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2 Abstract Background: Empirical work describing and comparing negotiation behavior of the upcoming generation of Indian and Danish managers is scarce. The aim of this study is to create a better understanding of negotiation behavior of both groups and to highlight the similarities and differences between them, which is important seen the improving economic relations between Denmark and India. Method: The study is conducted on a quantitative basis using a web based survey. Respondents were asked to assess their negotiation behavior by indicating the level of (dis)agreement on several Likert scale-based statements. Descriptive analysis and the Mann Whitney U test are used to uncover the differences and similarities in negotiation behavior between Indian and Danish respondents. Results: The results indicate that the upcoming generation of Indian and Danish managers behave more similarly than expected when negotiating with each other. One of the explanations could be the increasing adoption of Western management practices by Indian managers. Indians indicated like Danes to be cooperative, punctual, direct in communication and have a preference for specific agreements. Danes are however significantly more risk averse, express less emotions and have a significant lower relationship-focus compared to Indian respondents. Further research: The findings seem to confirm the descriptions of the extant literature regarding Danish negotiation behavior. Indian results, however, disconfirm the traditional descriptions of Indian managers and confirm the findings from the few empirical studies available. More empirical research is nevertheless necessary to validate the findings of this study. Practical application: The findings provide a guideline for Indian and Danish negotiators to get an understanding of the behavior of the counterpart and to select the right negotiation approach accordingly. The findings suggest that Danish negotiators when preparing for negotiation cannot rely on literature that describes the Indian negotiator as being traditional when dealing with the upcoming generation of Indian managers. K ey words: negotiation behavior, India, Denmark, upcoming generation, managers, differences, similarities, survey, Western management practices, culture

3 Building relationships is tiring. We are not used to dining out every night with our counterparts. A Danish manager who visited India seven or eight times in 2006 and Adopted from Gesteland & Gesteland (2010, p.32) The word no clearly does not exist the Indians we work with always say yes to any question we ask. A Danish executive in charge of outsourcing IT work to vendors in Chennai and Mumbai. Adopted from Gesteland & Gesteland (2010, p.66)

4 Acknowledgements This thesis could not have been written without the help and support from several people. First, I would like to thank Peter Kesting for the discussions and the valuable feedback given during the process. Second, I would like to express my sincere gratitude to Hitesh Kyal Kumar who assisted me in the distribution of the questionnaire and to the Danes and the Indians who completed the survey. Last but not least I thank my parents, my girlfriend and friends for their mental support and feedback. Jeroen Herman Sangers Aarhus, August 2011

5 !! Content " " 1 Introduction Background Research questions Delimitations Structure of the thesis Literature review Introduction Introduction to the negotiation profile and the role of culture The applied theoretical models Models describing the elements of the negotiation profile Cultural theories The seven elements of the negotiation profile Negotiation goal: Task or relationship focus Negotiation strategy: Distributive versus integrative strategy Specificity of the agreement: General versus specific Communication style: Direct or indirect Time orientation: Monochronic versus polychronic Use of emotions: High versus low Risk taking: High versus low The eight cultural dimensions Concept of individualism versus collectivism Concept of power distance & achievement versus ascription Concept of uncertainty avoidance Concept of masculinity versus femininity & assertiveness Concept of high versus low context cultures Concept of monochronic versus polychronic time orientation Concept of specific versus diffuse relationships Concept of neutral versus affective relationships Influence of the eight cultural dimensions on the negotiation profile Negotiation goal and culture Negotiation strategy and culture Specificity of the agreement and culture... 23

6 #! Time orientation and culture Communication style and culture Use of emotions and culture Risk taking and culture Indian and Danish negotiation profile in context of culture Negotiation goal Negotiation strategy Specificity of the agreement Communication style Time orientation Use of emotions Risk taking Expectations of Indian and Danish negotiation behavior Methodology Introduction Method of data collection Questionnaire design Case scenario Formulation of survey statements Likert-scale Demographic questions Process of data collection Methods of data analysis Quality Reliability Validity Results & Discussion Introduction Sample characteristics Descriptive analysis Analysis of differences between Indian and Danish sample Analysis of gender differences Analysis of age differences Other analysis... 58

7 $! 4.5 Discussion General discussion of the results Discussion per element of the negotiation profile Conclusion Introduction Summary of the findings Summary of the contributions Limitations of the study Suggestions for further research Practical application References " List of figures Figure 1: Structure Thesis Figure 2: Structure Literature Review Chapter Figure 3: Structure Methodology Chapter Figure 4: Process formulation of the survey statements Figure 5: Structure Results & Discussion Chapter Figure 6: Structure Conclusion Chapter " List of tables Table 1: Expectations about Indian and Danish negotiation behavior Table 2: Relationship between expectations and formulated survey statements Table 3: Reliability scores Table 4: Descriptives survey statement Table 5: Descriptives survey statement Table 6: Descriptives survey statement Table 7: Descriptives survey statement Table 8: Descriptives survey statement Table 9: Descriptives survey statement Table 10: Descriptives survey statement Table 11: Descriptives survey statement Table 12: Descriptives survey statement

8 %! Table 13: Descriptives survey statement Table 14: Descriptives survey statement Table 15: Descriptives survey statement Table 16: Descriptives survey statement Table 17: Descriptives survey statement Table 18: Descriptives survey statement Table 19: Descriptives survey statement Table 20: Descriptives survey statement Table 21: Descriptives survey statement Table 22: Results Mann Whitney U test - Indian versus Danish sample... 56" "

9 1 Introduction &! 1.1 Background India is emerging as a major player in the world economy. The growth rate of the Indian economy reflected by the GDP is high and is laying around 7% and 10% between 2005 and 2010 (OECD, 2010). Combining this with the potential demand from the expanding Indian middle class, which consisted in 2004 out of million people (Kumar, 2004), India receives considerable interest from foreign companies. The number of foreign companies being present in the Indian market is increasing, in the year 2000 foreign companies invested 3.584,22 million USD in India, compared to ,6 million USD in 2008 (OECD, 2010). To benefit from the growth, the EU closed in 2005 a strategic partnership with India to stimulate free trade. In 2008 Denmark individually enforced agreements with the Indian government to stimulate the cooperation between the two countries, focusing at trade, sustainable energy, innovation and education (The Danish Government, 2008). The investments of Danish companies into the Indian market sharply increased from 75 million USD in 2009 to 231 million USD in 2010 (Indian Embassy Denmark, 2011). The Danish exports in commodities to India totaled more than 483 million USD, which meant an increase of nearly 25% compared to Also the increase in exports of services increased with nearly 14% between 2009 and 2010 (Indian Embassy Denmark, 2011). Although this percentages look promising, it represents only around 1% of the total exports of Denmark in the year 2010 (Central Intelligence Agency, 2011). Till recently the trade of Denmark with India was relatively limited compared to China (The Danish Government, 2008). India is however more and more identified as a promising market with a lot of potential seen the introduced trade stimulation programs, the high growth rate of the economy and the increasing demands from the fast expanding Indian middle class. To be able to conduct business and to come to beneficial agreements in the future, it is essential that Danes understand how to negotiate with the upcoming generation of Indian managers and vice versa.!"#$%&'$( )*( &*+,-.#)*+/*'( )0%&#(,)1$( %#$,-2.( negotiation behavior is essential, no literature describes or compares the differences and similarities between the negotiation behavior of the upcoming generation of Indian and Danish managers.

10 '(! 1.2 Research questions The aim of the study is to describe and compare the behavior of the upcoming generation of Indian and Danish managers when negotiating with each other. First, the study aims to get more insights into the negotiation behavior of both groups. There is a lack of scientific literature that discusses the Indian and Danish negotiation behavior and the literature available is predominantly focused on the traditional Indian and Danish negotiation behavior and is often not empirically validated. Second, the gained knowledge can inform Danish and Indian negotiators about the likeable behavior of the counterpart when negotiating with each other and provide guidelines to the negotiator in the selection of an appropriate negotiation strategy. To reach this objective, the first step is to profile Danish and Indian negotiation behavior based on culture. This is done to be able to formulate expectations about the Indian and Danish negotiation behavior. Culture is one of the main determinants of behavior during international business negotiations and will be useful to provide insights seen the limited availability of literature. The second step includes the assessment of the negotiation behavior of the upcoming generation of Danish and Indian managers to be able to compare the made expectations with the results and discuss and highlight the differences and similarities in behavior. In order to answer the objective of this research the following two research questions will be answered: How does the upcoming generation of Indian and Danish managers behave when negotiating with each other? " What are the differences and similarities between the expected behavior and the assessed behavior of Indians and Danes?

