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My name is Thomas. I am a free business consultant providing consultancy of management to organizations who were willing to expand their operations .I know what should be done to concentrate or to have best of this because i am skilled in cross cultural negotiation issues.
1.1 Client's Description:
He was the manufacturer of Peter England cloths who was one of the famous manufacturers in manufacturing of formal clothes.
1.2 Client's Description of Problem:
The client has raised a problem for me that “Our planning and production department had a research and found that if Peter England outsources the production of formal clothes in India to a third party wear can save up to 80% of the current costs of production of the this items. These savings include with the human resources cost and tools preservations, includes insurance for transport, plant production, material, employees etc...
The negotiators squad should visit India to make conversation on the formal ware price. It was necessary for the team of negotiators to fully understand the Indian culture. Since the production margin of peter England in manufacturing the formal wear has been saved. The margin of the production of the product depends on the negotiators and the skills bring up by them.
1.3 Client Requirements:
Mc.Farland manager for planting and production approached me and asked me to give a suggestion to the team of negotiators to increase the margin of production of the product making a deal with the negotiators of India. He also asked me to give detailed information about the cultural differences between the England and India. He also asked me about the detailed description of the negotiation styles in India and how it is exposed in Indian culture.
2.0 Summary on Position
The research is done by client and potential has same up to 75% of its cost and production on trousers and t-shirts if production is outsourced to India. Here, actual saving mainly depends up on the skills of negotiators who are sent to India to compose the ultimate decision. The important thing is to understand the Indian culture and market then we will get the best results negotiators are support to know the values, interest, goals, and ethical principles of the Indian culture. Mainly the sources of project are depending by the capability of team and deal with the competing principles and morals of Indian culture.
SWOT analysis of the situation is essential for the team to know the depth of waters if it is entering it is important by doing PEST analysis we can understand about Indian environment in terms of financial, political and technological issues and conditions.
3.0 Analysis of the situation
According to Moran and Stripp (1991), negotiation takes place whenthere are having both common and conflicting interests and cooperatewith one another for the purpose sources of mutually beneficial agreement
3.1 PEST Analysis:
PEST is the important acronyms for political economic social and technological. This is used by the companies to study the whole environment of a country and industry for entering into business.
The politics and the state-polity relations play a fundamental role in shaping the design, implementation and impact of national assessment systems.
India is a country of both diversity and continuity. It is a creative blend of cultures, religions, races and languages. The nation's identity and social structure remain protected by a rich cultural history that dates back at least 5,000 years, making India one of the oldest civilizations in the world. The country is the largest democracy country in the world with political consensus on reforms and stable democratic environment in over 50 years of independence. With its consistent growth performance and abundant highly skilled manpower provides enormous opportunities for investments. One of the fundamental components of Indian culture is an understanding of the traditions and ways of communicating with others that form the basis of India's society. Understanding the comparative strengths and the internal dynamics of the India is essential for conducting business in the country and for policymakers.
India's Economy has grown by more than 9% for three years running, and has seen a decade of 7%+ growth. This has reduced poverty by 10%, but with 60% of India's 1.1 billion populations living off agriculture and with droughts and floods increasing, poverty. Alleviation is still a major challenge.
Growth in the manufacturing sector has also complemented the country's excellent growth momentum. The growth rate of the manufacturing sector rose steadily from 8.98% in 2005, to 12% in 2006. The storage and communication sector also registered a significant growth rate of 16.64% in the same year.
Indians are more motivated and influenced by the Americans. Indians are usually very friendly and polite. They prefer to do business with others who treat them with deference and genuinely like them, and it is important to demonstrate similar behaviors yourself.
These factors do not affect anybody's determination to reach business goals, though, and your counterparts will patiently and persistently pursue their objectives. It is in your best interest to do the same.
Meetings start with some small talk intended to establish personal rapport. This may include some personal questions about your family and allows participants to become personally acquainted. It is important to be patient and let the Indian side set the pace. People enjoy some friendly humor, but avoid appearing sarcastic or cynical.
The primary purpose of the first meeting is to get to know each other. Business may be discussed, but do not try to hurry along with your agenda. It is unrealistic to expect initial meetings to lead to straight decisions.
The negotiators are like to take advantage of these facts and talk to Indian team into their requirements. The team must be friendly with the Indians. This is achieved through socializing outside office hours. Social events may include in restaurants, bars, clubs etc.
India is the main technological hub of the east. Most high ability and latest technology of all sorts are available in India.
Presentation materials should be attractive, with good and clear visuals. Indians are often impressed with technical expertise. Having your English-language handout materials translated to Hindi or neither Indian language is usually not required.
