Resolving ethical conflicts through negotiation

Although laws and codes of ethics are good ways of governing ethical aspects of business, they do not cover all situations of human interaction, and conflicts are common in cross-cultural situations. Conflict resolution consists of a series of negotiations. This skill is widely considered one of the most important in international business, notably for managers in organisations with a culturally diverse workforce.

Negotiation is the process of discussion between two or more parties, aimed at reaching a mutually acceptable agreement. For long-term positive relations, the goal should be to reach a win-win situation: that is, to bring about a settlement beneficial to all parties. However, in cross-cultural situations, differences in values often lead to great difficulties in the negotiation process (Deresky, 2014). The following video shows examples of the different cross-cultural communication patterns that can pose challenges during the negotiation process. Please note, the video link will open in a new browser window.

Watch Negotiating across cultures video

As you can see from the video, cross-cultural and international negotiations are more complex than domestic ones. One proposed solution to the limitations of principled negotiation is the synergistic approach (Adler, 1991). This emphasises that although cultural and communication differences make it difficult to understand other parties, their interests and their assessment criteria, diversity of culture can generate creative options for mutual gain.

The synergistic negotiating process includes five stages.

Negotiation process

Stage 1

Preparation - Begin by familiarising oneself with the context and background (one's own and that of counterpart), as well as the subject of negotiation.

Stage 2

Relationship building - In many countries, personal commitments to individuals form the basis of the negotiation outcomes.

Stage 3

Exchanging task-related information

Stage 4

Persuasion - Both parties try to persuade the other to accept more of the opposing position and to give up some of their own.

Stage 5

Concession and agreement - Cultural differences become apparent at this stage, including an extent they reached agreements will be honoured.

Source: Deresky (2014)

Research indicates that the stage of exchanging task-related information, which is directly affected by cultural difference, is one of the most influential when seeking integrative solutions in international agreements (Walton & McKersie, 1965, cited in Drnevich, 2004).