11 1.3 Delimitations ''! The study is delimited to the upcoming generation of Indian and Danish managers. The researcher 1 defines 3#$,( &41%5/*' generation of managers6( as the respondents aged between 18 and 36 years old, who study business and management or are graduated for less than 10 years. This broad definition is due to the fact that there is a large age difference between the moment that Danes and Indians start and finish their studies. Indians mostly start their high education later, after a few years of working, while the Danes merely finish university before working. The main reason for choosing this target group is explained by the knowledge gap that exists regarding the negotiation behavior, especially for the upcoming generation of Indian managers. Since the liberalization of the Indian market, the younger generations of Indians have more exposure to the West which could affect their behavior. Seen the promising growth perspectives of Danish businesses in India, the number of negotiations to be conducted is likely to increase. Hence, it is of considerable importance that an understanding regarding the differences and similarities between the negotiation behavior of the upcoming generation of Indian and Danish managers is obtained. To formulate expectations about Indian and Danish negotiation behavior, the researcher uses cultural dimensions, which are measurable constructs, as determinant. The researcher realizes that culture is not the only important determinant of behavior during international business negotiations. Examples of other key determinants of behavior are the BATNA 2, the immediate stakeholders, the history of the relationship and above all the personality and the experience of the negotiator (Ghauri, 2003; Lewicki et al., p ). The majority of these factors is dependent on the context or on the individual. As these factors cannot be captured in measurable constructs, it is difficult to use them as determinants in this study. Owing to this fact, the expectations that are formulated at the end of the literature review are primarily based on the cultural dimensions and the extant country specific literature. " """"""""""""""""""""""""""""""""""""""""""""""""""""""""""" ' "!"#$%$#"&'"()*$+%",*"-&.$"#$*$,#/.$#0"12"&.$"%3#&.$#"*&34)5" ) "*+,-"./ "56"2" ".80++:+1-";<+=3>?3"+-"2/@A")((#A"B@''C"

12 ')! 1.4 Structure of the thesis The thesis is divided into five different chapters. The graphical display drawn below will be used throughout the thesis. Figure 1: Structure Thesis D1-069E>-361 <3-+02-E0+"0+43+= F+-G696/68H I+,E/-,"J" K3,>E,,361 L61>/E,361 The introductory chapter, the current chapter, explains the background and aim of the research, states the research questions and gives the delimitations of the study. The second chapter reviews the literature that describes the influence of the relevant cultural dimensions at the seven selected elements of the negotiation profile. This review is used to give indications about the Danish and Indian behavior and to conclude the chapter with behavioral expectations. The third chapter discusses the applied methods for data collection and data analysis, the questionnaire design and the quality of the study. The fourth chapter describes the results obtained from the data analysis and discusses and compares them with the behavioral expectations set in the second chapter. The fifth chapter concludes the study by summarizing the findings, highlighting the limitations of the study and providing suggestions for further research and practical application of the results. "

13 'M! 2 Literature review 2.1 Introduction Figure 2: Structure Literature Review Chapter " The literature review is the fundament of this study. The aim of the literature review is to conclude with expectations regarding the behavior of Indians and Danes. The negotiation profile is used to define the elements that capture negotiation behavior. In section 2.2 #$,(#,-5(3*,'%#/)#/%*(4-%7/",6()*+(#$,(-%",(%7 the cultural dimensions in this literature review are explained. In section 2.3 the models that describe the elements of the negotiation profile (described in section 2.4) and the several cultural dimensions (described in section 2.5) will be reviewed. The literature that describes the influence of the cultural dimensions at the seven elements is discussed in section 2.6. By understanding this influence, the country scores of Denmark and India regarding the cultural dimensions are used together with the reviewed country specific literature to determine the negotiation profiles of Danes and Indians in section 2.7. The chapter is concluded with the expectations regarding Indian and Danish negotiation behavior (section 2.8). 2.2 Introduction to the negotiation profile and the role of culture The behavior of a negotiator in general is not only affected by the interdependence or the conflict of needs and desires, but also by the alternatives that the negotiator has, the expectations from the immediate stakeholders, the history of the relationship between the two parties, the personality and the experience of the negotiator. In the case of an international business negotiation, there are some additional factors that determine the behavior of a negotiator. One of the most prominent factors is culture as recognized by several authors (Lewicki et al., 2006, p.409; Ghauri, 2003). Hofstede views culture as a collective phenomenon and is learned from and is shared with people who live or lived in the same social environment. Or as Hofstede (Hofstede & Hofstede, 2005) defines:

14 'N!!"#$%#&'()*(%+'(,-$$',%).'(/&-0&122)30(-4(%+'(2)35(%+1%(5)*%)30#)*+'*(%+'(2'26'&*(-4( -3'(0&-#/(-&(,1%'0-&7(-4(/'-/$'(4&-2(-%+'&*(8/9:;<9 Weiss (1994) argues that the presence of two different cultures can make the negotiation more complicated because the negotiator cannot take common knowledge and practices for '-)*#,+().(/*(#$,(1).,(%7()(38/#$-/*6(1&"#&-,(*,'%#/)#/%*9(Salacuse (1993) states that #$,( 4)-#/,.( *,,+( #%( &*+,-.#)*+(,)1$( %#$,-2.( culture to be able to find shared values which help to build a new negotiation culture. Several authors developed models than can be used by negotiators to assess the behavior of the counterpart as preparation for the negotiation (Salacuse, 2005; Metcalf & Bird, 2004; Usunier, 2003a; Ghauri, 2003). The term negotiation profile will be used to refer to these models further in the study. This negotiation profile exists out of different elements by which the behavior of the negotiator from a different culture can be evaluated, for example the preference for negotiation goal, strategy and time orientation. The negotiation profiles can be drawn by using common knowledge (Weiss, 1994). However, limited literature is available about the negotiation behavior of Danes and Indians. To cope with this lack of knowledge, the researcher will use the Danish and Indian cultural values, which are gathered in cultural dimensions, as determinants of negotiation behavior (Hofstede, 2005; Trompenaars, 1996; House et al., 2004). Several authors have indicated that there is a relationship between cultural dimensions and negotiation behavior (Cai et al., 2000, Metcalf et al., 2007). 2.3 The applied theoretical models In the previous section the term negotiation profile is defined and the role of the cultural dimensions as determinant is explained. Before the elements of the negotiation profile and the cultural dimensions can be described (respectively section 2.4 and 2.5) it has to be clear which models and theories explain the elements and dimensions. The selection of theories that describe the elements of the negotiation profile are explained in section and the applied cultural theories are discussed in section Models describing the elements of the negotiation profile Several authors break down the negotiation profile into multiple elements (Salacuse, 2005; Metcalf & Bird, 2004; Usunier, 2003a; Ghauri, 2003). The model of Salacuse is

15 '!! the most applied in cross-cultural studies, is empirically investigated (Metcalf et al., 2006) and is familiar to the researcher thanks to the 3Intercultural Competences6 course at Aarhus School of Business. Although not empirically investigated, the models of Usunier, Metcalf & Bird and Ghauri are used to strengthen the theoretical construct of the model of Salacuse. In total seven elements are selected by the researcher, firstly on the basis of availability of literature that indicates a relationship between those elements and the cultural dimensions. Secondly, on the basis that the element is present in at least two of the four models. Based on these criteria, the researcher selected the following seven elements: negotiation goal, strategy, specificity of the agreement, time orientation, communication style, use of emotions and risk taking Cultural theories One of the first researchers to capture values into dimensions was Geert Hofstede during the seventies (Hofstede & Hofstede, 2005, p.21). The theory of Hofstede is by far the most applied cross-cultural theory. Indeed, in 60% of the cross-cultural studies, )#(",).#(%*,(%7(:%7.#,+,2.(+/5,*./%*.(/.(&.,+(;<*',",*(=(>-,#tel, 2010). The cultural dimensions of Hofstede are often applied to investigate its influence on negotiation behavior (Volkema, 2004; Metcalf & Bird, 2004; Metcalf et al., 2007; Hofstede & Usunier, 2003). The theory of another Dutchman, Fons Trompenaars (1996) and the GLOBE study (House et al., 2004) are more recent and measure some of the dimensions of Hofstede. Apart from more recent qualifications, both studies add cultural dimensions that are not discussed by the model of Hofstede. A difference between the GLOBE study and the models of Hofstede and Trompenaars is that per dimension two scores are given: one measures the real situation (As-Is) while the other measures the ideal situation (Should- Be) (House et al., 2004, p.537). For research purposes the As-Is scores are taken into account instead of the Should-Be scores ).(4,%4",2.(/+,)".()-,(*%#()"8)?.(-,7",1#,+(/*( their behavior. The theory of Hall (Hall & Hall, 1990) complements the three above models with two cultural dimensions that are focused on the communication style and time orientation, which are two of the elements of the negotiation profile. In Appendix 1 an overview is given to indicate from which theories the applied cultural dimensions are originating.

