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International alliances have generated a significant increase in the number of multinational business agreements. As a result, behavioral guidelines for effective win-win business negotiations have gained new importance. This article explores the impact of location in cross-cultural negotiations. Basic intercultural business communication principles are reviewed, and the advantages and disadvantages of site options are discussed. Recommendations are offered to support positive outcomes for all international negotiations.

The impact of international trade on U.S. organizations has been understated. The international dimension affects all parts of the economy, with two-way trade in goods and services amounting to more than $81.6 trillion or nearly 25 percent of the U.S. GDP [4]. The growing commercial opportunities in international markets will include cooperation as well as competition with non-U.S, firms. Furthermore, the overall financial benefits of exporting are also becoming more evident. A recent study showed a widening gap between growth rates for exporting versus non-exporting small U.S. businesses, 31 vs. 25 percent, respectively for the past year [22]. In total, the 1990s has ushered in economic and political developments that make international trade an inevitable reality for most thriving U.S. businesses. Some examples are NAFTA, the dissolution of the Soviet Union, new alliances in the Pacific Rim, increased capitalism in communist countries, and the formation and consolidation of the European Union.

Negotiated agreements between organizations are at the forefront of international business opportunities. In fact, agreements are the most vital mutually developed documents among firms, international or domestic [85]. Regardless of the international dimensions, most business transactions have a negotiation aspect that presents opportunities and difficulties for all involved parties. With cross-cultural negotiating, possible benefits and roadblocks often are magnified due to increased legal and cultural complexity. In fact, many recent international deals have involved more than two countries [5,9].

One critical aspect of cross-cultural negotiations is place, a choice of the actual site and its effect on the particular negotiation strategy [8]. As a result, the role of place variations in related global negotiations strategies are examined and some general recommendations for cross-cultural negotiations supporting win-win outcomes are discussed.

When two people communicate, they rarely talk about precisely the same subject, since meaning is based on an individual's perceptions and cultural conditioning. In international negotiations, the potential for misunderstanding and distorted messages increases significantly. Effective international communication translates into an anticipation of culturally rooted ideas most likely to be understood by a person of a given culture. Otherwise, perceptual bias intervenes because different social systems produce divergent negotiating styles shaped by each nation's culture, geography, history and political system [2,20].

This strategic failure is often associated with communication "noise," namely any factor, including stress, which interferes with the receiver's comprehension of the sender's intended message. A lot of noise can also be attributed to the influence of place on the negotiation process [19]. For example, nervousness due to unfamiliar surroundings or a strong reliance on the physical characteristics of a meeting site when interpreting a counterpart's integrity is a noise contributor in the cross-cultural negotiation process. Logically, minimizing noise between negotiating parties will facilitate successful outcomes [19]. In cross-cultural negotiations, many of the strategies and tactics used domestically may not apply, especially when they are culturally unacceptable to the other party [7,19]. One succeeds in cross-cultural negotiations by fully understanding one's negotiating counterpart(s). This understanding is used to improve one's own advantage by (1) recognizing and identifying each party's expectations as expressed in the negotiations and (2) turning the negotiations into win-win outcomes for all parties. A"win-win" outcome is one that incorporates the concerns and meets the goals of all negotiating parties [19].

Site Selection

Site selection is a critical variable in the influence that place has on the intercultural negotiation process. Inevitably, site selection will heavily impact negotiating outcomes [10,11,14]. For this reason, choice of location is a focal decision point during the pre-negotiation phase. More specifically, site selection will affect psychological climate, space availability, time factors and limits, stress management, team building, information flow (including setting the agenda), and adoption of communication channels among other factors. For example, in cases where negotiations take place in the host nation, the host country negotiators typically assume responsibility for the protocols that govern location, transportation, orientation, introductory information (i.e., credentials, business cards, dress codes, social events and seating arrangements) and accommodations [14].

