Culture Phase of International Negotiation - Case Study Example

The Culture Aspect of International Negotiation Name Name of the Institution 15 March 2016 The Culture Aspect of International Negotiation Introduction International negotiation refers to international business deals not only across the borders but also across cultures. International negotiation is dialogue between two or more parties with the intention of reaching to a beneficial outcome. Taking into consideration the case of Tata Group (India) Company in the acquisition of Jaguar Land Rover (USA), a component owned by the Ford Motor Company during the process of acquisition, it is evident that the diverse culture of the nations influenced the whole process of negotiation and acquisition between the two companies. In the acquisition process, both Tata Group Company and Ford Motor Company agreed on a deal that involved much consultation from the representative of the two companies. The acquisition process become a success as Tata Group Company agreed to pay 2.3$ billion to the jaguar and land rover brand which cost Ford Company 5.3 $ billion. In analyzing this issue of Tata Group (India) in the acquisition of Jaguar Land Rover (USA), it is evident that the culture of the two companies played a major role in influencing the negotiation process. Therefore, this essay focuses on exploring the cultural aspect of international negotiations by businesses with an emphasis on Tata Group (India) in the acquirement of Jaguar Land Rover (USA). With paying much attention to this issue, the paper will mostly focus on discussing the practices of international negotiations, conferring the classic frameworks to support the ideas explained, the theories to a practical case, consequences of various approaches, as well as describing the best practice that international negotiators may apply in their business. The Understanding of the Processes and Practices of International Negotiation According to the issue of Tata Group (India) in the acquisition of Jaguar Land Rover (USA), it is evident that the procedures and practices of international negotiations is highly influenced by the cultural beliefs of the companies as both parties come from different venues of business operation with distinct behaviors and beliefs (Zartman, 2008). In any international negotiation practice, the main agenda is to reach for a long-term agreement that involves two parties. For example, in this case, the Tata Group Company (India) entered into an agreement to supply Ford Motor Company’s with engines and other products that it may need in regards to manufacturing of vehicles. In this case, any form of international negotiation, cooperation is paramount thus Jaguar Land Rover reached an agreement with TATA group to continue working together in areas such as design and development of new models of cars. This is being achieved through sharing the platforms and joint development of new technologies in the vehicle manufacturing industry. At the same time, international negotiation involves the aspect finance. Rendering to the case of Tata Group (India) and of Jaguar Land Rover (USA) negotiation practice, the Jaguar Company agreed to continue financing the TATA Company for the supply of the components used in manufacturing cars. The financing element is important in a negotiation process because it more than just a support to the companies doing the business, but it is also a motivational factor that makes two parties involved in an international negotiation practice come to an agreement. Classic Frameworks to Support the Above Explanation The classical frameworks of negotiation are also called the foundation negotiation theories. In this context, the classical frameworks in international negotiations are the elements that influence decision analysis and making by the parties conducting the practice. From the above explanation, it is apparent that one can pinpoint several negotiations classical framework. From the perspective of many scholars, international negotiation should be a win-win affair for both the parties involved in the practice through mutual agreement (Breslin, and Rubin, 2005). As such, looking at the understanding of the international negotiation practice it is clear from the case of Tata Group (India) acquiring the Jaguar Land Rover (USA) there was the application of the win-win classical framework. As such, the practice involved the win-win pie, whereby after reaching an agreement the two companies decided to go into business together. In this theory, each partner agrees to do business together under the condition of gain something, which was the case of Tata Group (India) and Jaguar Land Rover (USA). The other classical framework that is of paramount importance in regards to international negations is the case of collaborative negotiation theory (Ellis et al., 2015). In the international negotiation, the collaborative negotiation theory emphasizes on parties acting friendly to each other, as they negotiate to work with a common interest. For example, in the Tata Group (India) and of Jaguar Land Rover (USA) negotiation practice, the two parties were engaged in a friendly manner to an extent that