16 '#! 2.4 The seven elements of the negotiation profile In this section the seven elements of the negotiation profile are described: the negotiation goal (2.4.1), negotiation strategy (2.4.2), specificity of the agreement (2.4.3), communication style (2.4.4), time orientation (2.4.5), use of emotions (2.4.6) and risk taking (2.4.7) Negotiation goal: Task or relationship focus The authors of all the models mentioned in section 2.3.1, concur that negotiators who are more task-focused go straight to business and conclude with a definite written contract and thus a clear understanding regarding the control and the use of the resources. The relationship-focused negotiator on the other hand is more focused on establishing a long-term relationship. If there is no relationship developed before the negotiation starts, no deal will be attained (Salacuse, 2005; Metcalf & Bird, 2004, Usunier, 2003a). The written contract is less important, when unforeseen circumstances find place or when the counterpart is not able to fulfill his obligations, the negotiator relies on the relationship to solve the problems and does not view the written contract as definitive (Salacuse, 2005; Metcalf & Bird, 2004; Usunier, 2003a; Ghauri, 2003) Negotiation strategy: Distributive versus integrative strategy All models mention the negotiation strategy as part of the negotiation profile (Salacuse, 2005; Metcalf & Bird, 2004; Usunier, 2003a; Ghauri, 2003). The negotiator who uses a distributive strategy tries to maximize his own share of the fixed pie of resources (Lewicki et al., 2006, p. 32). The negotiator has no interest in a positive outcome for the other party and wants to attain the best possible outcome. The distributive negotiator tries to persuade the counterpart with tactics like threatening, high aspiration points, high first offers and overbidding (Lewicki et al., 2006, p. 40). The main difference between the integrative and the distributive strategy is that the integrative negotiator does not view the pie of resources as fixed. The pie of resources can be enlarged to enable a beneficial outcome for both parties. To attain this mutual beneficial outcome the negotiator will be clear about the objectives and expects the same from the other party (Cai et al., 2000; Lewicki et al., 2006, p. 73). By acquiring this knowledge both parties create a give and take process to reach a mutual beneficial outcome. In reality most negotiators do not use a purely distributive or integrative strategy, in most cases

17 '$! intermediate strategies are used. One strategy is however often dominant over the other (Usunier, 2003a) Specificity of the agreement: General versus specific The models of Salacuse (2005) and Metcalf & Bird (2004) reason that cultures differ in the preferred level of detail in the contract. When the negotiator favors a specific agreement, all the issues are discussed in detail and included in the contract in an attempt to anticipate all possible eventualities. Negotiators who prefer a general agreement discuss the issues more generally and rely more on the developed relationship between the parties in case of disturbances (Salacuse, 2005; Metcalf & Bird, 2004). This indicates that the favored level of specificity seems to be related to the predominant task or relationship-focus orientation of the negotiator Communication style: Direct or indirect Usunier (2003a) argues that good communication between the parties is necessary to acquire knowledg,()0%&#(,)1$(%#$,-2.(%0@,1#/a,.b(8$/1$(,*)0",.(#%()+%4#(an integrative strategy. Salacuse (2005) states that negotiators with a direct communication style have clear and definite responses to the proposals of the counterpart. Persons with an indirect negotiation style, however, show their (dis)approval of proposals by vague comments or gestures. Differences in communication style can lead to misunderstandings and can hereby disrupt the negotiation process Time orientation: Monochronic versus polychronic Time orientation plays an important role during negotiations and is influenced by the cultural background of the negotiator (Salacuse, 2005; Metcalf & Bird, 2004; Usunier, 2003a; Ghauri, 2003). Usunier (2003a) states that there are substantial differences in the way that time is used to get to know each other, to schedule the process and to make appointments. Negotiators with a monochronic time orientation plan and structure the negotiations according to tight time schedules and are punctual, while negotiators who have a polychronic time orientation view time as abundant and tend to be less punctual. When not understanding the time orientation of the counterpart, irritations could arise and the negotiation process could be negatively influenced (Ghauri, 2003).

18 '%! Use of emotions: High versus low The models of Salacuse (2005) and Usunier (2003a) both recognize that emotions influence the negotiation process and that the expression of emotions is dependent on the cultural background of the negotiator. Using positive emotions, like happiness, can make the counterpart more flexible, while negative emotions, like anger, can result in conflict escalation (Usunier, 2003a) Risk taking: High versus low Usunier (2003a), Metcalf & Bird (2004) and Salacuse (2005) give considerable attention to the role of risk taking during negotiations. Usunier (2003a) states that negotiators take risks when doing concessions or when disclosing information because these actions make the negotiator vulnerable to the other party. Information sharing and concessions are part of an integrative strategy. This is why negotiators who apply an integrative strategy are assumed to be less risk averse. 2.5 The eight cultural dimensions This section describes the eight cultural dimensions. The dimensions that are taken into account in this literature review are summarized in a table which can be found in Appendix 1. This latter also indicates to what cultural theories those dimensions belong Concept of individualism versus collectivism The cross-cultural theories of Hofstede (2001), Trompenaars (1996) and House et al. (2004) introduce the dimension of individualism versus collectivism. Hofstede & Hofstede (2005, p. 75) define an individualistic person as somebody that views himself as independent from the group. In individualistic cultures it is viewed as favorable when the individuals take their own decisions and prioritize their interests, known as #$,(35,- 7/-.#6()##/#&+,9(C*(collectivisti cultures, on the other hand, the interests and priorities of the group are more important than the individual interests, also 1)"",+(#$,(3'-%&4-7/-.#6( attitude. Sacrifices for the good of the group are common (Hofstede, 2001, p. 227). Trompenaars & Woolliams2(definition of individualism versus collectivism (2003, p.47) is similar to the one of Hofstede. The GLOBE study uses two separate dimensions. The dimension of institutional collectivism measures whether group loyalty is emphasized at the expense of individual goals and whether the economic system emphasizes individual

19 '&! or collective interests. In-group collectivism measures to which degree parents show pride, loyalty and interdependence in their family (House et al., 2004, p.463) Concept of power distance & achievement versus ascription Power distance is the extent to which members of the society are seen as unequal due to differences in power, status, privileges and wealth (Hofstede & Hofstede, 2005, p. 40). Small power distance cultures emphasize equality between members of the society resulting in less inequality in power, status and wealth (Hofstede, 2001, p. 59). Power distance is also one of the dimensions examined by the GLOBE study and is similar to the one of Hofstede (House et al., 2004, p.543). The differences in the role of status in the different cultures is also underlined by the dimension of achievement versus ascription developed by the cultural theory of Trompenaars (House et al., 2004, p.532). In achievement oriented cultures status is attained through past achievements, while in ascription oriented cultures a person gets status through seniority, prestigious education or family background (Trompenaars & Woolliams, 2003, p.71-72) Concept of uncertainty avoidance Uncertainty avoidance deals with the culture2.(#%",-)*1,(#%8)-+.(&*1,-#)/*#? (Hofstede & Hofstede, 2005, p.165). Individuals from weak uncertainty avoidant cultures are more likely to take decisions for which the outcome is uncertain. Cultures that avoid uncertainty discourage taking uncalculated risks, individuals have a fear for failure and prefer the solutions that generate certain outcomes Concept of masculinity versus femininity & assertiveness The cultural dimension of masculinity versus femininity deals with the desirability of competitive behavior versus non-assertive behavior linked to the roles of the genders (Hofstede & Hofstede, 2005, p.116). Men are supposed to be masculine, assertive and tough, while women are supposed to be feminine, more concerned about others and quality of life. The cultural dimension of assertiveness from the GLOBE study originates in the dimension of masculinity versus femininity (House et al., 2004, p ). Cultures that score high on assertiveness value competition and inequality, while cultures that score low value cooperation and equality (House et al., 2004, p.405).

20 )(! Concept of high versus low context cultures Edward Hall developed the dimension of high versus low context cultures. During interactions between individuals, information is transferred from one party to the other. In a high context the negotiator transfers the information via implicit non verbal messages, while in a low context environment the information is transferred via explicit verbal messages (Hall & Hall, 1990, p.6) Concept of monochronic versus polychronic time orientation Individuals from cultures with a monochronic time orientation prefer to do one thing at a time, are punctual and take formulated deadlines and schedules seriously (Hall & Hall, 1990, p.15). D/5,(/.(.,,*( ).( )(.1)-1/#?E(3D/5,(/.(5%*,?69( On the other hand, people with a polychronic time orientation do not view time as a scarcity, are less punctual, do more things at the same time and have less need for tight scheduling and strict planning Concept of specific versus diffuse relationships This cultural dimension of Trompenaars (1996) concerns the degree of involvement in relationships. Individuals from specific oriented cultures interact with each other in public but not in the private space. People from diffuse cultures blend private and working life and therefore talking about private matters is accepted and appreciated (Trompenaars & Woolliams, 2003, p ) Concept of neutral versus affective relationships The cultural dimension of neutral versus affective relationships deals with the display of emotions in relationships (Trompenaars, 1996). Members from affective cultures prefer to reveal their emotions overtly, while neutral cultures find expressing emotions unprofessional and inappropriate. People who hide their emotions are often viewed as cold by people from affective cultures, while individuals who show emotions overtly are seen as out of control and inconsistent by the more neutral (Trompenaars & Woolliams, 2003, p ). "

