Group Decis Negot (2008) 17:79 96
DOI 10.1007/s10726-007-9088-4
Effects of warm-heartedness and reward distribution on
negotiation
Nancy Chen Yifeng · Dean Tjosvold · Wu Peiguan
Published online: 1 June 2007
© Springer Science + Business Media B.V. 2007
Abstract Research is needed to identify the conditions and dynamics by which foreign
managers and local employees can negotiate their differences integratively. In an experiment
with 120 participants in South China, employees with foreign managers who communicated
warm-heartedness, compared to indifference, indicated that they had cooperative goals, a
quality relationship, were confident in future collaboration, and concluded that their man-
ager was an effective leader. Employees with foreign managers who structured mutual rather
than independent or comparative rewards found their manager s ideas reasonable and inte-
grated them into their decisions. Results, especially if they can be replicated in field settings,
suggest how foreign managers can negotiate effectively and develop their relationships with
Chinese employees.
Keywords Warm-heartedness · Reward distribution · Negotiation cross-cultural
1 Effects of warm-heartedness and reward distribution on decision-making between
foreign managers and Chinese employees
Managers and employees must often negotiate their different opinions and interests when
confronted with an issue that requires a decision. Negotiation researchers have studied
the conditions under which these discussions become integrative where mutual benefits
are developed or distributive where each side attempts to maximize its outcomes at the
expense of the other (De Dreu, 2004; Friedman et al. forthcoming; Walton and McKersie
1965). In the global marketplace, managers and employees increasingly have different cultural
N. C. Yifeng · D. Tjosvold ( )
B
Management Department, Lingnan University, Tuen Mun, Hong Kong
e-mail: [e-mail]
N. C. Yifeng
e-mail: [e-mail]
W. Peiguan
Lingnan (University) College, Sun Yat-Seng University, Guangzhou, China
e-mail: [e-mail]
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80 N. C. Yifeng et al.
backgrounds that can make integrative solutions more difficult to negotiate (Bond 2003;
Smith 2003). This study experimentally investigates negotiations between Chinese employ-
ees and foreign managers; it poses the question, what is the influence of warm-hearted-
ness and reward allocation on decision-making between foreign managers and Chinese
employees? It tests the hypotheses that foreign managers warm-heartedness, compared
to indifference, and mutual rewards, compared to independent and comparative rewards,
result in Chinese employees developing cooperative relationships with their foreign man-
ager, open-mindedly exploring the foreign manager s ideas, integrating these ideas into their
decision-making, and building confidence that they can work with the foreign manager in
the future.
This study makes several contributions to the literature. It empirically links the litera-
tures on expressing affect and the distribution of rewards to research on negotiations and
decision-making. The study tests the effects of the Chinese value of warm-heartedness on
the negotiations and suggests that foreign managers can communicate this Chinese value
credibly. It also contributes to the research demonstrating the utility of conflict for making
decisions by identifying conditions under which discussing opposing views can be useful.
This study adds to the empirical research on the value of quality relationships in China;
specifically, this study contributes to knowledge about the conditions that facilitate effective
discussion and leadership by foreign managers in China. Finally, the study provides an exam-
ple of how cross-cultural issues can be examined experimentally with random assignment to
conditions.
2 Negotiations between foreign managers and Chinese employees
Cross-cultural researchers have focused on documenting value differences between nations
and regions. They have concluded, based on comparing samples from China and the West, that
Chinese people are more collectivists who value their connections to others and relationships
highly whereas people from the West are more individualist who value their independent and
unique selves (Chen and Chen 2004; Child and Markoczy 1993; Hui et al. 1999; Jacobs et al.
1995; Leung and Yeung 1995; Tsui and Farh 1997; Xin and Pearce 1996). Psychologists have
argued that cultural differences affect people s construal of themselves as interdependent or
independent and these self-construals in turn significantly alter their emotions and behavior
(Markus and Kitayama 1991).
Cultural differences appear to be likely to make effective negotiations between people from
different cultures more difficult as they increase misunderstandings of meaning and intentions
(Earley and Gibson 2002; Earley and Mosakowski 2000). Recently, Bond (2003), Javidan
et al. (2004) and Smith (2003) have argued that researchers should not rely so extensively
on comparing samples of people from different cultural backgrounds but should examine the
interaction between cultural diverse people directly. Rather than compare foreign managers
and Chinese employees, this study experimentally investigates conditions that affect how
foreign managers and Chinese people discuss and negotiate their differences within China.
Specifically, this study proposes that foreign managers who express warm-heartedness
and distribute rewards mutually rather can more effectively integrate their differences. It
argues that Chinese employees, as collectivists who construe themselves connected with
others will respond positively to warm-heartedness and a mutual distribution of rewards as
both of them emphasize the value of and the commitment of the foreign managers to devel-
oping relationships with them (Markus and Kitayama 1991; Oyserman et al. 2002; Triandis
1995).
