Negotiation with chinese Essay Example for Free

Negotiation with chinese EssayWe aspiration to express sincere appreciation to Professor Shia Yun Chiang for his assistance in the preparation of this manuscript. In addition, special give thanks to Yama (Yuehai shoe hooey Ltd) whos familiarity with the needs and ideas of these tea leafm and was helpful during the early programming phase of this research. installation Continental Design is a comp or so(prenominal) where excellence and customer satisfactory be priority. After decennaryner years of being in origin, continental now pull inks to enter the Chinese merchandise.On Thursday, June 13th 2013, roughly members were selected to visit the potential customers of our in the raw shoe-soles designs to introduce and conduct our ground. These members include Mr. Emmanuel Mlay (Financial Officer), Mr. Robin Sharma(Managing Director), Mr. Cliff Osoo (Contracting Officer), Ms. Bella Chan (General Overseer), Ms. Sandra O. K (Sales Manager). Upon arrival, we were taken i n and around the factory to experience their ex consorts and then to the meeting room. In this report, we explain besides our observation and findings in negotiating with the typical Chinese.This report emphasizes mainly on the observations which includes specifications, mode of conduct, styles and techniques besides elaborating on how they lam to stick toher as privateist or collectivism. Again the style used, what they felt at ease to say, their babble skills, alliances with clients, were in like manner under study. However their reasoning and way of calling was somehow fascinating and unfeignedly evoke which this report enlightens i crapperly and strategi squally. A brief exclusively in truth informative research was d unity to roll in the hay our potential customers in the foremost place reaching come in to them.The matchless talked round in this report is Yuehai place material, a very ren admited shoesole company in China. In the end, all byplay operatio ns posterior be reduced to three words people, product and profits. Unless youve got a life-threatening aggroup, you cant do such(prenominal) with the early(a) deuce. 1 1 By Lee Iacocca 1 Chapter 1 THE CONTINENTAL DESIGN Continental design provides diverseiated products that accelerate innovations in the global design market. With ten years of experience and commitment, Continental design has grown to be one of the strongest competitors in the field of designing.This company has also spent those ten years in perplexing its communication and duologue skills. Its management capabilities pass on en subjectd it to technically handle the challenges and expeditiously provide products that atomic number 18 best in the market. As Victor Papanek once said Design is the intended effort to impose a meaningful order. Continental design was founded by a team of quintuplet engineers with one primary goal of working(a) hard helping all small and big shoes companies to succeed through professionally enhanced designs.Today, Continental design is a full-service independent company with about 10 percent of the world market sh ar. Our services cover the whole of Africa, South and nary(prenominal)th America, spunk eastern hemisphere and some countries in Asia. Recently we have initiated our first staple toward China market. 2 BUYERS community PROFILE Yuehai Shoes Materials Yuehai shoe material has more than 20 years of manufacturing experience and large yield of qualified senior employees who are devoted to settling problems and confronting challenges. It has adopted advanced equipment from Taiwan and main grunge China.The production technology is matured and reliable at the same time it uses the original material that figure outs its products to be famous by their mellowed qualities. Its domestic market ranges from Guangzhou and Dongguan where there is a stiff competition that helps them to develop new and up-to date designs that meet the market demands. It then covered the whole of China before capturing atomic number 63 and America as the first tar take off in external market. Most recently, it has expanded its external market to Middle East and Africa as a whole, where it has entered into more than 10 unlike countries.Shoes are tender-hearted daily life necessities. Shoes industries will never perish as grand as homosexual being still exists. With the use of imagination this company is committed to continue to develop shoe industries as part of making the life of entire society in the world unwrap off. Address No. 39 beicun road, huangqi, nanhai district, foshan city, Guangdong province, China. Tel 8675785938525 Fax 867578592981 Email emailprotected net Yuehaixe. com. cn 3 Chapter 2 NEGOTIATION PREPARATION In duologue there are few functions that have to be put in place before the negotiating team or person set off for the negotiation.The factors that are mostly dateed before negotiation are ? space of centralise This i s the period that the contract will take before its renewed again. The vendor perpetually concentrate in this factor because it affect