Cross-Cultural Negotiation and Management - Assignment Example

Cross-Cultural Negotiation and Management Part 1 Negotiation is the process by which two or more parties interact in order to arrive at some kind of agreement that is anticipated to last and which based on a background of common interests (Spoelstra & Pienaar 1999, 55). Negotiation may also involve resolving of conflict among various parties regardless of the parties’ or groups’ widely dividing differences (Spoelstra & Pienaar 1999, 55). The success of any negotiation is achieved when the parties involved in the process reach a common ground and create alternative solutions to the existing problems. Along this line, common ground is not necessarily just what people attain in common, but what they could become together (Spoelstra & Pienaar 1999, 57). Negotiation is also the process of exchanging information through communication. In view of this, the information is created as a series of strategies and methods. The strategies and methods arise from the negotiation relationship between the parties involved and either prolong the existence of a relationship or terminate it (Reardon, 2004, 223). In the negotiation simulations conducted from week seven to week eleven, focus was made to three areas. One area of focus was the Him and Her Australia (HHA). HHA is one of the largest retail stores for up market fashion clothes in Australia. The chain store is featured by a network of 80 stores. The success of the chain store can be attributed to its range of designs coupled by its crop of young designers form Sydney who have introduced characteristic Italian designs due to collaboration between the company and an Italian design house. HHA has also collaborated with Beijing Fashion Manufacturing (BFM), a move that has greatly lowered the price of its products though reduced costs while tremendously increasing profits. A simulated e-mail negotiation was done between HHA and BFM. The negotiation was aimed at reaching a common ground with reference to a deal for production of clothes in the summer season for the year 2009 to 2010. In order to simulate the negotiations, the students were separated into eight groups, with groups one to four representing HHA whereas the other groups represented BFM. The two groups communicated from different computer labs strictly via e-mail. This was a mock-up of the actual business environment and distance between China and Australia. A common ground reached by two groups was that the Chinese market, where BFM operates, provides a large market for Australian outfits, it was therefore agreed that BFM acts as a representative of HHA in China. In order to avoid competition, it was agreed that BFM produce accessories for the outfits produced by HHA. This specialization would greatly minimize competition between the two companies’ products. Another agreement was that HHA would provide training to staff of BFM as good will for the services delivered by the Chinese company. Since both sides were meant to benefit from the negotiation an integrative kind of negotiation was used. Spoelstra and Pienaar (1999) describe integrative negotiation as a win more-win more type of negotiation because all the parties involved want to gain more from the deliberations. Part 2 Preparation leading up to the Final Group Negotiation Simulation of 3rd August In the final preparation for the final group simulation negotiations carried out on 3rd August, the group followed a number of approaches and theories. The group was cognizant of the fact that negotiation is a mechanism by which conflict can be resolved, and is a problem solving technique that may lead to a mutual agreement as discussed by Hosrt (2007). Whereas there may be a common perspective that the idea in a negotiation is much easy to understand, it is also well understood that in practice the concept in a negotiation may be an overwhelmingly difficult phenomenon (Smith 2005). It is common to get opposing views about virtually any idea with regard to what is considered to be right and what is wrong. It commonplace to realize disagreements in a negotiation on what is equitable and fair across the cultural groups. Additionally, it may be difficult for the groups involved to understand each other’s messages and form some kind of good communication (Reardon, 2004). With the above factors in mind, the group participating in the simulated negotiation observed its preparation process to ensure that it was well prepared to meet any unexpected occurrences such as rejection of points considered good by the other group. Along this line, each group prepared alternative negotiation points just in case the other group rejected the first set of points. The group attended to matters closely by considering the two basic aspects of the negotiation theory. The two fundamental characteristics of the negotiation theory are competitive situational negotiation and interest based and problem solving negotiation (Malhotra & Bazerman 2008). Competitive situational negotiation was preferred since the negotiation involved business matters that were aimed at profiting the parties involved. Team meetings realized that competitive situational negotiation would be more instrumental for realizing business related agreement, but an interest based and problem solving negotiation would be more appropriate in solving any problems and issues arising within the course of the negotiation. While agreeing the ideas stated by Hosrt (2007) that culture is a is an important and powerful tool that influences how people reason, think behave and communicate, the simulated negotiation group prepared diverse ideas in order to cater for the cultural needs of every individual involved in the negotiation. This was done cautiously with consideration of the fact that culture affects how negotiating groups participate in the process. That is, the success of any negotiation depends largely on the participants’ culture (Reardon, 2004, 223). The group relied on various aspects of human beings regarding the success of negotiations, that is the human nature, culture, and personality. These three attributes relate with each other as illustrated in figure 1. Figure 1: Levels of uniqueness in human metal programming attributes used in negotiation Source: Hosrt (2007) The group used the above model to structure the negotiation program in order to enhance decision making processes, improve communication and increase interaction of the members. As shown in diagram 1, human nature is universal and can learned by everyone, on the other had culture is learned and may be specific to a particular group of people such as those involved in negotiation. The two influence personality, which interestingly, forms the basis of personal agreements or disagreement by the negotiating group. Part 3 The negotiation simulation of 3rd August will be made based on a number of issues as highlighted in the next section 1. Tailoring the negotiation group in order to match the acquisition situation Members of the negotiation team will be chosen by consideration of a number of issues such as having the smallest possible group, which can easily arrive at agreements. The team will be involved in cross-cultural negotiations involving a number acquisition prices and other complex issues. With this in mind, it is evident that a larger group would increase complexity of issues; hence, only experts in the related fields are required. 