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Effects of warm-heartedness and reward distribution on negotiation 81
2.1 Warm-heartedness and indifference
Foreign managers may be able to communicate that they want to develop a relationship with
their Chinese employees by expressing warm-heartedness. Chinese people have traditionally
valued warm-heartedness (Bagozzi et al. 2001; Greenberger and Chen 1996; Greenberger
et al. 2000). Western researchers have identified happiness, surprise, fear, sadness, anger, dis-
gust-contempt, and interest as major emotions (Eckman 1972). Warm-heartedness is closely
related to the Western emotion of happiness but, appropriately for collectivist China, is more
relationship-oriented. It is not only communicating that the person is in good spirits but also
a desire to support and be open to the other. Warm-heartedness may communicate that the
other is accepted and their relationship is valued. Indifference, on the other hand, expresses
a disinterest in the relationship and little openness to the other person.
Although there is not much evidence on the effects of warm-heartedness in China, research
in the West has investigated the expression of affect in conflict and negotiations (Johnson
1971a,b; Tjosvold 1984; Tjosvold and Sun 2003). Warm-heartedness would appear to com-
municate directly a positive regard that is experienced as rewarding and concretely reaffirms
the relationship. The other person feels accepted as a person and concludes that they have
a strong, open relationship, characterized by cooperative, compatible goals where by pro-
moting the other s goals they also promote their own (Deutsch 1973). On the other hand,
indifference conveys little interest and valuing of the other person and the relationship. Feel-
ing rejected and disconfirmed, the other concludes that they have a weak relationship without
cooperative goals.
By reaffirming a cooperative relationship, warm-heartedness may be an important influ-
ence on the interaction and outcomes of leaders and employees. As documented by previous
research (Tjosvold 1998), the conclusion of a cooperative relationship can induce an open-
minded discussion and integration of diverse views into their own thinking and decision-
making and confidence in future collaborative work.
Based on the above reasoning, it is hypothesized:
H1: Chinese employees whose foreign managers communicate warm-heartedness,
compared to indifference, develop a cooperative relationship, open-mindedly discuss
their opinions, integrate their managers diverse views into their decision-making, and
are confident in future collaborative work.
2.2 Distribution of rewards
Chinese leaders are often assumed to be autocratic and not willing or even needing to share
rewards with employees, but recent research has emphasized that Chinese managers are
expected to reciprocate employee loyalty or risk losing their support (Tjosvold et al. 2004).
The Chinese model of leadership imposes the moral obligation upon managers to consider
and respond to the needs of their employees (Cheng et al. 2004). Employees who believe
their leader has not sufficiently provided for them may withdraw from the relationship, albeit
often in an indirect manner (Abroad 2004; Bai 1998; Liu 1998; Morris and Leung 2000; Pun
2001). Foreign managers then may be able to negotiate with and develop a relationship with
employees to the extent that they reward effectively.
But how should foreign managers reward so that employees consider them fair and enhanc-
ing? Research in the West has investigated reward distribution and, in particular, has shown
that a critical justice consideration involves the principles by which tangible outcomes of
rewards and burdens should be distributed (Folger and Greenberg 1985; Greenberg 1990).
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82 N. C. Yifeng et al.
Distributions considered unjust provoke objections, withdrawal, and aggression (Colquitt
et al. 2001; Rawls 1999; Simons and Roberson 2003).
Equity is an influential normative approach to determining the fairness of the distribution
of outcomes. Equity solutions occur when the people are rewarded to the extent that their
individual contributions to the joint activity are valued. The more they contribute as individu-
als, the more rewards they believe they should be given. Considerable evidence indicates that
the equity principle operates in many situations, including those in China (Cohen-Charash
2001; Colquitt et al. 2001; Fields et al. 2000; Lam et al. 2002).
There are two distinct ways that individuals can be rewarded based on their own perfor-
mance. People can be rewarded based on individual performance evaluated against pre-estab-
lished criteria. They are awarded to the extent that their performance fails to meet, meets, or
exceeds these standards. The rewards of one do not impact the rewards of others. All individ-
uals could be rewarded generously if they all contributed according to the criteria whereas
all could be little rewarded if their contributions were considered below the standards. This
study labels this distribution as independent rewards.
Rewards can also be based on individual performance relative to others. Individuals are
rewarded to the extent that they contribute more than others. Here individuals are evaluated
and rewarded in comparison to others. Typically, some people would be highly rewarded
whereas others would be little rewarded. This distribution is labeled comparative rewards.
Equity is not the only principle operating within organizations (Chen et al. 2002). Rewards
can be distributed mutually where everyone receives rewards to the extent that they succeed
together (Deutsch 1985). The emphasis is on everyone being rewarded when they jointly
meet or exceed their standard and no one when it fails. Mutual rewards do not require that
everyone receive the identical outcomes, only that people are rewarded more, the more they
achieve together.
Deutsch (1985) argued that these reward distribution principles have profound effects
on relationships and interaction. Mutual distribution emphasizes cooperative goals where
people understand that, as they will succeed or fail together, it is to their own interest to help
each other be effective. They believe they can rely upon each other, and, therefore, are open
and supportive of each other. However, equity distributions based on independent rewards or
comparative rewards do not strengthen cooperative relationships.
