Negotiation with chinese Essay

We concupiscence to express sincere appreciation to Professor Shia Yun Chiang for his financial aid in the preparation of this manuscript. In addition, special thanks to Yama (Yuehai clothe hooey Ltd) whos familiarity with the needs and ideas of these team and was helpful during the early programming arrange of this research. INTRODUCTION Continental bearing is a comp twain whither excellence and no(prenominal)e satis chemical elementy argon priority. After ten days of being in product line, continental now hitchks to enter the Chinese securities indus experiment.On Thursday, June 13th 2013, more or lesswhat members were selected to visit the say-so customers of our current shoe-soles shapes to introduce and accomplish our harm. These members include Mr. Emmanuel Mlay (Financial Officer), Mr. robin redbreast Sharma(Managing Director), Mr. Cliff Osoo (Contracting Officer), Ms. Bella Chan (General Overseer), Ms. Sandra O. K (Sales Manager). Upon arrival, we were dep leten in and around the factory to control their works and then to the opposition room. In this report, we explain further our ceremonial occasion and findings in negotiating with the typical Chinese.This report emphasizes brinyly on the observations which includes specifications, mode of conduct, behaviors and techniques in any case elaborating on how they work together as individua return or sovietism. once to a greater extent the language employ, what they felt at ease to imagine, their communication skills, affinitys with clients, were also under(a) study. However their reasoning and way of regaining was somehow fascinating and rattling engagementing which this report enlightens ide solelyy and strategic totallyy. A brief plainly very informative research was tangle withe to sock our potential customers before range out to them.The iodine talked about in this report is Yuehai shoes poppycock, a very ren delivered shoesole political party in chinaw argon . In the end, all doing line operations burn down be reduced to three spoken communication tidy sum, product and proceedss. Unless youve got a good team, you slewt do such(prenominal) with the contrastive(a) 2. 1 1 By Lee Iacocca 1 Chapter 1 THE CONTINENTAL DESIGN Continental excogitation provides diametriciated products that accelerate innovations in the global design market. With ten years of experience and commitment, Continental design has grown to be unrivaled of the strongest competitors in the field of designing.This familiarity has also spent those ten years in give awaying its communication and duologue skills. Its management capabilities accommodate en able-bodiedd it to technically handle the challenges and expeditiously provide products that ar best in the market. As Victor Papanek once said Design is the conscious effort to impose a meaningful prep are. Continental design was readinessed by a team of five engineers with one primary finis of wor king sticky helping all small and king-sized 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 share. Our services cover the solid of Africa, South and North the States, sum eastbound and few countries in Asia. Recently we induct initiated our first staple toward China market. 2 vendeeS COMPANY PROFILE Yuehai shoes Materials Yuehai shoe material has more(prenominal) than 20 years of manufacturing experience and large number of qualified aged employees who are devoted to settling problems and confronting challenges. It has adopted advanced equipment from Taiwan and main land China.The production technology is matured and reliable at the kindred cartridge holder it practises the original material that functions its products to be famous by their risque qualities. Its domestic market ranges from Guangzhou and Dongguan where there is a stiff competit ion 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 take aim 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 divers(prenominal) countries.Shoes are human daily life necessities. Shoes industries testamenting neer perish as long as human being bland 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 conk out polish 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 dialogue there are few things that have to be put in coiffure before the negotiating team or psyche set off for the duologue.T he factors that are closelyly considered before duologue are ? Length of edit This is the period that the contract will publication before its regenerate again. The seller always 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 important because it also trance the worth to be offered to the buyer. ? majority to be ordered After a seller has hold on the continuance of contract then the next thing to talk about is the brashness that will be bought.When few goods are bought, there is a blue guess that the expenditure will be blueer unlike when a large metre is bought therefore these first two factors influence the price of the item. ? hurt The third factor to talk about subsequently distance 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 other things needed for production . The larger the quantity, the lower the price will be and vice versa. 4 ? Payment Terms and run.The most important thing for a company handout for a negotiation is length of contract, volume and price and other things like stipend damage and services returns up later. The last two remaining factors are considered to make sure that the items agree before is taken into account in a strait-laced manner. Payment terms are important because tear down if you have a long contract with large volume scarce 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 sess 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% RANG E 2-1 Years 500-100units/month $200-$150 10-15days 5/5-8/5 In the future(a) 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 believe that it wont be any problem even if we have 2 years long contract.In terms of volume we were ready to deliver any amount till up to 500 per months. Price was the main bear on of our meeting. We see that they will try to die more time on the price negotiating and knowing we have legion(predicate) a nonher(prenominal) competitors in the market, we needed to come up with a very good price range. We also had an conformity on payment terms which should meet inside the short period. Lastly, we agreed to offer them a good customer service. 2 Professor Shia Yun Chiang causality apex 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 present an pla cement or not. The first situation is where the seller and the buyer dont make believe an arranging at all, either, due to the buyer or seller not agreeing with the offer given. The second situation is where the two parties (Buyer and Seller) reach an agreement and signs a contract for the line of reasoning to take place immediately. For the two parties to reach an agreement, they will have to consider their Consequence of No balance (CNA). CNA will either make the two parties to agree or discord.