Culture, Accountability and Group Membership: A Dynamic Constructivist Approach to Cross-Cultural...

Electronic copy available at: http://ssrn.com/abstract=1493501

Title: Culture, Accountability, and Group Membership: A Dynamic Constructivist Approach to Cross-cultural Negotiation

Authors: Liu, Wu; The Hong Kong Polytechnic University

Friedman, Ray; Vanderbilt University Hong, Ying-yi; Nan Yang Business School

Presented at the

22nd Annual International Association of Conflict Management Conference

Kyoto, Japan

June 15 – 18, 2009

Abstract: Most cross-cultural research focuses on general differences or similarities

between cultures, while little attention has been paid to when these differences emerge. A

dynamic constructivist view of culture (Hong, Morris, Chiu, & Benet- Martínez, 2000;

Morris & Fu, 2001) posits that culture impacts individuals’ behaviors through the

activation of cultural knowledge in specific contexts. Using this approach, the present

study examines how the interaction between cultural and situational factors affects

business negotiation. Specifically, we predicted that only when they negotiate with

ingroup members under high accountability conditions, would Chinese negotiators show

greater relationship-oriented (vs. self-focused) tendencies than would American

negotiators. A pilot negotiation simulation study with 108 Chinese students and a main

study with 230 students from China and the United States provided support to our

predictions. The implications of our studies to theory and practice are also discussed.


Dynamic Constructivist

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Culture, Accountability, and Group Membership:

A Dynamic Constructivist Approach to Cross-cultural Negotiation

Abstract

Most cross-cultural research focuses on general differences or similarities between cultures,

while little attention has been paid to when these differences emerge. A dynamic constructivist

view of culture (Hong, Morris, Chiu, & Benet- Martínez, 2000; Morris & Fu, 2001) posits that

culture impacts individuals’ behaviors through the activation of cultural knowledge in specific

contexts. Using this approach, the present study examines how the interaction between cultural and

situational factors affects business negotiation. Specifically, we predicted that only when they

negotiate with ingroup members under high accountability conditions, would Chinese negotiators

show greater relationship-oriented (vs. self-focused) tendencies than would American negotiators.

A pilot negotiation simulation study with 108 Chinese students and a main study with 230 students

from China and the United States provided support to our predictions. The implications of our

studies to theory and practice are also discussed.



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In response to the growth of global business, in the last two decades management scholars

have paid increasing attention to cross-cultural negotiation (see a recent handbook edited by

Gelfand & Brett, 2004). This line of research has consistently reported that negotiators from

different cultures show distinct patterns in terms of negotiation schema (Brett & Okumura, 1998),

judgment biases (Gelfand & Christakopoulou, 1999), psychological states (Gelfand & Realo, 1999),

negotiation strategies (Tinsley & Pilutla, 1998), and communication styles (Adair & Brett, 2005;

Adair, Okumura, & Brett, 2001). These studies have significantly contributed to the development

of negotiation theories, most of which were established in Western cultures (Brett & Gelfand, 2006).

Nevertheless, “rigorous theorizing about negotiation and culture is in its infancy” (Gelfand

& Brett, 2004: 416). One salient limitation in this literature is that most studies focus only on the

main effects of culture on negotiation, while rarely taking situational factors into consideration

(Gelfand, Erez, & Aycan, 2007; Tsui, Nifaadkar, & Ou, 2007). A typical study in this literature

starts with an investigation of whether negotiation in culture A differs from that in culture B,

followed by a further exploration of whether such differences could be explained by cultural values,

norms or beliefs (e.g., individualism vs. collectivism). Such inquiries implicitly take a trait/entity

view of culture, a notion which regards culture as a holistic set of stable dispositions that influences

cognition, affect, or behavior in the same manner across all social contexts (see Hong & Chiu,

2001). However, such an explicit assumption taken by the trait/entity view of culture is not

necessarily correct. There has been the discussion about within-culture variance for a long time

(e.g., Triandis, 1989). Without taking social contexts into consideration, we do not know under

which conditions culturally typical patterns may exacerbate, disappear, or even reverse in

negotiation (Morris & Fu, 2001).

The primary purpose of the present paper is to investigate the interplay between culture and

social contexts in negotiation. Our investigation is guided by the dynamic constructivist theory

(Hong et al., 2000; Morris & Gelfand, 2004), an emerging theory in the cross-cultural psychology


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research. Following this theory, we regard culture as a loosely-organized knowledge system, and

argue that cross-cultural differences in negotiation can be seen only when cultural knowledge is

activated. We choose to examine negotiators from China and the United States, two countries with

distinctive cultures (e.g., Hofstede, 1980; Leung & Bond, 1984; Triandis, 1995) and with important

roles in the world economy.

THE DYNAMICE CONSTRUCTIVIST THEORY AND HYPOTHESES

According to the dynamic constructivist view of culture, culture is “a network of shared

knowledge that is produced, distributed, and reproduced among a collection of interconnected

individuals” (Chiu & Hong, 2006: 31). Compared with the trait/entity view of culture, the dynamic

constructivist approach has two very different assumptions. First, this approach regards culture as a

loosely-organized knowledge system rather than a rigidly integrated system (Hong & Chiu, 2001).

It assumes that people develop domain-specific theories or beliefs to make sense of the world. It is

in this sense that this approach is “constructivist.”