they agreed on doing business together. Lastly, to support the analysis regarding the understanding of what it is meant by international negotiation, the other classical framework considered is the multi-party negotiations. In this case, this theory is helpful in understanding international negotiations, as it helps one understand that the whole process of international negotiation involves two or more parties, which try to deal on a complex situation of negotiating. Lastly, Hofstede cultural dimension theory is the other classical framework that can be used to support the explanation about the meaning of international negotiation (Breslin, and Rubin, 2005). The theory describes that effect a society’s culture, how it can influence the behavior and values of members in a negotiation process. Most of the issues that this theory focuses on are things like, the impact a cultural element such as communication can have on international business and their operations. The Application of Negotiation Theory to a Practical, Real-World Situation In the real world of business, mostly in negotiation matters, the business people work with one primary goal of winning a deal and gaining an advantage of the outcome of a negotiation practice. According to Jewels, and Albon, (2013) in every business that is involved in some negotiation procedures, the negotiators need to apply the classical theories of negotiation. First, the win-win negotiation theory applies to the situation whereby a business wants to make money on its investment or rather expand. For example, in the case of Tata Group (India) and of Jaguar Land Rover (USA) negotiation practice, the companies wanted to make money as the outcome of the agreement (tata.com 2016). Consequentially, with the Tata Group Company supplying the Jaguar Land Rover with cars designing components, the payment is made in terms of money, which is the desired outcome of the negotiating practice. For other businesses, they rely on the collaborative negotiations theory whereby the whole process of negotiation is done in a dependent manner, whereby the two or more companies involved in the negotiation process uses persuasive techniques and creativity to enter into an agreement. With the case of Tata Group (India) and Ford Motor Company in the purchase of Jaguar Land Rover (USA) negotiation practice used as a reference, a friendly agreement between the two company leads to an agreement on doing the vehicle manufacturing business together. Lastly, focusing on the issue of Tata Group (India) and Ford Motor Company, the Hofstede theory is apparently applicable in the whole process because of the aspect of cross-cultural communication (Breslinm and Rubin 2005). This means that, the deal between the two companies was characterized by the dimension of two cultures, and for the negotiators to agree on the business the negotiation process was based on different categories of cultural dimensions. Culture-Specific Information about Negotiating and Business Styles in Each of the Two Countries With the analyzes of the issue of Tata Group (India) in the purchase of Jaguar and Land Rover (USA), one can learn that international business deals with more than just a cross-border trading, with the issue of culture in respective countries. International Negotiation United State Considering the case of the United States as the country that was involved Jaguar Land Rover negotiation with TATA group, one can understand that the country has specific cultural information. The culture information of this country is both formal and informal. In this case, the negotiator from the U.S Company had different personal styles concerning the way he was talking to others, dress code, and the way he interacted with others. It’s evident, that culture strongly influences the personal style of the negotiator (Bülow, and Kumar, 2011). Chances are the negotiator from America had formal style than the Indian negotiator. The culture information about communication- from the American heritage culture, it is clear that the country’s English language is different from those other English speaking nations such as Britain (Katz, 2008). The language culture may cause a miss understanding in the negotiation practice, in fact, the American people are said to speak louder while conducting negotiations, which in in turn influences their behavior as leaders and the general outcome of the negotiation process. Individuals relationships and perspective- the U.S culture strongly encourages people to offer different standpoints in different occasions. On the case of business association, the country business people are widely known for their role in interacting with other people from different part of the world in the case of an international business. Thus relationship played a major role in the acquisition process International Negotiation- India Sensitivity to time-for India, a country with diverse cultural beliefs, the culture information concerning the Indian negotiator is that they are always sensitive to time, regardless of whether the negotiation practice is high or low (Bülow, and Kumar, 2011). In other words, as a cultural belief the business people from Indian