In many cases, the location of negotiations will favor one side over another. The agreement of the Western allies to meet the Soviets in Soviet controlled Potsdam in 1945 allowed Stalin to manipulate the negotiating environment to the Soviet Union's advantage. In response, negotiators tend to prefer neutral settings: Malta for the 1989 meeting between Presidents Bush and Gorbachev, Paris for the Vietnam peace talks and a raft in the middle of the Neman River when Napoleon Bonaparte and Czar Alexander I met in 1807.

Playing Host

Pragmatically, the host company possesses many territorial advantages, including control over the location protocols. Furthermore, psychological stress is reduced since one tends to be more comfortable and confident in one's own surroundings [16,17]. For example, the host is more familiar with the negotiating environment. In addition, the assumption of host responsibilities offers the opportunity to treat the other team(s) lavishly, creating the potential both to enhance the relationship(s) and incur obligation on the part of the guests [1,20]. Adapting to the guest's role tends to engender both respect and willingness to concede. Furthermore, the visiting teams are less likely to walk out. On the contrary, pressure is on them to make extra concessions [1].

Equally important, guests may run the risk of culture shock. Jet lag and related travel fatigue have serious consequences, including insomnia and the inability to concentrate and react well. Guests are also prone to physical symptoms caused by unfamiliar food and climates. The visiting negotiator is away from his or her professional and personal support system. Without these factors, home office input and family affection, the passage of time tends to strengthen the drive to return home and hence to make concessions to conclude the negotiations [14]. These pressures are multiplied when manipulative hosts deliberately cause delays or when unexpected events prolong negotiations [16].

By comparison, hosts have control over the negotiating environment, including many powerful elements of nonverbal communication, such as the condition of the room itself, seating and the nature and timing of events. Moreover, when additional information is required for negotiations, the hosts often have easier access to local experts for advice as well as superiors for quick authorization and consultation. Finally, negotiating at home can be less expensive, especially when the hosts do not assume the majority of the guests' costs [16].

Of course, all of these advantages are moderated by the national characteristics of the host negotiators. In the case of U.S. business people, certain negotiation characteristics should be encouraged or discouraged to maximize the effectiveness of playing the "host" role. For example, researchers in international business have noted the following U.S. negotiating traits that tend to dominate when hosting meetings:

A focus on formal negotiating activities and location instead of informal gatherings

A high value placed on "winning" a negotiation at the expense of the counterpart(s)

A tendency to compromise too soon

A lower probability of speaking the native language of the guest's party [19].

These characteristics are more likely to be advantageous when U.S. business people are hosts, since they retain more "control" over these variables. On the other hand, these same traits should be tempered by the negotiating style of the guests. For instance, U.S. negotiators would be wise to exercise patience with Asian guests who often prefer a longer decisionmaking process that takes place in informal settings. In addition, many cultures equate a host's understanding or knowledge of the guests' language and traditions as a sign of necessary respect [3].

Being a Guest

Despite many disadvantages to negotiating at your counterpart's location, it may be necessary to view their facilities, personnel and capabilities firsthand. Sometimes, political, financial and other detrimental restrictions exist such that there is really no viable option except to meet at your negotiating counterpart's home base. The primary advantage of being the guest is that you have the opportunity to really learn about your partners' culture and lifestyle. You may also glean significant technical benefits from observing their physical facilities. This experience can give you valuable data regarding the company's operations, modernity and professionalism. At the same time, guests have the opportunity to show seriousness of intent and their desire to make a commitment.

Furthermore, negotiating in the counterpart's country could enable you to maintain low disclosure in cases where you would prefer discrete negotiations. In addition, visiting your partners' tuff may also save them money and thus express your concern and interest [1,6].

