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How to Avoid a Culture Clash in Business Mediations

by Submitted Posting on September 29, 2011

by Robert de By and George Mastoris

The past decade has been marked by an explosion in the use of mediation to resolve transnational business disputes. Increasingly, company officials from different countries and cultural perspectives find themselves seated across the table from one another while attempting to broker a satisfactory outcome. These cultural differences often lead to derailment of productive talks even when both parties negotiate in good faith. Indeed, anecdotes of such encounters — some fairly comical — are legion in mediation circles. Humor aside, it is of the utmost importance to avoid situations in which culture shock can turn into mediation failure.

For the advocate who represents a client involved in cross-cultural mediation, familiarity with how cultural differences manifest themselves is crucial. Although an individual’s nationality does not necessarily determine the attitudes and behavior she will bring to the mediation table, it can provide the advocate with valuable guidelines as to which negotiation strategies are likely to work and which are likely to end in failure. By acquainting himself with the various culturally-grounded expectations of each participant, the well-prepared advocate can avoid misunderstandings and communicate more effectively.

The word “culture,” like “art” or “ethnicity,” is notoriously difficult to define. At its most basic level, however, culture refers to a group’s or community’s common experiences and perspectives. These may include such things as values, manners, norms, dress, language, institutions and beliefs.

CULTURE AS ‘SOFTWARE OF THE MIND’

As Geert and Gert Jan Hofstede, two leading anthropologists (the two professors are father and son) have observed, culture is a kind of “software of the mind” that guides — though without predetermining — the manner in which members of a particular collective think, feel and act. Unlike human nature, culture is derived from one’s social environment. And like software, one needs to be familiar with how it functions in order to make it work.

The Hofstedes have identified several points along which members of particular cultures orient themselves. Several of these are particularly relevant to mediation:

Time orientation

Generally, cultures exhibit two different approaches to time, referred to as monochronic and polychronic. Individuals from monochronic cultures approach time in a linear fashion and tend to emphasize schedules and sequence.

In a mediation setting, individuals with monochronic orientations prefer to start and end meetings at a set time, discuss one agenda item at a time, communicate in explicit terms and focus on the present and future rather than the past.

Those from polychronic cultures, by contrast, approach negotiation from a more holistic perspective that involves more participants and occurrences. These individuals take a more flexible approach to time, view specific events as part of an overarching narrative, rely heavily on nonverbal modes of communication and concern themselves with past events as well as future outcomes.

While there are exceptions, monochronic cultures are concentrated in Northern and Western Europe, North America and the Far East while polychronic cultures are typically found in Southern and Eastern Europe, Latin America and the Middle East.

Individualism vs. collectivism

While people from every culture have both individualist and collectivist tendencies, those from western cultures value the former more than those from eastern and southern cultures. Generally speaking, collectivists tend to view themselves as part of a larger whole and value such things as harmony, face-saving and loyalty. Individualists, on the other hand, place a higher emphasis on autonomy, social recognition and equity.

In a mediation context, collectivists desire stability and seek to build relationships while individualists are more comfortable with conflict and take a more issues-oriented approach. Africa and Asia, in particular, are regarded as collectivist cultures.

Power distance

This concept, first developed in a study of how large corporations are organized, is defined as the extent to which less powerful members of a group expect and accept the unequal distribution of power.

In a mediation setting, this will impact the decision-making structure as well as the importance placed on status. Individuals from high power distance cultures, which are concentrated more heavily in Southern and Eastern Europe, the Middle East and Asia, are far more comfortable with hierarchical structures and the discretionary use of power. There is usually an inverse relationship between high power distance and individualism.

Masculinity vs. femininity

This concept usually refers to a culture’s emphasis on assertiveness as opposed to nurturing orsocial support. Countries that value masculinity more also tend to have more rigid gender roles and place a higher emphasis on achievement through work. Those in the femininity category stress cooperation and tend to have less defined gender roles.

In mediations, parties who come from masculine cultures are likely to exhibit more of a need for ego-boosting behavior and sympathize with shows of strength while those from feminine cultures tend to strive for compromise and consensus. Latin American, Southern European and Middle Eastern countries tend to be more masculine while Scandinavian and Southeast Asian countries are more feminine in this respect. European and North American cultures also gravitate far more to the masculine side of things though gender roles in these countries are increasingly less defined.

Uncertainty tolerance

Individuals from cultures with a low tolerance for uncertainty place a high emphasis on clarity, conformity to rules, process and agreements. Individuals from cultures with a high tolerance for uncertainty tend to value risk-taking and tend to be more flexible in their dealings.

