Cross‐cultural negotiations and power distance

Purpose - Negotiators from Asia are increasingly confronted with exchange partners from other regions, particularly Europe. The European culture differs from the Asian culture in many regards, one major aspect being distinct levels of power distance (hierarchy versus egalitarianism). The purpose of this paper is to analyze the impact of power distance in electronic negotiations between Asia and Europe. Design/methodology/approach - The paper describes an experimental study with a sample of 126 participants investigating the impact of power distance on strategies applied by Asian and European buyers and sellers in computer‐mediated negotiations. Findings - Significant effects of power distance in electronic negotiations were identified. Culture confirms to play a significant role in negotiations. The results indicate that negotiation schemes differ depending on the cultural dimension power distance in Asia and Europe. In the hierarchical (Asian) culture, sellers show more efforts in negotiations, while buyers apply more power‐related negotiation strategies but also tend to take more responsibility. In contrast, in the egalitarian (European) culture, buyers prefer negotiation behavior spreading power. Research limitations/implications - First, use of a student sample engaging in a negotiation simulation might restrain the generalizability of the findings. Second, the authors investigated only two cultures in Asia and Europe. Originality/value - The paper describes an experimental study comparing negotiators from Asia and Europe in order to analyze whether culture plays a significant role in electronic negotiations between Asia and Europe. The authors focus on power distance as the main cultural dimension.