These studies suggest that a mutual distribution of rewards between foreign managers and
Chinese employees is likely to communicate to the employees that they can develop a strong
relationship with their foreign manager and thereby can negotiate openly and integratively.
However, distributing rewards either independently or comparatively between the managers
and employees is likely to leave employees believing that they do not have an effective,
mutual relationship and to negotiate their differences distributively.
Based on the above reasoning, it is hypothesized:
H2: Chinese employees whose foreign managers distribute rewards mutually, rather
than independently or comparatively, develop a cooperative relationship, open-mind-
edly discuss their opinions, integrate their managers diverse views into their deci-
sion-making, and are confident in future collaborative work.
Warm-heartedness and mutual rewards are expected to both contribute to integrative nego-
tiations between foreign managers and Chinese employees. Researchers have argued that both
the nonverbal messages of emotions and information processing are powerful forms of social
communication (Druckman et al. 1982). Warmth-hearted is an affective communication that
can strengthen interpersonal bonds whereas mutual distribution is a cognitive communication
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Effects of warm-heartedness and reward distribution on negotiation 83
that can strengthen them. The experimental study allows for identifying the interplay between
these emotive and information communications by examining interaction effects. However,
previous research does not suggest hypotheses of interaction effects. This study hypothesizes
only main effects hypotheses but empirically examines whether interaction effects emerge
that should be pursued more vigorously in future research.
3 Method
3.1 Overview and participants
To test the hypotheses, four foreign graduate students were recruited to be confederates and
given the role of manager and 120 Chinese undergraduate students from a university in
Guangzhou, China were recruited to take the role of employees in an organizational simula-
tion.
The foreign students were four male graduate students from Africa, Nepal, Australia, and
America, with an average age of 33. They were given 15 h of training in how to induce par-
ticipants involvement and commitment in the experimental situation and how to negotiate
in a standard manner and carry out the experimental inductions.
The participants were university students; their average age was 21 years and 6 months,
and 55% were female. They were randomly assigned to six conditions, 20 in each condition.
They received 10 RMB (about US$1.25) for their participation and one chance in a lottery
for 500 RMB (US$42).
They read in the Instructions that their company had decided that a job rotation pro-
gram was too expensive in the face of growing competition; managers and employees had
to negotiate the value of job rotation and develop a decision whether it should be eliminated
or modified. Managers were given the position that the program should be eliminated and
employees that it should be continued as it is.
The participants studied the Instructions and learned of the reward distribution, the situ-
ation and their positions in Phase 1. In the second phase, they discuss directly with one of
the confederates who expressed warm-heartedness or indifference for a maximum of 18 min.
In Phase 3, they completed a decision form and measures of the inductions and dependent
measures and were then debriefed. The discussion was not taped.
3.2 Independent variables
The reward distributions of mutual reward, independent reward, and comparative reward were
crossed with the warm-heartedness variable (warm-hearted vs. indifferent communication)
to form a 3 × 2 design. Each induction is discussed in turn.
The warm-heartedness induction was implemented through confederate behavior and
a mid-discussion questionnaire. The confederates communicated their warm-heartedness
towards the workers verbally and nonverbally. To show their warm-heartedness towards the
employees verbally, supervisors indicated that they were interested in listening to the prob-
lems and difficulties faced by employees. On the mid-discussion questionnaire, they circled
a  6 on a 7-point rating scale for the question about their feelings of warm-heartedness
indicating that they felt highly warm-hearted to the other discussant. Previous research has
indicated that communicating affect is multi-channeled with facial expressions, body move-
ments, visual gaze, and vocal tone as well as verbal signals all affecting how the receiver
understands the other s emotions (Davitz and Davitz 1959; Druckman et al. 1982). These
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84 N. C. Yifeng et al.
challenges are often not coordinated but, if they are consistent, the receiver is more likely
to understand and believe that the emotion is genuine. Throughout the discussion, manag-
ers expressed their warm-heartedness nonverbally through eye contact, smiling, and leaning
forward, and by using a soft voice and open gestures.
In the indifference condition, the confederates communicated their indifference towards
the workers verbally and nonverbally. They indicated that they were not interested in listening
to the problems and difficulties faced by employees. For the mid-discussion questionnaire,
they circled a  2 a 7-point rating scale for the question on their feelings of warm-heartedness
indicating that they felt indifferent toward the other discussant. Throughout the discussion,
confederates showed their indifference to listening to the participants problem nonverbally
by avoiding eye contact and through a serious facial expression, leaning away, an impassive
voice, and closed gestures (Davitz and Davitz 1959; Druckman et al. 1982).
