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This case study describes the negotiation style between US and Indian company. Negotiation is about establishing market for a US based companies product in India. this case study is written to give better knowledge about what's negotiation and how culture background affects it on the negotiation process. This case study shows how a packaged form manufactures from India has established itself in the market and how much competitions a new company has to face to established its product and in that process how an Indian company can help them. For this a successful relationship and good deal has to be made. I have also provides some recommendations which are to be followed to get a successful negotiation.
I am working in US based packaged food manufacturing company. My company is interested in making a deal with one of the companies in India for releasing its products in Indian market. For a successful business deal to happen and to get success in the market there is need to have a negotiation between the two companies. Company has selected me as the negotiator on behalf to the company in the negotiation as I have some knowledge about the India commercial and social sector.
U.S is a multi-cultured, advanced in technology and a developed company. And India is multi-cultures, developing in both financial and technical sectors but with a huge capacity of human resources.
Overview Of Situation :
With vast population base, growing middle class population, Indian food market has emerged as rapidly growing industry. A packaged food industry has been showing increase rapidly as change in lifestyle. Researches' say that there is an anticipated growth of CAGR of 8% during 2008-2012.Snake food market growth is expected to grow by 18% to 20% in coming years.
India is a potential marked for instant, packaged or fast foods. There are more than 500 verities of food with can be marked in this sector. Many international companies have introduced their products and many more are trying to introduce their products in India. Not only international but even there are some Indian companies who are very successful in this matter. Haildiram's is one such company. Company's estimated turnover is Rs 400 corers and its self proclaimed brand value is of Rs 1500 corers. There marked is not just limited to India but there products reach different parts of the word.
Before negotiation styles of the two countries let us get some basic information about negotiation and negotiation styles.
Whets negotiation and Negotiation styles how they affect a business deal?
Negotiation is the process where two or more people or group of people try to resolve a problem to make it profitable to both the respective individual and group participating in the negotiation. Negotiation is a process but not a single skill, to get this master negotiation there are different skills to be considered.
Negotiation can take please in between individuals, at cooperate level or even at diplomatic levels. In general negotiation takes places when there is some task to accomplish where both the parties are involved and the need to come to a common agreement on varies matter involved in that matter as the task cannot be accomplished without mutual cooperation. A good negotiation takes pleases such that both parties interests are considered.
Negotiation can also be done in conflicts resolution. Seven principal involved in negotiation:
There are two or more parties involved in achieving a common interest.
Although there is a common interest by all the parties but with a degree of differences which initially prevent from achieving the common out come.
At least at the initial state all the parties consider that negotiation is useful than any other alternative.
Each party considers that t can convince the opponent with their terms which is not always easy. But negotiation has positive attitude and which to influences each others.
Both parties retain hope to get the most possible positive outcome even at a situation proves unattainable.
Each party has some influences or has power over the opponent.
Negotiation process itself a process in interaction.
By considering all these negotiation can be defined as follows:
"The process in which, two or more group of people try to resolve a project of common interest with some slight differences, to achieve a mutually acceptable decisions."
Is negotiation necessary?
One of the aspects of negotiation is to decide whether there is a requirement for negotiation. By asking if a negotiation is required it is possible to save from some unnecessary compromise. The best alternative to a negotiation is to ask Yes or No, i.e. if any differences in opinion occurs, should it skip the negotiation and proceed to the third party intervention
A good general rule is: Do not negotiate till you have to or unless you can obtain some direct or indirect advantage by doing.
Skills Involved In Successful Negotiation:
Negotiation involves creative thinking, so it can be considered as a form of art. A set of
skills are required for a prospective negotiation. They are as follows:
Awareness is required :
A thorough knowledge about the background of the negotiation topic is required .About the tensions and the emotions involved by both the parties is also very much required.
A negotiator should be aware of the sensitive to the needs and interest of the opponent parties. Should be able to interpret by the body language and should be able to tackle the opponent's tricks.
Patience is required :
A successful negotiator should be very patient as the presses of negotiation, is very time consuming. Patience is a vital factor during as it takes so much of time to break the barriers.
It's not always necessary that the opponents speak what we are interested or how we want them to speak they may not make us convenient in such conditions we should be about able to be patient enough to make the negotiation successful.
Communication Skills is required :
A communication skill is very essential part as two-way process is required.
Listen skills is required as lot of listening is involved in a negotiation, as to get an account of the data from the opponent. A very good speaking skill is required as the negotiator has to involve in the conversation express one's own point of view over the others.
