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Cultural Differences in Approaches to Arbitration
Professor Peter B. Smith
University of Sussex, UK
Cross-cultural psychologists have most typically mapped variations between cultural groups
around the world in terms of relative endorsement of values and of beliefs. A key dimension
of variance has proved to be between cultural groups that are characterised by individualism
and low degrees of hierarchy and those that are characterised by collectivism and greater
degrees of hierarchy. Nations can be arrayed along a spectrum reflecting relative degrees of
endorsement of these attributes, which correlate also with nation-level wealth.
This contrast implies distinctive attitudes toward the nature of justice and how it may be
accomplished. Distinctions have been proposed between distributive justice (what is fair),
procedural justice (how allocations are made) and interactional justice (the behaviours of
resource allocators). Persons within individualistic cultures tend to endorse universalistic
concepts of fair outcomes and of what are fair procedures. However, persons from more
collectivistic cultures tend toward a sharper, more particularistic perspective. What is fair and
just among members of one's in-group may be judged according to different criteria than what
is fair and just in relation to out-groups.
Within work groups, the equity of pay allocations is a major source of concern in
individualistic cultures, because pay is indicative of the status and esteem of each individual.
Equity is a lesser concern in collectivistic cultures, because the group membership of
individuals is assured by continuity of membership. However, when inequitable allocations
are made, members of collectivistic groups react more strongly than do those in
individualistic cultures. Thus resource allocations elicit different types of motives across
cultures.
Contrasting motives have also been identified in studies of negotiation. Researchers from
individualistic cultures have typically postulated that negotiator behaviour depends on the
level of concern for one's own group outcome and for the other party's outcome, but this
perspective has weaknesses when used in non-Western contexts. Leung (1987) is a researcher
from a collectivistic culture who has postulated an alternative model. He proposes that
motives for reduction of animosity and for avoidance of group disintegration will be
predictive of outcome. The relative salience of these two motives will depend on the nature of
the other party. Animosity reduction is more relevant to negotiations with out-groups, while
disintegration avoidance is more relevant to in-group issues.
Each of these research literatures has relevance to ways in which the use of arbitration will be
perceived. A first question has to do with the preference for the use of arbitration in relation
to other modes of conflict resolution. A second question has to with the reasons for whichever
preferences are found. A final question concerns the extent to which arbitration is found
satisfactory when it has been employed.
In Leung's initial (1987) study, he found that US respondents favoured arbitration whereas
Hong Kong respondents had a stronger preference for bargaining and mediation. However,
when he compared the ratings as to why these different preferences occurred, he found that in
both nations the preferred procedure was that which was perceived as giving disputants
greater control over the process and being most likely to reduce animosity. Gire and Carment
(1993) presented students in Canada and Nigeria with the same scenarios, one of which
described an interpersonal conflict and the other of which described an intergroup conflict.
Canadians rated negotiation more highly than the Nigerians, and Nigerians evaluated the use
of threats more positively than the Canadians. There was no difference in their relative
preference for the use of arbitration. Canadians perceived negotiation as most fair, whereas
Nigerians perceived arbitration and accepting the situation as most likely to reduce animosity,
and more likely to give control of the process. Bond, Leung and Schwartz (1992) studied
groups of students in Hong Kong and Israel who must agree the course grades for fellow
group members. Israelis had a stronger preference to use threats and to use arbitration..
Finally, in further studies also using the same scenarios, Leung et al. (1990, 1992) found that
Japanese students had a stronger preference for the use of arbitration than those in Spain, the
Netherlands or Canada. In none of these samples was arbitration the most strongly preferred
mode of handling the featured conflicts. However, in all of them the preferred procedures
were those that were rated as giving greater control over the process and greater prospect for
animosity reduction.
These studies have value, but their real world implications are reduced by the fact that they all
used students as respondents, and mostly asked respondents to react to imaginary scenarios. A
more recent study has asked US and Chinese arbitrators to make judgments about scenarios
describing breaches of commercial contracts. Friedman et al. (2007) drew on the literature of
individualism and collectivism to predict that US arbitrators will hold individuals accountable
for contract breach, whereas Chinese arbitrators will hold groups accountable. In the
commercial field it is ordinarily organizations rather than individuals who breach contracts.
Consequently, they predicted and found that Chinese arbitrators would hold the offending
party more accountable and would therefore award larger damages against them.
The available studies span an insufficiently broad range of samples to permit clear
conclusions as to which types of nation are particularly favourable toward arbitration or
averse to it. However they do provide a clear basis for specifying the cultural values that
underlie the variety of procedural preferences that has been examined, and these values may
also be predictive of reactions to judgments made by arbitrators.