Introduction
According to Beasor & Steele (2000), commercial negotiation is negotiation in the context of a business setting such that it involves the management of commercial activities that includes contract negotiation and project management with the sole intention of making maximum returns from the same. This process allows for the development and creation of new business opportunities. The job description of commercial negotiators includes an over viewing role in the whole sales process and to some extent, they are responsible for the implementation of a detailed business sales plan. The overall role is to make sure they retrieve the best deal out of any business opportunity (Lam, 2000). It is therefore important for a commercial negotiator to have a grasp of the customers’ business needs in order to offer the required products and services demanded by the consumer. Commercial negotiation entails the following vital functions as pointed out by Meunier (2005); conducting market research of the different products by the business, analysis of data from the sale activities of a business, provision of financial reports to the senior management of the business and also to the different stakeholders of the enterprise. Another function is the identification of new opportunities for the business. Commercial negotiation also includes reviewing and assessing opportunities for new businesses. Moreover, they play a critical role in the maximization of the revenue from the business (Adoranti, 2006).
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Research questions
- What are the commercial negotiation skills and techniques in Europe and China?
- Why are the negotiation styles different between the two cultures?
- Why is the knowledge of target culture necessary in commercial negotiation?
Commercial negotiation skills and techniques in the western world (European Union) and China
For one to do business abroad he has to understand the different practices and cultures that are accepted in the process of commercial negotiation. Burke (n.d) stated that before an individual travels to the European Union, one has to consider the required etiquette that is observed and required in the meetings, negotiations and business protocol. Europeans are known to be humourless, stubborn, aggressive and also pay attention to details. A successful business has to understand the cross-cultural aspects to present the right etiquette. The Europeans are strictly formal while doing business and according to them, it is wrong to swap jokes or have informal chats when working (Fox, 2009). Europe is a significant trade partner for many states, therefore learning to do business in Europe and understanding their business practices, culture and etiquette improves skills and success of international businessmen (Meunier, 2005).
The first aspect of etiquette in Europe’s business spheres is Organization. They are usually uneasy with ambiguity and disorder. They lean towards conservatism and conformism they do not like uncertainty so one has to have first-hand information and facts at hand. According to Gates (2011), when doing business in Europe, one has to emphasize on careful planning. One has to consult and get a consensus before presenting his idea and opinions. European commercial negotiations appreciate statistics, facts and details and there is no room allowed for mistakes and omissions. To observe business etiquette one has to avert risk and negate uncertainty. The stress on conformity and fear of risk makes them apprehensive and they guarantee security through risk analysis. This is ensured by keen deliberation and scrutiny based on factual evidence and not intuition. They prefer written documentation as it is the safest and objective for analysis (Marsh, 2001).
On the other hand, Pye (1990) observed that in communication, the Chinese mind their privacy and they usually divide their private and public life. While communicating one has to be formal and stick to official duty. They do not talk about their private lives, as they are protective of personal issues. They prefer their communication to be short direct and straight to the point. They consider emotions unnecessary in conversations at the work place. They do not talk out of context as they only stick to the issue at hand. Similarly, Ward (2012) indicated that the Chinese also prefer brief greetings and that is why they only do short handshakes when several people are being introduced they take turns to greet each other and they avoid reaching out over someone’s hand. They find it rude to greet someone with one hand in the pocket and when women enter a room, the men stand as a show of politeness. The men sit after all the women have taken their seats (Beasor & Steele, 2000). The Chinese etiquette requires that people are addressed using Mr., Ms or Mrs. followed by the surname. The only people who are allowed to use the first names are family members and very close friends. The Chinese culture also insists on the use of professional titles such as doctors, academics and others. One has to establish professional titles before any meeting. They use the surnames to maintain formality and respect (Lam, 2000).
Meunier (2005) stated that punctuality is another important aspect of etiquette in Europe. Punctuality is a serious issue as they value their time. The business people are usually under a lot of pressure and they plan for their time very well to meet their daily objectives. Being late shows disrespect for people and their time, it is also a show that the person is not interested or not serious about the business deal or meeting. The punctuality is seen as a sign of commitment to the business. Europeans also do not mix humour with business affairs. If jokes are made they should be in context and tasteful. They usually have a very strict protocol in their meetings leaving little room for humour. They believe that when jokes are made during business then the meeting ceases to be formal (Adoranti, 2006). In doing business with Europeans one has to plan ahead the meetings should be booked two to three weeks in advance. They have a culture where they hold their meetings between eleven to one and three to five p.m. They avoid meetings on Friday afternoons, during their regional festivities and the holiday months of July, December and August (Burke, n.d.). Their meetings in most cases are usually formal, functional and they stick to the set agenda. The set start time and finish time are obeyed so everything is done within the time limit. They prioritize business as they discourage relationship building and small talks (Lam, 2000).
Fox (2009) also pointed out that the europeans analyse commercial negotiation proposals thoroughly while considering every detail. They ensure the information and facts are provided in written and scientifically presented. They make logical conclusion basing on the empirical details. Decisions are not made based on the subject’s charm or marketing skills but they consider concrete facts and the accuracy found in the details. The Europeans are slow when it comes to making decisions hence the proceedings should not be rushed. They take their time as they try to furnish the decisions with additional information. Once a decision is reached, they rarely change their mind regarding the same. They give respect priority and they give each other personal space in the work environment. They are not allowed to touch during meetings and business dealings. They do not mix official meeting with social issues (Gates, 2011).