Moreover, based on the knowledge activation theory in social cognitive psychology

(Higgins, 1996), the dynamic constructivist theory argues that although domain-specific knowledge

can be widely shared among cultural group members, the real expression of a culturally typical

pattern in a particular domain depends upon the availability (whether or not a knowledge construct

is available in one culture), accessibility (the likelihood that a knowledge construct is accessible),

and activation (whether or not a knowledge construct is motivated to be used and applicable to

particular situations) of cultural knowledge (Hong, 2009; Hong & Mallorie, 2004; Morris &

Gelfand, 2004). It is in this sense that this approach is “dynamic.” We will focus on construct

accessibility and construct activation in the present paper, given that many constructs discussed in

cross-cultural literature, such as individualism/collectivism and independent/interdependent self,

may be available in all cultures (Morris & Gelfand, 2004; Oyserman, Coon, & Kemmelmeier,

2002).


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Accessible Constructs for Negotiation in Two Cultures

Culture provides people with constructs as cognitive shortcuts for sense-making (e.g.,

Markus & Kitayama, 1991). Processes such as socialization, everyday practice, and public

disclosure play a critical role in affecting how a knowledge construct is more chronically accessible

in one culture than another (Lau, Chiu, & Lee, 2001). For example, Gelfand and McCusker (2002)

found that the public discourse (e.g., newspaper stories and TV shows) in North America frequently

portrays negotiation as sports, racing, or war. Consequently, it is not surprising that American

negotiators tend to have a win-lose frame toward conflict resolution (Gelfand, Nishii, Ohbuchi, &

Fukuno, 2001). Some scholars have further suggested that the cross-cultural differences reported

by many previous studies can be explained by variations in the level of chronic accessibility of

particular knowledge constructs (Hong & Mallorie, 2004; Morris & Gelfand, 2004). In the present

paper, we focus on comparing Chinese and American negotiators on two important constructs in

negotiation: relationship negotiation frame and relationship-based negotiation tactics.

Negotiation frames are the lens through which negotiators define negotiation situations

(Pinkley, 1990; Pinkley & Northcraft, 1994). A relationship negotiation frame emphasizes

negotiation as the opportunity to develop or strengthen relationships through cooperation (Gelfand

et al., 2006; Pinkley, 1990; Pinkley & Northcraft, 1994). It is in contrast to a task negotiation frame,

which concentrates on the material part of negotiation, such as property settlement and money

(Pinkley, 1990; Pinkley & Northcraft, 1994). Cross-cultural research indicates that Chinese people

are socialized to define themselves as interdependent individuals, whereas Americans tend to define

themselves as independent individuals (e.g., Markus & Kitayama, 1991). As a result, while the

Chinese focus on the relational facets in social interactions, Americans emphasize the individuating

aspects in social interactions (Gelfand, Spurlock, Sniezek, & Shao, 2000). Moreover, it has been

reported that East Asians regard negotiation as the chance for both parties to make mutual

compromise; North Americans, on the other hand, view negotiation as a win-lose situation, and


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tend to blame one side for the social conflict rather than both sides involved (Gelfand &

Christakopoulou, 1999; Gelfand et al., 2001). Consonant with this idea, we argue that a

relationship negotiation frame is more accessible for Chinese negotiators than for American

negotiators (Hypothesis 1a).

Relationship-based tactics are defined as negotiation tactics that emphasize connection and

relationship building, such as relational appeal (emphasizing common attributes) and socializing

(talking about a subject irrelevant to the request but of personal interest to the target before making

the request) (Fu et al., 2004). Research has shown that the Chinese place more emphasis on

harmony, social conformity, and social tradition than Americans do; in contrast, Americans place

more emphasis on self-enhancement or self direction than the Chinese do (Liu, 2004; Morris et al.,

1998). Consequently, in Chinese culture, tactics that focus on relationship building and

interpersonal relatedness are regarded as influential and effective; whereas in North American

culture, tactics that promote individual benefits and uniqueness are viewed as powerful. In conflict

resolutions, while the Chinese believe that an avoiding style is appropriate, North Americans

believe that a competing or self-interested style is appropriate (Friedman, Chi, & Liu, 2006; Morris

et al., 1998; Tinsley & Pillutla, 1998). Moreover, negotiators from collectivistic cultures (e.g.,

Greek) were found to be less likely to use tactics such as claiming value for self, threats, warnings,

comparisons, and putdowns than were negotiators from individualistic cultures (e.g., American)

(Gelfand & Christakopoulou, 1999). Therefore, it is proper to infer that relationship-based tactics

are more accessible knowledge for Chinese negotiators than for American negotiators (Hypothesis

1b).

Although Chinese and American negotiators may differ in the degree to which a

relationship frame and the relationship-based tactics are accessible, it is also important to consider

under which social conditions the accessible knowledge is really activated (Morris & Gelfand,

2004). Recent research has suggested that cultural knowledge is activated (1) when individuals are


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motivated to follow cultural norms (Briley, Morris, & Simonson, 2000; Gelfand & Realo, 1999;

Tetlock, 1992); and (2) when the knowledge is applicable to the situation (Wong & Hong, 2005).

The first social condition is relevant to our discussion on negotiator accountability, defined as “the

condition of being answerable for conducting oneself in a manner that is consistent with relevant

prescriptions for how things should be” (Schlenker & Weingold, 1989: 24). The second social

condition is relevant to our discussion on group membership of the negotiating parties (ingroup vs.

outgroup).

Culture and Accountability

Accountability requires negotiators to justify the negotiation processes and outcomes to

constituents, who have the power to allocate rewards to negotiators (Carnevale, Pruitt, &

Seilheimer, 1981). In order to gain social approval from constituents, negotiators are motivated to

achieve what constituents would like to obtain from the negotiation (Pruitt & Carnevale, 1993).

Previous research has consistently found that accountability leads to the contentious behaviors of

representatives in negotiations (Ben-Yoav & Pruitt, 1984; Carnevale et al., 1981; Friedman, 1994;

Pruitt et al., 1986).

