Expert answer:Discussion
Expert answer:Unit IV1) Imagine that you are the manager in charge of a company negotiating a joint venture with the Chinese government. Discuss how your understanding of the decision-making process can help you through the negotiation process and the concessions that you might be willing to make during negotiations. What are some of your main cultural concerns in the negotiations, and what are some of the Chinese concerns about negotiating with you?_________________________________________________________________________________________________________________Unit V1) Every day we see more and more impact locally from international business decisions. In your community, how do you see one or more of the international business strategies of franchising, management contracts, and e-business changing how local businesses conduct business?
2) Discuss the advantages and disadvantages of each of those entities in your local business community.
unit_iv_study_guide_for_management.pdf
unit_v_study_guide.pdf
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UNIT IV STUDY GUIDE
Cross-cultural Negotiation
and Decision Making
Course Learning Outcomes for Unit IV
Upon completion of this unit, students should be able to:
4. Examine the influence of culture on strategic choice.
4.1 Describe the influence of culture on decision-making.
4.2 Discuss how to prepare for cross-cultural business negotiations.
4.3 Describe the five stages of the negotiation process
4.4 Explain the variables in the decision-making process
Reading Assignment
Chapter 5:
Cross-cultural Negotiation and Decision Making
Unit Lesson
The art of negotiating is essentially a decision-making process. Some of the decisions you have to make
include what an acceptable outcome entails, how you will set out your proposal, and what you are willing to
concede. In this unit, you will learn about cross-cultural negotiations and you can apply all that you have
learned so far about culture and how it can relate to this decision-making process.
First, interacting on a global platform means that you must understand the subtleties of negotiating across
cultures. You might be negotiating with people you have never met before. You may be talking with people
whose decision styles might be very different to your own. You have to know what to expect and how to frame
your proposal.
Negotiations can take place between two companies or among several companies seeking contracts,
acquisitions, or some sort of trading pact. As a negotiator, you have to plan carefully. You must be able to
answer the questions of who, where, when, why, and what.
According to Deresky (2014), the “relationship building process… is regarded with much more significance in
most parts of the world than it is in the United States” (p. 147). In the United States, people want to get down
to business immediately and work things out. If you negotiate in another country, you have to understand how
the negotiation process works there.
Second, you must recognize that negotiating means making decisions, which is normal for a manager, but not
necessarily normal for those people at the negotiation table. In some countries, the person at the meeting is
the one who makes decisions. In other countries, the person at the meeting has to take the offer to someone
else who will make the decision whether to accept or not.
Problems can arise because of “differences in culture, language, and environment” (Deresky, 2014, p. 146).
You can spend days in negotiation meetings if you do not fully understand these differences. Every time that
you think a decision is about to be made, you might learn of some slight difference in terminology or timing
that makes it impossible to complete the negotiation.
Once you have a profile of the party or parties with whom you will be negotiating, you have to consider how to
gain their trust. You also have to work out the negotiation process. Deresky (2014) points out that in some
countries contracts are negotiated through personal relationships rather than through legal relationships.
People meet in social settings as they begin the negotiation process.
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The amount of information that is shared during meetings held subsequently depends
on the culture.
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across North America, Europe, and Asia, Deresky (2014) notes that “MexicanTitle
negotiators are usually
suspicious and indirect . . . French negotiators enjoy debate and conflict . . . the Chinese also ask many
questions” (p. 148). That means you must plan how you will handle each situation depending on where the
negotiating is taking place and with whom you are negotiating.
Throughout the negotiation process, you will be making decisions as to whether you will accept or make
proposals. You have to know when to give in and when to stand your ground. Do not only consider your
perspective on the issue, but think of the other party or parties and how they are viewing the issue.
Throughout the process, negotiators use various methods of persuasion. They may use one of several
nonverbal strategies that “include promises, threats, initial concessions, silent periods, interruptions, facial
gazing, and touching” (Deresky, 2014, p. 167). Each of these tactics may be used to further propositions that
are laid out by each side and can help or hurt the process.
