Paying a Price: Culture, Trust, and Negotiation Consequences

Brian Gunia
Northwestern University – Kellogg School of Management

Jeanne M. Brett
Northwestern University – Kellogg School of Management

Amit Nandkeolyar
Indian School of Business (ISB), Hyderabad

Dishan Kamdar
Indian School of Business (ISB), Hyderabad

July 11, 2011

Journal of Applied Psychology, Forthcoming

Abstract:

Three studies contrasting Indian and American negotiators tested hypotheses derived from theory proposing why there are cultural differences in trust and how cultural differences in trust influence negotiation strategy. Study 1 (a survey) documented that Indian negotiators trust their counterparts less than American negotiators. Study 2 (a negotiation simulation) linked American and Indian negotiators’ self-reported trust and strategy to their insight and joint gains. Study 3 replicated and extended Study 2 using independently coded negotiation strategy data, allowing for stronger causal inference. Overall, the strategy associated with Indian negotiators’ reluctance to extend interpersonal (as opposed to institutional) trust produced relatively poor outcomes. Our data support an expanded theoretical model of negotiation, linking culture to trust, strategies, and outcomes.

Paying a Price- Culture, Trust, and Negotiation Consequences