Companies are always punctual. In this essence, with the culture of paying much attention to time, the negotiators from India are quick to make a deal. This culture value makes the Indian negotiators sensitive to time more than any other negotiators, however, Americans are time conscious as well thus the ease of acquisition between the TATA group and Jaguar Land Rover. Communication- in India most of the people use Hind as a major language of communication (Katz, 2008). However, as a diverse nation many people continue to follow and learn other languages in India, which is in turn influencing the communication culture in businesses. Some of these languages include English, which is mostly used by the business people. Consequences of Different Approaches, Attitudes, and Values in Intercultural Encounters First, as a result of different methods, attitude, and values in the intercultural encounters, there is the aspect of language barriers mostly in the world of business. For example in the case of Tata Group and Ford Motor Company in the selling of Jaguar and Land Rover component in U.S, there is the likeliness of language barrier due to cultural differences (Bülow, and Kumar, 2011). As the two companies have people from different culture, communication here will be problematic for both parties. The other consequence that may occur due to the case of cultural difference in the negotiation business is the change of one’s customs. Jaguar and TATA employees may be forced to adopt new customs that will help them approach the new business with caution and a high level of cultural sensitivity. If a negotiator learns new ways of doing business from the business he or she is doing, that person may be forced to take the culture perspective to the business, which will usually cause a political and economic tensions within the company (Jetu, and Riedl, 2013). Best Practice for International Negotiators For international negotiators to be successful, they need to have an adequate skill that makes them apply best tactics and training in the process of international negotiation. In fact, for many international negotiation practices, the person carrying out the mandate should have substantial or potential value, so that his or her work is useful (Wiener, 2013). Therefore, for an international negotiator to have the best practice in the negotiation process, he or she needs to have distinct skills. The skills make the negotiator be an expert in a particular specialization, such as marketing, law, production, or finance (Druckman, 2013). In addition, a best negotiation practice should be done to protect the interests of the company as well as the public. As such, for this to happen the negotiator should follow the rule and regulations of the negotiation process. Finally, a best negation practice for any business should be strategic or done strategically. In this case, the negotiator of Ford Motor and Tata Group Company should be the strategist in the negotiation practice. The negotiator needs to have experience concerning the business structure and relationship with other companies. Conclusion To sum up this paper, it is evident that international negotiation occurs in private companies, non-profit organizations, government branches, among others forms of business. In a global business, international negotiations are influenced by the culture i.e. how business people think, communicate, and behave differently. As such, looking at the Tata Group (India) and Ford Motor Company (USA) in the purchase of Jaguar and Land Rover the negotiation process, one can clearly identify the element of cooperation and continuity in the practice of international negotiation. In recap, the process of international negotiation is influenced by the classical framework, which determines the decisions of the negotiators thus through the negotiation process TATA group was able to acquire Jaguar and Land Rover despite the cultural differences. Moreover, the paper talks about the best practice in negotiation business as for negotiators to be effective, they must have specific skills, tactics, and protect the interest of the company and the public. Bibliography Bülow, A. and Kumar, R. (2011). Culture and Negotiation. International Negotiation, 16(3), pp.349-359. Bercovitch, and Elgström, (2011). Culture and International Mediation: Exploring Theoretical and Empirical Linkages. International Negotiation, 6(1), pp.3-23. Breslin, J. and Rubin, J. (2005). Negotiation theory and practice. Cambridge, Mass.: Program on Negotiation at Harvard Law School. Ellis, C., Ellis, C. and Ellis, C. (2015). Negotiation Theory and Practice. [online] Negotiatewithchad.blogspot.co.ke. 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Tata Group | Tata Motors | Media releases | Tata Motors completes acquisition of Jaguar Land Rover. [online] Available at: http://www.tata.com/article/inside/mCgnlgckTZw=/TLYVr3YPkMU=http://www.tata.com/article/inside/mCgnlgckTZw=/TLYVr3YPkMU= [Accessed 15 Mar. 2016]. Wiener, O. (2013). High impact fee negotiation and management for professionals. London: Kogan Page. Zartman, I. (2008). The Negotiation process. Beverly Hills, Calif.: Sage Publications. Read More