Cross-Cultural Negotiation and Management - Case Study Example

Name Institution Course Date Individual Reflective Journal *** Cross Cultural Negotiation and Management Table of contents Introduction.............................................................................................................................3 Part 1: the three negotiations..................................................................................................4 Part 2: group discussion and the way forward.....................................................................7 Part 3: the negotiation plan.....................................................................................................10 Part 4: the negotiation process...............................................................................................11 Conclusion...............................................................................................................................12 References................................................................................................................................13 Introduction Negotiation is defined as a process that involves two parties. The two parties usually engage in a dialogue aimed at reaching a compromise, resolve a misunderstanding between the two parties or for one party to acquire advantage over the other team (Thompson, 2005). The two parties may also be negotiating in order to come up with a course of action. In negotiation each party wants to gain from the process and to end up getting what they wanted. Negotiations therefore, are a compromise between the two parties, where everyone gets a win- win situation. Negotiations are known to occur in businesses, amongst nations, in government and even in personal matters. Part one: the three negotiations. Our group was involved in six negotiations, but I will reflect on three out of the six. The first negotiation involved a buying a car from an Australian seller. The car model was a Holden commodore 2003. This negotiation proved to be very difficult because we were new in Australia and had little knowledge of the people and their culture. We are a group of international students in Australia. In our negotiation with the seller, we had to first understand the Australian culture; this would be helpful for us as we would avoid conducting our negotiations in a way that was not pleasing to the seller (Kumar, 1996) The car was being sold at a price of $12500. Our group though was looking to buy the car at$ 10000. This negotiation was a distributive negotiation, which means one party was giving and the end result is a win loss situation. Our main challenge in this negotiation is that we had to negotiate the price down to $ 10000 from $12500. To do this we researched on what the other sellers were offering. In negotiations, especially the distributive type, the only information one should give to the seller is that that shows that you as the buyer has other alternatives at hand (Thompson, 2005). We therefore, tried our best to show that, that car was not our only option; we had other places to look. We also showed the seller that we had little interest especially because the car consumed a lot of fuel and the only price we could offer was $10000. This worked because the seller lowered the price to $10500. The second negotiation was between an environmental group and a local community. I was very passionate about it because it involved the environment and helping a local community. We were aiming at developing the Hinchinbrook island national park. We were aiming at making the national park attractive to tourists. This was to be accomplished by building a bridge, a resort and a restaurant. We also wanted to develop the transportation system of the community so as to make it easier for tourists to access the national park. Our main goals as a group were to improve the economy of the area, and creating an eco-friendly environmental. The benefits the local community were to get were the creation of job opportunities and favourable environment. Energy was to be obtained from the sun; this would reduce amounts of pollution to the environment. Our group was able to learn the importance of communication and sharing when involved in integrative negotiations. As a result of the negotiations we were able to reach an agreement. Our third negotiation was, our group was acting on behalf of our customer. Our task was to negotiate for the best offer for our customer Page Turner. Our client was an author, who was looking for a publishing house to publish their latest novel. In this negotiation we were acting as an advocate. In advocate approach, the negotiator has to have the adequate skills of negotiating. He or she must aim at getting the most pleasing results for their client. It is important to determine what level the publisher is willing to go and adjust to their demands while also pushing for your clients. One must make sure they do not loose the deal altogether. We were quite successful in our role as an advocate, although it was difficult because of the disagreements. The clients were disagreeing on the price to be paid. Eventually we came to an agreement, this was done by showing the publishing house-Best Books, the amounts of profits they could make. Our group was able to learn about the power of negotiations and the compromise that parties have to make to get a win-win situation for all. Part two: group discussion and the way forward Our group which consisted of four members all from Saudi Arabia held a discussion afterwards. In the discussion, we were able to discover that we had not properly organised who was to talk and at what time they were to talk during the negotiations. This resulted to two or three people talking at the same time. This was negative for our part as the other parties could see we had not effectively prepared for the negotiations. We also poorly managed our time, we did not understand the other parties' culture and we did not properly delegate the tasks that were at hand (Hofstede and Hofstede, 2005). The outcome of the group meeting was that for our future negotiations proper planning and sharing of duties should be done. We had now understood the process of negotiation and seen our previous shortcoming. Our group now was well equipped for the next negotiation. This was a negotiation for two companies to venture into a contract. Our group was the Fernet Company, while the other group was a Chinese company called Datong mining companies. For these negotiations, we prepared adequately. The first step was that we had to realise that we were dealing with a company from a different country; therefore we had to take their culture into consideration. Our research covered the statistics of mining in China; we also researched on the profits that could result from the venture and the training requirements for engineers to the mine. All this work was shared amongst the group members. We as a group created a company, where we gave each member titles. Then, we set the targets for our company, while including the incentives we were going to present to