Cross Cultural Negotiation and Business Success

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This work is devoted to the issues of negotiation in business. The concrete case discussed in this work has given me opportunity to apply theoretical knowledge that relates to the field of negotiation in practice. The work demonstrates how important it is to have necessary background in negotiating in order to succeed in business. The work is divided into four parts, each of which is devoted to a separate task I worked on.

Car Purchase

The practical case that we worked on was the negotiation about car purchase. Despite both sides had interest in bargain, it was necessary to discuss the price and find a compromise so that each side will be satisfied. My group was in the role of a car buyer; consequently, the task of our negotiation was to reduce the price as much as possible. We developed out strategy based on this goal.

My group was interested in a car with the following characteristics:

Automatic.
Eight months registration.
Air conditioned.
One owner.
Six cylinders.
Excellent condition.
Holden Commodore 2005.

The tentative price was $12,500; we had opportunity to work with one of the groups and discuss it. We started negotiation trying to convince a seller to reduce the price. At first, our groups were setting the good rapport. However, we expected that we would meet some resistance, which turned out to be true.

A group welcomed us and communicated in a friendly and polite manner; however, they had the purpose to keep the price on the level of $12,500; this could not be a good buy for us. Our offer was $10,000, which, in turn, did not meet their interest.

Finally, our negotiation led us to the compromise: another group offered the price of $11,250, which met our expectations, and we agreed. It was interesting experience that gave us opportunity to use our knowledge in negotiating in practice. We had a strategy that had worked well, and our team had achieved our goal.

E-Mail Negotiation

When working on this task, we had opportunity to feel how e-mail negotiation differs from that carried out in the first case. On the one hand, it is somewhat simpler, as you do not see your interlocutor and have time to think; on the other hand, you have no opportunity to get implicit response from another side, and it is difficult to influence their decision.

We fulfilled the task in the computer lab; each team had a separate computer: the way we communicated was sending e-mails to each other. My group was a representative of HHA (Him and Her Australia), and another group was a representative of BFM (Beijing Fashion Manufacturing).

The focus of negotiation was production of clothes for summer 2010-2011: we had to discuss such conditions as price, quantity and time. Our request was to:

Increase the quantity to 16,000 units;
Reduce the price.

We got the following conditions formulated by another group:

Increase the price.
Give more time.

After we have negotiated the conditions in several e-mails, we agreed on the following conditions:

Plus 5% for price.
Delivery of goods to Sydney in January annually.

Our group was satisfied with the result.

Bestbooks Publishing Company

In this case, our group was Bestbooks Publishing Company. This task was quite interesting and difficult, as it implied negotiating on several points at once, and each side had its view on each of them. Particularly, we had to work on the following points:

Number of print runs for the book.
Royalties.
Number of weeks that Paige has to promote the book.
Number of books.
Number of countries where the book will be sold.
Number of book clubs that will adopt the book.
Contract signing Bonus.
Advance.

Out task was to win all eight points; however, we were ready to make certain concessions and look for the compromise. After we and another group introduced ourselves to each other, we started negotiation. It had the following course:

Our offer was 7%, their request was 10%. Finally, we agreed that they will be given 10% this year and 7% the next year, which was a good compromise.
Contract Signing Bonus. We offered $10,000, and they requested $20,000; the difference was significant. We had to agree on $15,000, which was the happy medium for both groups.
A number of print runs for the book. This point was quite easy to negotiate: we offered another side 5 copies, which was approved by them. Another side expressed their satisfaction with the outcome.
A number of weeks that the book will be promoted by Page. Our offer was 35 weeks; another side did not have objections. Thus, the final decision was 35 weeks.
A number of books. We offered another side 6 books, which did not correspond to their objectives; their request was 3 books; our group agreed, and the final decision was 3.
Our task was to reduce the amount as much as possible; our offer was $10,000. however, another side insisted on $15,000. After negotiating, we agreed on $12,000, which was very good for us, as it was even less than the “happy medium”.
A number of countries the book will be distributed to. We offered 14 countries to another side; they said that they were satisfied with this offer, and we agreed that the book will be translated to 14 languages.
A number of book-clubs that will adapt the book. We offered another group 5 clubs, which corresponded to their expectations, and we agreed on 5 clubs.

The negotiations finished with signing the contract. Both sides were satisfied with the outcome of the negotiation.

Final Negotiation and Preparation

At this stage, we had opportunity to share our ideas and results of observation, which was very interesting. This was quite useful for all the members of the group, as we systematized and analyzed our way of negotiation; many interesting ideas were expressed.

To fulfill our final preparation, we gathered together having contacted each other face-to-face, by e-mail and by-phone; we worked in a room in the library. This time, we represented the Fernet Brio, an Australian company. Our group has 8 members, and we worked in pairs that focused on the following points:

Closing of mines- reduced workforce.
Training of Chinese engineers.
Financing upgrade of the existing railway.
Splitting of profit.

I focused on financing upgrade of the existing railway.

In our group, we also observed our negotiation in order to detect strengths and weaknesses and take them into account. In my opinion, our group had performed well: we managed to set effective goals and reach them. I highlighted the following positive points:

Good team work. I emphasized respect to each other, good distribution of responsibilities, equal participation and equal contribution to the result.
Good time management.