the profit the company will make and for how long. Mostly its 1 to 3 years. This factor is grievous because it also influence the price to be offered to the buyer. ? Volume to be coherent After a trafficker has agreed on the length of contract then the next affaire to talk about is the Volume that will be bought.When few untroubleds are bought, there is a high possibility that the price will be higher un same when a large quantity is bought thus these first two factors influence the price of the item. ? Price The third factor to talk about afterward length of contract and volume is price at which the good will be sold. In every(prenominal) company, there is a price offered depending on the quantity to be bought, quality and separate things needed for production. The large the quantity, the lower the price will be and vice versa. 4 ? Paymen t Terms and Services.The most important thing for a company qualifying for a negotiation is length of contract, volume and price and other things like payment terms and services comes up later. The last two remaining factors are considered to make sure that the items agreed before is taken into account in a proper manner. Payment terms are important because even if you have a long contract with large volume however payment is not done in time, you will have to lose something. Services are offered to the buyer to make sure he/she is satisfied with the goods bought. 5 SELLERS WISH argument.Here we make our wish list before we went to the meeting. We had decided our lowest price and the contract length. Below you can see the result of our company board meeting before going to negotiate with Chinese company ITEM2 length of contract Volume Price Payment terms Services WEIGHT 40% 25% 20% 10% 5% RANGE 2-1 grades 500-100units/calendar month $200-$150 10-15days 5/5-8/5 In the spare-tim e activity table you can see that we agreed to have at least 1 year contract with Chinese company. As they are old and experience company, we consecrate that it wont be any problem even if we have 2 years long contract.In terms of volume we were ca-ca to deliver any amount till up to 500 per months. Price was the main concern of our meeting. We kip down that they will try to spend more time on the price negotiating and knowing we have some(prenominal) competitors in the market, we needed to come up with a very good price range. We also had an concordance on payment terms which should meet within the short period. Lastly, we agreed to offer them a good customer service. 2 Professor Shia Yun Chiang Power point presentation-Estimating wish list ,Power point presentation drop absent no. 9 10 6 THE AGREEMENT ZONE In every negotiation, there are two possible outcomes.The parties can either reach an agreement or not. The first situation is where the seller and the buyer dont reach an agreement at all, either, due to the buyer or seller not agreeing with the offer given. The sanction situation is where the two parties (Buyer and Seller) reach an agreement and signs a contract for the business to take place immediately. For the two parties to reach an agreement, they will have to consider their Consequence of No agreement (CNA). CNA will either make the two parties to agree or disagree.BUYERS WISH LIST ITEM3 Price Services Payment terms space of contract Volume WEIGHT 45% 25% 20% 5% 5% RANGE $100-$150 8/5-5/5 Cash transfer 3-1Years 50-100units/month After a lengthy discussion with the buyer, following were the outcomes of negotiation OUTCOME ITEM Price Length of Contract Volume Payment Terms Services DETAILS $150/Design 1 Year 100 Units/month Cash Transfer in 2 days 10 Days fosterage Professor Shia Yun Chiang Power point presentation-Estimating wish list ,Power point presentation slide no. 9 10 7 Chapter 3 OBSERVATION VALUES AND THINKING IN NEGOTIATION.Whe n going for a negotiation one has to learn the buyers values in thinking. These values differ from one landed estate or one region to the other and it can cause a misunderstanding betwixt the two parties. According to the research we did about Chinese negotiation, we found out that Chinese are more relationship oriented than Africans and even other nations. As soon as we entered into the Chinese office for the negotiation, they offered us Water. This proves that they are more relationship oriented they use this to build a rapport between their clients even before negotiation.Another thing that the company we were negotiating with did is that, they invited us for supper. In these acts we can see how Chinese people are mostly towards relationship with their clients unlike other European countries or America and even Africa. Before us reaching a conclusion, the Chinese people asked a lot of personal questions even in the core of our negotiation. Some of the questions they asked were When will you go back to your country? Do you like china? Is your country very hot than china? These personal questions that are not related to business are a bring picture of Chinese values and thinking in a negotiation.As a general rule, its always safer to adopt a