Negotiation with chinese Essay

We need to express simple appreciation to prof Shia Yun Chiang for his assistance in the preparation of this manuscript. In addition, special thanks to Yama (Yuehai shoe substantive Ltd) whos familiarity with the needs and ideas of these team and was helpful during the early programming phase of this research. INTRODUCTION Continental use is a comp some(prenominal) where excellence and guest satisfactory be priority. by and by ten age of macrocosm in caper, continental no seeks to enter the Chinese market.On Thursday, June 13th 2013, or so members were selected to visit the authority customers of our smart shoe-soles proposes to introduce and negotiate our terms. These members include Mr. Emmanuel Mlay (Financial Officer), Mr. Robin Sharma(Managing Director), Mr. Cliff Osoo ( pay offing Officer), Ms. Bella Chan (General Overseer), Ms. Sandra O. K (Sales Manager). Upon arrival, we were scoren in and virtu anyy the factory to experience their works and then to the meet ing room. In this report, we explain further our observation and startings in negotiating with the typical Chinese.This report emphasizes primarily on the observations which includes specifications, mode of conduct, styles and techniques also elaborating on how they work together as individualist or collectivism. Again the language used, what they felt at ease to say, their converse skills, relationships with clients, were also below study. However their reason tabooing and counseling of thinking was some(a)how fascinating and rattling interesting which this report enlightens ideally and strategically. A brief but very informative research was d wizard to do our potential customers in front make turn up to them.The genius blabbered about in this report is Yuehai shoes material, a very renowned shoesole company in mainland chinaw ar. In the decease, all stock operations screw be cut back to three words plurality, crossway and profits. Unless youve got a good team , you shadowert do ofttimes with the new(prenominal) two. 1 1 By Lee Iacocca 1 Chapter 1 THE CONTINENTAL DESIGN Continental throw pass ons contraryiated 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 developing its communication and talks skills. Its management capabilities have enabled it to technically handle the challenges and efficiently provide products that argon best in the market. As Victor Papanek once said Design is the conscious grounds to impose a meaningful order. Continental design was founded by a team of five engineers with one primary goal of working hard helping all small and big shoes companies to acquire through professionally enhanced designs.Today, Continental design is a full-service independent company with about 10 percent of the world market sh atomic go 18. Our services cover the whole of Africa, South and North the States, pose einsteinium and few countries in Asia. Recently we have initiated our prototypal staple toward China market. 2 BUYERS COMPANY compose Yuehai space Materials Yuehai shoe material has much than 20 years of manufacturing experience and large number of adapted senior employees who argon devoted to settling line of works and confronting challenges. It has adopted advanced equipment from Taiwan and main land China.The proceeds technology is matured and reliable at the same cartridge holder it uses the original material that reads its products to be celebrated by their mellow qualities. Its domestic market ranges from Guangzhou and mountgguan where in that respect 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 Europe and America as the first target in external market. Most rec ently, it has expanded its external market to Middle East and Africa as a whole, where it has entered into to a greater extent than 10 dissimilar countries.Shoes are human free-and-easy life necessities. Shoes industries go absent never perish as long as human organism still exists. With the use of imagination this company is committed to continue to develop shoe industries as bump of making the life of entire society in the world come apart off. Address No. 39 beicun road, huangqi, nanhai district, foshan city, Guangdong province, China. Tel 8675785938525 Fax 867578592981 Email tailon21cn. net Yuehaixe. com. cn 3 Chapter 2 NEGOTIATION PREPARATION In talks thither are few involvements that have to be put in place before the negotiating team or somebody set off for the negotiation.The factors that are for the most part considered before negotiation are ? Length of stipulation This is the period that the proclamation allow for imbibe before its renewed again. The seller perpetually turn in this factor because it affect the profit the company provide make and for how long. Mostly its 1 to 3 years. This factor is important because it also influence the impairment to be offered to the purchaser. ? Volume to be ordered later a seller has agreed on the distance of contract then the next topic to talk about is the Volume that lead be bought.When few goods are bought, thither is a high surmise that the price will be higher un worry when a large quantity is bought therefore these first 2 factors influence the price of the item. ? expense The third factor to talk about afterward length of contract and volume is price at which the good will be sold. In every company, there is a price offered depending on the quantity to be bought, quality and separate things postulate for issue. The larger the quantity, the disappoint the price will be and vice versa. 4 ? Payment Terms and Services.The most important thing for a company going for a negotiatio n is length of contract, volume and price and other things like stipend terms and services comes up later. The last two remaining factors are considered to make undispu fudge that the items agreed before is taken into account in a proper manner. Payment terms are important because change surface if you have a long contract with large volume but payment is non 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 LIST.Here we made our wish list before we went to the meeting. We had decided our lowest price and the contract length. Below you can see the resolving 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 Years 500- speed of lightunits/month $200-$150 10-15 years 5/5-8/5 In the accompanying 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 imagine that it wont be any problem even if we have 2 years long contract.In terms of volume we were ready to contain any amount till up to 500 per months. Price was the main concern of our meeting. We know that they will try to egest more time on the price negotiating and knowing we have galore(postnominal) competitors in the market, we needed to come up with a very good price range. We also had an agreement 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 slide 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, receivable to the buyer or seller not agreeing with the offe r slide byn. The second 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 Length 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 training 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.When going for a negotiation one has to learn the buyers values in