Cultural Differences in Approaches to Arbitration Peter B. Smith University of Sussex Brunel University May 24, 2013.

Cultural Differences in Approaches to Arbitration

Peter B. Smith

University of Sussex

Brunel University

May 24, 2013

In Search of ‘Culture’

Behaviors have different meanings in different contexts

Values are context free, but not all cultures endorse value-behavior consistency

Beliefs are also context free and may account for additional variance in behavior

Roles determine behaviors more in some cultures

Figure 2-5: Schwartz’s Mapping of 67 Nations in Relation to Seven Value-Types

Conceptions of Justice

Distributive Justice

Procedural Justice

Interactional Justice

Some evidence for generality across cultures

Motives Related to Negotiation

Individualistic Cultures: Thomas – Concern for Self

- Concern for Other Collectivistic Cultures: Leung - Animosity Reduction

- Disintegration Avoidance

Levels of Analysis

Interpersonal conflicts Intergroup conflicts International conflicts

Gelfand and Realo (1999): Accountability accentuates normative behaviours

Persons from individualistic cultures become more competitive

Persons from collectivistic cultures become more relational

Wu et al. (2012) In China, this effect is stronger when negotiating with other Chinese. In the US, the effect is the same whoever is the other party

Handling Interpersonal and Intergroup

Conflicts: Canadians and Nigerians

1

2

3

4

5

6

7

Canadians

Nigerians

Reasons for Preferences?

Nigerians perceived threats and accepting situation as is as more fair

Canadians perceived negotiation as more fairNigerians perceived arbitration as giving more

control of the process than CanadiansCanadians perceived threats, accepting the

situation-as-is and arbitration as less likely to reduce animosity

Gire & Carment, Journal of Social Psychology, 1993

Handling an Interpersonal Conflict:

Israelis and Hong Kong Chinese

1

2

3

4

5

6

7

Israelis

HKChinese

Reasons for Preferences?

Making threats was perceived as likely to increase control over the process and also to increase animosity

Arbitration was perceived as likely to reduce animosity

These effects were significantly stronger for the Israelis and can therefore be said to explain the differences in preference between the more individualistic Israeli culture and the more collectivist Hong Kong culture.

Bond, Leung & Schwartz, International Journal of Psychology, 1992

Handling Interpersonal and Intergroup

Conflicts: Canadians and Dutch

-1-0.8-0.6-0.4-0.200.20.40.60.81

Canadians

Dutch

Reasons for Preferences?

The Dutch perceived greater process control than Canadians from mediation, negotiation and arbitration

The Dutch perceived greater animosity reduction than Canadians from mediation and negotiation

Thus, process control and animosity reduction can explain the difference between the confrontational procedures favoured in a masculine culture over those more favoured in a feminine culture

Leung et al., Journal of Experimental Social Psychology, 1990

Handling Interpersonal and Intergroup

Conflicts: Spanish and Japanese

-1-0.8-0.6-0.4-0.200.20.40.60.811.21.41.6

Spanish

Japanese

Reasons for Preferences?

Process control and animosity reduction can again explain the difference between preferred procedures

However, the comparable data from this study and the preceding one suggests that preferences for mediation and for arbitration cannot be predicted from either the dimension of individualism/ collectivism or that of masculinity/ femininity

We may need to investigate how terms such as ‘mediation’ and ‘arbitration’ are interpreted by respondents in different cultural contexts

Leung et al., International Journal of Psychology, 1992

Accountability and Arbitration (1)

Gelfand and Realo (1999): Accountability accentuates normative behaviours

Persons from individualistic cultures become more competitive

Persons from collectivistic cultures become more relational

Wu, Friedman et al. (2012): In China, this effect is stronger when negotiating with other

Chinese. In the US, the effect is the same whoever is the other party

Accountability and Arbitration (2)

Friedman et al. (2007): 68 Chinese and 68 US arbitrators evaluated

scenarios that gave different types of reasons for a contract violation

Most other companies also failed to deliver Mixed information Most other companies did not fail to deliver

Chinese arbitrators made higher awards, especially in

the mixed condition

Hypothesis: Chinese arbitrators hold violators more accountable because they attribute causality to groups

Psychological Mediation

If the association between A and B disappears when C is controlled, there is evidence for psychological mediation

National samples who respond to arbitration in different ways will differ from one another in numerous ways. Psychological mediation studies enable us to test whether our theories as to why these differences occur are supported.

Attribution of internal causality partially mediated the magnitude of arbitrator awards.

Mediation in Friedman’s study

Conclusions (1)

National cultures differ in both beliefs and values

In situations of conflict, negotiating partners favour process control and animosity reduction

Nations differ in their beliefs as to whether arbitration, mediation and negotiation will yield optimal process control and animosity reduction.

Conclusions (2)

Members of individualistic and collectivistic cultures take differing views of individual and collective accountability

Studies of intergroup conflict have greater relevance to real world arbitration

These differences will affect arbitrators’ decisions and the reactions of parties to these decisions

These conclusions are preliminary because of incomplete sampling and the use of imaginary scenarios