Joint Venture Negotiations in China - Essay Example

? Year: Introduction English Anthropologist Edward B Taylor defines culture as a complex whole which includes knowledge, belief, art, law, morals, custom, and any other capabilities and habits acquired by man as a member of society. It is a way of life of a society; what they do, think and feel. Every individual has to learn the culture of the society he or she is living in so as to live harmoniously. Characteristics of the Chinese culture, how they differ from the American and how they affect negotiation They place very high value on relationships. This culture highly values personal relationships to an extend that, it is the basis on which long-term business relationships are formed. They get involved in an individual’s personal live prior to doing long-term business with them. At a social level, formal and informal relations make a big difference when it comes to business relationships. The Chinese culture would rather one pretends than to express an honest opinion or individualism if it will hurt or discredit another person’s feelings. Emotions are a private matter not to be shared in public. At social functions, there are certain rules that have to be observed failure to which a guest is deemed as disrespecting to the host. This etiquette at social functions control interpersonal relationships. Universally, smiling and laughter are used to express pleasure and humour but the Chinese culture also uses this as a response to negative occurrences. In the American culture, long-term business relationships are not necessarily determined by how well people know each other’s personal live. As long as objectives of both entities are met, business proceeds. At the social level, Americans freely express their emotions, opinions and individualism unlike the Chinese. Smiling and laughter in the American culture is for expressing humour and pleasure and sad emotions are also freely expressed. The Chinese businessmen place a great importance on personal relationships and social traditions when conducting business with one another unlike the Americans who place great importance on business issues. The political environment in China is not so friendly to foreign investors. Some political measures in place such imports being controlled by the government, their courts not enforcing contracts and holding back tax preferences for foreign investors delay businesses and cause mistrust to the foreign investor. In conclusion, culture is important since it allows members of a given society to function with one another without the need to negotiate meaning at every moment. Negotiations between Electrowide and Motosuzhou failed because four key criteria for the selection of a Joint Venture partner were not met as outlined below. Strategic complementarily Strategic objective is broad goal that an organization must attain for it to be successful in its strategy. Strategic complementarily implies that the strategies of the two organizations must complement each other. Electrowide’s strategic objective is to become a major, aggressive player in Asia. On the other hand, Motosuzhou’s objective is to team up with a foreign venture that will harmoniously work with government’s policies. This means that the ultimate direction comes from the municipal. This doesn’t complement Electrowide’s strategy and therefore, negotiations on a joint venture cannot work. Compatible operating policies Policies are rules and guidelines adopted by an organization to reach its long-term goals. They influence and determine all major decisions and actions in an organization with all activities taking place within the boundaries set by them. The two entities differed in their employment policies. For example, China still discriminates against women workers by placing them in lower positions with little wages which the counterparts, the U.S, have affirmative action policy where they don’t discriminate. Communication Communication is the sharing of ideas and information from a sender to a receiver. For it to be effective, a message must be received and understood by the receiver in the manner the sender had intended it to be. Misunderstanding may occur due to several barriers such as language, cultural, psychological, and attitudinal. Language barrier occurs when the sender and receiver don’t speak the same language and therefore, end up not understanding each other. An example is the Chinese team has a poor command of the English language and had to use an interpreter. According to the writer of the case, the mastery of the Chinese language quite difficult and this is a major communication barrier especially at the workplace. Cultural barrier is witnessed since different cultures differ in norms of their social interaction and how they express emotions. For example, more than half of the Chinese workforce is male dominated and occupy majority of leadership positions. Meaning women are looked down upon and are not involved in decision making. This is what Barb Morgan of the American team experienced when she was asked not to participate vocally in the negotiations. On psychological barrier, the psychological state of the receiver influences how they decode a message. For example, each member of the American team was going through a stressful stage in their lives. Barb was undergoing a divorce, Tom would miss his daughter’s graduation ceremony and Mark was down with flu. These personal worries and stress cause personal concerns which affect how one receives a message compared to when they are not stressed. Finally, attitudinal barrier is experienced because of perceptions of either the sender or receiver of a message. This causes one to be prejudiced and make assumptions instead of hearing exactly what message is being communicated. Trust Dr. Duane defines trust as the state of readiness for unguarded interaction with someone or something. Ai Hwa, the deputy director of Motosuzhou and a well respected member of the company, was sceptical about Electrowide’s concessions. He concluded that all Electrowide wanted was to have greater control for itself in the local Asian market. Trust is absolutely essential in any meaningful long-term business relationship without which, it is difficult to make a deal between negotiating parties. Below is an evaluation of the American team. Tom Sherman He has the qualifications coupled with a rich experience in the field. Tom’s interpersonal skills are good as seen from the bonds he developed with top executives of the company. The fact that he stayed in the same organization for 32 years, shows that he is a patient person. His shortcoming was in his limited international experience. Barb Morgan She has both academic and professional qualifications. Barb had proved herself career wise which had earned her a permanent position in the company and was almost completing an international assignment. Despite her qualifications, she had sought this overseas assignment as a way of hiding the pain caused by her divorce. Mark Porters Despite his young age, Mark had achieved a lot in his career and academics within a span of 6 years. Within 1.5 years, he had rotated in various departments of the organization. His strength of being a self starter and a drive to excel no matter the cost would also be a weakness on the flipside. This personality is very poor in interpersonal skills and quite impatient. For example, Mark was not interested with the social meetings organized by the Chinese team. He viewed them as a waste of time. The following strategic alternatives would be useful to Tom in current negotiation process and for future international negotiations. Separating people from the problem This will help him to focus on getting solutions of their differing opinions as opposed to attacking the opposing Chinese and their culture. His perception will change, opening his mind to a realm of possibilities without restrictions, thereby enabling him to untangle the negotiations. Plan and prepare for negotiations before the actual negation Gather as much as possible information about the other entity prior to the negotiations. This information includes, but not limited to, the party’s negotiations strategy, their objective and its culture that may hinder or enhance negotiations. As part of the preparations, select a highly qualified and disciplined team that will establish good relationships. Be flexible but firm Make a decision of how far he will push on the negotiations and how much are he is willing to let go. This helps to determine a final position. It is wise to have a flexible strategy and adjust it as the game plays itself out since one cannot know everything before the first meeting. In conclusion, any kind of negotiations requires the involved parties to approach the negotiating table prepared to give and take; and also have a position that they cannot go beyond. There are two approaches to negotiation; the adversarial approach (win-lose) and the partnership approach (win-win). Partnership approach is the best because it leaves both the parties involved as winners after the whole exercise. References Thompson, L 2001, The Heart and Mind of the Negotiator-2nd Edition, Prentice Hall, Business Publishing Lewicki, JR & Litterer, JA 1985, Negotiation, RD Irwin Publishers Williams, G 2007, Negotiate Afraid, 'know' More: How to Negotiate Your Way to Success, AuthorHouse Publishers, Indiana Harvard Business Essential, 2003, 'Negotiation' Harvard Business School Press Tway, CD, Jr 1993, Dissertation: A Construct of Trust http://www.skillsyouneed.co.uk http://www.easipol.co.za http://www.businessdictionary.com Read More