4. Conclusion
Cross-cultural negotiation is a continuous and pervasive phenomenon in the modern business environment because it plays a significant role in the formation, management and evaluation of inter-organizational alliances (Kumar, 2014). The question we posed was twofold: whether and how the negotiator’s power influences the negotiation outcome for the explorative– exploitative duality of the purpose, and how national cultural distance mediates these relationships. The focus of this question is negotiation for the formation of an international alliance. An MOU (memorandum of understanding) signed by two parties is an instance of a successful negotiation for the formation of an alliance. We used anecdotes from real settings and related literature to support the analysis that led to the formulation of the model shown in Fig. 1. The theoretical development of the model takes the following form: ‘why Z for Y in the X!Y relationship’ (Whetten, 1989, 2009). In the negotiation process, the power–purpose relationship is the X!Y link, and the cultural distance is the Z in this link. This study identified several ways in which cultural distance affects and reflects the power–purpose relationships. First, the negotiator’s power influences the outcome of the purpose-based negotiation. Propositions 1 and 2 project these relationships. On the opposite side, the P0 link suggests that the executive’s power does not change the culture. Culture is pervasive and somewhat unique to every nation, and it shapes the identity of the negotiator. Second, national culture influences the power–purpose link more negatively than it does positively. Nevertheless, we do not suggest that cultural distance can never induce a positive outcome. The anecdotes and literature support the direction of the model. Third, the intermediate influence of cultural distance partially influences two types of powers and two types of purposes.