The reward distribution inductions were based on justice distribution norms (Deutsch
1985). In the mutual reward condition, participants read in the Instructions that their com-
pany has a history where supervisors and employees are genuinely committed to the idea that
both supervisors and employees should be rewarded when they succeed. They believe super-
visors and employees share the credit when they solve problems with solutions accepted by
both. They feel good when they work together for their mutual reward. They have found that
they can be more effective when they maintain this relationship. The confederates reinforced
this condition by commenting that the supervisors and employees were working for mutual
rewards. In addition, the number of chances they would earn for the lottery depended upon
promoting their and their supervisor s mutual rewards.
In the independent reward condition, participants read in the Instructions that the organi-
zation has a history where employees and supervisors are rewarded based on their individual
performance. The employees have a special responsibility to work for their own independent
rewards. They have found that they can be more effective to solve the problem when they
only consider and work for their individual rewards. Confederates argued that they should
solve the problem for their own reward and interest. Therefore, the number of chances they
would earn depended upon promoting their own independent reward.
In the comparative reward condition, participants read that the organization has a history
where rewards are only given to those who outperform others. Employees believe that if they
contribute more to the company than their supervisors, they then deserve higher rewards. The
employees realize that they have a special responsibility to solve the problems and obtain
more rewards than supervisors. They have found that they can be more effective on solv-
ing problems by demonstrating their solution deserves more rewards than their supervisors.
Confederates argued that only those who have better ideas deserve the reward. In addition,
the number of chances they would earn depended upon their outperforming their supervisor.
3.3 Checks on the manipulations
Participants provided ratings in the post-discussion questionnaire using 7-point Likert-type
scale questions to check on the effectiveness of these inductions. Participants in the warm-
heartedness condition (M = 4.26, SD = 2.00), compared to the indifferent condition (M =
2.35, SD = 1.50), indicated that their supervisors were warm-hearted, F(1, 118) = 7.21,
p < .01. Participants in the indifference condition (M = 5.48, SD = 1.98), compared
to the warm-heartedness condition (M = 3.67, SD = 1.97), indicated that their supervi-
sors were indifferent, F(1, 118) = 5.51, p < .01. Therefore, it can be concluded that the
warm-heartedness and indifference inductions to test the hypotheses were successful.
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Effects of warm-heartedness and reward distribution on negotiation 85
Participants in the mutual reward condition (M = 4.73, SD = 1.64), compared to
independent reward condition (M = 3.54, SD = 1.76) and comparative reward condi-
tion (M = 4.00, SD = 1.64), indicated that they tried to reach agreements for the reward
of both supervisors and employees, F(2, 117) = 6.61, p<.01. Participants in the indepen-
dent reward condition (M = 5.63, SD = 1.56), compared to the mutual reward condition
(M = 5.10, SD = 1.61) and comparative reward condition (M = 5.04, SD = 1.71), indi-
cated that they and the supervisors were willing to work for their own independent reward,
but this difference was only marginally significant, F(2, 117) = 2.21, p<.10. Participants
in the comparative reward condition (M = 4.52, SD = 1.63), compared to the mutual
reward condition (M = 3.81, SD = 2.00) and independent reward condition (M = 4.03,
SD = 1.82), indicated that the rewards for supervisors and employees were relative, but this
difference was not statistically significant, F(2, 117) = 1.59, ns. Although the results on the
reward inductions were not as strong as expected, overall they indicate the inductions needed
to test the reward distribution hypotheses were largely successful.
3.4 Dependent variables
There are four sets of dependent measures: interpersonal relationship, open-minded discus-
sion, integration of diverse views, and future collaborative work. Appendix A has all the
items.
To measure the participants view of the interpersonal relationship, participants rated four
scales in the post-discussion questionnaire. Ratings measured cooperative goals (5 items
from Alper et al. 1998); interpersonal interaction; leader member relationship (6 items from
Fairhurst et al. 1987; Fairhurst and Chandler 1989); and, willingness to help each other (4
items devised for this study).
The second set of dependent variables was open-minded discussion, which was measured
by three scales. Participants rated their openness to the different position (Tjosvold et al.
1998); how much they were exploring the issue thoroughly (2 items designed for this study);
and the degree that they agreed and considered the other s argument (6 items from Tjosvold
et al. 1991).
The next set of dependent variables was the integration of diverse views. After the discus-
sion, the participants made their decision and indicated how many arguments provided by
the other were accepted. Participants integrated decisions were coded as 1 if they reflected
only the participant s assigned position, 2 if they reflected some arguments from the opposing
view, and 3 if they extensively incorporated the other s position. The participants recalled the
arguments of the other and indicated which ones were reasonable. The number they indicated
was the measure of acceptable arguments.
Finally, to measure future collaborative work, participants rated the other s leader effec-
tiveness (four items from Ashford and Tsui 1991; Tsui 1984) and willingness for future
collaborative work (6 items from Tjosvold et al. 1991).
The experimental materials were originally written in English. To provide bi-lingual mate-
rials, several bi-lingual researchers translated it into Chinese (Mandarin). They reached agree-
ment on the translated version (Brislin 1970). The participants read bi-lingual materials and
discussed in English with the foreign confederates.