21 )'! 2.6 Influence of the eight cultural dimensions on the negotiation profile In the previous sections 2.4 and 2.5 the seven elements of the negotiation profile and the eight cultural dimensions are described. The following review concerns the influence of the cultural dimensions on the elements. A schematic overview can be found in Appendix Negotiation goal and culture The negotiation goal of the negotiator is affected by the cultural dimensions of individualism versus collectivism and specific versus diffuse relationships. When cultures score high on individualism and prefer specific relationships the negotiator seem to be more task-focused. Scoring low on collectivism and favoring diffuse relationships indicates a relationship focus. Several researchers show that the dimension of individualism versus collectivism influences the relationship focus of the negotiator. Hofstede & Usunier (2003) argue that negotiators from collectivistic cultures have a need for stable relationships and negotiations are carried out amongst persons who are familiar already for a long time. Replacement of the negotiators leads to disturbance in the relationship (Hofstede & Usunier, 2003). For the collectivistic negotiator the established relationship between the two parties is a prerequisite for the negotiation itself. Metcalf et al. (2007) state that collectivistic negotiators concentrate on relationship building, while individualistic negotiators focus on the task itself. There is no extant literature that stresses the influence of the dimension of specific versus diffuse relationships on the negotiation goal. Members from specific cultures however do not mix work and private life (Trompenaars & Woolliams, 2003, p.63). Based on this statement it can be argued that during negotiations people from specific cultures appoint themselves to the task while negotiators from diffuse cultures prioritize the development of a relationship Negotiation strategy and culture The cultural dimensions of individualism versus collectivism, power distance & achievement versus ascription, masculinity versus femininity & assertiveness and uncertainty avoidance all seem to have influence on #$,(*,'%#/)#%-2.(4-,7,-,*1,(7%-( )(

22 ))! distributive or integrative strategy. When cultures score high on individualism, masculinity, assertiveness, power distance and ascription and low on uncertainty avoidance the negotiator tend to prefer a more distributive strategy. Strong uncertainty avoidance and low scores on the other dimensions indicate a preference for a more integrative strategy. Cai et al. (2000) state that negotiators from collectivist cultures use more often an integrative strategy because the pool of resources is not considered as fixed. Collectivistic negotiators use integrative tactics to get a good understanding of the interests, needs and objectives of the counterpart. The authors also indicate that collectivists in comparison with individualists focus more on the broad perspective and discuss the issues simultaneously. This stimulates the give-and-take process and the probability of a mutual beneficial outcome. Individualists at the other hand will prefer to discuss each issue individually. Gelfand & Christakopoulou (1999) argue that collectivists prefer to use an integrative strategy, while individualists favor a distributive strategy. Brett et al. (1998) suggest that in cultures with large power distance, status is used during negotiations. Lower status individuals have to concede to individuals with a higher status during negotiations. The differences in power are clarified during the negotiation. Cultures characterized by small power distance, do not have to make this clarification of power (Brett, 2001, p.19). Negotiators from cultures with large power distance do not believe in equality and legitimacy in the roles of the parties involved (Hofstede, 2001, p.98). Therefore negotiators from these cultures find the use of distributive instead of integrative strategies more appropriate (Purohit & Simmers, 2006; van Oudenhoven et al., 1998; Natlandsmyr & Rhoden, 1995). It is considered as a sign of weakness when an integrative strategy is used (Gulbro & Herbig, 1998). There is little literature available that emphasizes the relationship between the selection of a negotiation strategy and the cultural dimension of achievement versus ascription (Trompenaars, 1996). It is assumed by the researcher that negotiators from achievement-oriented cultures favor integrative strategies while members from ascription-oriented cultures prefer distributive strategies seen the role of status.

23 )M! Hofstede & Usunier (2003) predict that a high level of masculinity leads to ego boosting behavior during negotiations. This will lead to a competitive stance by the negotiator and the application of a distributive strategy (Hofstede & Usunier, 2003). This prediction of Hofstede & Usunier (2003) is in line with the empirical indications given by Natlandsmyr & Rhoden (1995), who conclude that a low level of masculinity leads to integrative behavior, while negotiators from masculine cultures behave more competitive. The findings of this study are confirmed by the results from other crosscultural negotiation studies (van Oudenhoven et al., 1998; Metcalf et al., 2007; Volkema, 2004). Metcalf et al. (2007) apply the cultural dimension of assertiveness from the GLOBE study and argue that negotiators from cultures with low assertiveness favor an integrative instead of a distributive strategy. Further findings are not available because the dimension is relatively young (Engelen & Brettel, 2010). Negotiators from a culture characterized by strong uncertainty avoidance prefer to use a distributive strategy during the negotiation. The findings of Natlandsmyr & Rhoden (1995), Metcalf et al. (2007), Volkema (2004) and Van Oudenhoven et al. (1998) all confirm the above statement. Negotiators from strong uncertainty avoidant cultures rather take a competitive stance and adopt a distributive instead of an integrative strategy. The use of an integrative strategy is perceived as inappropriate (Volkema, 2004) Specificity of the agreement and culture The preference for more general or specific contracts is seemingly dependent on the level of uncertainty avoidance and on the individualistic or collectivistic orientation of the negotiator. When originating from a collectivistic culture characterized by weak uncertainty avoidance the negotiator will prefer a more general agreement. On the other hand, a highly individualistic and strongly uncertainty avoidant culture encourages the negotiator to prefer a more specific agreement. Literature that investigates the relationship between the specificity of agreements and individualism versus collectivism is scarce. Metcalf et al. (2007) suggest that negotiators from individualistic cultures are mostly task-focused as suggested earlier and favor a detailed discussion of the issues. Specific agreements are valued. Collectivistic negotiators are relationship-focus and

24 )N! favor a broader discussion of the issues for more general agreements (Metcalf et al., 2007). Some literature argue that there is a relationship between uncertainty avoidance and the specificity of agreements. Gulbro & Herbig (1998) indicate that negotiators who are strongly uncertainty avoidant spend more time in making the agreement to ensure that all minor points and issues are covered. By tailoring the agreement as specific as possible these negotiators attempt to reduce the risk (Gulbro & Herbig, 1998). This is acknowledged by Metcalf & Bird (2004) who imply that negotiators from uncertainty avoidant cultures have a preference for explicit agreements Time orientation and culture Negotiators from polychronic cultures do not see time as a scarcity, are less punctual and feel less time pressure to conclude a negotiation. Negotiations are relatively lengthy and the preliminary stage is long (Usunier, 2003b; Macduff, 2006). Less importance is given to the setting of a common agenda and precise time schedules for the negotiation process. It can happen that meetings are longer than planned and it is relatively easy for polychronic negotiators to change their agenda accordingly (Usunier, 2003b). For monochronic negotiators the preliminary stage is kept relatively short because it is viewed as a waste of time (Macduff, 2006). Negotiators from monochronic cultures view the negotiation process inefficient when it is taking longer than planned (Macduff, 2006) Communication style and culture Negotiators from high context cultures prefer to use a direct communication style while individuals from a low context culture favor an indirect communication style. Negotiators who use direct communication get to know their counterpart by asking questions, interpreting answers, having discussions about the issues, and observe the reaction of the counterpart (Brett et al., 1998; Adair, 2003). Negotiators with an indirect communication style prefer to transfer information via the context of the offers and counteroffers. This means that the information is not explicitly stated in words but more implicit in the context (Adair, 2003).

25 )!! Use of emotions and culture The dimension of individualism versus collectivism has influence on the use of emotions during negotiations. Literature underlining the relationship between this cultural dimension and the use of emotions is rather limited. Matsumoto et al. (1998) and Adam et al. (2010) reason that individualistic negotiators find it appropriate to express negative emotions during negotiations, while collectivistic negotiators try to suppress emotions. When the individualistic negotiator expresses emotions, the collectivistic negotiator can find it inappropriate and starts to behave more competitive. There is currently no literature available that supports the relationship between the cultural dimension affective versus neutral relationships and the use of emotions (Trompenaars, 1996). It is assumed by the researcher that negotiators from affective cultures find it more appropriate to express emotions than individuals from neutral cultures Risk taking and culture Although it is stated by Hofstede that uncertainty avoidance does not have the same meaning as risk avoidance, it is argued that individuals from a weak uncertainty avoidant culture have a higher willingness to take risks (Hofstede, 2001, p.148). Purohit & Simmers (2006) indicate that negotiators who strongly avoid uncertainty prefer not to apply integrative tactics that are more risky. Indeed, when being the first to do a concession the reaction of the counterpart is uncertain, which enlarges the risk and abdicates the power of the counterpart. 2.7 Indian and Danish negotiation profile in context of culture The elements, the cultural dimensions and the influence of the dimensions on the elements have previously been described. The scores on the cultural dimensions are used together with the reviewed country specific literature to indicate the Indian and Danish negotiation behavior regarding the seven elements. Expectations about the negotiation behavior of both Danes and Indians are thus formulated in section 2.8. The scores of India and Denmark on the cultural dimensions can be found in Appendix 3.

