326 ENTREPRENEURSHIP
Sometimes the negotiators have no choice but to use third parties. The labor laws
of the United States sometimes demand the use of mediation or binding arbitration.
The parties to a negotiation can agree to use certain types of third-party intervention
before a disagreement arises. For example, in major league baseball, the owners and the
players use binding last-offer arbitration to determine salaries for special classes of play-
ers.^35Situational and Environmental Factors. The immediate environment in which the
negotiations take place can alter the outcome. Pleasant surroundings promote coopera-
tion. There are home-field advantages, just as in sports contests. The party that is at
home among familiar surroundings is more relaxed and comfortable. This is a major
advantage if the opponent is uncomfortable, rushed, tired from travel, and maybe even
suffering jet lag.
The agenda makes a difference too. When there is more than one issue to deal with,
more cooperative negotiation is possible. When the entire package is negotiated at one
time, there is a greater possibility of compromise than when items are negotiated
sequentially.
The remote environment of the negotiation also has an impact. The legal structure of
a country can determine whether some negotiations are mandatory or illegal. Social
norms affect negotiations: In the West a norm of efficiency makes negotiators task-ori-
ented and likely to rely on rational arguments to influence their opponents. Many coun-
tries outside the West do not share these norms. In Eastern cultures, for example, there
is much more emphasis on establishing personal relationships. Negotiations in similar
cultures adopt shared norms; cross-cultural negotiations can be troublesome. For exam-
ple, in one study of North American, Russian, and Arab negotiators, it was found that:- North Americans relied on logic and persuasion. They reciprocated with fact
exchange. They made small concessions early and then reciprocated opponents’ con-
cessions later. Deadlines were important. - Arabs tried to persuade by emotion. They allowed their subjective feelings to count-
er opponents’ facts. They made numerous concessions and always reciprocated
opponents’ concessions. Deadlines were not important. - Russians were idealistic, trying to persuade by reference to principle. They did not
employ concessions as a tactic; in fact, they saw them as signs of weakness. They
never reciprocated. They ignored deadlines.^36
Other studies confirm that each national culture and subculture has its own styles,
preferences, and tactics. The Chinese use time very shrewdly, speeding up negotiations
when they know that a Westerner must return home soon and slowing them down when
that is to their advantage.^37 Cross-cultural negotiations therefore tend to be more com-
petitive and stressful.
The general munificence of an environment also has an effect. In non-munificent
environments, the mode of bargaining is likely to be distributive. In munificent environ-
ments, it may be possible for all parties to meet their needs, and an integrative mode
may prevail. In an ironic twist, however, labor relations may become contentious when
unions see signs of a company’s profits in its munificent environment. Labor leaders,