3.5 Procedure
The experiment was conducted in three phases: Participants prepared for a discussion about
a work distribution issue with a partner, discussed the issue with a person with an opposing
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position, and were debriefed. Two participants and two confederates (posing as participants)
were scheduled at each session.
To begin Phase 1, the experimenter divided them into two groups, each with one par-
ticipant and one confederate. She escorted them into different rooms and outlined that the
research studied communication between persons in decision-making and they would take
the role of supervisors at East Asian Electronics. They were to read the written instructions
and discuss them with each other to understand the situation and their role.
The participants read that as employees they had to meet with their foreign supervisors
about job rotation. The employees had developed a practice of trading their positions every
hour. The supervisor, as a representative of management, opposed this job rotation as ineffi-
cient and participants were also given a briefing sheet outlining six arguments supporting
their position. The inductions were introduced at this time.
To begin Phase 2, the confederates exchanged rooms and were introduced as the super-
visor representative. They were reminded to present their opening positions in 2 min and
then to discuss freely for the remainder of 18 min. The deadline was not meant to pressure
participants to make an agreement. Nearly all of them did take the full 18 min and then after
that they made their decisions.
Eight minutes into the discussion, the experimenter entered the room and asked them
to complete the questionnaire that included part of the inductions. Then she unexpectedly
exchanged the questionnaire  to increase communication so that the participant could read
the confederate s ratings. The experimenter asked them to continue discussing and later gave
them a warning of 2 min. Then the experimenter entered the room, asked the participant to
complete the decision report form and the post-discussion questionnaire, and escorted the
confederate out of the room.
The participants were then fully debriefed and were asked to comment on the experiment.
No one was judged to be suspicious of the procedures. They were thanked and asked not to
discuss their experience with others who might participate. All participants were then paid
and given one chance in the lottery.
4 Results
The analysis of variance results (Table 1) provide strong support for the study s major argu-
ment that in organizations, warm-heartedness can significantly affect the dynamics and out-
comes of negotiations and decision-making. In particular, the findings support the hypothesis
that warm-heartedness helps Chinese employees discuss issues integratively and develop
effective, cooperative relationships with their foreign supervisors.
Experimental evidence provides good support for the first hypothesis that Chinese employ-
ees whose foreign managers communicate warm-heartedness, compared to indifference, de-
velop a cooperative relationship, open-mindedly discuss their opinions, and are confident in
future collaborative work.
Participants in the warm-heartedness condition, compared to indifference, were more
confident that they had a strong relationship with their foreign supervisors. They indicated
that they had cooperative goals, F(1, 114) = 14.46, p < .01, and interpersonal attrac-
tion, F(1, 114) = 47.38, p < .01, between themselves and their foreign supervisors.
They believed they had good leader member relationship with their foreign supervisors,
F(1, 114) = 43.93, p<.01, and were more willing to help each other, F(1, 114) = 25.67,
p<.01, compared to the participants in the indifferent condition.
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Effects of warm-heartedness and reward distribution on negotiation 87
Table 1 Comparisons among conditions
Variables MR-W (1) MR-I (2) IR-W (3) IR-I (4) WLR-W (5) WLR-I (6) Comparisons F -value
Cooperative goal 4.78 3.97 4.39 3.37 4.44 3.52 W>I 14.46""
1.26 1.37 1.50 1.43 1.01 1.23
Interpersonal 5.45 3.10 4.85 3.10 4.95 3.25 W>I 47.38""
attraction
1.05 2.02 1.46 1.83 1.05 1.55
Leader Member 4.79 3.23 4.41 2.65 4.28 3.14 W>I 43.93""
relationship
1.23 1.46 1.16 1.22 1.09 1.10
Willingness to 5.24 4.26 4.9 5.52 5.00 3.66 W>I 25.67""
help each other
1.71 1.56 1.40 1.59 1.18 .94
Openness 5.95 5.40 6.05 4.70 5.70 4.90 W>I 11.60""
.94 1.35 .94 1.84 1.38 1.92
Exploring the is- 5.50 5.45 5.58 4.60 5.33 4.73 W>I 7.03""
sue
.88 1.01 1.16 1.55 .82 1.41
Agree and con- 5.33 4.57 4.80 4.10 5.09 4.05 W>I 17.90""
sider the other s
argument
.97 1.22 1.20 1.15 .92 .93 MR>IR>CR 2.27(<.10)
Integrated decision 2.35 2.4 1.87 1.35 1.35 1.25
.81 .75 .66 .49 .49 .64 MR>IR>CR 28.74""
Acceptable argu- .56 .56 .54 .41 .42 .42
ments
.22 .27 .31 .18 .28 .28 MRLeader effective- 5.33 4.26 5.13 3.48 4.90 3.28 W>I 35.45""
ness
1.00 1.64 1.48 1.46 1.08 1.20 MR>IR>CR 2.97"
Willingness for 5.29 3.59 4.80 2.80 4.57 3.12 W>I 37.39""
Future collabora-
tive work
" ""
p < .05; p<.01
Warm-heartedness was found to facilitate open-minded discussion. Participants in this
condition were confident that they had enough openness to different positions, F(1, 114) =
11.60, p<.01, and were exploring the issue well, F(1, 114) = 7.03, p<.01. They tended
to agree and consider the other s opposing arguments, F(1, 114) = 17.90, p < .01, more
than did those in the indifferent condition.