Nonetheless, there are many disadvantages to negotiating in another country. Culture shock and its companion physical and mental discomfort pose potential problems. Physical fatigue, such as jet lag, is real and can hinder negotiating efforts. In general, when playing guest eat light and drink alcohol in moderation on the trip over. Give yourself adequate recovery time to get acclimatized before negotiations. Since being away from home can be expensive, frustrating, rime consuming and lonely, be careful not to let the time, money and investments in the trip dissuade you from implementing plans that were created beforehand. Do not concede merely to get the deal, since such a deal may be no deal at all [8].

The Chinese are skilled at using their role as hosts to control the timing of meetings, agenda items and the pacing of the negotiations. Often, the visitors do not even receive a definite negotiation schedule. The Chinese also have been noted for promoting guest dependency and a sense of obligation. For centuries, the Chinese have reminded visitors that they are guests [18,21]. These tactics can be quite effective, especially in countries such as China, and may be an overwhelming experience for first time visitors [ 11]. Often Chinese living arrangements are not up to Western standards. Coupled with other guest characteristics, these settings can produce visitors impatient to conclude the deal and return home.

However, the overall effect of Chinese hospitality can be tremendous and most visitors to China leave with warm sentiments for the hosts. This often happens because the Chinese seek relationships with permanence, steadfastness and faithfulness. To succeed with Chinese hosts, guest business people are well advised to achieve some proficiency in Chinese, learn the intricacies of the culture and live in or at least visit the country as often as possible [23,24].

The key reasons for a neutral location are conflict avoidance, time or convenience and sensitivity to cultural context. In the case of conflict avoidance, a location that is not associated with any of the participant countries may be preferred in order to eliminate any undue advantage gained from playing host. This alternative has been frequently adopted in diplomatic and union negotiations [15]:

A more recent innovation to neutral territory is found with electronic communications, most notably through Internet technologies, fax transmittals, teleconferencing, electronic mail and simple phone communications. These technologies often reduce the cost and transportation-related problems that are associated with international business. Equally important, the electronic media has shown promising results when appropriately used to assist group decision making and conflict resolution [19]. Despite the lure of high technology, these choices may not be compatible with all groups. High context cultures, which operate with high levels of interpersonal trust and ambiguous communication, may find electronic communications too impersonal for effective intercultural negotiations.

In conclusion, the role of place has a significant impact on the effectiveness of international negotiations, particularly when the desired outcomes are win-win for all major players. Unfortunately, cookbook recipes for success are not usually applicable in all settings, because cultural differences moderate optimal communication strategies that include location as a key factor. Nevertheless, some universal guidelines apply to most places and can be of great assistance for business people seeking success in cross-cultural negotiations.

These guidelines have been summarized by Harcourt, Krizan and Merrier [13]. First, know how to practice good organizational communication skills in your home culture. The basic premises of good business communication will often prevail across countries. For example, principles such as tailoring messages for target audiences and using proper grammar/syntax (even if it takes a capable interpreter) hold true universally.

Second, understand the cultural precepts of the country that you represent. It is impossible to identify and collaborate with another culture until one can define the values and characteristics that shape that culture. Once the negotiator has accomplished this step, he or she is ready to adopt the third. Be sensitive and receptive to other cultures. Above all, avoid cultural arrogance. Although this advice may seem simplistic, it is not always easy to follow, particularly in stressful situations where the usual amenities of one's native country are not readily available, such as a pizza parlor in many small French towns. The third guideline also implicitly asks the international buff mess person to set aside long standing conceptual frameworks. Case in point, a negotiator from the U.S. may not wish to informally socialize with negotiating counterparts prior to the meetings. However, non-business, social, group gatherings are standard practice for the Japanese prior to any deal-making [12].

Finally, do your homework rigorously, and put your knowledge to good use [19]. In other words, this guideline advises the international business person to acquire extensive information about the negotiating cultures prior to the meetings and remain culturally receptive during the negotiations. Regardless of the place, careful preparation and the practice of such critical communication' skills as active listening and accurate interpretation of nonverbal behaviors increase the probability that international negotiators will achieve results that are in the best interests of all involved.

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