formal posture and move to an knowledgeable stance, if the situation warrants it, than to assume an informal style too quickly4 4 As Jeswald W. Salacuse- (Ivey Business journal) 8 . During our research, we were also able to notice some of the things that are not common in African countries and even other continents. The first thing that they did is to welcome us in a very encouraging manner that made us feel at home, and with such hospitality, we were able to do the negotiation having been convinced that Chinese are good business people.This kind of hospitality that Chinese people give to their clients make them win in the businesses they negotiate in because the other party will feel so cared for that they can trust the offers given. Another thing we noticed in the research is the way they asked us whether someone has introduced us to the company or we looked it up in the internet. At the beginning I didnt see the reason why they should be have-to doe with with how we got to know about the company, simply after we finished the meeting I had to ask and what they told us is, in Chinese (Intermediary/ middleman). This is one of the things that make us to realize how important Chinese value relationship in the business arena. The other behavior that we observed in the process of visiting and doing the negotiation is that, immediately we arrived at the factory, we were received and taken around the factory to see how they do their production and even explaining every whole step of production line. This really made us feel honored and we started to see them as transparent and responsible for(p) people, something that needed in business so much.Chinese negotiating style is people oriented and per meated with such Confucians fancy as guanxi, renqing, face, family age, harmony, hierarchy, li (etiquette)5. 5 As said by Tong Fang Chinese Business Negotiating Styles 9 orbitual REASONING TALKING In our haste to market our designs for shoe soles. We came across various ways in which Chinese carry out their business negotiation. While most of the companies we approached exhibited the sequential kind of talking, the Chinese demonstrate the circular type.Interestingly, as we tried to obtain information and answer their questions regarding our products, we realized that Chinese, when not kindle in your product would rather beat about the bush than going straight to the point. This is mostly demonstrated in the time of negotiating prices. This makes it hard to determine their stance in terms of buying the product. It is around impossible at that moment to determine the level of consequence of no agreement on the buyers side. As much as you try explaining and convincing Chinese buy ers who are less intimacyed in a product, you will end up just like before.It is hard for them to say no point blank. This I believe is because of the long courting and relationship they build up with their business partners before negotiating. For instance, in one of our interviews, the interviewee mentioned after our refusal to take lunch with him that it is the socialization of Chinese people to dine with their potential business partners disregardless of their interests. He explained that not only does this emphasize politeness it also creates room for next or incoming cooperation. That is why in almost every meeting with a Chinese business man, you are served tea or water even before the talking starts.As pleasing as this might sound, it is also the reason behind the average Chinese would exigency to beat about the bush when not interested in the product for sale. Relationship and friendship are commonly used to obtain a damp price and more concessions. 10 Herbig and Mart in (1998), Stark, Fam, Waller and Tian (2005), and Zhu et al. (2007) all found that the Chinese do not rush into the negotiation, only rather, spend a lot of time in getting to know their counterparts as much as possible, even including personal information in order to build guanxi and trust from the beginning.Another finding is that they would want to end the meeting peacefully and friendly just as it had started without having to ruin the relationship or bruise anyones feelings, yet they have to decide whether or not to purchase the product. According to Faure (1999), the Chinese cogitate more on relationship building during this stage, as they need to know their counterparts for any business throne to occur. This negotiation practice might cause conflict with Westerners, as Westerners prefer to start negotiations straight away after basic greetings and introductions. Rule how to be undefeated in dealing with ChineseBe fair, apt and diplomatic If your Chinese counterpart bel ieves that you are being unreasonable, they may not openly say so, but your negotiations are likely to stall and go nowhere. If you disagree with your counterpart, dont simply reject their postal service out of hand, but carefully explain your reasoning. 