FIGURE 1 I Culture as an Iceberg
Behaviors and Institutions
Above the iceberg's waterline are the characteristic behavior patterns of cultural members, as well as the culture's overt institutions. Some of the most obvious cultural behavioral differences are differences in greetings. For example, in Japan people bow; in India they may press hands together in namaste; in Latin America they grab each other's upper arms; and in France, Italy, and Spain they kiss on the cheeks. Although it is always polite to respect another culture's greeting protocols, and there are many websites with good advice about what to do in Rome and so on, it is not always necessary to engage in them when negotiating cross culturally. You are after all a cultural outsider. Even with significant cultural experience you will probably never get the inclination of the Japanese bow right, because the degree of inclination depends on the status of the person you are bowing to.
Interpreting the behaviors that you may see at the negotiation table is of greater importance. The risk is that you will jeopardize the negotiation by interpreting these behaviors through the lens of your own culture. For example, the first time I watched a class of Indian managers negotiate, I was startled by their side-to-side head move¬ments. Side-to-side head movements in U.S. culture mean no, no, no! I thought negotiations were not going well, and I was really upset when many in the class continued this behavior during my debriefing. I asked my host professor. "What went wrong, they hated the class, how can we fix it for tomorrow?" He replied, "Why do you think that?" I said, "They shook their heads no, no, no all afternoon." "Oh," he said, "That means 'I'm listening.'"
I cannot anticipate all the behaviors that you are likely to encounter across the ne¬gotiation table. I can assure you that it is normal to interpret those behaviors through the lens of your own culture, and that such interpretation is frequently erroneous and may affect negotiation relationships and ultimately outcomes. To avoid these cultural biases when negotiating globally, you need a cultural interpreter, someone who not only knows the language but also can interpret the body language and the strategic behavior being exhibited across the table. Your cultural expert should also be able to help you under¬stand the cultural context of the negotiation, for example, the institutional environment in which the negotiation is embedded.
Institutions on the iceberg figure stands for economic, social, political, legal, reli¬gious institutional environments that may affect the negotiation. Culture is manifested
Section Five Negotiation across Cultures
in institutional choices, such as whether there is a free-market economy or a communist political system, and it is embedded in the institutions' ideologies—the set of principles and precepts underlying institutional choices.
These cultural institutions provide social structures for nation-states, which is why in this book we are interested primarily in culture contained within national boundaries. Nation-states have their own unique institutional cultures that negotiators must navigate. Consider the aftermath of the Arcelor acquisition by Mittal. Ultimately, Arcelor shareholders preferred selling to Mittal, a company registered in Rotterdam, incorpo¬rated within EU laws, and run by an Indian living in London, rather than selling to Severstal, a Russian company lead by a Russian oligarch, Alexsei Mordashov. Why? Mittal's EU-based political, legal, and economic environment apparently was viewed by shareholders as much less risky than Severstal's.
Another reason to be concerned with the institutional structure of nation-states is that governments have interests that derive from their institutional ideologies and are reflected in their approach to negotiations. As we saw in the Lafarge example, the Chinese government, although encouraging foreign investment, nevertheless had strong institutional interests that included maintaining some local ownership, acquiring state-of-the-art technology, maintaining employment, and availability of construction materials.
In fact, one of the most important realities about negotiating globally is that gov¬ernments are frequently at or close to the table! Western and Eastern companies alike, regardless of their negotiation experience, too frequently stumble badly when they try to do business in a new cultural environment. A recent example is China National Offshore Oil Company's 2005 failed bid for Unocal, which was ultimately bought domestically by Chevron. CNOOC failed to take into account the risk that their acquisition could be blocked by the U.S. Congress. When Congressional approval appeared to be unlikely, CNOOC let Chevron outbid them for Unocal. Failing to understand the institutional environment in which the negotiation is occurring can sabotage negotiations.
Cultural Values, Beliefs, Norms, and Knowledge Structures
The behaviors and institutions that one can see above the cultural iceberg's waterline are supported underwater by a culturally shared psychology of values, beliefs, norms, and knowledge structures. It is convenient to characterize a culture by its values or norms, but there are two important traps to avoid when doing so.
The first trap to avoid is confounding a cultural prototype (a central tendency) with a cultural stereotype (the idea that everyone in a culture is the same; that there is no distribution around the mean). Keep .in mind this distinction between prototypes and stereotypes. There is always variance within a culture.
The second trap is failing to understand that cultures are characterized by features measured at the individual level but then aggregated (averaged across cultural group members) to create a cultural prototype. It is at the cultural group level that we are most likely to find relationships between group-level psychological