In a mediation, it may be more difficult to establish close working relationships in the short time available with individuals from cultures that tend to avoid uncertainty. Moreover, such individuals usually demand more structure or ritual in the mediation. Cultures that generally show low uncertainty tolerance are concentrated in Western and Northern Europe and Asia while Southern European, Latin American and African cultures generally show a higher tolerance for uncertainty.

FIVE KEYS TO SUCCESSFUL MEDIATION

Mediation as it is practiced today owes a heavy debt to the Western — and particularly North American — culture in which it mainly developed. Mediations conforming to this model involve a structured confrontation moderated by a neutral third party without any authority to make decisions and rely heavily on explicit communications between the parties as to their goals and positions. As such, parties from individualist and monochronic cultures enjoy certain advantages born of familiarity with the values inherent in the dominant mediation paradigm.

While it is a rough tool — individual exceptions abound between and within cultures — the ability to evaluate one’s client, the counterparties and the mediator along the cultural reference points identified above is an excellent starting point for counsel seeking an optimal mediation result.

While these reference points can certainly help counsel avoid gaffes that might cause offense, they also provide valuable knowledge regarding the following five keys to a successful mediation:

1. Know the client

This is particular important when client representatives come from a culture different from the predominant Western European/North American mediation paradigm. Without a keen understanding of the values, attitudes and beliefs that they bring to the table, and how they will react to certain situations, counsel cannot hope to be as effective as possible.

2. Prepare the client

If the client representative lives and works in a culture to which the cultural environment of the mediation is foreign, counsel must prepare that representative for the cultural backdrop of the mediation. This can be done in a variety of ways. One technique that has proven particularly effective involves walking through an instructional video of a mediation and acquainting the representative with the personalities and cultural background of the other parties.

3. Make sure the client representative is willing to exercise authority

Care should be taken to choose a client representative who has the will to make binding decisions, if necessary without input or approval from others at home. Opportunity may knock but once during a mediation and it is important to be able to seize it if it does. Knowledge of cultural differences may put counsel in a good position to know whether his client has and will use such authority when necessary.

4. Play to cultural backgrounds

Counsel can sometimes discern how an opposing party is likely to react based on its cultural background. For instance, if the adversary comes from a collectivist society that places a high premium on loyalty and relationships, the client representative may want to take a less confrontational approach in an effort to build some amount of trust rather than lay out a series of grievances to be addressed.

Similarly, it may help to take the initiative and suggest certain ground rules when dealing with an individual from a culture that seeks to avoid uncertainty. Or if the adversary hails from a high power distance, collectivist culture it may help to explain that the consequences of the adversary’s actions to your client were far more severe and widespread (in terms of reputation, power, the number of people affected, etc.) than the adversary realized.

On the other hand, it might be useful to push the adversary out of his zone of comfort and explain the story from your client’s cultural perspective. For example, if an adversary comes from a more monochronic society than your client, this might be done by reconfiguring a series of discrete sequential issues into a narrative with emotional appeal.

5. Cultivate the mediator

Although most mediators will have some awareness of the importance of cross-cultural differences, counsel must keep in mind that each mediator brings her own cultural preconceptions to the table and that these are often the same as those illuminating the mediation structure as a whole. As such, a practitioner who represents a client from another culture should take special care to explain to the mediator the cultural factors influencing the client’s actions and may suggest certain procedures for the mediation that allows the client to present its case in the most compelling fashion possible.

CONCLUSION

At the end of the day, of course, effective mediation advocacy depends on a host of factors, including preparation, flexibility and creativity. Too often, however, the crucial role played by culture and cultural differences is overlooked. By being aware of, and incorporating, the cultural orientations of the players, counsel can significantly increase the odds that his client will leave the mediation table satisfied that the best possible result was accomplished.

About the Guest Author: Robert de By is chair of the International Arbitration Practice Group at Connon Wood Scheidementle LLP. For over 25 years Robert de By has successfully represented numerous domestic and international clients in international arbitrations, litigations, and mediations concerning complex cross-border contractual, business, investment and other major multi-jurisdictional disputes. Before joining the Firm, Mr. de By was the Chair of the Global Arbitration Group at Dewey Ballantine, and a partner in its successor firm Dewey & LeBoeuf. Prior, he practiced for nearly a decade at Sullivan & Cromwell. George Mastoris is an associate in Dewey & LeBoeuf’s New York office.

Reprinted with permission from the October 11, 2010 online edition of The Recorder. © Copyright 2010. ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, call 415.490.1054.

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