However, some scholars have pointed out that most of these prior studies were conducted in

Western (individualistic) cultures, where people generally have a win-lose, or competitive, frame in

negotiation (Gelfand et al., 2001). People tend to choose the socially acceptable way in their

cultures when they are aware they need to justify their decisions or behaviors to others (Briley et al.,

2000) because culture provides people with accessible and shared knowledge about social norms

and rules in social interactions (Markus & Kitayama, 1991). In other words, accountability

activates cultural knowledge that is accessible in particular contexts (Morris & Gelfand, 2004).

Using two samples of American and Estonian students, Gelfand and Realo (1999) found that

collectivistic negotiators were more likely to concede and cooperate in high accountability


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conditions than in low accountability conditions; conversely, individualistic negotiators were more

likely to compete in high accountability conditions than in low accountability conditions.

When negotiators are required to report and to justify their negotiation tactics and outcomes,

they may infer that their constituents would endorse the culturally typical negotiation approach. As

a result, we propose that accountability moderates the impacts of culture on negotiation, such that:

Chinese-American differences in (a) having a relationship negotiation frame and (b) using

relationship-based tactics will be larger in high accountability conditions than in low accountability

conditions (Hypothesis 2).

Culture and Group Membership

Ingroup members are usually connected by common traits, common goals, a common fate,

or the presence of an external threat; whereas outgroup members are those with whom one has no

connection, or are those with whom one does not share common goals or a common fate (Campbell,

1958; Tajfel & Turner, 1986; Triandis, 1989). Research indicates that collectivists feel more

obligated to be cooperative with ingroup members than do individualists, but are as competitive as

individualists when interacting with outgroup members (Markus & Kitayama, 1991; Triandis, 1989;

Yamagishi, 2003). For example, in mixed-motive games, Chen and Li (2005) found that when

partners were ingroup members, the Chinese were more likely than Westerners to use cooperative

strategies; but when interacting with outgroup members, participants from both cultures exhibited

similarly low levels of cooperation.

These studies illustrate the applicability principle of knowledge activation (Higgins, 1996),

which argues that a knowledge construct is activated only when it is applicable to the social context.

In negotiations, although a relationship approach is more accessible for Chinese negotiators than for

American negotiations, Chinese negotiators use a relationship approach only when the other party

is an ingroup member (Wong & Hong, 2005). However, when the other party is an outgroup

member, both Chinese negotiators and American negotiators tend to be similarly less relationship-


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oriented. Accordingly, we hypothesize that group membership moderates the impacts of culture on

negotiation, such that: Chinese-American differences in (a) having a relationship negotiation frame

and (b) using relationship-based tactics will be larger when the other party in the negotiation is an

ingroup member rather than an outgroup member (Hypothesis 3).

Culture, Accountability, and Group Membership

As argued above, when the other party is an ingroup member, social norms in the Chinese

culture strongly encourage cooperation (Chen & Li, 2005; Wong & Hong, 2005), accommodation

(Leung & Bond, 1984), and harmony in social interactions (Leung, 1988). Accountability would

further enforce the relationship-oriented approach for Chinese negotiators when they negotiate with

ingroup members. By contrast, in the American culture, where competition is the accessible

knowledge and where people are less likely to distinguish between ingroup and outgroup members

(e.g., Thompson, 1993), accountability may activate competition even when Americans negotiate

with ingroup members. For example, researchers have shown that although in general Americans

show more benevolent attitudes toward ingroup than outgroup members (e.g., Tajfel & Turner,

1986), such ingroup favoritism is contingent upon whether or not common group membership

could enhance one’s self-image (Chen, Brockner, & Katz, 1998). When ingroups perform poorly,

Americans show less ingroup favoritism than when ingroups perform well (Chen et al., 1998;

Crocker & Luhtanen, 1990; Seta & Seta, 1992, 1996). In comparison, the Chinese are less

motivated by the desire for personal self-enhancement; they tend to maintain ingroup favoritism

regardless of the performance of ingroup members (Chen et al., 1998).

The above discussion suggests that the differences between Chinese and American

negotiators on negotiation frame and negotiation tactics would occur primarily in the high

accountability/ingroup condition. Taking these together, we hypothesize that there is a three-way

interaction between culture, accountability, and group membership on negotiation, such that

Chinese negotiators are more likely than American negotiators to (a) have a relationship negotiation


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frame and (b) use relationship-based tactics only in the high accountability/ingroup condition

(Hypothesis 4).

We have proposed that relationship negotiation frame and relationship-based tactics are

influenced by culture, accountability, group membership of the other party, and their interactions.

The next critical question is how culture and social contexts interact in affecting negotiation

outcomes.

Relationship Approach and Negotiation Outcomes

Fixed-pie Perceptions. The most important feature of integrative negotiation is the fact that

negotiators’ interests are not completely opposite to each other; because they usually have different

priorities such that they can create joint gains by making trade-offs. However, people often fail to

realize trade-off opportunities in integrative negotiations (Thompson & Hastie, 1990). The belief

that the other party’s interest is directly opposite to one’s own is called fixed-pie perceptions

(Thompson & Hastie, 1990). It has been found that most negotiators hold such perceptions at the

beginning of a negotiation but such biased perceptions could be adjusted after information is

exchanged about each other’s priorities (Thompson & Hastie, 1990).

