Cross-Cultural Negotiations between the Him and Her Australia and Beijing Fashion Manufacturing - Assignment Example

Part According to (Spoelstra and Pienaar, 1999), negotiation is described as a situation where two or more people engage in a discussion that is meant to reach a consensus or agreement over something on the basis of common understanding of the issue. Negotiation is also used as a vehicle to solve conflict among the members of the society where solutions to a problem can be sought and agreed upon by the feuding parties (Spoelstra and Pienaar, 1999). In the event that people have reached a consensus and agreed to iron out their differences, then long lasting solutions can be put in place which marks the success of the negotiation process. Against this backdrop, common understanding is not only limited to what the members achieve or share in common but what they can be as a single entity (Spoelstra and Pienaar, 1999). Exchanging information through communication is an integral part of the negotiation process and this information is generated through different methods. The nature of methods used in exchanging information in the negotiation process depends on the relationship of the negotiating parties where in some cases this relationship can be terminated where consensus is not reached or prolonged when it has been reached (Reardon, 2004). In order to test the concept of negotiation, simulations that were conducted between week seven and eleven focused on three main areas highlighted below. The Him and Her Australia (HHA) is one of the key focus area. HHA is regarded as an upmarket store specialising in retailing fashion clothes in Australia and is comprised of a prestigious network of about 80 chain stores. The company worked together with another Italian designer shop where the young crop designers from Sydney have managed to add some flavour and HHA has emerged as a force to reckon with as this has greatly contributed to its success. HHA has also underscored to collaborate with Beijing Fashion Manufacturing (BFM) where the companies have seen a reduction of production costs which in turn has lowered the prices while at the same time increasing the profit margins. In order to investigate if a common ground can be reached between HHA and BFM to establish a platform where they can share similar agreement in the process of manufacturing clothes for summer clothes for the 2009 and 2010 seasons, a simulated e-mail negotiation was conducted between HHA and BFM. The participants mainly comprising students were grouped into eight different categories and the groups were split into two parts where the other group represented BFM and the other HHA in order to promote dialogue meant for negotiating a deal between the two companies. Communication between the two groups was strictly limited to the use of e-mail from different computer labs. This exercise was stage managed in a bid to illustrate a mock-up business environment that is characterised by the distance between China and Australia and how in real terms the companies can enter into negotiations. It was unanimously agreed by all the partners that the market in China where BFM operated was a favourable market for Australian outfit and an understanding was reached that BFM ought to represent HHA in the market in China. The groups also reached an agreement that BFM should supply the implements that were required in manufacturing of clothes by HHA as a way of trying to minimise the chances of the two companies competing against each other. The parties also made an agreement that BFM staff was supposed to receive training by HHA as part of showing appreciation for all the services rendered by the company from China since an agreement reached was meant to be beneficial to both organisations through the all encompassing negotiation process which was meant to integrate all the parties. Integrative negotiation is described as a win-win type of negotiation process where all the interested parties involved in the deal will be earmarking to benefit from the deal (Spoelstra and Pienaar 1999). Part 2: In preparation for the final group of simulation that was held on 19 November, a lot of considerations underpinning the theoretical framework were taken into place by the group. The group used the principle that the process of negotiation is meant to be a yardstick to ensure that conflict can be solved on the basis of the principle that negotiation is a problem solving technique where mutual agreement can be reached (Horst 2007). The group began the negotiating process by sharing the ideas as well as discussing contentious issues that were of particular concern so as to be better positioned to deal with unexpected occurrences in the simulated negotiation process. The group discussed in detail the important ideas that would guide the final process of the negotiation simulation. The discussions were also meant to make every thing clear in order to create common understanding among the members of the group to behave and act as one single entity where the following was agreed: Success table for Fernet Brio to be treated as confidential. Closing of mines so as to reduce the workforce 30 mines were to be closed reducing about 2000 jobs - 20 points Need to train engineers from China It was already projected that only a limited number of about 1000 was needed in surface mines and they would require special training and skills to empower their performance in order for the joint venture to be viable. It was also noted that 100 Engineers required training in safe mining technology - 5 points. It was suggested that the group will offer the first 50 engineers pecks that were meant to cover the costs for their training while the remaining 50 will be trained internally as a way of ensuring that production was not going to be affected or stopped. The costs were expected to be low for both sides. Need to finance the upgrading of the existing railway infrastructure The company was at first offered 10% for the development of the railway but they refused the offer and it was later offered 0 million AUD – 20 points. This would lower investment and lower risk and in turn the company would be able to achieve better profit margins that would ensure positive growth and development without direct control at the beginning operation. Splitting of profit Fernet Brio 50% - Zijan Mining 50% - 0 points The team comprising of the negotiating members granted a nine member delegation different roles to play instead of having each individual play a role. Instead it was suggested that two people from the group will play the roles for example: Environmental sustainability officers Finance officers OH&S officers HR officers One was supposed to be a group leader in this case. The negotiating teams realised that the model that focused on competitiveness would be appropriate in stimulating a business related agreement. It was also noted that problem solving negotiation technique would be more ideal for problem solving and any other issues that may arise during the course of negotiation. The group also noted that the concept of culture is very important in the negotiating process. According to Horst (2007), culture is seen as a very effective vehicle that often influences the way people think and behave, it also shapes their reasoning and ways of communicating in their daily lives. Thus, the groups involved in the negotiating process sought to incorporate diverse views from different cultural backgrounds characterising the members. Consideration was taken to observe how culture affected the negotiating groups in the process. It can be noted that the success of negotiation is mainly determined by the culture of the participants (Reardon, 2004). Part3: The negotiation process was based on a number of issues highlighted below. 