26 )#! Negotiation goal The reviewed literature shows that the cultural dimension of individualism versus collectivism has influence on the task or relationship-focus of the negotiator. Trompenaars (1996) uses a relatively equivalent dimension as Hofstede (2005, p.81) and the index score indicates that Indians prefer collectivistic values. However the score does not show an obvious predominance of one dimension over the other. This is confirmed by the resu"#.( %7( :%7.#,+,2.( -,.,)-1$. The Indians score mediocre on the individualism versus collectivism index. It seems that individualism and collectivism both play an important role in the Indian society. This is acknowledged by Sinha et al. (2001) and Kumar (2004). Kumar argues that Indians have two modes of behavior; traditional behavior based on Hindu values and western behavior influenced by globalization. Hinduism values collectivistic 0,$)A/%-( 8$/",( #$,( 3F,.#,-*6( 0,$)A/%-)"( mode is more individualistic (Kumar, 2004). The use of the different modes depends on the context. Sinha et al. (2001) acknowledge the effects of the context and found indications that Indians adopt more collectivistic values when dealing with in-group members and more individualistic when dealing with members from the out group. The collectivistic behavior used when confronted with members from the in-group is confirmed by the score of India on the cultural dimension of in-group collectivism from the GLOBE study. It is expected that the individualistic values will be more dominant in the future as wealth and prosperity are increasing, but Indians are not likely to behave fully individualistic seen the strong presence of the traditional values of Hinduism (Sinha et al., 2001). Due to the existence of both individualism and collectivism it is hard to predict whether the Indian negotiators will be more relationship or contractfocused. This is emphasized by the Indian score on specific versus diffuse relationships, which is mediocre and does not show a clear preference either. The results from Metcalf et al. (2006) do also not give a clear indication. The authors expected that Indian negotiators would be more relationship-oriented than task-oriented. After empirical research the authors found that Indians do not have a clear preference for task or relationship orientation. Other literature is directed towards a relationship-focus. Gesteland & Gesteland (2010, p.35) argue that Indians are predominantly relationship focused. To be able to reach an agreement it is essential to have good relationships and connections. Kumar & Wormer (2004) describe Indian negotiators as relationship-focused but not to the same degree as

27 )$! negotiators from East Asia. Salacuse (2003, p.22) find indications for a relationship focus as India scored only 33/100 on being task-focused. Katz (2007b) argues that Indians value long-term relationships and therefore contracts have a less definite character. Indians expect the counterpart to be flexible in changing the contract terms when necessary. Based on this country specific literature, Indians are expected to be relationship-focused. Denmark scores in comparison with India higher on individualism. The theories of Hofstede and Trompenaars indicate that Danes are strongly individualistic. The results of the GLOBE study show that for the cultural dimension in-group collectivism (the degree to which the individual is independent from the in-group), Denmark has the lowest score of all participating countries. The score of Denmark at the dimension of specific versus diffuse relationships indicate that the Danish respondents have a strong preference for specific relationships. This preference is confirmed by Worm (1997, p.97). The scores of Denmark on the cultural dimensions indicate a preference for a taskfocus. Several authors confirm this finding. Relationships are moderately important and are no prerequisite for starting the negotiation process. People may be quickly accepted when introduced to an existing relationship (Katz, 2007a). Business relationships in Denmark are developed during the negotiation process and not before the start of the negotiation (Gesteland, 2005, p.290). Danes seem to be slow on developing relationships, communicate mainly about business and find it tiring to invest too much time into relationship development (Gesteland & Gesteland, 2010, p.32). The written contract rather than the established relationship is a stronger confirmation of commitment. Gesteland (2005, p.294) adds that Danes use the written contract as a reference when disagreements arise. The extant literature clearly indicates the dominance of the task-focus for Danish negotiators Negotiation strategy The cultural dimensions of individualism versus collectivism, power distance, achievement versus ascription, uncertainty avoidance, masculinity versus femininity and assertivenes seem to influence the use of integrative and distributive strategies during negotiations. As India is both individualistic and collectivistic, it is difficult to indicate the preferred strategy of Indian negotiators on basis of this cultural dimension. Kumar

28 )%! discusses a specific Indian cultural value: Brahmanical idealism. This value traduces the importance for Indians to uncover the ultimate reality no matter how difficult this might be (Kumar, 2004). The effect of this cultural value on behavior is that Indians want to achieve the best possible and most desired outcome. This can lead during negotiations to high aspiration points and application of a distributive strategy. By having overoptimistic confidence in attaining the most desired outcome the Indians try hard to persuade the counterpart in order to obtain the best possible outcome for themselves (Kumar & Wormer, 2004; Kumar, 2004). As well as that a distinction is made in the use of high aspiration points between the in-group and the out-group. When dealing with ingroup members, family and people from the same caste, the Indians are more willing to adopt an integrative strategy and change their aspiration points compared to out-group members (Kumar, 2004). Individualistic, competitive behavior is used when dealing with the out-group while collective behavior is applied with in-group members (Sinha et al., 2001). This means that Indians will adopt a more distributive strategy when negotiating with Danes. Gesteland (2005, p.133) agrees and states that Indian managers prefer to use a distributive strategy. The high scores on power distance and masculinity confirm the preference for a distributive strategy as identified by Volkema (2004). This author found indications for the appropriate use of distributive strategies in masculine cultures, like India, with a large power distance. The score on the cultural dimension of achievement versus ascription shows that Indians are more ascription oriented, which is assumed again to be indicative for a more distributive strategy. Nevertheless not all the literature indicates the preference for a distributive strategy. India scores relatively low on uncertainty avoidance and this suggests that Indians favor an integrative strategy. The score on the cultural dimension of assertiveness is mediocre and does not imply a preference for one of the strategies. The results of Metcalf et al. (2006) likewise do not emphasize a preference, Indians seem to favor both strategies. Salacuse (2003, p.15) brings it even further and indicates that Indians favor an integrative strategy instead of a distributive strategy. Although several authors suggest otherwise, the researcher expects, based on the majority of the literature, that the Indians prefer a distributive strategy. Denmark scores, compared to India, different on the cultural dimensions that influence the selection of the negotiation strategy. Danes score relatively high on individualism amplified by the low score on in-group collectivism. Surprisingly the score on

29 )&! institutional collectivism is relatively high: Denmark belongs to the group of countries with the highest score. This means that, although Danes have a fundamental belief in the rights of the individual, everybody in the society is viewed as equal and no difference is made between people from different social backgrounds. Although it is not explicitly mentioned, it is known that Danes have a concern for the interests of others and thus for collective interests. It can be assumed that this is the reason for the high score of Denmark on institutional collectivism. Other Scandinavian countries, like Sweden and Finland share these values and also score high on this cultural dimension. Negotiators from individualistic cultures, like Denmark, are assumed to prefer the use of a distributive strategy. The Danish negotiators are however not only concerned about their own outcome but also about the outcome of the counterpart. This would suggest the use of an integrative instead of a distributive strategy. The scores on the other cultural dimensions are also indicative for the use of an integrative strategy. The GLOBE study shows that Denmark is the country with the smallest power distance amongst all the participating countries. In addition the high score on achievement and the low scores on masculinity and uncertainty avoidance suggest the preference for an integrative strategy. The mediocre score of Denmark on assertiveness is the only dimension that does not give a clear indication about the favored negotiation strategy. The Danish preference to behave integrative or cooperative during the negotiation is emphasized by different authors (Tixier, 1996; van Oudenhoven et al., 1998; Katz, 2007a). By describing the differences between Swedish and Danish management Tixier (1996) states that Danes have a strong tendency towards a cooperative orientation when solving conflicts. Van Oudenhoven et al. (1998) show that Danes prefer to use a problem-solving approach when dealing with managerial conflicts. Katz (2007a) argues that Danes prefer to use an integrative strategy to reach an outcome fair for both parties. Being cooperative is typical for the mediocrity of Scandinavian cultures. Denmark is characterized by a homogeneous society with feminine values like taking care of the weak, focusing on collaboration and having a negative connotation to competition and power (Worm, 1997, p.88-89). Due to the small power distance there is a high level of egalitarianism. Little differences are made between people, groups, classes and sexes (Brett, 2001, p.19; Worm, 1997, p.79).