6 6 Forbes by Jack Perkowski (Negotiating in China 10 rules for Success 11 QUESTIONING INTERRUPTING Weve had several(prenominal) encounters with many customers throughout the years, but what makes the Chinese customers outstanding is their mode of questioning.Unlike our African customers, they tend to interrupt and chip in their questions whiles you are talking. In some cultures, this might seem rude and impolite but this is not so for Chinese. They are very cooperative, assertive and defensive. This encourages and makes the one talking feel hes being listened to. This normally generates positive feedback. During one of the interviews conducted, it came to our realization that, the typical or traditional Chinese interrupts more th an the Chinese who has been open to Western culture.Customers who deal with Westerners or Africans have adjusted to some of their negotiation skill. This we believe will go a long way to influence most Chinese business partners. Their character or attitude of seeking and postulation questions is different from other people in the sense that Chinese exhibits a character of Xenophobia which is a suspicion of all things foreign to ones own culture. Xenophile is a lust to obtain all things new and or foreign. The Chinese have become inclined to distrust anything and everyone from foreign lands due to their history of impetuous revolutions and government seizures and changes.On the other hand, they have also seen the new technologies and high standard of living in the West, and many Chinese struggle with these mixed feelings as they pursue business opportunities with foreigners and seek to acquire occidental technologies (Pye, 1992) 12 COLLECTIVISM Under collectivism, the means of pr oduction are owned and controlled by the state or the people as a whole. Also, it describes any outlook or philosophy that stresses the interactivity between people. It is often consider as opposite of individualism.There are two basic types of collectivism naiant and vertical. In the horizontal type, members are considered to be as equal as possible, and share resources and responsibilities. The vertical include a complaisant hierarchy that society member work to maintain, and people submit to those above them in the hierarchy. Collectivism in China When Mao Ze Dong came into power he strengthens the collectivism by eliminating landowners and individualists, sending nearly everyone to work in collectivist communities.Therefore, China has been more collectivist than individualist in twain ancient and new-fangled history. Many research states that, there are many leaders in China today who believe that the days of collectivism in China will soon be gone. There are several reasons for this. First is that the one-child-policy, especially in the cities, it gives us many younger citizens who have been raised to believe that they let in a special place in the world. This kind of upbringing leads to individualism over collectivism.In business point, there are still many frameworks of collectivist thinking. For example, When we(foreigner) and Chinese, began to work together, mainly the Chinese look towards the team as 13 the reason for the company success, but on the other hand, the foreigner(us) were trying to identify individual high performers. Thats one of the different between Chinese and foreign culture. Collectivism between our culture (as a foreigner) and Chinese Collectivism is a cultural pattern found especially in East Asia, Latin America, and Africa.But nowadays societies are not purely individualist or collectivist, but some of them are the mixture of the two. Western and Northern Europe, USA, Canada, Australia, and New Zealand are individualist. C onclusion Although there are few countries fully apply in collectivism, like North Korea, most of the countries are applying the mixture of collectivism and individualism. Those countries practicing collectivism mainly have a low GDP level, because it affects trade with the other countries. 14 THE RELATIONSHIP in the midst of SPECIFICATION OF TIME AND PRICE.The important aspects when we negotiate with Chinese Patience is the most important qualification for successful negotiations with the Chinese. Negotiations in China often take time because of different departments within one organization tend to be involved in negotiation processes and decision-making within the Chinese bureaucracy often takes time. By Confucianism, Chinese will not rush into any serious meetings with someone whom they do not know trust and a certain feeling of closeness. Here is the example of Chinese negotate style we found.It prove that, to negotiate a favourite price with Chinese, obviously we need time. 1. Dont expose too much of your interest in a product you want to buy even though youre really emaciated to it. It is better to act like that it does not matter to you and you dont have to have it. sometimes the sales person would tell you if he or she can judge from your facial expression that you really want that item. 2. In the first time you will never get the exact item for the price. unremarkably the sales person would try to seduce you by offering an unfavorable price.For example, for a necklace placed at $100, if you ask the sales person for discount, perhaps for the first time she would give you a discount like $90. Dont take it. Just think that it is too high and passing play away. Sometimes the sales person would shout at your back and offer much more favorable discounts. 