On first thought, negotiators who take a relationship approach should exchange information

more honestly, such that it is easier for them than for those who take a self-centered approach to

reduce fixed-pie perceptions. However, existing literature implies that the opposite may be true—

negotiators who take a relationship approach may be less likely than those who take a self-centered

approach to reduce fixed-pie perceptions (e.g., Curhan, Neale, Ross, & Rosencranz-Engelmann,

2008; Fry, Fireston, & Williams, 1983). Two plausible theoretical explanations could account for

such an argument. One the one hand, according to the dual-concern model (Pruitt & Rubin, 1986),

negotiators with a relationship-orientation are very likely to take the accommodating strategy in

negotiation. Rather than appearing selfish and focusing on their interests, they tend to place high

value on the other party’s interests (Bolton & Ockenfels, 2000; Gelfand et al., 2006), thus being


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less aggressive when making opening offers, and less likely to make aggressive counteroffers

(Barry & Friedman, 1998; Liu, Friedman, & Chi, 2005). They tend to accommodate the other

party’s needs too quickly to fully exchange information needed for integrative results. On the other

hand, negotiators who take a relationship approach may care too much about building or

maintaining a good relationship with the other party, such that they are distracted from problem

solving (Fry et al., 1983). Given time constraints in most negotiations, the more time is devoted to

relationship building, the less time is devoted to problem solving, thus less ineffectively reducing

their fixed-pie bias.

We have proposed in the last section that the differences between Chinese and American

negotiators in taking a relationship-oriented approach would be exacerbated only in the high

accountability/ingroup condition. Combining those predictions and the discussion regarding the

effect of a relationship approach on fixed-pie perceptions, we propose that there is a three-way

interaction between culture, accountability, and group membership on fixed-pie perceptions

because Chinese negotiators will have greater fixed-pie perceptions than do American negotiators

only in the high accountability/ingroup condition (Hypothesis 5).

Joint Gain. When negotiators can accurately perceive the integrative potential between

each party, they are more likely to make value-producing trade-offs. By contrast, when negotiators

believe their own interests are opposite to the other party’s (they have fixed-pie perceptions), it is

difficult for them to create value by making trade-offs. Several empirical studies have provided

evidence supporting the negative relationship between fixed-pie perceptions and joint gain in

negotiation (De Dreu, Koole, & Steinel, 2000; Thompson & Hastie, 1990). Moreover, several other

empirical studies indirectly suggest that relationship-orientation may hinder the creation of joint

gains (Amanatullah, Morris, & Curhan, 2008; Curhan et al., 2008; Fry et al., 1983). In an

integrative negotiation study, Fry et al. (1983) compared 74 dating couples and 32 mixed-sex

stranger dyads in the United States, finding that dating couples made lower joint gain than did


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stranger dyads. These researchers attributed the lower joint gain of the dating couples to their

concern about protecting the relationship. This finding is also consistent with a study reported by

Amanatullah and colleagues (2008), who found that negotiation dyads with strong tendencies to

strain relationships made suboptimal arrangements in integrative negotiations. Based on the logic

in Hypotheses 5 and on the existing evidence, we propose that there is a three-way interaction

between culture, accountability, and group membership on joint gain because Chinese negotiators

will achieve lower joint gain than do American negotiators only in the high accountability/ingroup

condition (Hypothesis 6).

METHOD

Before fully testing our hypothesized model, we conducted a pilot study with a Chinese

sample in order to develop and validate the measures of relationship negotiation frame and

relationship-based negotiation tactics designed for this study. We invited 108 undergraduate

students from a university in Shanghai to participate in the pilot study.

The participants’ relationship negotiation frame was measured using a five-item scale in a

pre-negotiation survey. The scale was created based on previous literature on negotiation frame

(e.g., Pinkley & Northcraft, 1994) and on relational self in negotiation (Gelfand et al., 2006).

Sample items were “It is important for me to develop a good relationship with the other party” and

“I hope to develop a good relationship with the other party via negotiation.” The Cronbach’s Alpha

was .83, providing preliminary evidence that this scale was reliable. We further conducted a

confirmatory factor analysis (CFA), with all five items loading on a single factor. The results

showed satisfactory fitness (χ2=7.94, df=5, CFI=.99, NNFI=.97, SRMR=.04), and all loadings of

the five items were above .60.

As none of the three existing negotiation tactics scales (Rahim Organizational Conflict

Inventory—II, Rahim, 1983; Rahim & Magner, 1995; Dutch Test for conflict handling, De Dreu,

Evers, Beersma, Kluwer, & Nauta, 2001) explicitly emphasize relationship-based tactics, we


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created a scale to measure relationship-based tactics based on Gelfand et al.’s (2006) conception

and an existing relationship-based influence tactics scale (Fu et al., 2004). Our scale includes five

items, a sample of which is “During negotiation, I tried to find the similarity between us, such as in

hobbies and experience.” The Cronbach’s Alpha of the five-item relationship-based tactics scale

was .74. A single-factor CFA showed satisfactory fitness (χ2=7.19, df=5, CFI=.97, NNFI=.98,

SRMR=.04), and all loadings of the five items were above .50. In short, the two new measures

were reliable.

Main Study

The design was a 2 X 2 X 2 factorial, with culture (Chinese vs. American), accountability

(high vs. low), and the other party’s group membership (ingroup vs. outgroup) as between-dyads

factors. Dependent variables include relationship negotiation frame, relationship-based negotiation

tactics, fixed-pie perceptions, and joint gain.

Participants. We invited 242 undergraduate students (124 from China and 118 from the

U.S.) to participate in this study. The Chinese students were from a university in South China, and

the American students were from a university in Southeast U.S. Participants were recruited through

posts on an online bulletin board system, flyers on campus, or notices at the psychology pool. All

materials for the Chinese participants were in Chinese, whereas all materials for the American

participants were in English. The materials, which were originally in Chinese, were translated and

back translated to assure equivalence (Brislin, 1970).

Four students who did not finish the negotiation within given time limits and eight students

who did not report on key dependent variables were excluded from further analysis in this study.