Negotiations may also be conducted through the use of technology. The InterNeg Support Program for
Intercultural REsearch (INSPIRE), a Canadian web system, was designed to help the process move along
effectively and reduce the costs that companies accrue when negotiating abroad. Whether the negotiations
are face to face or web based, it is essential that negotiating parties develop good listening skills.
Listening is an important part of the negotiation process. You must listen carefully when others are presenting
their proposals. When it is your turn to present your ideas, do so clearly. It is best to be flexible and to be
open to options others suggest. You have to ensure you have carefully noted information shared about
disclosures and about any concessions that are being made. As negotiators complete their bids, they must
understand how people in various cultures will honor the agreements.
As the negotiating process draws to a close, decisions are made about formalizing the agreement. Details
have to be worked out and policies or procedures considered so that the agreement can be implemented.
You must ensure that all the points are in the written agreement. At this point, your decision-making skills are
tested.
Finally, you have to understand that “local practices determine how these agreements will be honored”
(Deresky, 2014, p. 149). If the agreement you worked on is suddenly rejected by the other party, do you walk
away or do you try again? Your understanding of the culture and different negotiation styles will let you know
whether to draw up a legal document or to base your agreement on trust.
Reference
Deresky, H. (2014). International management: Managing across borders and cultures (8th ed.). Boston, MA:
Pearson.
Suggested Reading
The article below is suggested reading that can provide further information on intercultural communication.
The article can be located through the Business Source Complete database in the CSU Online Library.
Mannix, Elizabeth. [Review of the book Negotiating globally: How to negotiate deals, resolve disputes, and
make decisions across cultural boundaries]. Industrial & Labor Relations Review. Oct 2002, Vol. 56
Issue 1, p193-194. 2p.
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UNIT V STUDY GUIDE
Organizing Structure
and Control Systems
Course Learning Outcomes for Unit V
Upon completion of this unit, students should be able to:
1. Explain how the political and economic environment affects decision making.
1.1 Examine the organizational structure of the United Nations Human Rights Council.
Reading Assignment
Chapter 8:
Organization Structure and Control Systems
Unit Lesson
In recent years, corporations and small companies have entered the global market in larger numbers. If
Company B sees that Company A is doing well overseas, Company B will want to enter the global market
before Company A corners the market. Other reasons for wanting to engage in global trading might be to
avoid trade barriers and increasing costs at home.
Much planning goes into creating overseas corporations or subsidiaries. Managers for these corporations or
subsidiaries have to plan strategically, organizing structures for maximum impact, and putting control systems
in place that will secure their investments. All stakeholders in these ventures must pay attention to cultural
factors that can help them succeed or fail.
In 2011, Target acquired Zellers stores in Canada and entered the Canadian market. In January 2015, it was
reported that Target was closing all of its stores in Canada, leaving thousands of people jobless. According to
Kopun (2015), Target did not plan strategically. Kopun (2015) quoted Jamie Tate of Tate Economic Research
Inc. as saying that Target had “underestimated the Canadian competition . . . You might even want to call it
arrogance” (para.2).
When companies enter markets globally, they must organize the structure and design control systems that
will stop them from making the same mistakes that were possibly made by Target. When companies create
structures, those structures change depending on new strategic directions and the competition. Perhaps
Target should have redesigned its organizational structure or rethought its control systems.
According to Deresky, structures that are commonly the focus in the organizational stage include:
Domestic structure plus export department
Domestic structure plus foreign subsidiary
International division
Global functional structure
Global product structure
Matrix structure (2014, p. 244)
Understanding the social and business cultures will help managers determine which structure is best suited to
their organization. Small organizations tend to favor the export structure, using contractual services to help
them establish their products/services. Later, they can reorganize and move toward having the structure that
involves foreign subsidiaries. As their investments grow, those organizations might expand more, leading to
an international division organized by those categories that brought them success.