30 M(! Specificity of the agreement The cultural dimensions individualism versus collectivism and uncertainty avoidance seem to have influence on the specificity of the agreement obtained. Seen the mediocre score of India on the individualism versus collectivism index, no indication is given regarding the preference for a general or specific agreement. The low score on uncertainty avoidance points towards a more implicit agreement which is recognized by Katz (2007b). Indians seem to have predominantly a relationship-focus and therefore written contracts have a less definitive character. Contracts are less specific and less detailed. Contradicting findings are done by Metcalf et al. (2006) and Salacuse (2003, p.104). The Indian respondents of both studies indicated that 66% of them preferred a specific prior to a general agreement. Although different findings are available, it is not clear from the extant literature whether Indians prefer a specific or a general agreement. Therefore it is assumed that the Indians will prefer moderate specific agreements. Denmark scores high on individualism and low on uncertainty avoidance. By scoring high on individualism Danes appear to have a clear preference for specific and explicit agreements. Danes are concise but do not include too many legalistic details (Katz, 2007a). Not including all legalistic details in the agreement could possibly be explained by the weak uncertainty avoidance of Denmark Communication style Traditionally Indians seem to favor a indirect communication style because India is seen as an high context country. Zaidman (2001) found when comparing the communication styles of Israel and India that Indians prefer to include the information in non-explicit messages. This is acknowledged by Gesteland, who states that Indians do not always give a straight answer and us,(#$,(#,-5.(3?,.6()*+(3*%6(/*#,-1$)*',)0"?()*+(4-,7,-(#%( communicate their disapproval via implicit messages (Gesteland & Gesteland, 2010, p.69). Kapoor et al. (2003) found out during their research to the communication style of American and Indian students that Indians appreciate low context messages more than Americans. However most of the tested variables indicate that the communication style of Indians is not that different from Americans and thus relatively direct. This could indicate that the Indian high context culture is transforming into a low context culture. Nishimura et al. (2008) argue that this transformation is a consequence of the globalization that has a strong effect at the Indian culture and society. More Indian

31 M'! people have exposure to the Western world in the form of travelling, technology and media (Nishimura et al., 2008). This change from an high context to a low context culture is also notified by Metcalf et al. and Salacuse. Metcalf et al. (2006) discovered that 71% of the Indian respondents have a preference for a direct communication style. Salacuse (2003, p.101) discovered that only 11% of the respondents favored an indirect instead of a direct communication style during the negotiation. It is therefore expected by the researcher that Indians prefer to apply a direct communication style. Denmark is a classic low context culture according to Hall (Hall & Hall, 1990, p.14). The communication style of the Danes is direct and most of the communication goes through explicit messages and vague gestures are disliked. Danes prefer to receive the information without requiring extensive background information (Worm, 1997, p.94). Indians view Danes often as too direct and too straightforward (Gesteland & Gesteland, 2010, p.70) Time orientation Several authors state that India has a polychronic time orientation rather than a monochronic time orientation (Gesteland, 2005, p.129; Kumar, 2004). Indians strive for the best possible solution and take the time needed to attain this ideal outcome. Indian negotiators do not easily accept a solution that is not close to their ideal solution (Kumar, 2004). Gesteland (2005, p.129) argues that time is a flexible concept in India and that minutes normally do not count for much. It is not unusual that Indian negotiators arrive late at the scheduled meeting and do not apologize for the delay. The Indian counterpart will answer phone calls and sign documents during a negotiation process. However, in his latest publication Gesteland explains that the Indian time behavior is changing because the majority of private businesses are adopting a monochronic time orientation (Gesteland & Gesteland, 2010, p.30). The results of Metcalf et al. (2006) confirm this trend and indicate as well a relatively high sensitivity to time. Hence, it is expected that Indians adopt predominantly a monochronic time orientation during negotiations, with still some polychronic influences seen the ongoing transformation. Danes have a strictly monochronic time orientation (Hall & Hall, 1990, p.14; Hofstede & Usunier, 2003) combined with a direct communication style. The monochronic time orientation of Danes is recognized by different authors (Worm, 1997; Gesteland, 2005;

32 M)! Katz, 2007a; Tixier, 1996). Worm (1997, p.98) mentions that Danes solve issues one by one during negotiations and stresses the importance of deadlines. Visitors are rarely kept waiting and schedules are firm (Gesteland, 2005, p.291) Use of emotions As argued by several authors the dimension of individualism versus collectivism has influence on the expression of emotions (Adam et al., 2010; Matsumoto et al., 1998). It is indicated that negotiators from individualisti cultures use more emotions than those from collectivistic cultures. Referring to the mediocre scores of India on this dimension, it can be argued that Indian negotiators are not extremely affective but also not neutral in showing their emotions. The score of India on the dimension neutral versus affective relationships is as well mediocre and confirms the suggested relationship between individualism versus collectivism and the display of emotions. Metcalf et al. (2006) hypothesize that Indians display emotions overtly and emotions, instead of showing facts, are necessary to persuade Indians. The authors found however that Indian respondents answered to both sides of the spectrum. Salacuse (2003, p.103) found out that 56% percent of the Indian respondents reveal emotions during negotiations. The country specific literature and the scores on the relevant cultural dimensions suggest that Indians do not display emotions overtly but do not hide them either. Danes are more individualistic than Indians. Therefore it is expected that Danes express more emotions during the negotiation process. However by being modest, taking care of the weak, not showing status or power differences it seems logical that Danes hide their emotions instead of revealing them. Worm (1997, p.80) confirms that Scandinavians find it difficult to show emotions to others. However, not all the literature indicates a strong Danish preference to hide emotions. Denmark scores, like India, mediocre on the dimension neutral versus affective relationships. This score does not imply that Danes hide emotions overtly. The results of Finland from the study of Metcalf et al. (2006) show that the Finish respondents do not indicate that emotions are hidden. Finns and Danes are relatively similar to each other in the expression of emotions according to Worm (1997, p.80). Consequently it is expected by the researcher that Danes hide emotions but not to the same extent as suggested by Worm (1997, p.80).

33 2.7.7 Risk taking MM! India scores low on uncertainty avoidance which suggests that Indians are likely to take risks during negotiations. Metcalf et al. (2006) agree on the previous statement and the results show that almost half of the Indian respondents (49%) are willing to take risks, while only 19% of the respondents are strongly risk averse. The findings of Metcalf et al. (2006) are confirmed by Salacuse (2003, p.108), who found out that 89% of Indian respondents are risk takers during negotiations. Danes also score low on uncertainty avoidance, which suggests that Danes take risks during negotiations. According to Schramm-Nielsen (2000) the weak uncertainty avoidance is the consequence of a highly secured life and of a certain and predictable environment. However Danes do not appreciate to work in unsecure and unpredictable situations. This could be the reason for Danes, though not being uncertainty avoidant, to be moderate risk takers during negotiations as it is pointed out by Katz (2007a). Taking some risks is needed, especially when taking into account that Danes rather use an integrative instead of a distributive strategy as discussed earlier. 2.8 Expectations of Indian and Danish negotiation behavior In the previous section Indian and Danish negotiation profiles are derived from the cultural dimensions and the country specific literature. Based on these profiles, expectations can be formulated regarding the possible behavior of the upcoming generation of Indian and Danish managers. Differences between Indians and Danes are expected in regards to: negotiation goal, applied negotiation strategy, preferred specificity of the agreement, acceptance of using indirect communication, use of time, emotions and risk taking. The eighteen statements in the questionnaires have been formulated based on these expectations (denoted with E for later reference). " " "

34 MN! Table 1: Expectations about Indian and Danish negotiation behavior Negotiation goal: Task versus relationship-focus It is expected that: E1: Indians will place more emphasis on the development of a long term relationship compared to the Danes, for whom developing relationships is of moderate importance. E2: The Danes, on the other hand, will be more focused on the task and the attainment of the contract. E3: Indians will be more flexible in changing the agreed terms after the contract is signed, while the Danes view the agreed terms as binding and use the contract as reference when disagreements arise. Negotiation strategy: Integrative versus Distributive strategy It is expected that: E4: Indians will be more competitive as Danes during the negotiation, and will try to persuade the counterpart aggressively to maximize their own pay offs. E5: Danes will be more eager to cooperate with the counterpart, to apply an integrative strategy and to maximize the joint pay offs. Specificity of the agreement: General versus Specific agreements It is expected that: E6: Indians prefer contracts that are neither too general nor too detailed, while Danes seek specific contracts in which the issues are discussed in details. Communication style: Direct versus Indirect It is expected that: E7: Danes and Indians both prefer to communicate direct with the counterpart. E8: (Dis)approval of offers is preferably communicated via explicit messages and not via implicit contextual messages, like vague gestures or comments. E9: Indians will find it more appropriate to use implicit messages to refuse an offer seen the past of India as a high context culture. Time orientation: Monochronic versus Polychronic It is expected that: E10: Danes will have a stronger monochronic time orientation than Indians, seen the past of India as a polychronic culture. E11: Indians will consider time more flexible than Danes and do not expect from the counterpart to be on time or use the scarce time as efficient as possible. Use of emotions: High versus low It is expected that: E12: Both Indians and Danes will not show and use emotions overtly. E13: Indians will reveal emotions to a larger extent than Danes, who avoid expressing their emotions during negotiations. Risk taking: High or risk averse It is expected that: E14: Indians will be likely to take more risks during negotiations compared to Danes, who are moderate risk takers.