The final sample size was 230 (120 from China, and 110 from the U.S.). Among the 230

participants, 60% were females (54.2% of the Chinese sample, and 66.4% of the American sample).

Consistent with findings from past research (e.g., Schwartz, 1992), the Chinese sample placed more

value on power (Mean=3.99), conformity (Mean=4.94), and security (Mean=5.03) than did the


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American sample (power Mean=3.38, conformity Mean=4.50, and security Mean=4.50). On the

other hand, the American sample emphasized stimulation (Mean=4.41) and benevolence

(Mean=5.54) more than the Chinese sample (stimulation Mean=4.06, benevolence Mean=5.09).

All of these t-tests were significant at the .05 level. Therefore, it is reasonable to believe that the

sampled Chinese and American students were representative of their own cultural groups.

Negotiation Task. An integrative negotiation task used in a previous study (Gelfand &

Realo, 1999) was modified to serve the purpose of the current study. The negotiation concerned a

brochure printing contract which involved four issues. In order to meet a client’s urgent demand

for advertising brochures, two managers, one from the Client Services Division and another from

the Production Division, need to reach agreements on four issues to print those brochures (detailed

payoff schedules can be provided upon request). For each of the four issues, there are five

alternatives that negotiators could choose, with each alternative representing certain values for

negotiators (in terms of points). Two issues (paper quality and the number of color pages) were

distributive (i.e., one party’s gain is the other party’s loss), on which buyers and sellers had

perfectly opposite interests. Integrative potential was present for the other two issues (i.e., the

number of copies and the billing date). Failure to reach an agreement would result in zero points

for each negotiation party.

Procedures. Participants were invited to the laboratory in groups of eight people each.

Upon arrival at the laboratory, participants were asked to fill out a short grouping survey, which

was claimed to be the basis upon which the grouping decisions were made for the next step of the

study (see details in the manipulations). Then, participants were separated into two groups with

four members in each group. Both groups were in full view of one another but they could not

communicate with each other. Each group then worked on a brainstorming task, after which

participants drew lots to decide their roles (representative or manager) in the following negotiation

task (see details in the manipulations). Finally, participants negotiated either with a member of


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their own group or a member of the other group. After reading the negotiation scenario, but before

negotiating, participants filled out a pre-negotiation survey; after the negotiation, participants filled

out a post-negotiation survey.

Manipulations. We manipulated group membership in multiple ways, using a modified

version of the minimal group paradigm employed in previous studies (Chen et al., 1998; Wright,

Aron, McLaughlin-Volpe, & Ropp, 1997). First, participants were led to believe their assignment

to different groups was based on the social networks and personal preferences they reported in the

grouping survey (Chen et al., 1998). Second, to make the boundary between groups clear,

participants were seated with their fellow group members but away from participants in the other

group, and the two groups used stationery with distinct colors (red vs. blue). Third, before

negotiations, participants finished a group brainstorming task, which was expected to reinforce the

boundary between groups by enhancing ingroup interaction (Wright et al., 1997). After the three

manipulation steps, participants in the ingroup condition negotiated with a person from their own

group, while participants in the outgroup conditions negotiated with a person from the other group.

Following previous studies (Carnevale et al., 1981; Gelfand & Realo, 1999), we used two

procedures together to manipulate accountability. First, in the high accountability conditions,

participants needed to write and submit a report to their “division managers” after the negotiation to

justify their negotiation process and outcome, while participants in the low accountability

conditions did not need to do so. Second, participants in the high accountability condition were

told that their “manager” would evaluate their report and allocate points earned from the

negotiation based on that report and the negotiation results. In contrast, participants in the low

accountability condition were told that their manager would not evaluate the performance, the

negotiation processes and outcomes were confidential, and their points from the negotiation were

independent of managers’ judgments.


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Manipulation Checks. Four accountability manipulation check items (one sample item is

“After negotiation, my manager will formally evaluate me based on the agreements I reach.”)

showed satisfactory reliability (for the Chinese sample, Cronbach’s Alpha=.82; for the American

sample, Cronbach’s Alpha=.84). The average score of these items for each sub-sample was

submitted to a two-way ANOVA (accountability X group membership). For both the Chinese and

American samples, participants in the high accountability conditions were significantly more

inclined to believe they were held accountable (Chinese Mean=5.17; American Mean=5.02) than

those in the low accountability conditions (Chinese Mean=4.01, F(1, 116)=36.30, p<.001, η2 =.24;

American Mean=3.35, F(1, 106)=87.70, p<.001, η2 =.45). Neither group membership nor the

interaction between group membership and accountability had any significant effects on the score

for each sub-sample.

Two group membership manipulation check items (one sample item is “The one I will

negotiate with is an ingroup member.”) showed satisfactory reliability (for the Chinese sample,

Cronbach’s Alpha=.91; for the American sample, Cronbach’s Alpha=.94). The average score of

these two items for each sub-sample was submitted to a two-way ANOVA (accountability X group

membership). For both the Chinese and American samples, participants in the ingroup conditions

(Chinese Mean=4.74; American Mean=4.87) were significantly more inclined than those in the

outgroup conditions to consider the other party as an ingroup member (Chinese Mean=2.61, F(1,

116)=91.59, p<.001, η2 =.44; American Mean=2.09, F(1, 106)=112.70, p<.001, η2 =.52). Neither

accountability nor the interaction between group membership and accountability had any

significant effects on the score for each sub-sample. In summary, our manipulations on

accountability and group membership were successful and they were perceived similarly in the two

cultures.

Measures. Relationship negotiation frame. In the pre-negotiation survey, participants

reported their relationship negotiation frame on the five-item scale validated in the pilot study. The


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scale showed satisfactory reliability statistics for both sub-samples (Cronbach’s Alpha was .83 for

the China sample and .72 for the U.S. sample).