Participants in the warm-heartedness condition, compared to those in the indifferent one,
also looked forward to the future collaborative work with the other. They rated more on
the other s leader effectiveness, F(1, 114) = 35.45, p < .01, and were confident in their
future collaborative work, F(1, 114) = 37.39, p<.01, compared to those in the indifferent
condition.
Some findings support the hypothesis on reward distribution. Participants in mutual reward
condition, compared to those in the independent reward and comparative reward ones, indi-
cated that they agreed and considered the other s argument more, although the difference was
only marginally significant, F(2, 114) = 2.27, p <.10. The t-tests follow-up comparisons
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88 N. C. Yifeng et al.
Table 2 Comparisons among different reward conditions
Mean and S.D. t value
MR IR CR MR vs. IR IR vs. CR MR vs. CR
Agree and consider the other s argument 4.95 4.45 4.57 1.91(<.10) -.53 1.52
1.15 1.21 1.06
Integrated decision 2.38 1.60 1.3 4.86"" 2.25" 7.10""
.77 .63 .56
Acceptable arguments .56 .48 .42 1.46 .84 2.28"
.24 .26 .26
Leader effectiveness 4.79 4.30 4.08 1.41 .62 2.23"
1.44 1.67 1.40
" ""
p < .05; p<.01
showed that participants in the mutual reward condition (M = 4.95), compared to those in
the independent reward condition (M = 4.45), tended to agree and consider the opposing
opinion (t = 1.91, p<.10).
Importantly, participants in the mutual reward condition, compared to those in the inde-
pendent and comparative reward conditions, were found to integrate their managers diverse
views into their decision-making. They made integrated decisions more than participants in
independent reward and comparative reward conditions, F(2, 114) = 28.74, p <.01. The
t-test comparisons indicated that participants in the mutual reward condition (M = 2.38)
made more integrated decisions than those in the independent reward condition (M = 1.60,
t = 4.86, p<.01) and in the comparative reward condition (M = 1.30, t = 7.10, p<.01).
Participants in the comparative reward condition (M = 1.30) made less integrated decision
than those in the independent reward condition (M = 1.60, t = 2.25, p<.05) (Table 2).
Participants with mutual rewards, compared to independent and comparative ones,
reported more acceptable arguments, although this difference was only marginally signifi-
cant, F(2, 114) = 2.49, p <.10. Result from t-test comparisons showed that participants
in the mutual reward condition (M = .56) accepted more diverse arguments than those in
the comparative reward condition, (M = .42, t = 2.28, p<.05).
The participants in the mutual reward condition also appreciated the other s leader effec-
tiveness more than those in the independent and comparative reward conditions, F(2, 114) =
2.97, p < .01. The t-test results showed that participants in the mutual reward condition
(M = 4.79) regarded the other as an effective leader more than those in the comparative
reward condition (M = 4.08, t = 2.23, p<.05).
5 Discussion
Researchers have focused on identifying the conditions and dynamics under which managers
and employees can negotiate their differences, but fewer studies have examined when man-
agers and employees have a different cultural background (De Dreu 2004; Friedman et al.
forthcoming; Walton and McKersie 1965). Results of this study support the reasoning that
foreign managers, by communicating warm-heartedness and structuring mutual rewards, can
negotiate integratively in China. Warm-heartedness was found to induce employees to believe
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Effects of warm-heartedness and reward distribution on negotiation 89
that they had a cooperative relationship, discuss their manager s opinions open-mindedly, and
become confident in future collaborative work with the manager. Structuring mutual rewards,
compared to independent and comparative rewards, was found to encourage employees to
integrate their managers diverse views into their own thinking and decision-making and to
believe that their leader was effective.
5.1 Warm-heartedness
Findings further support that Chinese people value warm-heartedness; expressing warm-
heartedness appears to communicate personal support and a desire to develop a cooperative
relationship (Bagozzi et al. 2001; Greenberger and Chen 1996; Greenberger et al. 2000).
Chinese people appeared to believe the expression of warm-heartedness was both credible
and confirming, even though communicated by a foreigner.
Although it had a range of positive, strong effects on the employees relationship with
their foreign managers, warm-heartedness was not found to affect employee integration of
the foreign manager s ideas into their decision-making. Previous research had suggested that,
by developing a cooperative relationship to discuss opposing positions, warm-heartedness
would result in integrative decision-making (Tjosvold 1998). It may be that warm-heart-
edness also communicated that the foreign manager was very open toward the employee s
position as well as the employee as a person. Employees may have thought that the warm-
hearted foreign manager, even though proposing no compromise, would eventually accept the
employee-oriented decision as reasonable. Employees with indifferent managers, although
they did not have a cooperative relationship, may have concluded that they should make at
least a somewhat integrative decision so as not to alienate the indifferent foreign manager
further. Future research is needed to investigate this speculation.
