

Firstly, let's have a test, and figure out what kind of mindset do you possess, a typical Chinese one, or an International one.

1. Your company is going to have a meeting with a new business partner on the potential of your collaboration, and which element do you think is more essential and should be the initiative step of the negotiation?

A. Collecting concrete facts and statistics related to the negotiation.

B. Building emotional bonding and interpersonal relationship.

2. When conflict emerges, which way is better for problem-solving?

A. Having an open discussion at the negotiation table.

B. Showing agreement indirectly and delicately instead of bargaining openly.

3. What kind of objectives will you set for the negotiation, short-range or long-range?

A. Short-range.

B. Long-range.

4. Will you cover all the details in the Final Agreement or in a SupplementaryAgreement?

A. FinalAgreement

B. SupplementaryAgreement

5. When it comes to the decision-making stage, who should be responsible for decision-making?

A. The boss of the company.

B. Decisions should be made based on the event itself, not the role of the negotiator. 

This is the end of the test, and if you want to figure out your thinking pattern, please have a look at the following table.

People from different cultures all have their distinctive features in decision-making.

Americans: Americans tend to make decisions relying on rational thinking and concrete data, and they usually apply factual inductive style of persuasion. For Americans, the negotiation is the process of problem-solving, so any problems related to the event, even disagreement, canbe put on the negotiation table, which is called “honest confrontation”. Americans often work with short-range objectives. Regarding signing agreement as the end of a negotiation, they prefer to take the time for in-depth plan and try to cover all the details in the agreement. Everyone on the team works in their best interest, and team-leaders, who would like to take the responsibilities, will be given certain rights and authorities to make decisions.

The French: The French pay a lot of attention to interpersonal relationship, so intimate and long-term relationship is usually the guarantee for successful negotiation. The French have no problem with open disagreement, and they debate more than they bargain. The French are conservative and safe decision-makers, and they engage in a lateral style of negotiation, so agreements of each stage including the outline agreement, the principle agreement, the heading agreement, are crucial. Decisions are made centrally and by the top authorities.

The Japanese: The Japanese use mediators in negotiations, and to them, it's not important what you know, but who you know, so finding proper mediator will be a good start. In Japan, any approach to problems in any negotiation is based on each side trying to understand the other person's point of view, so the decision of a meeting is a mutual attempt to reduce confrontation and achieve harmony, and open disagreement during formal negotiations are considered insulting and embarrassing. Though cautious, the Japanese prefer short-range objectives and simple agreement with no legal bonding, so that adjustments and modifications can be added based on the physical situation. “Consensus-opinions” and “bottom-updirection” are important for decision-making, however, the final decisions are usually made by the authorities.

The Chinese: Similar to the Japanese, Chinese people also regards reciprocity as an important element for negotiations, and successful negotiations are usually based on mutual trust and dependence. For the Chinese, decision-making is more authoritative than consensual; decisions are exclusively made by higher level authorities.

Middle-Easterners: Middle-Easterners have an intuitive-affective approach to persuasion. Easy and comfortable environment is crucial to a good beginning. Leaders in a team often make the final decision, and they expect highest ranking representatives to negotiate with them.

Mexicans: Social discourse and trust among participants are crucial to Mexicans for successful and harmonious negotiations, and they usually use a centralized decision-making process.