Relationship-based tactics. Participants reported their own use of relationship-based tactics

in the post-negotiation survey. The five-item scale also showed satisfactory reliability statistics for

both sub-samples (Cronbach’s Alpha was .67 and .78 for the China sample and the U.S. sample,

respectively).

Fixed-pie Perceptions. Fixed-pie perceptions were assessed in the way suggested by past

research (De Dreu et al., 2000; Thompson & Hastie, 1990). Participants were presented with a

blank profit schedule after negotiation and they filled in the points they thought that the other party

would get for each of the contract levels specified. The fixed-pie perceptions were measured as the

sum of deviance (absolute differences) between estimates of the other party’s real payoff points and

negotiators’ estimate points on two integrative issues. The range of fixed-pie perceptions varies

from 0 to 14000 points, with 0 referring to the perfect integrative perceptions and 14000 referring

to the perfect fixed-pie perceptions. In other words, the larger the number, the more one has fixed-

pie perceptions1.

Joint Gain. Joint gain was the sum of individual gains within each dyad.

In order to assure construct equivalence in the China and U.S. subsamples, we conducted a

two-sample analysis of a two-factor model (relationship negotiation frame and relationship-based

tactics), which indicated an adequately strong fit to the data, χ2 (142, N=230) = 212.37, p<.01

(CFI=.95, NNFI=.94, SRMR=.07). These results showed that the factor structure was invariant

across these two subsamples (Cheung & Rensvold, 1999). Moreover, when the factor loadings

were constrained to be equivalent, a non-significant increase of the chi-square statistic was

observed (Δχ2 (14)= 20.91, n.s.), and the CFI and IFI indexes remained the same. These results

1 Our measure is exactly opposite to De Dreu’s (2000) and Thompson & Hastie’s (1990) fixed-pie perception measure. For them, the smaller the number, the greater the fixed-pie perception. We did this to avoid confusion.


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indicate that relevant measurement properties of the indexes were statistically equivalent across the

two samples.

Treatment of Data. Following Kenny and colleagues’ advice (Kenny, Kashy, & Cook,

2006), we checked the intra-class correlations (ICC(1)) for dependent variables. One pre-

negotiation variable (relationship negotiation frame [ICC(1)=.02, F(114, 115)=1.04, p>.40) was

independent, while both post-negotiation variables (i.e., relationship-based tactics [ICC(1)=.33,

F(114, 115)=1.99, p<.001] and fixed-pie perceptions after negotiation [ICC(1)=.29, F(114,

115)=1.83, p=.01]) were non-independent at the dyadic level. Hence, in further analyses, the

relationship negotiation frame was analyzed at the individual level, whereas other dependent

variables were aggregated and analyzed at the dyadic level.

Test of Hypotheses. Four dependent variables were analyzed: (a) relationship negotiation

frame, (b) relationship-based tactics, (c) fixed-pie perceptions after negotiation, and (d) joint gain,

with culture (Chinese vs. American), accountability (low vs. high), and group membership (ingroup

vs. outgroup) as three between-subject factors.

Relationship Negotiation Frame. The relationship negotiation frame revealed a marginal

main effect of culture, F(1, 222)=1.74, p=.09, η2 =.01 (the first column on Table 1 shows the

ANOVA results). As Hypothesis 1a predicted, Chinese negotiators had a slightly higher level of

relationship frame (Mean=4.69) than did American negotiators (Mean=4.57). Therefore,

Hypothesis 1a was marginally supported.

---------------Insert Table 1 about here---------------

There were also two significant two-way interactions: one was between culture and

accountability (F(1, 222)=3.14, p<.05, η2 =.01), and the other was between culture and group

membership (F(1, 222)=2.75, p<.05, η2 =.01). Figures 1a and 1b depict these findings, respectively.

Specifically, as Hypothesis 2a contended, in high accountability conditions, Chinese negotiators

had a higher level of relationship negotiation frame than did American negotiators (Means=4.83


18

and 4.54 respectively), t(112)=1.66, p<.05, whereas in low accountability conditions, there was no

difference between Chinese and American negotiators (Means=4.56 and 4.60, respectively),

t(114)=.27, p>.70. Therefore, Hypothesis 2a was supported. As Hypothesis 3a predicted, when

negotiating with an ingroup member, Chinese negotiators had a higher level of relationship

negotiation frame than did American negotiators (Means=4.98 and 4.68, respectively), t(116)=2.26,

p<.05, whereas there was no difference between Chinese (Mean=4.40) and American negotiators

(Mean=4.45) on the relationship negotiation frame when the other party was an outgroup member,

t(110)=.30, p>.70. Therefore, Hypothesis 3a was also supported.

---------------Insert Figures 1a and 1b about here---------------

Of great importance, the three-way interaction was significant, F(1, 222)=2.75, p<.05, η2

=.01. Figure 2 illustrates this interaction. As Hypothesis 4a predicted, a significant difference

between the two cultures was observed in the high accountability/ingroup condition, in which the

Chinese negotiators had a higher level of relationship frame (Mean=5.09) than did the American

negotiators (Mean=4.76), t(58)=1.76, p<.05. Unexpectedly, although the Chinese and American

negotiators did not significantly differ from each other in the low accountability/ingroup or in the

high accountability/outgroup conditions (p>.10 for each), in the low accountability/outgroup

condition, Chinese negotiators had an even lower level of relationship frame than did American

negotiators (Means=4.22 and 4.62, respectively), t(56)=2.22, p<.05). Therefore, Hypothesis 4a was

partially supported.