the other company to persuade them to join our venture (Minetti, Puri & University College Dublin, 2008). We decided to share profits in the ratio of 58:65. The lower ratio was for our company while the Chinese company got the higher ratio. Our company also offered to repair the existing railway, by financing its reconstruction. Additionally the group members were able to develop protocols that would be followed if the venture was to be successful. They suggested the use of uniforms, business cards and a file system. The biggest challenge that we faced in these negotiations was the cultural difference between our company and the other company. The problems caused by cultural differences in negotiations are language, behaviour, values and the way of thinking (Hofstede and Hofstede 2005). If the differences are not properly addressed then the negotiations will not be successful. We as a group considered the following differences; we had to avoid the use of number four as it is considered unlucky by the Chinese. Some members learnt the language and what they considered crucial in their culture. Also according to the face negotiation theory, the identity of people's culture is represented by their faces (Trompenaar & Hampden-Turner, 2005). We should therefore take different culture seriously to avoid insulting people on their faces. Part 3: the negotiation plan for our group Our negotiation plan was to begin by introducing our company, our vision and our targets to the other company; we were then to give them a chance to introduce themselves briefly. The next strategic step was to introduce the project, which was to demolish and close their mines. We then showed them what our research had discovered that their current mines were killing more of their people. If we were to bring in our technology, we would save many lives and would still offer job opportunities even if some of their employees were to lose their jobs due to the closure of the mines. Our company would also offer the employees safer working conditions. We then proceeded to inform the other party of what we as a company were prepared to do. First we were going to train managers on our new technology. We could not train everyone because it was a new technology and we needed it to be Australian before it was duplicated by others. Second we proposed to reconstruct the railway rather than repair the one that was present. Since we were foreign in that country we could not channel lots of money to the project due to the risk involved. Third we proposed to share profits; our first strategy was to persuade them to take the lesser share while we took the biggest since we were going to invest a lot. If this strategy was not going to work we could offer them the higher profits. Part four: the negotiation process The negotiations finally took place. Our company had decided that they were going to start the negotiations, given that we were the host it would be courteous of us, but the other party surprised us by asking if they could first present their presentation. We declined to this offer because the negotiations were in our country and it was only fair that as the host we began the negotiations. We also asked for their permission to manage time. I had been allocated this responsibility of making sure that everything was going as per the schedule and that no item was taking more time than required. The negotiations then began, each party presented their PowerPoint presentations within six minutes and we moved to the meeting table to further our negotiations. We had decided to go against our plan and begin with the profits instead of the closing of the mine but this plan did not work and we stuck to the original schedule. We then proceeded to the meeting table; here negotiations on our disagreements began. First Datong Company did not see it fit to close down the proposed 30 mines. They argued that these mines were too many and could lead to the loss of 2000 jobs. If this action was taken the Chinese government would not react well and the relationship between the company and their government would be poor. After tough negotiations, our team decided to compromise and reduced the number of mines to 20 leading to 500 jobs being lost. Second the other party was not happy with the number of engineers we were willing to train; to them the number was too undersized. Our team had agreed to train 75 managers; the Chinese wanted the number to increase to 150 managers. Our group declined to add the number since we had reduced the number of mines to be closed. We argued that the two had to be equal, also there were risks involved. The other team reasons were that the Chinese government would applaud them if they created more job opportunities and their relationship would consequently improve. Third, we proposed to have financial upgrading of the existing railway. The other group asked for $ 15 million funding to upgrade the railway. On profits they wanted to get 50% of the share. We also made sure that they knew that there was no relation between the profits and the upgrading of the railway. These negotiations took time because our team asked for time so that they could consider the new developing. We came up with a new proposal, which was that we got 55% share of profits and the only finance we were able to give was $ 5 million. They too took time to discuss our proposal. It took time before they finally agreed to the proposal. Conclusion Throughout this time I have been able to learn a lot on negotiations skills. I have learnt and experienced three types of negotiations: the distributive, the integrative and the advocacy negotiations. The most important lesson though is working in a team, initially our group was not working as a team and we ended up getting negative results, but after deciding to work as a group we were successful. Delegation of duties to group members is also essential to the success of a group. I was also able to learn negotiations between different cultures and what one has to consider before going into such negotiations. This will help me in the real business world, especially when dealing with foreign and international companies. References Hofstede, G., & Hofstede, G. J. (2005). Cultures and Organizations. Intercultural Cooperation and Its Importance for Survival. Software of the Mind. 2nd Ed. London: Profile Books. The negotiations expert. (2011). Negotiation Types. Negotiation training home. Retrieved from: http://www.negotiations.com/articles/negotiation-types/ Thompson, L. L. (2005). The Mind and Heart of the Negotiator. 3rd Ed. New Jersey: Pearson Education –Prentice Hall. Trompenaar, F. and Hampden-Turner, C. (2005) Riding the Waves of Culture. 2nd Edition, London: Nicholas Brealey Publishing. Minetti, M., Puri, A., & University College Dublin. (2008). How cultural specific characteristics affect the problem solving approach in intra and cross cultural negotiations: A buyers perspective. Dublin: University College Dublin, Graduate School of Business. Kumar, R. (1996). The dynamics of cross cultural negotiations: A social cognitive viewpoint. Vaasa: Univ. of Vaasa. Read More