Asians Don’t Ask? Relational Concerns, Negotiation Propensity, and Starting Salaries

Abstract: In the US, Asians are commonly viewed as the “model minority” because of their economic prosperity. We challenge this rosy view by revealing that certain Asian groups may be susceptible to lower starting salaries. In Study 1, we analyzed 19 class years of MBAs who accepted full-time job offers in the US. At first glance, Asians appeared to have starting salaries similarly high as Whites’. However, a striking gap emerged once we distinguished between East Asians (e.g., ethnic Chinese), Southeast Asians (e.g., ethnic Vietnamese), and South Asians (e.g., ethnic Indians): Whereas South Asians started with the highest salaries of all ethnicities, East/Southeast Asians were near the bottom. This salary gap was mediated by East/Southeast Asians’ propensity to not negotiate due to higher relational concerns. Importantly, negotiation predicted higher salary for each of the three groups (East/Southeast Asians, South Asians, and Whites). In further support of negotiation propensity as a mechanism, we identified industry as a boundary condition: The salary gap was not observed for consulting jobs, where MBA starting salaries are typically standard and non-negotiable. The non-consulting salary gap between East/Southeast and South Asians was estimated to be $4,002/year, a sizable difference that can compound over career life. Study 2 found similar results in a non-MBA sample while further accounting for individuals’ bargaining power (e.g., the number of alternative offers, the highest alternative offer). In revealing the differences between East/Southeast and South Asians, this research moves beyond the predominant West-vs-East paradigm, and reveals a more complex reality underneath Asian prosperity.

Keywords: culture, negotiation

Topic: NEG   |   Format: Full Paper