35 3 Methodology M!! 3.1 Introduction Figure 3: Structure Methodology Chapter " This study attempts to describe the differences and similarities between the negotiation behavior of the upcoming generation of Indian and Danish managers. It classifies this project as a descriptive research when looking at the definition of Saunders et al. (2000),!%+'(-6=',%(of descriptive research is to portray an accurate profile of persons, events -&(*)%#1%)-3*(8/9>?;<9 The data analysis method chosen is quantitative, understanding that the fourteen expectations (section 2.8) are translated into eighteen survey statements for which the respondents have to assess their own negotiation behavior. The collected data contains numerical values which will be analyzed with statistical methods. In this section attention will be given to the method of data collection (3.2), the questionnaire design (3.3), the process of data collection (3.4), the methods of data analysis (3.5) and the quality of the study (3.6). 3.2 Method of data collection The common methods of data collection in the area of international negotiation are predominantly simulations (Gelfand & Christakopoulou, 1999; Cai et al., 2000) and surveys (Salacuse, 2005; Metcalf et al., 2006). The researcher conducts web surveys to measure th,( -,.4%*+,*#2.( )..,..5,*#( %*( $/.( %8*( negotiation behavior. Using web surveys has several advantages but also disadvantages compared to the use of simulations. There are different arguments for choosing web surveys and not simulations as method of data collection. First, it is difficult to conduct intercultural negotiation simulations, as it is time consuming and complicated to gather a large number of Indians and Danes in

36 M#! the same location as done by Cai et al. (2000). Web surveys are relatively easy and quick to distribute via or social networks. Second, the researcher is not sure if sufficient samples can be reached in case of simulations. The number of potential respondents willing to participate is uncertain as a simulation is more time consuming and requires more effort than the completion of a survey. Third, it is costly in terms of time to organize the data obtained by simulations into a dataset that is suitable for analysis. While in the case of a web survey, the dataset is automatically generated by the software. On the other hand, there are some disadvantages in the use of a web survey instead of a simulation. First, there is a response bias when conducting a web survey as the respondents can misunderstand or misinterpret the questions and the perceptions of their own behavior can be influenced by egoistic or moralistic biases (Paulhus & John, 1998). Second, in the case of simulations it becomes more clear how Indians and Danes behave and interact with each other, giving more insight into the actual differences and similarities in negotiation behavior. Third, when formulating a survey only a limited number of statements can be used to assess behavior. When there are too many statements in the questionnaire the respondent could get de-motivated and not complete the survey (Saunders et al., 2000, p.94). Other methods, which are seldom applied in this research field, that can be used instead of the web survey are postal questionnaires, telephone interviews and structured interviews (Saunders et al., 2000, p.280). The postal questionnaire is not appropriate seen the geographical distance between Denmark and India. The data collection period will be long and addresses of potential participants need to be known in advance, which is not the case seen the absence of a sampling frame. The same reason applies to phone interviews where phone numbers need to be known by the researcher, which is relatively difficult owing to the fact that potential respondents are unknown. Telephone and structured interviews are time consuming and can make the respondent hesitant to participate or complete the interview. Although the risk of response bias is reduced as further instructions can be given when needed, the total number of participants compared to web surveys will be lower. Overall the researcher recognizes that the survey has several disadvantages compared to other methods. However due to the restrains in time and resources, the ease of

37 M$! distribution, the need for a sufficient number of respondents and the frequent use of surveys in studies regarding negotiations, the web survey is viewed as most suitable method of data collection. 3.3 Questionnaire design Two versions of an Internet-based survey were created and separately distributed to Danish and Indian respondents. Both surveys were created with the online tool SurveyXact. The questionnaire starts with a screen that welcomes and informs the participants about the purpose of the questionnaire. The overall study is explained and the approximate duration is given. Contact details of the researcher are supplied in case respondents have questions or suggestions. The actual questionnaire exists out of a case scenario and includes statements and demographic questions. Each part of the questionnaire is detailed in the following sections. Both the Danish and the Indian versions of the questionnaire are included in respectively Appendix 4 and Case scenario After the introduction screen the respondents are invited to read a short case scenario. This case scenario is aimed to minimize the response bias by placing Danes and Indians in the same contextual situation. The scenario describes the CEO of a Danish company who has a first meeting with the CEO of an Indian company to negotiate the opportunity of outsourcing its production to India. Several issues need to be discussed like the duration and the costs of the agreement, the sharing of knowledge and the size of the operations. Danish respondents are placed in the role of the Danish CEO, while Indians get assigned the role of the CEO of the Indian company. The use of a case scenario is necessary to make sure the respondents understand that the negotiation behavior needs to be assessed for a case of intercultural negotiation and not for a case of bargaining. Often people use the terms bargaining and negotiation interchangeably (Lewicki, 2006, p.3; Ghauri, 2003). Prices of consumer goods are generally not fixed in India so Indians need to bargain every day as experienced by the researcher himself. When bargaining, distributive tactics are applied. A consequence can be that the responses to the questionnaire will be strongly directed towards a more competitive orientation (Lewicki et al., 2006, p.3). By creating a scenario it is clear for

38 M%! Indians in what context the negotiation behavior needs to be assessed. The same misunderstanding of the term negotiation could occur with Danes as the respondents could understand that they have to assess their bargaining style like they would do when buying a second hand car. The scenario is written as a case of an international business negotiation to be explicit that it involves an intercultural and not a 38/#$/*( 1&"#&-,6( negotiation. The reasoning behind is that there could be a difference in behavior when dealing with a foreigner rather than a fellow citizen (Weiss, 1994). The argument for choosing Indians and Danes in the questionnaire is related to the country specific focus of this research. The aim of the study is to enlarge the understanding of the differences and similarities in negotiation behavior between the upcoming generation of Indian and Danish managers when negotiating with each other Formulation of survey statements The actual questionnaire is composed of eighteen closed statements. In section 2.8 several behavioral expectations are formulated about the negotiation behavior of both the upcoming generation of Danish and Indian managers based at the negotiation profiles. The survey statements are derived from these fourteen expectations. Virtually it could be presented by the following figure: Figure 4: Process formulation of the survey statements Negotiation profiles (Section 2.7) Expectations (E) (Section 2.8) Statements questionnaire (S) The eighteen statements are listed in Appendix 6 and denoted with S in the further study. On the first screen of the questionnaire the statements assessing the preference for the negotiation goal, strategy and specificity of the agreement are stated. The second screen states the statements related to communication style and time orientation. On the third screen the statements regarding the use of emotions and risk taking are given. On each screen the respondent needs to state his level of (dis)agreement with all the statements listed. Per screen all statements need to be assessed before the respondent is able to continue to the next screen. This is done to make sure that the researcher only receives complete responses. The overview below lists which element of the negotiation

39 M&! profile is represented by which statement as well as which expectation is related to which statement. The behavioral expectations are denoted by E. Table 2: Relationship between expectations and formulated survey statements Elements of the negotiation profile Behavioral expectations Derived statements Negotiation goal E1, E2, E3 S1, S2, S3 Negotiation strategy E4, E5 S4, S5, S6 Specificity of the agreement E6 S7, S8 Communication style E7, E8, E9 S9, S10, S11 Time orientation E10, E11 S12, S13, S14 Use of emotions E12, E13 S15, S16 Risk taking E14 S17, S18 A few authors of previously research were contacted and requested to provide questions and statements used in their surveys to assist the researcher in the formulation of the statements. Seen the fact that these questions have gone through an extensive pre testing phase, it would have increased the reliability and validity of the survey. Unfortunately no responses were received. The initial formulation and the answerability of the statements was therefore discussed with an Indian professor and two former Indian and three Danish classmates. It appeared that the statements were understandable although some formulation and grammar mistakes were corrected. The formulation of the statements for the Indian and Danish version of the questionnaire is identical. Both questionnaires are written in English. It is assumed by the researcher that the respondents have a sufficient level of English to be capable of answering the questions. Further no technical terms are used in the formulation of the statements to avoid possible misunderstandings. The statements are written from the perspective of the Indian and Danish CEO, the respondents are instructed to place themselves in these roles when assessing their behavior during the negotiation process Likert-scale The respondents assess themselves on the eighteen statements with the use of the Likert scale. These scales are often used in surveys to measure attitudes or behavior. The researcher uses a seven 4%/*#(.1)",(#$)#(-)*',.(7-%5(3G%54",#,"?()'-,,6(#% 3G%54",#,"? +/.)'-,,6. The most important argument for the use of the seven point scale is the probability that Danes are modest in their answers, and do not choose the two extreme