Technology leads to greater social economic division. Laborers are viewed as commodities and expendable. Technology leads to alienation because it can create jobs that require no specialist knowledge.
3.2 SWOT analysis
SWOT had come for abbreviation of strengths, weakness, opportunities and threats. Analytical tool is used by companies to study the overall environment the macro environment of a country and industry which is entering into business with them.
The Indian society is open and friendly towards the westerners. Indian government have prepared laws to holdup foreign investors
The firm said although a comparison of India with the rest of Asia may show that valuations on the basis of price to book value are higher in India, the premium can be justified. “First, India continues to show earnings growth. Second, book value is not being eroded because of losses or foreign exchanges write down. Third, the cost of funds is still below the return on equity,” it said. “India is operating under “normal” circumstances, unlike most other Asian economies.
Coming to us culture, Indian culture is totally different and negotiating styles of the people and their ways are entirely dissimilar from each other.
For example in Indian culture it is further essential to protect a good correlation with the other member either you or able to lose something but in culture are not supposed to make a good relationship and not able to give importance to other person they will go on their own path.
The user may be able to save more amounts due to availability of low cost of labor in India.
Based up on potential rescue issue's as deadlines are measured strictly in the Indian culture where as they considered absolute in the us culture in calculation to this the us negotiators are not able to gain the targets if they fail to know the variable working behind the attitudes of the Indian negotiators.
3.3 Overall Analysis:
According to the Indian culture they follow the right negotiation style and techniques can be adopted and are able to use the five cultural dimensions Hofstede's calculated the cultural dimensions around the world which is accessed in his website in the form of graphs we will use this to analyze the Indian culture.
1. Power Distance Index
This measures the extent to which less powerful members of organization and institutions allow and accept that power is circulated unfairly or irregularly. The figure (1) shows in India PDI is 68.3 and remaining a world average of 53.2 but UK is only 40.This shows a more level of inequity in Indian society with consider of power and wealth.
It is defined as the point at which individuals are included into group's figure (1) shows the IDV of India as 62 against that of UK at 92 and a world average at 50. This shows that the Indian culture is was interested in working together than working as an individual.
It is the sharing of roles among the genders in culture. In this India is placed at third highest ranking according to Hofstede's dimension is 56 when compare to world average it is just 47 slightly lower.
4. Insecurity Avoidance Index
This deals with a how the society tolerates taking place ambiguity or haziness. In the fig (2) India is compared to world average of 65. This tells us Indian culture is open to fresh and unfamiliar vistas.
(Greet Hofstede Cultural dimensions, 2009)
5. Long standing Orientation
This deals with good value in spite of facts and values associated with long standing orientations are saving and determination. The long standing orientation of India ranks 61 beside of USA at 29 in fig (1) which is shown in graph while world's average is 48.This shows that the cultures are entirely different. The Indians concentrate on high build and long term relationship while doing business with an additional party where as Americans are focused on getting the job at hand done. The one to score shows that the culture is determined and economical.
4.0 Solutions and Recommendations
A brief analysis of Indian culture, while compared with American culture and its SOWT and PEST analyses the Indian market is heavy fit for outsourcing the manufacturing of T-Shirts and Trousers. In order to reach their target the total teams of negotiators fallow these points
- A brief study and understand the basic cultural differences and use of the information is very intelligently.
- Try to ask more questions in business because it is very help full to make the process very easy.
- ÂÂ Planning the correct personal and organization images.
- Taking the appropriate plan in developing a personal connection with Indian counters parts. As we know the Indians are more concentrate while making a long relationship the negotiators are trying to make cash this attribute asks seeks required targets.
- The team members try to impress the leader and fallow him to capitalize the tenderly of Indian culture to respect and accept variation in process.
- Not only showing the focus on their targets but showing the flexibility to achieve them. This can show the smooth and successful negotiation.
- The negotiators should not accept the sequential style of negotiation in fact they are able to accept the holistic style of negotiation and deal the problems also.
- The negotiators try to use a joint style and create a win situation. This not only helps them to achieve goals but also help to maintain a long term relation with Indian counter parts.
5.0 Forecasts and Outcomes
The plan of outsourcing manufacturing of T-shirts and trousers to Indian company is realistic the positive outcome of project depends entirely on success of negotiation between the team members from beauty expressed this is possible is they are able to fallow above mentioned recommendations are sensitive to Indian culture, it demands the variables in the lead which it works.
1. Robert T. Moran, William G. Stripp (1991), Dynamics of Successful International Business Negotiations, Gulf Pub Co.
2. Hofstede's cultural dimensions
(Accessed on 10-01-2010)
3. Fundamentals of International Negotiation
(Accessed on 10-01-2010)
4. Making Sense of Cross Cultural Communication
(Accessed on 10-01-2010)