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Small corporations or subsidiaries might use the global functional structure, especially
if their marketing
UNIT x STUDY
GUIDE
strategy targets small markets. Those organizations that target more diversified
markets tend to use the
Title
global product structure, while matrix structures “combine geographic support for both global integration and
local responsiveness” (Deresky, 2014, p. 247).
Each of these structures must be carefully considered and will drive the strategies being used. Whichever
structure is chosen, managers have to ensure they attend to rules and regulations and to the cultures within
which those rules and regulations will apply.
As plans move forward, companies have to focus on producing products targeting specific markets and
understanding those markets sufficiently to build effective control systems. As they do so, managers must rely
on strategic alliances. Cultural interactions are important and managers must be fully aware of cultural
differences that help them to create and maintain positive alliances. Control systems must be carefully
designed so that, should a structure fail, it would not be difficult to get rid of a bad partner.
Managers should not underestimate the importance of the control systems they put in place. Attention must
be paid to the reporting systems, ensuring that the corporation or subsidiary is meeting the organization’s
standards and goals. They are also responsible for meeting any international accounting standards or other
standards that may apply in the host country.
When considering e-business, managers will have to work with both e-exchanges and traditional exchanges.
When running an e-network, stakeholders include suppliers, contractors, distributors, buyers, and sellers. All
exchanges occur in cyberspace. With the connectability of the world’s population today, consumers all over
the globe can be checking out your goods and services by simply accessing the World Wide Web with their
computer, tablet, or phone. Small businesses all over the planet can attract customers next door, across
town, elsewhere in the country or even on other continents. So how can that be bad? It is not bad, but it does
raise challenges such as shipping overseas, taxes, duties, local cultural demands, customs laws,
environmental concerns, consumer protection issues, or child labor laws. Those considering international etrade need to be aware of guidelines set forth by the Organization for Economic Cooperation and
Development (Federal Trade Commission, 2000).
The reporting systems referred to in your textbook can be set up and maintained using information systems
that provide reliable data. Managers should be able to make comparisons across countries. There should be
clear links between strategy, structure, and culture.
Additional variables affecting structural choices include geographic dispersion and cultural attitudes toward
foreign businesses. These variables introduce further layers of complication. In Africa, “the continent’s total
GDP has gone up by about 135% in the past decade. By comparison, the European Union’s collective GDP
went up by about 37% during the same period” (International Business Degree Guide, n.d.). Corporations
entering new markets will no doubt be interested in what is happening in these fast growing economies and
will rely on their managers to understand all the cultural advantages and barriers.
References
Deresky, H. (2014). International management: Managing across borders and cultures (8th ed.). Boston, MA:
Pearson.
Federal Trade Commission. (2000). Electronic commerce: Selling internationally a guide for businesses
[Website].Retrieved from https://www.ftc.gov/tips-advice/business-center/guidance/electroniccommerce-selling-internationally-guide-businesses.
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International Business Degree Guide. (n.d.). Business is Booming in Africa? [Website].
Retrieved
from
UNIT x STUDY
GUIDE
http://www.internationalbusinessguide.org/africa/.
Title
Kopun, F. (2015). How ‘arrogance’ led to Target’s pullout. Toronto Star. Retrieved from
http://www.thestar.com/business/2015/01/15/breaking-target-to-pull-out-of-canada.html.
Suggested Reading
The articles below are suggested readings or resources that can provide further information on intercultural
management.
International. (2013). 10 successful American businesses that have failed overseas – International business
degree guide. Retrieved from http://www.internationalbusinessguide.org/10-successful-americanbusinesses-that-have-failed-overseas/.
Lewis, K. (n.d.). Nine steps to an international marketing strategy. Retrieved from
http://www.business2community.com/strategy/nine-steps-to-an-international-marketing-strategy044946
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