Phenomenon of Negotiation :
Basic phenomenon of negotiation lies between win and loss. Negotiation can be either concessive, collaboration or competitive.
Concession : Considering of others.
When interests of the opponents are given priority then once own interest. Considering for other will barely depends on once self values and belief on the others, values means the facts, derives of how one thinks and behaves on a particular situation.
This is a lose-win condition
Collaborative : The Mid-way.
This lies in between of the self interest and opponents interest's .Constant sharing or process in which both the parties try to get benefits maximum but try to do come adjustment so as to cooperate with opponent as will.
This is a win-win condition.
Competition : Considering of self.
Negotiator who things about once interest only and does not care about the other person or the relationship. Where priority is about once interest opponent's fact and interests are not considered, over aggressive, deterrence, playing tricks are considered normal and necessary.
Symbol of victory is considered opponent's is defeated. This is win-loss condition.
Process Involved In Negotiation :
A successful negotiation involves a phases to be followed. The key stages involved in negotiation are as follows:
Preparation Phases : through preparation before negotiation begins.
Actual negotiation Process : The interaction leading to agreement on an outcome.
Implementation Stage : A stage sometimes is where the outcome is executed, but sometime given too little attention.
Negotiation need to be planned. About the relative strength of the parties and the setting objective of negotiation.
Two primary questions are to be asked which will decide in the further process:
What's the real issue to be solved?
Which parties to be involved in negotiation?
By asking these two questions it will be clear about issues and with whom to interact. This gives a clear picture about the outcome of negotiation.
Actual negotiation accurse after the first stage of planning. During negotiation process what al will happen can be easily explained in six stages. They are as followers:
Defining the issues : the parties agree about what is to be negotiated.
Defining the initial stages : Each side set its criteria's of what it seeks. Opponent's side calms its point and the opposite party gives its initial responses.
Thing about the initial positions : this is a more open phase when the initial responses or passions of the parties are tested in argument.
Tentative Exploration : Then the parties try to find out the possible adjustment which can be made to get a possible outcome.
Formal Proposal : A formal proposal an outcome acceptable by the parties is made discussed and modified.
Final Agreement : A final agreement is derived defined and conclude.
The agreement which does not give much infuses on the implements will frequently collapse soon after it has concluded. Propose of the negotiation is to achieve an agreement so it must implement some positive action.
Steps preventing from implementation failure :
Conforming in writing about what is agreed.
Ensure each party to do the function allotted to it. Clear picture about who has to do what is to be included in the implementation programmer.
Conform that everyone is informed about the agreement, what it implies and what action it follows.
Negotiation style :
Negotiation style depends mostly with respect to the individual person. Depends on once beliefs and skills and culture to which they belong to.
Culture is the most influencing factor in a negotiation, especially in cases where there are
the parties involved in argument are from two different countries.
Cross Cultural Negotiation :
How does a culture affect negotiation styles?
To make any successful deal between any two countries, there some kinds of negotiation have to take place. People of different cultural have to sit together and share opinion of mutual interest. Cross cultural negotiation is not just about closing a deal. It influences all the factors affecting the following proceedings.
Some of the things which effect cross cultural negotiation are given below :
Eye Contact : In general in some cultural direct eye contact conveys confidents and sincerity. In other cultural it's considered trust worthiness and in others it's rude and generally avoided.
Personal Space And Touch : In some cultural a distances is maintained in a formal scenario. Touching only takes places between friends and relatives but in some cultural they try to come closer in formal meeting.
Time : Some cultures are very time conscious for them time is money and punctuality is crucial. In some cultural if people turn up late it's considered insult. And some others are not a matter of worry.
Meeting & Greeting : Most official meeting start with a handshake.
In some countries handshake is not acceptable between opposite gender. Even the way
handshake is given is also considered differently in different countries. Something a firm handshake as weakness and on some others firm handshake is considered aggressive.
Then how people are to be addressed is also a matter of consideration. To use weather the
first name, middle name or last name.
Till now we have gone through what are negotiation and different negotiation style and thing effecting factors on negotiation style.
United States of America and India are two countries form extremely different cultural background. A study about the strengths, weakness, Opportunities and threats involved in these countries is to be considered to make a negotiation to be successful.
SWOT ANALISIES :
Comparing the US and Indian Negotiation Styles. The table below shows some of the factors in of the respective negotiation styles.