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 capital 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 p oint 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 apprizes in bring forwarding. These values differ from one country or one region to the other and it can cause a misinterpret between the two parties. According to the research we did about Chinese negotiation, we found out that Chinese are more kindred 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(prenominal) thing that the company we were negotiating with did is that, they invited us for supper. In these acts we can see how Chinese slew are mostly towards relationship with their clients unlike other European countries or America and even Africa. Before us reaching a conclusion, the Chinese people aske d a lot of personal questions even in the sum of our negotiation. any(prenominal) 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 clear picture of Chinese values and thinking in a negotiation.As a planetary rule, its always safer to adopt a testis posture and move around to an informal stance, if the situation warrants it, than to assume an informal style too cursorily4 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 odour 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 tang so cared for that they can trust the offers given. Another thing we noticed in the research is the way they asked us whether mortal has introduced us to the company or we looked it up in the internet. At the begin I didnt see the reason why they should be bear on 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 ob advertd 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 step of production line. This truly made us feel honored and we started to see them as vaporific and responsible peopl e, something that needed in business so much.Chinese negotiating style is people oriented and permeated with such Confucians notion as guanxi, renqing, flavor, family age, harmony, hierarchy, li (etiquette)5. 5 As said by Tong Fang Chinese Business Negotiating Styles 9 government note REASONING & TALKING In our haste to market our designs for shoe soles. We came crosswise 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 poster type.Interestingly, as we tried to obtain information and answer their questions regarding our products, we realized that Chinese, when not fire in your product would rather beat about the crotch hair than going straight to the point. This is mostly demonstrated in the time of negotiating prices. This makes it tight to determine their stance in terms of buying the product. It is almost unacceptable at that moment to determi ne 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 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 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 median(a) Chinese would want to beat about the bush when not interested in the product for sale. Relat ionship and friendship are commonly used to obtain a better price and more concessions. 10 Herbig and Martin (1998), Stark, Fam, Waller and Tian (2005), and Zhu et al. (2007) 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 peacefully 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 partake to occur. This negotiation fare might cause conflict with Westerners, as Westerners take to start negotiations straight away after prefatory greetings and introductions. Rule how to be successful in dealing with ChineseBe fair, reasonable and diplomatic If your Chinese counterpart believes that you are being unreasonable, they may not up to(p)ly say so, but 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 poop Perkowski (Negotiating in China 10 rules for Success 11 QUESTIONING & INTERRUPTING Weve had some(prenominal) encounters with many customers throughout the years, but what makes the Chinese customers outstanding is their mode of questioning. distant 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 i nterviews conducted, it came to our acknowledgment that, the typical or traditional Chinese interrupts more than 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 pursuit 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 overseas 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 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 render to acquire western technologies (Pye, 1992) 12 COLLECTIVISM Under sovietism, the means of production 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 a great deal 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 favorable hierarchy that society member work to maintain, and people submit to those above them in the hierarchy. communism in China When Mao Ze Dong came into force 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 research states that, there are many leaders in China t oday 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 jr. 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 examples of collectivist thinking. For example, When we(foreigner) and Chinese, began to work together, chiefly 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 ethnic pattern found especially in East Asia, Latin America, and Africa. exactly 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. culture 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 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, plainly 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. close totimes the gross sales person would tell you if he or she can judge from your seventh cranial nerve 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 displace 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 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 LANGUAGE BARRIER Our group members come from Nepal, Ghana, Tanzania, and Hong Kong.We discourse different languages. English is our second language. We often face with language prohibition within and outside the group. . Language barricade 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 tast e of the accents, practice of telling in a fluent way. Cause of language barrier 1. Emails scripted 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 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 look-alike or sign for almost every place. It means they are efficient to give information to people without any words. They have high pos sibility 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 intense research negotiation we conducted at Yuehai Shoes Materials factory widened up our companionship about Chinese negotiation.We believe through th is 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 have 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 accommodate 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 huge amount of effort for sellers and buyers to reach the agreement zone. twain 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. superstar 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 tending, but lets us never fear to negotiate. 8 7 Professor Shia Yun Chiang class PowerPoint presentation 8a.