---------------Insert Figure 2 about here---------------

Relationship-based Tactics. The main effect of culture was not significant (p>.30), so

Hypothesis 1b was not supported (The second column of Table 1 shows the ANOVA results). The

interaction between culture and accountability was not significant (p>.10), so Hypothesis 2b was

not supported either. However, there was a significant interaction effect between culture and group

membership on relationship-based tactics, F(1, 107)=4.66, p<.05, η2 =.04. In line with the


19

prediction of Hypothesis 3b, when negotiating with an ingroup member, the Chinese dyads used

more relationship-based tactics than did the American dyads (Means=4.41 and 4.10, respectively),

t(57)=1.44, p<.10. Interestingly, when negotiating with an outgroup member, the Chinese dyads

used even less relationship-based tactics than did American dyads (Means=4.08 and 4.38,

respectively), t(53)=1.59, p<.10. Therefore, Hypothesis 3b was partially supported. Hypothesis 4b

was not supported by the data because the three-way interaction was not significant.

Fixed-pie Perceptions. Hypothesis 5 predicted that Chinese negotiation dyads would have

more fixed-pie perceptions after negotiation than would American dyads only in the high

accountability/ingroup condition, but not in other conditions. Indeed, we found a significant three-

way interaction effect between culture, group membership, and accountability, F(1, 107)=3.23,

p<.05, η2 =.03 (The third column of Table 1 shows the ANOVA results). As Figure 3 shows, when

negotiating with an ingroup member under high accountability conditions, Chinese dyads

(Mean=9336) had more fixed-pie perceptions than did American dyads (Mean=5281), t(28)=2.60,

p<.05. Meanwhile, in the other three conditions, Chinese and American negotiators did not differ

from each other on the fixed-pie perceptions. Therefore, Hypothesis 5 was supported.

---------------Insert Figure 3 about here---------------

In order to state the three-way interaction effect differently, within the Chinese sample there

was a significant simple interaction effect between accountability and group membership, F(1,

56)=4.85, p<.05. Specifically, the Chinese negotiators had considerably more fixed-pie perceptions

in the high accountability/ingroup condition relative to all other three conditions. In contrast,

within the American sample, the simple interaction effect between accountability and group

membership was not significant, F<1.

Joint Gains. Hypothesis 6 predicted that Chinese negotiation dyads would achieve less

joint gains than would American dyads only under the ingroup and high accountability condition,

but not in other conditions. As expected, there was a marginally significant three-way interaction


20

effect between culture, group membership, and accountability, F(1, 107)=2.52, p<.10, η2 =.02 (The

last column of Table 1 shows the results). When negotiating with an ingroup member under high

accountability, Chinese negotiators made less joint gain (mean=10450.00) than American

negotiators (mean=11393.75), t(28)=2.87, p<.01). But there were no differences in joint gains

between the Chinese and American negotiation dyads in the other three conditions. Therefore,

Hypothesis 6 was marginally supported.

To state the three-way interaction effect differently, within the Chinese sample, there was a

significant simple interaction effect between accountability and group membership, F(1, 56)=6.65,

p<.01. Specifically, the Chinese negotiators had considerably less joint gains in the high

accountability/ingroup condition relative to all other three conditions. On the other hand, within the

American sample, the simple interaction effect between accountability and group membership was

not significant, F<1.

DISCUSSION

The main purpose of our study is to explore how culture, accountability, and group

membership interact in affecting negotiation processes and outcomes. Our predictions for the

relationship negotiation frame were generally supported by the data. Chinese negotiators on

average had a higher level of relationship frame than American negotiators (Hypothesis 1a), which

seems to be concordant with the traditional trait/entity view of culture. Nonetheless, such a main

effect of culture was marginal (p=.09), and it was moderated by both accountability (Hypothesis 2a)

and the group membership of the other party (Hypothesis 3a). More importantly, there was a

significant three-way interaction between culture, accountability, and group membership on

relationship frame (Hypothesis 4a). Further analysis showed that it was only in the high

accountability/ingroup condition that Chinese negotiators had a higher level of relationship frame

than did American negotiators. Interestingly, it appears that American negotiators had a higher


21

level of relationship frame than did Chinese negotiators in the low accountability/outgroup

condition.

Findings on fixed-pie perceptions are consistent with our predictions as well. Chinese

negotiation dyads had more fixed-pie perceptions after negotiation than did American dyads only in

the high accountability/ingroup condition, but not in the other three conditions (Hypothesis 5).

Consonant with the findings on fixed-pie perceptions, Chinese negotiation dyads achieved lower

joint gain than American dyads only in the high accountability/ingroup condition, but not in the

other three conditions (Hypothesis 6).

With regard to the relationship-based tactics, we only found a significant two-way

interaction between culture and group membership (Hypothesis 3b), such that Chinese dyads used

more relationship-based tactics than did American dyads in the ingroup condition, but Chinese

dyads used even less such tactics than did American dyads in the outgroup condition.

Guided by the dynamic constructivist view of culture (Hong et al., 2000; Morris & Gelfand,

2004), we proposed and found that the condition most likely to produce cultural differences in

negotiation—in which the Chinese negotiators are more likely to take a relationship-oriented

approach than American negotiators—is the high accountability/ingroup condition. Our analyses

showed that the Chinese participants had a higher level of relationship frame, had more fixed-pie

perceptions, and achieved less joint gain, than did American participants only in the high

accountability/ingroup condition.