5.2 Reward distribution
As expected, the distribution of rewards was found to affect the integrativeness of employee
decisions. However, it was argued that mutual rewards would encourage such decision-
making by developing strong, cooperative relationships with employees as they disagreed.
However, employees in the mutual reward condition, compared to those in the independent
and comparative reward conditions, did not indicate significant higher levels of cooperative
relationships nor were they confident in future collaborative work. Perhaps employees in the
mutual rewards condition assumed that combining their ideas with the managers was more
consistent with the mutually responsive practices within the group, even if they did not have
a particular close personal relationship. Future research is also needed to investigate this
speculation.
Participants understood the mutual rewards induction and reacted differently than did those
in the independent and comparative rewards. However, participants did not seem to distin-
guish much between the independent and comparative rewards. Employees in both reward
conditions reported low levels of cooperative goals and integrative decision-making. It seems
that, although independent and comparative reward distributions can be distinguished theo-
retically, they can easily be responded to quite similarly. These results are consistent with
research that independent and competitive goals are highly related, as if people find them
compatible with each other (Stanne et al. 1999).
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90 N. C. Yifeng et al.
5.3 Interaction effects
It could be argued that expressing the emotion of warm-heartedness and sending the cog-
nitive information of the reward distribution could have resulted in interaction effects. For
example, Chinese people with their relationship-oriented culture would have been open even
when their rewards were independently related provided that they believed their manag-
ers was warm-hearted. However, the analysis yielded no statistically significant interaction
effects.
Results rather indicate that expressing warm-heartedness and structuring rewards com-
plement each other. By both expressing warm-heartedness and structuring mutual rewards,
foreign managers can strengthen their overall quality of their discussion with Chinese employ-
ees, their leader effectiveness, and encourage Chinese employees to incorporate their ideas
into their thinking and decision-making.
5.4 Cross-cultural research
Cross-cultural researchers have relied on comparing differences across samples drawn from
different countries and regions. Although this study directly examines the interaction between
culturally diverse managers and employees, results do have some tentative implications for
cross-culture research.
Indeed, results may seem to contradict traditional assumptions that Chinese people empha-
size harmony and avoid conflict (Bond and Lee 1981; Ho 1994, 1975; Hwang 1985; Redding
and Ng 1982; Triandis et al. 1990). Their collectivism leads them to be hesitant about engag-
ing in aggressive interaction that may communicate a lack of respect for others (Kirkbride
et al. 1991; Tse et al. 1994). Findings indicate that, although it may be that Chinese people
prefer to avoid conflict overall, Chinese people can discuss opposing views with their foreign
manager openly and integratively, when given the opportunity and facilitative conditions are
developed.
This study provides an example of how experiments with random assignments can be
used in cross-cultural research. Important cross-cultural studies have used experiments to
develop behavioral data but typically have compared samples drawn from different cultures
(Tinsley 2001; Tinsley and Pillutla 1998). Without random assignment though, the results
do not provide high internal validity in that age, experience, and other differences between
the samples are reasonable alternative explanations for the observed differences. This exper-
iment randomly assigned Chinese people to different conditions and then had them discuss
with foreign people serving as confederates. Although this kind of experiment has its own
limitations, especially in terms of external validity, it provides a model for developing find-
ings with high internal validity that then can be investigated with surveys and other methods
for generalizability.
5.5 Limitations
This study provides experimental support for the hypotheses on the dynamics and outcomes
of warm-heartedness and structuring rewards. The sample and operations of this study, of
course, limit the results. Discussants had positions that could be integrated. Participants
were students and had a shorter time perspective and fewer tangible outcomes involved
than most organizational members. Inferences to organizations in the marketplace should be
drawn cautiously. The dependent measures were self-reported and could be subject to social
123
Effects of warm-heartedness and reward distribution on negotiation 91
desirability effects. A few results did not quite reach the traditional standard of .05 signifi-
cance level.
Druckman (2005) has argued that the most effective way to overcome methodological
weaknesses is to test ideas with different methods. His examples of multi-method research
designs show that the weaknesses of laboratory experiments can be offset by the strengths of
surveys or field studies if both are included in the research. With regard to these hypotheses,
generalizability can be evaluated by conducting field studies in Chinese organizations. It can
also be evaluated by conducting similar experiments in other cultures. This would go a way
toward establishing the extent to which these findings on warm-heartedness and reward
distribution are culture-specific.
5.6 Practical implications
In addition to developing theoretical understanding, the hypotheses, if they can continue
to be supported, have important practical implications for promoting effective negotiations
and leadership across cultures, especially in China and perhaps other collectivist cultures.