thinking. These va lues differ from one country or one region to the other and it can cause a mis correspondence between the two parties. accord to the research we did about Chinese negotiation, we found out that Chinese are more relationship point 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. other 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 enquireed a lot of personal questions even in the middle of our negotiation. well-nigh of the questions they asked were When will you go back to your country? Do you like china? Is your country very desirous than china? These personal questions that are not related to business are a clear range of a function of Chinese values and thinking in a negotiation.As a general hold, its always safer to adopt a formal posture and move to an informal 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 annotate 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 flavor 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 observe in the research i s 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 wherefore they should be concerned with how we got to know about the company, but 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 receive and taken around the factory to see how they do their production and even explaining every step of production line. This really made us feel honored and we started to see them as transparent and responsible people, something that needed in business so much.Chinese negotiating style is people oriented and permeated with such Confucians notion as guanxi, renqing, face, family age, harmony , power structure, li (etiquette)5. 5 As said by Tong Fang Chinese Business Negotiating Styles 9 CIRCULAR logical thinking & 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 demonstrated the banknote type.Interestingly, as we tried to obtain information and answer their questions regarding our products, we realized that Chinese, when not interested 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 closely impossible at that import to determine the level of consequence of no agreement on the buyers side. As much as you try explaining and convincing Chinese buyers who are less interested in a product, you will end up jus t 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 culture of Chinese people to dine with their potential business partners irrespective of their interests. He explained that not only does this emphasize politeness it also creates room for next or future 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 insufficiency to beat about the bush when not interested in the product for sale. Relationship and friendship are commonly used to obtain a break up price and more concessions. 10 Herbig and Martin (1998), Stark, Fam, Waller and Tian (2005), and Zhu et al. (20 07) all found that the Chinese do not rush into the negotiation, but 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 peace fully and friendly just as it had started without having to ruin the relationship or hurt anyones feelings, yet they have to decide whether or not to purchase the product. According to Faure (1999), the Chinese focus more on relationship building during this stage, as they need to know their counterparts for any business deal 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 successful in dealing with ChineseBe fair, reasonable and diplomatical If your Chinese counterpart believes that you are being unreasonable, they may not openly say so, bu t your negotiations are likely to stall and go nowhere. If you disagree with your counterpart, dont simply reject their position 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 encounters with many customers throughout the years, but what makes the Chinese customers large 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, imperative 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 acknowledgement that, the typical or traditional Chinese interrupts more than the Chinese who has been open to Western culture.Customers who deal with Westerner s 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 asking questions is different from other people in the sense that Chinese exhibits a character of Xenophobia which is a distrust 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 violent revolutions and disposal 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 western technologies (Pye, 1992) 12 COLLECTIVISM Under collectivism, the means of production are owned and controlled by the state or the people as a whole. Also, it describes any outlo ok or philosophy that stresses the interactivity between people. It is often consider as opposite of individualism.There are two basic types of collectivism horizontal and vertical. In the horizontal type, members are considered to be as equal as possible, and share resources and responsibilities. The vertical include a social 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 both ancient and modern history. many a(prenominal) 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. initiatory is that the one-child-policy, especially in the cities, it gives us many y ounger citizens who have been raised to believe that they hold a special place in the world. This kind of upbringing leads to individualism over collectivism.In business point, there are still many grammatical cases 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. Conclusion 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 BETWEEN precondition 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 dearie 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 drawn to it. It is better to act like that it does not matter to you and you dont have to have it. Sometimes the gross 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. Usually 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 walk 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. If the agreement cannot be reached, walk away again.4. The final negotiation will be the last attempt. Be firm an d 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 LANGUAGE bulwark Our group members come from Nepal, Ghana, Tanzania, and Hong Kong.We declare different languages. English is our second language. We often face with language parapet within and outside the group. . Language barrier often is a big problem. If this was an outsourcing job or arrangement 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 written communication we should be able to clearly understand written instructions and reply with clear and also fol low 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 phone 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 representative 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 useful method as icon or sign for almost every place. It means they are efficient 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 use 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 conquer any negotiation ? Be prepared Make sure you are we ll prepared. ? Understand the cultural differences. write down 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 long 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 requi rements 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.