Impact of Culture on International Business Negotiation: A Cross-Cultural Comparison of Taiwan, Hong Kong, and Mainland China

Each year international business amounts to more than $1 trillion U.S. dollars (WTO, 2005). Both foreign investment and international trade are growing substantially, causing increasing interdependence of national economies as well as furthering the globalization of companies. Presently, Greater China\u27s economy holds an increasingly large influence on the world. Despite the enthusiasm for increased economic exchange, many people have found that cultural differences have hindered their ability to efficiently conduct business due to their lack of understanding of the cultural differences among Chinese citizens living in Hong Kong, Taiwan, and Mainland China. People engaged in the negotiations of agreements in international business come fiom a variety of backgrounds and have different culturally influenced negotiation styles. Through an exploration of the impact of cultural differences on negotiation styles, this study attempts to identify implications for international business negotiations, in addition to identifying areas for future scholarly inquiry. Dr. Pierre Casse and Dr. Surinder Deols\u27 model of four negotiation styles and Hofstede\u27s model of individualism/collectivism characteristics are utilized in the research. Additionally, the model provided socio-demographic variables including gender, age, work experiences, and years of residence in foreign countries, as well as independent variables to examine how cultural differences affect the negotiation process. The research found that although Taiwan, Hong Kong, and Mainland China share a similar ancestry and cultural background, each has developed unique practices relating to international business and the negotiating process. These differences have imbued each area with a specific set of values and attitudes relating to foreign cultures. This study may help companies develop better negotiation skills by giving them insight into the nuances of business negotiation in all of the areas in Greater China. Therefore learning about the culture and negotiating styles of one\u27s business partner is a key to success in international business negotiations. Both empirical studies and the theoretical literature support the notion that companies that desire to invest and expand into other countries should also be willing to invest the time in preparing for negotiations