Michelin has decided to expand the company internationally to China. As treasurer for this prestigious company it’s my responsibility to research different factors prior to the expansion that will assist the company in this successful venture. Topics of discussions are foreign trade issues; determinants of entering China, embarking in international negotiation and many more valid points are included in my research to soften the blow of unnecessary challenges.
Dealing with foreign trade issues.
Acting as treasurer several factors would have to be developed and monitored when expanding internationally such as money exchange, current exchange rates, cash flow, bribery, tariffs, and ...view middle of the document...
(Contractual risk) High control entry modes will be enforced over the company’s assets and skills to avoid opportunism (Phatak, Bhagat, & Kashlak, 2009, Pg. 236 - 237).
Embarking on negotiation
The art of negotiation can be very challenging however; several aspects that take place prior to, during, and after negotiating can establish it. Negotiation is a method used in international relations, business deals, managing relations, mergers, and agreements between an organization and two or more parties. There are four elements to consider when negotiating; conflict pertaining two or more parties regarding an important goal, shared interest in reaching a resolution, preparation prior to the negotiation process, both parties have a goal however there’s no certainty of a shared agreement (Phatak, Bhagat, & Kashlak, 2009, Pg. 363 & 364).
5 stages of negotiation and preparing for them
There are five stages of negotiations, which involve communication that requires preparation, making concessions and reaching an agreement, relationship building, persuasion, and information exchange. The relevance of each stage and time span will vary depending on the country’s culture. Negotiators prepare by learning as much as they can about the other party by strategizing, gathering as much information as they can to assist them in coming to a mutual consensus (Phatak, Bhagat, & Kashlak, 2009, pg. 364, par. 2). I would gather up as much information as possible to study for future negotiations assisting in the approach of the opponent’s organizations culture.
Relationship building allows all parties involved to meet several times on neutral grounds formally and informally exchanging contact information learning about each other’s culture. This would be the most opportune time to discuss each others expectations, individual goals and cultures, establishing a personal relationship which will gain their trust making negotiations go along smoother (Phatak, Bhagat, & Kashlak, 2009, pg. 365, par. 1). I would establish a relationship and gain the opponent’s trust by taking them out to social functions and dinners allowing us to get a better understanding of one another and our cultures.
Information exchange allows both parties to formally present and discuss the issues at hand. Each party will have an opportunity to ask questions to clear up any misunderstanding. Relevant information is brought to the table starting the negotiating process where are parties involved can comprehend (Phatak, Bhagat, & Kashlak, 2009, pg. 365, par. 2). I would ask as many questions as I could to gain a better understanding of their issues and convey my issues in a way that they could comprehend to gain their trust for future negotiations.
Persuasion is when each party tries to influence the other party to change their beliefs, interest, attitudes, preference structures, demands and positions. This stage suggest each party attempts to come to a mutual agreement both...