1. Structuring the groups negotiating to meet the scenario A lot of considerations were taken into account when choosing the members of the negotiating team as there was need to have as small groups as possible which was easier for such a group to reach an agreement. The team was also in other activities such as cross-cultural negotiations that involved issues such as prices for acquisition and other related issues to the negotiation process. It was generally observed that large groups will contribute to the complexity of the issues involved hence the need for experts to be part of the process. 2. Objectives of the negotiation There is need to identify major objectives of the issues put on the negotiation table. It is therefore important for the team to prioritize pertinent issues such as government contractual obligations, of management systems as well as cost analysis programmes based on appraisal of company audit reports (Reardon, 2004). It was important for the team to address issues such as competition in order to come up with the best strategy of negotiation that does not adversely affect the other parties. 3. Offeror’s approach Through the use of Offeror’s approach, it was observed that the process of negotiation was likely herald some changes to the agenda hence the negotiating team underscored to consider quite a number of issues which included the following: Checking previous record of proposals, the contracts, price negotiation memos and different other related issues. Issues such as bargaining of power through increasing competition were discussed as well. Thus, the concept of bargaining power is mainly concerned with either increasing competition or avoiding it such that the organisation will remain viable depending on the available time for the whole process of negotiation (Reardon, 2004). The group was guided by various factors that characterise the human being such as cultural values, human nature and personality in order to ensure success of the negotiations. These three attributes are closely related as diagrammatically illustrated below. Figure 1: Levels of uniqueness in human metal programming attributes used in negotiation Source: Horst (2007) The above model was used to structure the negotiation program so as to be better positioned to enhance level of interaction, promote positive communication in a bid to make informed decision making process. As illustrated in the diagram above, human nature is universal and can be learned by anyone hence the need to incorporate values peculiar to a group of people. It can be seen that culture is dynamic and is also learned where it can influence the behaviour of people involved in the negotiation process. Basically, the two influence personality which apparently forms the foundation upon which people in a negotiating group can agree or disagree. Part4: In the Negotiation Simulation, it was discovered that our group members were all flexible besides the fact that they speak Chinese which at times made it difficult to understand. However, each member of a group had a very important part to play in the discussion with other groups where for instance, my part was about discussing the financing of upgrading the existing railway infrastructure which was done by other group members. Though upset by the development, this showed that the relationship was not cordial which was not good for the group. Although, I am not quite satisfied with my participation at this stage, I am however, willing to be part of the negotiating team and positively contribute more. I have come to realise that I have been dealing with people with strong personalities hence the need to take note of what they say. Little progress was witnessed during the negotiation progress since each team wanted to get the best deal out of the whole initiative. The main points of contention were the need to split the profit and upgrade the railway infrastructure as well as failing to agree on the number of engineers required. However, my team and the Chinese team both believed that there were chances of making a good deal and agreed on the following: To close 30 mines $0 million grant to upgrade the railway training 100 engineers a profit distribution of 50% for our group and 50% for Chinese group The following points were taken into consideration in order to make a good agreement: It is important to understand the impact of Chinese culture It was realised that the Chinese negotiators are more flexible (Zhenzhong,2006). Focus was on cross-culture communication. Understanding the Chinese culture gives the leader more power than understanding the western culture (Luthans&Doh,2009). The Chinese showed more collectivism (Luthans&Doh,2009 ). From this experience, it was realized that it is very important to be an effective member of a group. This is because of the fact that being an effective member of a group would make it easier for the members to freely share ideas and views and seek help where there is need. References Horst P.(2007)Cross-cultural negotiations, viewed 5 August 2009, http://www.au.af.mil/au/awc/awcgate/awc/horst_crosscultural_negot.pdf Reardon, K.( 2004), The skilled negotiator: mastering the language of engagement, John Wiley and Sons, New York. Spoelstra, M and Pienaar W. (1999), Negotiation: Theories, Strategies and Skills, 2nd Edn, Juta Academic, New York. Lewicki, Barry, & Saunders. (2007). Strategy and Tactics of Distributive Bargaining. In Essentials of Negotiation. The McGraw-Hill Companies. Luthans, & Doh. (2009). The Meanings and Dimensions of Culture. In International Managment:Culture, Strategy,and Behavior. The McGraw-Hill Companies Zhenzhong, M. (2006). Negotiating into China: the impact of individual perception on Chinese negotiation styles. International Journal of Emerging Markets . 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