Compared to the many studies on the value of leader relationships (Deluga 1998; Graen and
Uhl-Bien 1995; Howell and Hall-Merenda 1999), few studies have investigated how effec-
tive relationships between leaders and employees can be developed, especially when they are
culturally different. Collectivist values tie people together by developing in-groups but also
wall others into distant out-groups (Leung 1997). Observers have noted that in comparison
with Westerners, Chinese have a much stronger tendency to divide people into categories and
treat them accordingly, where they trust and assist their in-group members but ignore and
dismiss out-group members (Butterfield 1983; Hui and Graen 1997). Considering a leader
as out-group, which would appear to be particularly easy for foreign managers working in
China, can be very disruptive of joint work.
Although not having access to traditional ways to develop relationships, foreign manag-
ers can communicate warm-heartedness and structure rewards to develop their negotiations
and relationships with Chinese employees. Warm-heartedness is not necessary to develop an
effective leader relationship, but results suggest the value of foreign manager s expressing
warm-heartedness to Chinese employees. Foreign managers can be trained to communicate
their interest in listening to the problems and difficulties faced by employees. They can ask
questions and convey their intent not to harm the employees. In addition, they can learn the
nonverbal skills of communicating their interest in listening to the workers problem through
eye contact and show to the workers their warmth through smiling, leaning forward, and
using a soft voice and open gestures.
Structuring mutual rewards can also be useful for negotiations between foreign managers
and Chinese employees. Managers communicate that they want to share the credit when they
solve problems together. Then they reward employees as well as themselves when they work
together and find mutual agreements to solve a problem. Group bonus and profit sharing plans
appear to be human resource management practices that structure mutual rewards (Hanlon
et al. 1994).
The findings of this study would appear to be more easily generalized to China and other
collectivist countries. But it may be that warm-heartedness can promote negotiations between
managers and employees in other settings as well.
Increasingly in the global marketplace, managers are called upon to lead employees from
a different culture. This study responds to recent calls by cross-cultural researchers to inves-
tigate directly the interaction between diverse people (Bond 2003; Javidan et al. 2004; Smith
2003) and used an experiment with random assignment to conditions to do so. This study s
123
92 N. C. Yifeng et al.
results suggest that warm-heartedness and mutual rewards together provide a basis for effec-
tive negotiations, decision-making, and leadership by foreign managers in China and perhaps
in other collectivist countries as well.
Acknowledgements The authors thank their research assistants from Lingnan (University) College at Sun
Yat-Seng University for their able assistance in conducting this study. They also appreciate the financial support
of the Research Grants Council of Hong Kong, RGC Project No: LU3404/05H to the second author.
Appendix A
Scales and items
Cooperative goals
1. To what extent do you and the supervisor have compatible goals?
2. To what extent do you take interest in what the supervisor wants to accomplish?
3. To what extent do you and the supervisor want each other to succeed?
4. To what extent are you pleased when the supervisor succeeds?
5. To what extent do you believe the supervisor s goal attainment contributes to your
achievement?
Interpersonal attraction
1. How much do you like the supervisor?
LMX relationship
1. To what extent did this interaction strengthen your relationship with the supervisor?
2. To what extent did this interaction make you believe the supervisor care about the work
problems and needs of yours?
3. To what extent did this interaction help you believe the supervisor recognize your po-
tential?
4. To what extent did you believe the supervisor is inclined to pool his available resources
to solve the problems?
5. To what extent did this interaction help you have confidence that the supervisor know
about your capability?
6. To what extent did this interaction make both of you are satisfied with each other.
Help each other
1. How much were you willing to help the supervisor improve his position?
2. To what extent is the supervisor is willing to help you improve your position?
3. How much were you willing to help the supervisor improve his position and chances?
4. How much was the supervisor willing to help you improve your position and chances?
Openness
1. How open were you to listening to the supervisor s arguments?
123
Effects of warm-heartedness and reward distribution on negotiation 93
Explore the issues
1. To what extent did you explore and bring out disagreements with the supervisor?
2. How much do you feel you understand the supervisor s position and arguments?
Agree and consider
1. To what extent did you try to find a solution accepted by both parties?
2. To what extent did you agree with other s position and argument?
3. To what extent did you think that the supervisor s position and argument is workable?
4. To what extent did you integrate the opinion of both parties?
5. How much did you consult the supervisor s opinion?
6. How much did you try to understand the reasonable components of the supervisor s
argument?
Leader effectiveness
1. How much did the supervisor performed his/her leader roles appropriately?
2. How much did the supervisor exercised his/her responsibilities well as a leader?
3. How much are you satisfied with the supervisor s overall effectiveness as a leader?
4. To what extent did this interaction help you believe you can work effectively under the
leadership of the supervisor?
Future collaboration
1. How much did this interaction with the supervisor make you more confident that you
could work successfully with him in the future?
2. How much did this interaction make you hope to work with the supervisor in the future?
3. How much did this interaction make you hope the supervisor to help you recognize and
correct your mistakes in the future?
4. How much did this interaction make you want to seek opportunity to work with the
supervisor in the future?
5. How much did this interaction make you pleased if the supervisor will take in charge of
the employees in the future?
6. How willing are you to work with the supervisor in the future?
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