40 N(! answers. Reflecting this to the five point Likert scale, it could mean that Danes only consider three choices to express the level of agreement with a statement. In this case it will become more difficult for the researcher to find out to what extent the respondents agree or disagree Demographic questions Several questions are asked regarding the demographic characteristics of the respondents. Those questions regard the age, nationality, gender, university and year of graduation of the participant. This is done to ensure that each respondent belongs to the target group of the study. One additional question regards the federal state where Indian respondents are born to possibly identify particularities in the negotiation behavior across different regions of India. The demographic questions are positioned at the end of the questionnaire as suggested by Czaja & Blair (2005, p.94). 3.4 Process of data collection The data collection period started in week 23 and lasted four weeks before it ended in week number 27. Seen the difficulty of establishing a sampling frame the study adopted a method of non probability sampling (Saunders et al., 2000, p.170). The data collection was merely done through networking, also known as snowball sampling. Danish and former Indian classmates of the researcher were asked to forward the questionnaire to their contacts using social media and . It was made clear to them what the target group was, so that the questionnaire got distributed to the relevant acquaintances. Unfortunately the researcher received no reply from the majority of his former Indian classmates, even after sending reminders, which was probably due to the holiday season. Fortunately one former classmate, who the researcher contacted before the study, forwarded the questionna/-,( #%( #$,( )"&5*/2.( %7( HIC( &*/A,-./#?. This increased significantly the number of responses. The process of data collection for the Danes went smooth and generated a constant number of responses throughout the collection period. Apart from the use of networking, the researcher used Facebook to distribute the questionnaire via university forums and blogs to generate additional responses.

41 N'! 3.5 Methods of data analysis To be able to get valid and satisfying findings the researcher has to make a choice between the different available statistical methods. One of the determinants is the data type that is used in the questionnaire. As explained in section the respondents have to indicate the level of agreement with the eighteen statements via a seven point Likert scale, which means that ordinal data is collected by the researcher. The consequence of using ordinal data is that only a few statistical methods can be used because the mean and measures of variability, like the variance and the standard deviation, are inappropriate for the analysis of ordinal data (Keller, 2004, p.726; Jamieson, 2004). The majority of the parametric tests are based on these inappropriate measures of central tendency and variability which explains the rather limited choice of statistical methods. Descriptive statistics will be used by the researcher to indicate the level of agreement of the respondents with the eighteen statements. The results can be used during the discussion (section 4.5), to identify differences and similarities between the behavioral expectations (section 2.8) and the actual responses from Danes and Indians. The measure of central location will be the median and not the mean, seen the use of ordinal data (Keller, 2004, p.96). The level of dispersion will not be assessed with the standard deviation or variance, as in the case of interval data, but with the interquartile range of the data (Keller, 2004, p.110). The frequency tables will be used to get a deeper insight into the results. To analyze if the Danes and Indians assess their behavior significantly different from each other, the Mann Whitney U test will be used. This method is the non parametric equivalent of the unpaired T-test (or the two independent sample T-test) and tests whether the distributions of the samples are equal (Siegel, 1990, p.684). The main difference between the two methods is that the T-test calculates the difference in distribution by using the mean values, which is an inappropriate measure for ordinal data. Instead the Mann Whitney U test uses the sum of the overall ranks of the responses to test the difference in distribution (Siegel, 1990, p.683). It is recognized by the researcher that this non-parametric test could be less powerful compared to parametric methods and accepts weaker and less accurate data, due to the fact that no assumptions have to be made about the normality of the data. However this

42 N)! disadvantage is relatively limited according to Siegel (1990, p.675). The disadvantage of using the T-test on the other hand is much bigger as the application of parametric methods to ordinal data can lead to wrong conclusions (Jamieson, 2004). The statistical analysis will be completed with the statistical computer program SPSS, version Quality Reliability The quality of the survey instrument and the used scales can be tested by measuring the reproducibility or stability of data, also called the reliability (Litwin, 1995, p.84). One way to test reliability is to measure the internal consistency of the data with G-%*0)1$2.( Alpha. The statements that are related to the same construct can be tested on internal consistency. Metcalf et al. (2007) suggest that the bipolar dimensions of each element of the negotiation profile needs to be viewed as separate constructs. For example the,",5,*#( 3J,'%#/)#/%*( '%)"6( 1%*./.#.( %&#( %7( #$,( 0/4%")-( +/5,*./%*.( 3D).K-7%1&.6( )*+( 3Relationship-7%1&.69(D%(#,.#(/*#,-*)"(1%*./.#,*1?, at least two statements need to assess the same dimension. Only for four dimensions more than one statement is used: relationship-focus (negotiation goal), integrative strategy (negotiation strategy), direct communication (communication style) and monochronic orientation (time orientation). Elements of the negotiation profile Table 3: Reliability scores Bipolar dimensions Statements Denmark (alpha) India (alpha) Negotiation goal Relationship focus S1, S Task focus S3 - - Negotiation strategy Distributive strategy S4 - - Integrative strategy S5, S Specificity of agreement Specific S8 - - General S7 - - Communication style Direct S9, S Indirect S Time orientation Monochronic orientation S12, S Polychronic orientation S Use of emotions High S Low S Risk taking High S Low S18 - -

43 NM! The internal consistency is acceptable when! "#.7 (Litwin, 1995, p.31). The results show that for both samples the majority of the dimensions is not internally consistent. The probable cause originates in the statement itself. The statements assessing monochronic time orientation are a good example. A negotiator who is on time for the negotiation does not necessarily prefer to follow strict time schedules, though both strict time schedules and being on time are indicative of a monochronic time orientation.!*%#$,-(,l)54",( /.( #$,( "%8( /*#,-*)"( 1%*./.#,*1?( %7( 3C*#,'-)#/A,(.#-)#,'?6. The negotiator can behave cooperatively, but this does not necessarily mean that he prefers to discuss issues simultaneously. Another argument for the low internal consistency is the low number of items to measure the construct. Indeed, t$,( G-%*0)1$2.( )"4$)( /.( increasing at the moment that more items are taken into account (Cortina, 1993). Other measures of reliability, like test-retest and alternate form reliability are not suitable for this study seen the limited availability of time. The detailed test results are included in Appendix Validity Validity is used to see if the statements of the questionnaire measure what it is supposed to be measured (Litwin, 1995, p.33). The formulation of the statements is done by the researcher without referring to other surveys that have already gone through an extensive validity check. The questionnaire was pretested by three Danish and two Indian classmates with some experience in negotiations. The researcher discussed with them the answerability of the statements and checked if the responses given assessed what was supposed to be measured. Furthermore, an Indian teacher of the researcher with extensive experience in the area of negotiations was asked to review the questionnaire. The given feedback, especially regarding formulation and the use of wording was incorporated into the questionnaire. The review of the Professor has been valuable and led to higher validity. Other methods to test the validity of the survey instrument are not applicable. First it is not possible to judge the validity of the survey against other surveys in the same area, seen the fact that no survey material is made available by authors from previous studies. Second, the study is not longitudinal, so no comparison can be made between the results from the different tests in time to ensure validity (Liwin, 1995, p.40). Third, not enough

44 NN! experience is obtained from this survey instrument to test construct validity, which tests how meaningful the scale or survey is when in practical use (Litwin, 1995, p.43). Nevertheless the researcher believes that the statements represent the reviewed literature and measure what needs to be measured. By not using technical terms and the valuable feedback from former classmates and the Professor, the respondents are assumed to be able to fully understand and interpret the statements. Although the survey instrument cannot be compared to already existing and validated surveys, the findings regarding Indian negotiation behavior from previous empirical work are to a large extent confirmed by the results of this study.

45 N!! 4 Results & Discussion 4.1 Introduction Figure 5: Structure Results & Discussion Chapter " Since the method has been chosen and explained, the researcher was able to distribute the survey and collect the answers. In this section the data will be presented and analyzed. The demographic characteristics of Indian and Danish samples are presented in section 4.2. The results from the descriptive analysis are presented in section 4.3, while the results of the Mann Whitney U test are explained in section 4.4. Finally in section 4.5 the results are discussed and compared with the behavioral expectations derived from the literature review (section 2.8). 4.2 Sample characteristics The analysis is based on the data collected from a total of 114 respondents, who belong after filtering to the target group. 68 persons are Danish, while 46 participants are Indian. Chi square results show that the two samples are not homogeneous with respect to the demographic characteristics age, gender and year of graduation. The p-value is in all three characteristics significant (p<0,05) which shows that the samples do not have the same composition. The researcher is not surprised by the differences and recognizes that there is a variance in demographic characteristics due to the presence of alumn/2. in the Indian sample. It is however still believed that the data will provide useful insights into the negotiation behavior of the upcoming generation of Indian and Danish managers. The demographic characteristics of the Indian and Danish sample can be found in more detail in respectively Appendix 8 and Appendix 9. The results of the Chi square tests are presented in Appendix 10. Regarding the 68 Danish respondents, 58% is male while 42% is female. The majority of the participants, almost 66%, is between 21 and 23 years old while nearly 28% of the