Our findings have three important implications to cross-cultural negotiation theory and

research. First, the present study provides further evidence that the dynamic constructivist theory is

a very useful framework to explore how social conditions interact with culture to influence

negotiation. Previous cross-cultural negotiation research has been dominated by the trait/entity

view of culture, mainly focusing on the main effect of culture on negotiation while neglecting the

dynamic nature of human cognition and behavior. Our study indicates that using a relationship-


22

oriented negotiation approach may be more accessible knowledge to Chinese (vs. American)

negotiators, but whether such knowledge is used depends on the activation (high accountability)

and the applicability (negotiation with an ingroup member) of such knowledge (Higgins, 1996;

Morris & Fu, 2001). Our findings resonate with the findings in recent cross-cultural research that

cultural knowledge is likely to be used when people are under social or cognitive pressure (Briley et

al., 2000; Chiu et al., 2000) and when knowledge is applicable to social contexts (Wong & Hong,

2005). Future research should use the dynamic constructivist theory to identify other critical social

contextual and distortional factors that may influence cross-cultural negotiation. One potential

factor, for example, is time pressure (Morris & Gelfand, 2004). It would be interesting to explore

how culture and time pressure interact to influence the appearance or the disappearance of cross-

cultural differences during negotiation.

Second, as a classic social contextual construct in negotiation, accountability has long been

regarded as something that motivates competition in negotiation (e.g., Carnevale et al., 1981). Such

a claim has been generally accepted without qualifications until a study by Gelfand and Realo

(1999), who found that accountability motivated different negotiation norms in different cultures

(collectivists vs. individualists). In particular, accountability encouraged collectivists to cooperate,

whereas it drove individualists to compete in negotiation. Our study suggests that while that

finding is right, the story is not complete. Even with accountability, when the other party was an

outgroup member, the Chinese negotiators were as competitive as the Americans. Only when the

other party was an ingroup member did accountability reflect the effects reported by Gelfand and

Realo (1999). These findings indicate that as we develop cross-cultural theories of negotiation, it is

critical to take social conditions into consideration.

Finally, this study contributes to the currently active scholarly discussion on the mixed

findings regarding the connection between relationships and negotiation (Gelfand et al., 2006;

McGinn, 2006). Some studies have found a negative relationship (e.g., Fry et al., 1983), others


23

point to a positive relationship (Moore et al., 1999), and still others argue it is not justified to

investigate such a connection because relations should never be used instrumentally (McGinn,

2006). Our study provides an alternative approach—relationship orientation is not as simple as

being an instrumental strategy or not; rather, it is a cultural norm or schema which takes effect only

when activated. For example, we found that Chinese negotiators had a higher level of relationship

frame than did American negotiators in the high accountability/ingroup condition. More

interestingly, it seems that under the high accountability/ingroup conditions, relationship orientation

was a barrier to making joint gains for Chinese negotiators but a facilitator in making joint gains for

American negotiators. We argue that different cultures may have different expectations in using

relationships in negotiation. Therefore, the same level of relationship orientation in negotiation

may have distinct effects across cultures. Future research should further explore the connection

between relationship and negotiation from a cultural perspective.

Aside from theoretical contributions, our study also has important practical implications.

Our findings suggest that cross-cultural negotiators need to carefully consider contextual factors;

otherwise they may be misled by cultural stereotypes. For example, if an American negotiator has

the stereotype that the Chinese always focus on relationship and harmony, s/he may end up upset

and surprised when s/he finds that a Chinese negotiator is unfriendly and ruthless. According to

our findings, the American negotiator should expect a Chinese negotiator to take a self-focused

approach in negotiation under the outgroup condition.

Limitations. There are several limitations of this present research. First of all, we used

negotiation simulations to address our research question. Experiments gave us the advantage of

manipulating social conditions, but at the same time presenting the disadvantage of generalizing the

results to real-world negotiation settings. Nevertheless, we believe that our manipulations were

operationalized in ways that captured the important aspects of group membership and

accountability. That being said, it is of course important to incorporate other research methods


24

(such as interviews and field studies) to study cross-cultural negotiation. Second, the student

sample may also limit the generalizability of our findings. There is evidence, however, that experts

and novices behave similarly in negotiations (e.g., De Dreu, Giebels, & Van de Vliert, 1998).

CONCLUSION

Our study suggests that culture, accountability, and group membership of the negotiating

party interact in affecting negotiation processes and outcomes. The dynamic constructivist

approach is a promising theoretical framework in studying cross-cultural negotiation.

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TABLE 1 ANOVA Results for the Effects of Culture, Accountability, and Group Membership on

Outcome Variables 1

Relationship Frame

Relationship-based Tactics

Fixed-pie Perceptions

Joint Gains

Predictors Main Effects Chinese 1.74† 0.01 2.94* 4.20*Ingroup 14.40** 0.03 0.24 0.24Accountability 0.85 1.01 0.44 0.03 Two-Way Interactions Chinese X Ingroup 3.14* 4.66* 0.20 0Chinese X Accountability 2.75* 1.67 2.79* 2.74*Ingroup X Accountability 0.80 2.22 1.01 3.26* Three-Way Interaction Chinese X Ingroup X Accountability 2.75* 0.59 3.23* 2.52†

R2 0.11 0.09 0.1 0.11N 230 115 115 115

† p<.10 * p<.05 **p<.01

Note: 1. For the variable of “Chinese”, Chinese=1, American=0; for the variable of “Ingroup”, Ingroup condition=1, Outgroup condition=0; for the variable of “Accountability”, High Accountability=1, Low Accountability=0.


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FIGURE 1a FIGURE 1b

Culture X Accountability on Relationship Frame Culture X Group Membership on Relationship Frame

FIGURE 1

Two-way Interactions on Relationship Frame


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Outgroup Ingroup

FIGURE 2 Three-way Interaction Effect on Relationship Frame


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Outgroup Ingroup

FIGURE 3 Three-way Interaction Effect on Fixed-pie Perceptions After Negotiation

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