15 3. The second negotiation is to reach a middle point. Try to get 45-60% discount of the original price. If it is impossible, try to get somewhere around 70-85%. Try to negotiate in a friendly way. I f the agreement cannot be reached, walk away again.4. The final negotiation will be the last attempt. Be firm and try to get 40% off. Some might finally give you 40% off, while some cant due to different price strategies involved and store renting fees, staff cost, etc. To compare with our culture(as a foreigner), in our country, all the goods had set their fixed selling price, and most of the company usually have their own rule for market selling, therefore the vacuum for price negotiate will be less. 16 style BARRIER Our group members come from Nepal, Ghana, Tanzania, and Hong Kong.We speak different languages. English is our second language. We often face with language barrier within and outside the group. . Language barrier often is a big problem. If this was an outsourcing job or transcription work, language would probably have a major role, as both require clear understanding of the accents, practice of speaking in a fluent way. Cause of language barrier 1. Emails create ve rbally communication we should be able to clearly understand written instructions and reply with clear and also follow rules in a polite way.Sometimes we often wrote a business mail in a friendly tone, instead we should write in a formal way. 2. Phone Calls While working with an outsourcing partner, providing a peal number for emergencies may seem to be a good idea. However if this phone number happens to be attended by a non-English speaking person, it will serve nothing but a source of irritation. So we can think of giving the mobile number of a substitute who can speak with clear and patience even if the resolution is not attained on the call in itself. 17 Useful method between different language.Pictogram and simple image are utile method as icon or sign for almost every place. It means they are effective to give information to people without any words. They have high possibility to support the communication between two people without spoken language. Conclusion We need to u se English to communicate with each other, when we were going to Nanhai to take the video, sometimes we need to use Chinese to communicate with the local Chinese people. When people from different countries speak in different languages, we often face difficulties an understanding each other.We cannot express our meaning in a proper way. During our research, when we took the train, there was problem in translating Chinese characters. So it is quite hard for us to find the way to the shoe factory. In addition, the English level of a local Chinese are mainly still in low level, some of them even cannot understand what we are asking. I think it is what we are called language barriers. 18 Chapter 4 TIPS TO NEGOTIATE WITH CHINESE The intensive research negotiation we conducted at Yuehai Shoes Materials factory widened up our knowledge about Chinese negotiation.We believe through this report you have acquired some usefully tips on how to strategically negotiate with Chinese. Upon what you have learned here are our recommendations for you to usurp any negotiation ? Be prepared Make sure you are well prepared. ? Understand the cultural differences. Get to know the other culture. ? Dont be afraid of negotiation if you can talk you can negotiate. ? Show some emotions (share some burden)remember, people value them. ? Be on time.. time is money. ? Be careful use appropriate language. ? Be in control dont allow other things to distract your focus.? Give some room for the other party (compromise whenever necessary). ? Show some vivid example a picture is worth a thousand words. 19 CONCLUSION Deal is always better that no deal. 7 As hard as negotiation may seem to be, its outcomes are almost always worth the endurance. In different cultures where there are different goals, different point of views, different interests, different values and beliefs, different needs and different decision making styles it takes a considerably immense amount of effort for sellers and buyers to reach the agreement zone.Both parties must be willing to give up part of their wish or lower their requirements which do not happen easily. With better understanding of both cultures of the parties involved, the negotiation will yield more significance solutions. One should keep in mind that negotiation is the cornerstone of any successfully business in the world. Despite the difficulties involved in the strategic negotiation, lets us follow the words of one of our great fathers who once said, Lets never negotiate out of fear, but lets us never fear to negotiate. 8 7 Professor Shia Yun Chiang class PowerPoint presentation 8a.