Strategic code-switching in IB negotiations: How confessional institutions shape negotiation strategy in Lebanon

Abstract

Dominant culture-centric models in international business (IB) negotiation research often overlook the influence of intra-national religious diversity and its interplay with specific institutional contexts. This study extends these models by examining how religious values and a powerful, faith-based institutional system jointly shape negotiation strategy. Drawing on Neo-Institutional Theory (NIT), this paper analyzes qualitative data from 40 in-depth interviews with senior Lebanese managers from diverse religious backgrounds (Muslim, Christian, and Druze) with extensive IB negotiation experience. The study reveals that Lebanese negotiators navigate a tension between two competing institutional logics: a “logic of universal religious ethics” (derived from faith values like honesty and fairness), which fosters a preference for integrative strategies, and a “logic of sectarian pragmatism” (derived from Lebanon's confessional system), which encourages more distributive tactics. Managers engage in “strategic code-switching,” selectively deploying these logics based on the negotiation context (intra-Lebanon vs. cross-border), the dyadic pairing (e.g., intra-faith vs. faith-secular), and the deal structure (e.g., international joint ventures (IJV) vs. sales). This dynamic is most salient in the critical pre-negotiation phase of partner selection and trust-building. This study advances IB negotiation theory by providing a granular, institutionally-embedded conceptual model of negotiator behavior that moves beyond monolithic views of culture. It contributes to NIT by empirically illustrating how actors strategically navigate conflicting logics at the micro-level and enriches the study of religion in IB by specifying the mechanisms through which faith shapes strategy. Practically, the findings highlight the need for managers to develop deep institutional acumen to succeed in complex, multi-faith markets.