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Cultural factors in negotiation
Role Of Culture In International Markets
Role Of Culture In International Markets
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The biggest apprehensions in international business are related to transactions and negotiations crossing national as well as cultural borders. In order to make this mechanisms take place on an international base level, businesses awareness of external uncertainties needs to be tackled and turned into a beneficial dimension. Reducing risks and getting access to new markets are major goals of international co-operations such as mergers, strategic alliances, contractual forms of co-operation and international joint venture (IJVs). International Joint Venture A joint venture is a collaboration agreement between two or more companies, which entails the sharing of profits and losses, skill and managerial expertise and technology to a varying degree. Joint ventures are typically formed between smaller domestic companies and foreign multinational companies and should incur benefits for all parties. Multinational companies tend to use joint ventures as a mode of entry into a foreign market and capitalize on domestic government relation and local knowledge whereas smaller domestic companies seek out the growth opportunities arising from access to new technology, managerial expertise and access to a global marketplace (Weston and Mitchell et al., 2004). Apart from the economic benefits derived from a joint venture, many companies also pursue this strategy to reduce risks associated with new business ventures. Joint ventures serve the purpose of achieving a joint goal and are therefore regarded as temporary arrangements (ANDRÄ, BROLL; 2012). Joint ventures are generally approached from two distinctive points of view: on the one hand the control perspective, which emphasizes the tradeoff between control and the risk of appropriation of... ... middle of paper ... ...nt if they are in need of the partner’s technology, as they need to build trust. The ownership structure is a tradeoff between control and efficiency, to the one extreme there is high foreign ownership which leads to high knowledge transfer and high control by the foreign party but little efficiency in the long run as the local firms perceived responsibility is low, and on the other extreme is a high ownership percentage by the local company which leads to little knowledge exchange and thus again a poor performance. In order for a joint venture to be successful a balance between the two extremes needs to be found. In conclusion equal partnership, good planning and communication between the partners and careful selection of potential partners after in depth industry and market analysis and possible synergetic effects characterize the most successful joint ventures.
inside and exports it outside of Malundi. On the other hand KJH is an American
... it is can at times be about co-operation and this is evident in the merger of BHP and Billiton in 2001. What BHP Billiton should have learnt from this analysis is that if they continue to diversify, look for new opportunities in emerging markets and maintain a good public image than maintaining success will not be as difficult as it is to build it up in todays times. It is also important to note as it has been evident in the past that the joint ventures and mergers are becoming increasingly more popular as it opens up many different avenues into conducting business in other parts of the world as well as giving more power and control to MNCs in controlling markets, in an increasingly more globalized world we must put at best foot forward to diversify and integrate business and cultures to remain globally competitive.
Individualism refers to the extent of which people are integrated into groups. Individualistic societies have loose ties among individuals. In collectivism, society is tightly integrated into groups or extended families in which people have unquestioning loyalty and support for each
However, the concerns of partnering with a firm can lead to exploitation or copy/take away proprietary, competency, technique or technology, which will harm future long term gains.
Many business owners and entrepreneurs are doubtful about the global opportunities available to their business. In other words, business owners don’t give consideration to the world markets, instead they tend think locally in terms of gaining customers. This doubt however is unfounded. The international trade commission reported that 70% of the world’s purchasing power and 95% of the world’s consumers are located outside of the United States, which means that there is a massive market that is currently untapped by 99% of business in America. In addition to doubt, there is the uncertainty about exporting to other countries, this uncertainty may stem from lack of knowledge about foreign trade and the international laws. A business owner may be uncertain about how, when, where, and to whom it is legal to ship their products. Although, this uncertainty is understandable it is not required for businesses that are conducting business legally within the United States, business owners should remain mindful of this so that they can push their uncertainties aside. The last factor that deters businesses from international trade is Fear. Fear that there will be unforeseen and uncontrollable issues with transporting goods such as: theft, loss, damages, diversions, and/or regulatory penalties that may be imposed on the business. Although, there is a
• Establish a relationship with partnering organization with similar business philosophies and client base we would like to collaborate with for programs, events or services.