US Negotiation Style
Indian Negotiation Style
Preparation &Planning Skills
Preparation &Planning Skills
Thinking under pressure
Win Respect &Confidences
Judgement & Intelligences
Judgement & Intelligences
Perceive &Exploit power
Will to bargain
There are very good possibilities of making a successful negotiation between US and Indian Cross cultural negotiation. Establishing a business with Indian company will create great deal of opportunities to the US company in making their products available to the Indian market.
Negotiating between US and Indian companies will be a well formatted. The desires and issues will be presented in a good manner as both the negotiators will do unmatchable preparation and planning before the actual negotiation so that all the required aspects will be considered. Decisions made will be very intelligent and judgment on each issues will be presences about with is the exact requirement. Both the parties try to get the maximum production knowledge as a result there will be not much need to spent time explaining about the products and how and what it's like, saves time.
US negotiation style says that they should be able to be integrity and should be able verbally expressive, this quality gives the strength to express the issues and opinions in an effective manner. Integrity is another aspect on US negotiation all the ethical codes or the morals are strictly followed this give a clear picture of the structure.
Indian negation styles try to make relationship, winning respect and confidences will help in making a relationship which is strength as to make the deal be able to be a successful because a positive environment and trust is created. If the deal showed is interesting nothing can stop from accepting it for an Indian negotiator because it's the important to do any work to Indian work cultural.
Both the US and Indian cultural have some of the futures which can give negative
Impacted on the negotiation process, it can some time lead to a negotiation failure. Some factors
which are considered are strengths can also act as weakness.
US negotiation style does not give much importance in ability of bargaining where as
India negotiators are efficient in bargaining this give Indian negotiator to bring the deal in to
there hand which is not acceptable, it's a loss to the counterpart.
Indian negotiator it's difficult to find verbal expressiveness this will be a fallback, as its
already told US negotiation style involved a very effective verbal power this can take the
negotiation in to the other side's hand will result in failures in the Indian point of view.
Indian culture gives them the ability to learn new thing this is strength to Indian
Negotiation but in US point of view it's very difficult so it becomes a weakness that they are able
to give the knowledge or unable to learn new thing as easily as there counterpart do. Its better if
these weaknesses are kept in mind to improve the negotiation to be successful.
The ratio that the cross cultural negotiation between the countries of US and India will be
a success is more. This is because that the both countries are multi-cultured countries and have
some knowledge about the opposites negotiation style this improve the possible that the
negotiation is successfully.
Indian is a fast developing country which is largest democratic country. Indian has the
population of more than 100 millions. The prospect of the product to be successful because India
is a developing country, lifestyle of India is changing this is basically because of globalization
people different parts of the world are moving around and different multi-national companies
have already established in Indian and their products are successful. The chances that the
introduction of new product will not be tough task but there will be different competitors as will
who have made entries in to the country's market long back the will make be strong competitors.
There are situation that the negotiation can be failure. This happens when the two
parties do not come to a common conclusion on something or issue. Then it's said to be a
failure. This can some time happen because of unable to understand what the opponent parties
US negotiators have the capacity to thing under presser capacity where as Indian
negotiation style does not give that attention to this accept which this can be considered as a
threat to Indian companies negotiator.
Indian negotiators are considered to be very determinant and persistence this will create a
threat as they will restrict from doing any amendment in there offers in such cases it will become
treat to the negotiation.
The negotiation should be with the consideration that the business deal is to be done with
extremely new country with different cultural, environmental, political and financial background.
If a successful business is to be established with an Indian company some of thing should be
tried while negotiating they are as follows.
It's very important that Indian company finds that US company is very much trustworthy
else they won't be interested in doing a business deal. It is very impotent that a friendly
relationship is built in odour to make deal successful we can see this from many India
companies make only deals with only know people, they not encourage a just formal
Bargaining is another interesting fact, people from India tend to bargaining a lot and if
they don't get much to do that its felt the deal is not positive scenario must be created for
Forecasts And Outcomes :
The prospects that a successful business deal can be made between two countries like India and US are very high.
As a result of the negotiation its will be a clear and structured agreement and will lead in
a mutual collaborative business.
The Indian company know about the market and the interests of the common man
this knowledge can be used for the better prospects of the product launch.
Negotiation Skills AND Strategies- By Alan Fowler
Culture-Based Negotiation Styles-By Michelle LeBaron
Negotiation-an importent life skill-By www.pjonline.com
Negotiation- By Michelle Maiese
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