2. Identification of the objectives and issues to be addressed in the negotiation Well set objectives are fundamental in addressing the issues put on the negotiation table. The team will therefore address issues that need priority such as government contract negotiations, development of management analysis and cost analysis programs and negotiations based on appraisal of company audit reports (Reardon, 2004, 224).The negotiation team will have to address issues such as the relevance of competitive negotiation and therefore come up with the best negotiation strategy. The strategy used in the negotiation should be one that brings out clearly the issues to be addressed while ensuring that no party stands to be adversely affected (Reardon, 2004, 223). 3. Identification of the offeror’s presumed approach and assessment of bargaining weaknesses and strengths of the parties With the knowledge that the offeror’s approach in the negotiation would provide a different path to the negotiation agenda. The team will review a number of items including current proposals, past record and proposals as well as contracts, previous price negotiation memoranda and a host of other related issues. The negotiation team will also address issues such as the common sources of bargaining power, whether to increase competition or plan to avoid it, the general issues to be involved in the negotiation, and the time available for the entire negotiation process (Reardon, 2004, 223). 4. Establishment of negotiation priorities and determination of an overall approach strategy The negotiation team will study the issues to be treated as priorities during negotiation and come up with an approach that can be used to ensure that the negotiation process is successful and beneficial (Gelfand & Brett 2004, 108). The above highlighted issues will be tackled during the negotiation process at Australia’s Hinchinbrook Island. This is a beautiful island with a multiplicity of activities and events. There are environmental issues to be addressed. There are many groups in the Island such as local community representatives, local business groups such as fishermen and scallop collectors, eco-tourist organizations, and resort operators. These groups have divergent interests on the island. For instance, the resort operator will want to increase the size of the venture in order to attract more revenue. Yet such a move would increase the risk of environmental damage caused by the various activities involved. Thus, the negotiation will have to be shifted from time to time in order to accommodate the interest of various groups at the resort without inducing conflict. In particular, priority will be given to the development activities involved on the waterfront land on Australia’s Hinchinbrook Island (Gelfand & Brett 2004, 109). Part 4 The Final Group Negotiation Simulation of 3rd August will involve implementation of a variety of techniques in negotiation. Persuasion will be used where it is deemed that no other conventional form of negotiation would be instrumental in arriving at a common ground. Collective bargaining will be used where it is deemed that there is need for collective responsibility such as in the negotiations at the Hinchinbrook Island where various groups of people have divergent interests in the resources available. Integrative negotiation will be used in situations that present win more-win more environments (Gelfand & Brett 2004, 110). Distributive negotiation or win-lose negotiation will be used in circumstances where it is perceived that the negotiation team needs to win, such as in the negotiation with resort owners interested in expansion of their operations at the Hinchinbrook Island without due consideration for the environment. But the most important kind of negotiation that will be used on the Hinchinbrook Island will be aimed at problem solving and will be interest based. Since the Hinchinbrook Island is an area that attracts many interests, it is bound to have as many problems and possible conflicts. At the island, it is highly likely that the negotiation team will encounter a series of problems from a multiplicity of dimensions. One is that the group may begin with a win-lose approach. For sensitive areas such as resort management at the Island, this method may yield few fruits because the resort owners are likely not to reveal the details of their actions with regard to the environment for fear of further action. Inability to review the negotiation team may also be encountered depending on the standpoints that will be taken by various participating groups (Smith 2005). This may be encountered due to the fact that the various interest groups are likely to have their own opinion of particular issues, thus making change of negotiation techniques quite taxing. This may also mean that the negotiation team will be under pressure to make concessions just for the sake of the respective interest group’s satisfaction and thus distort the essence of the negotiation. Making concessions to the people or groups interested in a negotiation also means that the negotiation team will be hard pressed to be involved in bargaining rather than the intended negotiation process (Reardon, 2004, 224). Another problem that the negotiation group is likely to face is when it sets it objectives at fixed points rather than ranges (Reardon, 2004, 223). The latter is a better idea since by setting a range of options, particular issues are likely to be argued out with adjustments in order to match recommended or agreeable standards. Such a scenario may not work if the negotiation team sets objectives at a given fixed points and refuses to have them adjusted. This may be influenced by wrong choice of members in the negotiation team, as well as failure to plan in advance and establish priorities (Reardon, 2004, 224). References Gelfand, M J & Brett J M 2004, The handbook of negotiation and culture Stanford University Press, Palo Alto. Horst, P R 2007, Cross-cultural negotiations, available from http://www.au.af.mil/au/awc/awcgate/awc/horst_crosscultural_negot.pdf (28 July 2009) Malhotra, D & Bazerman, M 2008, Negotiation Genius: How to Overcome Obstacles and Achieve Brilliant Results at the Bargaining Table and Beyond, Bantam Books, London. Reardon, K K 2004, The skilled negotiator: mastering the language of engagement, John Wiley and Sons, New York. Smith, M L 2005 Negotiation Success Requires Planning, Available from http://www.pmforum.org/library/papers/2005/Negotiating_success_requires_planning.pdf Spoelstra, H I J & Pienaar W D 1999, Negotiation: Theories Strategies and Skills, Juta and Company Limited, New York. Read More