Q2 what is intrapreneurship? How can a business organisation incentivise it and benefit from it?
Introduction In the reading "A first time expatriate's experience in a joint venture in China" we have come to understand the nature and structure of the joint venture between the U.S.A. and China and the role that James Randolf played in strengthening and maintaining the international partnership. Controls Inc. was a subsidiary of the parent company Filtration Inc. and so was shielded from any outside competition. When Controls Inc. was given the charter to pursue its own business, they realized the need for being cost effective as a result of which they started an operation in Singapore with the name Controls Asia-Pacific with the prime objective to have a presence in the region and to study and evaluate any possibility of a joint venture. James has been an employee of Controls Inc. for the past 23 years with experience in managerial positions of about 15 years.
Before the alliance the two firms were in totally different market and they were also in different country but the industry was of same type. Both of the firms were aware about their future plan and lacking.
The topic under review is strategic alliances. This particular form of non-equity alliance between firms in the same industry (competitors) is becoming an increasingly popular way of conducting business in the global environment. Many different reasons of why such alliances are occurring have been recognized. These include: the increasing globalization of the world's economy resulting in intensified global competition, the proliferation and disbursement of technology, and the shortening of product life-cycles. This critique will use Kenichi Ohmae's viewpoint on strategic alliances as a benchmark for comparison. Firstly, a summary of Ohmae's article will be provided. Secondly, in order to critique Ohmae's opinion, it will be necessary to review other literature on the topic. Thirdly, a discussion of the various viewpoints and studies, that have hence arisen, will be discussed in detail. Finally, conclusions will be drawn with implications for companies operating in today's global environment, together with suggestions for future research on strategic alliances.
Sharing of knowledge, technology, and capital that are brought to the company by the partner.
Any negotiation challenges the parties involved in a variety of ways, but parties with conflicting interests face important additional difficulties when attempting to negotiate an agreement across culture lines. Not only will the difficulties arising from the known similarities and differences of opinion be more pronounced, but also unsuspected factors could easily enter the picture and condition perceptions of the situation. In cross-cultural negotiations, a reasonable second acknowledgment should be that the hidden factors that are always at work are more likely to interfere with reaching an agreement. It is especially important that this acknowledgment be understood to apply not only to the dynamics of interactions across the table, but those of individuals on the same side of the table. [At times, it may be tempting to attribute the outcomes of negotiations to a single variable (such as the culture or the relative power of a country).] The term culture has taken on many different meanings but basically it reflects the shared values. Culture affects negotiations in different ways. In this paper, we are going to discuss the American and Jap...
After a period of continuing growth, the stagnant sales growth of the automotive industry in the late 1970s led all car makers to start to look for methods to fit the new climate. With the purpose of using money on research and development more effectively, spreading the risk of making main components in greater volume, and accessing to new market which were hard to enter, more and more automobile producers reached to the conclusion of collaborating with others. In addition, to remain independent, joint venture seemed to be the best answer. (Campbell, Stonehouse & Houston 2002)
International Marketing, at its simplest level, involves the firm making one or more marketing mix decisions across national boundaries (Jobber, 2010). At its most complex level, it involves the firm establishing manufacturing facilities overseas and coordinating marketing strategies across the globe (Jobber, 2010). There are various reasons for going global, some of which are: to find opportunities beyond saturated domestic markets; to seek expansion beyond small, low growth domestic markets; to meet customers’ expectations; to respond to the competitive forces for example the desire to attack an overseas competitor; to act on cost factor for example to gain economies of scale in order to achieve a balanced growth portfolio. The methods of market entry that could be used are indirect exporting (for example, using domestic –based export agents), direct exporting (for example, foreign –based distributors), licensing, joint venture and direct investment. I found this par...