Similarly, the Europeans prefer official dressing when doing commercial negotiations (Marsh, 2001)).They rarely dresses in casual clothes when working. Europeans trade show participants do not wear badges. Introductions are saved until the visitor shows interest. If the introduction is made too early, they consider it superficial and intrusive. Europeans also do not give their business cards quite easily. They value their privacy and in case they hand you one it should be treated as confidential and private. It should not be passed to another person without the owner’s permission (Ward, 2012). In calling the Europeans, they take it offensively when they are not referred to by their title and name. Europeans shake hands to say hello and goodbye. The hand shake should be done using a firm grip. This is a show of respect and also it depicts the appreciation of the colleague. Women are the ones to be greeted first and not while seated. The men have to stand before they greet women this clearly shows the high level of respect they maintain in the working area. They also have a culture of maintaining eye contact. This is a show of confidence and legitimacy (Beasor & Steele, 2000). In Germany, Meunier (2005) asserted that company stability and long-term commitment are top priorities. Europeans are usually curious about the company ownership, history and the product lines. References will be requested to prove honesty and reliability. Because of all this, the process may be slow and trying to speed them up is considered rude and suspicious.
Importance of Knowledge on Target Culture in Commercial Negotiation
The influence of cultural diversity has major impacts on work relationships in most organizations commercial negotiation (Adoranti, 2006). The cross-cultural occurrence affects communication between employees, causing confusion and thereafter results in misunderstanding in the workplace. It is therefore important for both managers and their employees to understand the target cultures’ communication process and recognize the sources of cross-cultural conflicts (Burke, n.d). Depending on how they are managed, cross-cultural conflicts may have either positive or negative outcomes. It is also significant for managers to develop better skills that help in handling the complications caused by different cultures. Managers should be able to convert the problems of cultural diversity into strengths of the organization (Beasor & Steele, 2000). This is so to avoid getting in disputes in different cross-cultural platforms. As a commercial negotiator, Fox (2009) suggested that it is significant to find out and address any underlying disputes or conflicts before anything goes wrong at the workplace. I have made it clear and understandable to my employees of the expected behaviours at the work place and most importantly during their interactions with foreign customers.
Methodology
The research was conducted through a case study. Which are Commercial negotiation skills and techniques in the western world (European Union) and China.
Discussion
A commercial negotiator needs to have contact with other required resources. For projects that need coordination between divisions and departments, a commercial negotiator with contacts outside a single department is required. According to Gates (2011), an aspiring commercial negotiator should ensure and develop contacts within the organization’s departments to help run a project successfully. They should also be able to coordinate a diverse pool of resources. This would be achieved by working with different people from different backgrounds and disciplines. As an aspiring commercial negotiator, one should be able to supervise and delegate work in areas alien to their background. All this is possible by having a close rapport and teamwork (Marsh, 2001).
Procedural and communication skills are also significant because of the constant flow of information from team members. One should also be accommodative of other team member’s opinions that are different from dependable as a commercial negotiator (Ward, 2012).
Conclusion
As a negotiator, one is the greatest ally but also greatest obstacle to effective management of the employees. One has to be closer to the junior managers who need to adapt to the new behaviours and cultures associated with management programs. Getting supervisors and managers on board and taking the lead in supporting cultural diversity is an important aspect of its commercial negotiation skills. This will ensure that employees are given an opportunity and platform to interact and raise any issues or concerns that they might have. Most importantly, employees should be given a chance to develop their own competencies and skills for enhancing cultural sensitivity among other employees in the company.
Recommendations
As a commercial negotiator working in a multicultural company, it has been necessary for me to develop my skills in cross-cultural conflict management which affects productivity in the long run. Cross-cultural disputes have often led to voluntary employment termination. These conflicts resulted in the loss of working time and loss of morale (Beasor & Steele, 2000).
5.2 Limitations and scope for further research
The present study was limited to time and money, so that research cannot be done in more detail. This paper provides the funds needed to do more detailed case studies, such as the need to go to the target’s company find more details of where the investigation
References
Adoranti, F. (2006). The Managers Guide to Understanding Commercial Contract Negotiation. New York: Global Professional Publishers.
Beasor, T., & Steele, P. (2000). Business Negotiation: A Practical Workbook. London: Gower Publishing, Ltd.
Burke, W. (n.d.). An examination of the commercial principles of the late negotiation between Great Britain and France in MDCCLXI: In which the system of that negotiation with regard to our colonies and commerce is considered (Google eBook). Printed for R. and J. Dodsley.
Fox, W. F. (2009). International Commercial Agreements: A Primer on Drafting, Negotiating, and Resolving Disputes. Kluwer Law International.
Gates, S. (2011). The Negotiation Book: Your Definitive Guide To Successful Negotiating. New York: John Wiley & Sons.
Lam, M. L.-L. (2000). Working with Chinese Expatriates in Business Negotiations: Portraits, Issues, and Applications. Greenwood Publishing Group.
Marsh, P. D. (2001). Contract Negotiation Handbook. London: Gower Publishing, Ltd.
Meunier, S. (2005). Trading Voices: The European Union in International Commercial Negotiations. Princeton : Princeton University Press.
Pye, L. W. (1990). Chinese Commercial Negotiating Style. Hong Kong: Oelgeschlager, Gunn & Hain, Publishers.
Ward, D. (2012). Contract Negotiation Handbook: Getting the Most Out of Commercial Deals. New York: John Wiley & Sons.
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