I also emphasized the following negative points:

Ineffective distribution of roles and responsibilities within the team, which sometimes was the obstacle for effective work.
Due to absence of the explicit leader, our work was sometimes conducted somewhat chaotically.

I think that the overall performance of our team was good, and we coped with our tasks successfully.

Distributing Roles and Responsibilities within the Group

We had eight people in our group, and our work was conducted in three meetings. The following points were discussed:

Closing of mines – reduced workforce
Training of Chinese engineers
Financing upgrade of the existing railway
Splitting of profit.

In my opinion, the work was carried out quite effectively.

My Research

I was in the team that worked on such issue as financing upgrade of the existing railway. From the first moment of our work, we decided to distribute our responsibilities in order to make our work more effective.

We outlined the points that we need to research, and I was expected to work on such question as the current condition of the Chinese railway. Working on my question was very important, as it could provide us with important arguments to use in our negotiation: we would need to:

Persuade the Chinese side that their railway really needs upgrade
Inform the amount needed for the upgrade and provide persuasive ground for it.

Besides, the research was necessary for us to estimate China’s need in the railway upgrade.

To find the necessary information, I used the computer and the Internet. I found the following source that could be useful for us:

The report titled “China’s Rail Revolution” (ABB). This report provided us with the information on the current condition of China’s railway. The second question that I worked on was the Chinese government and its attitude to the upgrade of the railway. I found the following sources:
“The Railway Development in China and Ambitious Plans of Chinese Railways” (OSEC). We had the opportunity to see that China’s government is ready to put effort into the upgrade of the Chinese railway and has significant plans regarding this issue.
“China Offers Railway Upgrade Loan” (Bangkok Post): the article states that “China was ready to provide financial and technological support”. This corresponded to our initial notion and gave us necessary background for the negotiation. On the one hand, China’s government is ready to invest into upgrading the railway; on the other hand, our company has strong competitors.

My Plan

Based on the research, I planned to emphasize the following points in my negotiation:

Despite certain steps have been taken to upgrade the Chinese railway, it still needs further modernization.
Upgraded railway will make all kinds of transportation in China more effective; that is why financing its upgrade is not spending, but good investment.
Our company is able to use the latest technology in the upgrade of the Chinese railway, which guarantees that it will be up-to-date and effective in the long run.
Our company is able to work quickly and well; terms are negotiable.
We offer the cost of upgrade at 15 million AUD; but this point is also negotiable.

Reflection on Final Negotiation Simulation

Our strategy in negotiation was to:

Set effective goals.
Be able to find compromise, but not forget about our own interests.
Be able to listen the partner.
Be polite, but persuasive.

Record the Negotiation Simulation

We prepared a presentation that was aimed at providing substantial and persuasive ground for our offer. The plan of the presentation was based on the points that we outlined during the preparation; thus, the points that I worked on were also included into it. I talked about the current condition of the Chinese railway; my focus was at the idea that the railway still needs upgrade and that this upgrade would be not spending, but effective investment into the future.

Another point presented by me was the effectiveness of cooperation with our company. I needed to persuade that working with our company is better for them than with other companies. I introduced the conditions that we offer and explained how beneficial they are. I also voiced the price that we offered, which was $15 million.

After our presentation, we listened to another group. Their members expressed their considerations on the upgrade of the Chinese railway. Our team was listening carefully trying to notice the “points of intersection” and the “points of discrepancy”.

In the negotiation, another side had a neat and clear position:

On the one hand, the Chinese railway should be upgraded further. The necessity and scale of upgrade is clear.
On the other hand, China’s company was considered to be a better candidate for this project. The presentation briefly outlined the advantages; at the same time.

We agreed to negotiate on the following points:

Time.
Price.
Working places for the Chinese.

Reflect on the Negotiation and Apply the Appropriate Theory

This work was been very useful for me in terms of applying theoretical knowledge in negotiation in practice and solving practical problems that concern negotiation. I had to use the background on theory of negotiation and cross-cultural communication. The work included the following steps:

Doing a research in order to get the necessary background.
Formulating the goals and the position in negotiation.
Preparing to negotiation.
Carrying out the negotiation.

I understood that preparation to negotiation is a very responsible step. I also felt the importance of team work in negotiation. Despite in many cases there are only two sides participating in negotiation, the success of each side depends on its members’ effective work and equal contribution.

The issue that the teams should work on is the effective distribution of responsibilities and defining team leaders. Another important matter is the ability to listen to another, to hear and understand their arguments. Though I have always considered it natural, I felt that during the negotiation, it may be quite difficult to follow these principles, as each side is focused on their position and their own interests.

The overall impression about the team’s performance is good. The teams did substantial preparation and were well-motivated.

References

ABB. (n.d.). China’s Rail Revolution. Web.

Bakgkok Post. (2009). China Offers Railway Upgrade Loan. Bangkok Post. Web.

OSEC (n.d.). The Railway Development in China and Ambitious Plans of Chinese Railways. Web.

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