A final assignment paper of Leadership and Organizational Behavior (MBA - Andrews University)

1. CROSS-CULTURAL
NEGOTIATION
B S A D 5 1 5 - G R O U P A S S I G N M E N T
Instructor:
Dr. Soren R. Kirchner
Group 3:
Le Ngoc Long
Hoang Van Tho
Huynh Huu Quoc

2. S t r a t e g y
S t y l e
B e h a v i o r
I n d i v i d u a l
O r g a n i z a t i o n a l
N a t i o n a l
N e g o t i a t i o n
C u l t u r e
The Big Picture
I n t e r n a t i o n a l
N e g o t i a t i o n
C o n t e x t

3. S t r a t e g y
S t y l e
B e h a v i o r
I n d i v i d u a l
O r g a n i z a t i o n a l
N a t i o n a l
N e g o t i a t i o n
C u l t u r e
The Big Picture
I n t e r n a t i o n a l
N e g o t i a t i o n
Cross-Cultural Negotiation

4. NATIONAL CULTURE
CONCEPTUALIZING
Y O U C A N W R I T E H E R E
S T R U C T U R A L
& Q U A N T I F I E D
0
10
20
30
40
50
60
70
80
90
100
Power
Distance
Individualism Masculinity Uncertainty
Avoidance
Long-Term
Orientation
Hofstede's National Cultural Dimensions
C U LT U R E
I N N AT U R E
A r t i fa c t s
E s p o u s e d v a l u e s
A s s u m p t i o n s

5. 03 Groups of Variables.
N E G O T A T I O N F R A M E W O R K
Can be influenced by culture
N E G O T I A T I O N F A C T O R S I N
M A N A G E R I A L P E R S P E C T I V E
B a c k g r o u n d
P r o c e s s
At m o s p h e r e
GOAL
ATTITUDE
STYLE
COMMUNICATION
TIME SENSITIVITY
EMOTIONALISM
AGREEMENT FORM
AGREEMENT BUILDING
TEAM ORGANIZATION
RISK TAKING

6. Vietnam – Accept hierarchical order, collectivistic society
Japan – Severe competition between group*, high risk adverse, very long -term
U.S. – The most individualist nation, very short-term orientation
THE CULTURE CO MP ARISO N
70
20
40
30
57
54
46
95
92
88
40
91
62
46
26
0
10
20
30
40
50
60
70
80
90
100
PDI IDV MAS UAI LTO
Hofstede's National Cultural Dimensions
Vietnam Japan United States

7. Vietnam - Relationship-focused – Formal – Polychronic – Reserved
Japan -Relationship-focused – Formal – Monochronic – Reserved
U.S. - Moderately Deal-focused – Informal – Monochronic – Variably Expressive
NEGO TIATIO N FACTO RS CO MP ARISO N
GOAL
ATTITUDE
STYLE
COMMUNICATION
TIME SENSITIVITY
EMOTIONALISM
AGREEMENT FORM
AGREEMENT BUILDING
TEAM ORGANIZATION
RISK TAKING
Deal
Win/Lose
Informal
Direct
High
High
Specific
Inductive
One Leader
High
Relationship
Win/Win
Formal
Indirect
Low
Low
Gereral
Deductive
Consensus
Low
Vietnam Japan U.S.

8. CASE ANALYSIS
Buying – Selling Negotiation between Loteco (Japan) and
Schneider Electric (France)

9. BACKGROUND
B U Y I N G - S E L L I N G N E G O T I A T I O N
Loteco invited SEVN for a deal negotiation, focus
on price bargain
01 Japanese Deputy General Director, leader
01 Vietnamese Tech General Manager
01 Electrical Manager
Schneider Electric Vietnam (SEVN) offered complete
solution with package price US$350,000, higher than the
other two local solution providers 15% and 20%
Japanese-owned Long Binh Techno Park (Loteco)
Operate and manage a 100ha industrial zone in Dong Nai
Planning to buy a Power Monitoring System to manage
better Electrical network, predict & prevent failure

10. JAPAN CULTURAL DIM.
Top of the world
L O N G - T E R M O R I E N T A T I O N
Top of the world
Many rules & regulations
U N C E R T A I N T Y A V O I D A N C E
Top of the world but not assertive
Group competition instead individual
M A S C U L I N I T Y
Tendency to Collectivistic society,
mix up Western & Asia
I N D I V I D U A L I S M
Always conscious of their hierarchical
position, but not high (Consensus in decision
making)
P O W E R D I S T A N C E
54
46
95 92
88
0
10
20
30
40
50
60
70
80
90
100
Power
Distance
Individualism Masculinity Uncertainty
Avoidance
Long-Term
Orientation
Japan - National Cultural Dimension

11. NEGO TIATIO N FACTO RS WITH CULTURAL
INFLUENCE
GOAL
ATTITUDE
STYLE
COMMUNICATION
TIME SENSITIVITY
EMOTIONALISM
AGREEMENT FORM
AGREEMENT BUILDING
TEAM ORGANIZATION
RISK TAKING
Deal
Win/Lose
Informal
Direct
High
High
Specific
Inductive
One Leader
High
Relationship
Win/Win
Formal
Indirect
Low
Low
Gereral
Deductive
Consensus
Low
Japan

12. ADAPTATION STRATEGY
Buy at discount price Win deal at offered price
Certified Products &
Solution
Trusted Partner
Life-long service
New account
penetration
Add-in product & service
POSITION
INTEREST

13. ADAPTATION STRATEGY
Formal
01 VP, 01 RSM, 01
Product specialist
Dress code, Material
Indirect
Mild tone
Respectful language
STYLE
(PROTOCOL)
COMMUNICATION

14. ADAPTATION STRATEGY
Relationship focused
Global corporate
Long operation
After-sale service
Future project
Win/Win
Rational reasons for
price
Free warranty extension
(goodwill)
GOAL
ATTITUDE

15. ADAPTATION STRATEGY
Specific agreement
T&C, list of equipment,
scope of works,
installation schedule,
training, hands-on, after-
sale service policy
Inductive
(from detail to general)
Accommodate to
counterparty way
AGGREEMENT
BUILDING
AGGREEMENT
FORM

16. ADAPTATION STRATEGY
Consensus
Approach 02
Vietnamese members
before
Low Risk taking
SEVN history, capacity
Reference projects
High commitment spirit
RISK TAKING
TEAM
ORGANIZATION

17. 32%
SEVN Revenue Share
FDI Project
Local Project
Distribution
Total Revenue: US$ 100 mil.
FDI Project Rev: US$ 32 mil.
No deal Deal Success Total
Discount
100%
Discount
10%
Full offer
Probability** 15% 30% 55% 100%
Deal value (%) 0% 90% 100%
Revenue (US$) 8,640,000 17,600,000 26,240,000
Simulation Revenue Loss
US$ - 5,760,000
(18%)
ESTIMATE COST OF LOST DEALS
(CAUSED BY CULTURE FACTORS)
**Estimated

18. Estimated 18% annual revenue drop
(nearly US$ 6 mil.)
S I G N I F I C A N T I M P A C T
T O B U S I N E S S
By external experts.
In-house coaches.
T R A I N I N G
Countries exchange their culture &
negotiation characteristics.
E X C H A N G E P R O G R A M
In case unfamiliar culture, it is
strongly recommended.
U S E A G E N T / A D V I S O R
CONCLUSION

19. THANKS FOR
LISTENING
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