Stages of Negotiation: Prepare, Information Exchange, Bargain, Conclude, Execute

This article discusses the five stages of negotiation - prepare, information exchange, bargain, conclude, execute - with examples. It explains the importance of each stage in reaching a successful agreement. The article also explores the common objectives of firms, factors for the success of cross-border alliances, indicators for structural changes in MNCs, and factors influencing employment policies of international firms in host countries.

Managing Across Border-
Tutorial Question Assignment 2
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Q1 What are the five (5) stages of negotiation? Provide examples in your response.
Ans. Negotiation is defined as the method or process through which people mainly
compromises or make agreement over a topic by performing discussion in order to avoid
arguments or disputes. Under this process two parties discuss over a particular offer in order to
reach over a point where both the parties get benefited from the agreement. For example, if a
company is planning to expand business abroad by adopting strategic alliance mode with another
company dealing in same segment than both the companies make agreement over the terms of
alliance and accessibility of resources or other benefits (Paelinck, 2015). The negotiation process
take place in systematic pattern where it consists of five main stages that are explained below:
Prepare: The first stage is to identify the potential of particular collaborative situation so
that an appropriate strategy can be develop for performing negotiation. In this more time is spend
over the information research, analysing the data, identify the interest and position, preparing
points to discuss. Usually this stage includes arranging all the facts and information to be
discussed for keeping their view point in front of another party (Negotiation Stages. 2020). For
example, in this the company in home country arrange keep point by gathering information about
the performance of company operating in host country to determine the viability of alliance and
then presenting with the points that help in influencing the company of host country to enter into
alliance.
Information exchange and validate: In next stage, the key person pf both the
companies sit together, organise a meeting and exchange the information which they collected
and consider to be crucial for bargaining. In this several areas are covered like what both the
parties need at their position, interest of both parties’ deal, benefit they get etc. For example, in
this both the companies will present their position and information the benefit that each of them
will get with this alliance and how this deal is helpful or beneficial for them.
Bargain: This is the stage where give and take thing happens, where both the parties
open by one bargain about their offer and their terms regarding the agreement. In this the give
and take process must be so that both the parties get benefited with the negotiation process so
that long lasting relation can be build and outcome decided can be achieved. For example, here
both the companies planning to enter into strategic alliance will discuss their terms and condition
as well as try to convince one another over their offer.
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Conclude: This is the stage where one reach to an agreement after a detailed discussion
about information and terms (Garcia and Sebastia, 2014). For example, when both the companies
have discussed their terms and get agreed over it the final stage is concluding all the agreed
terms or option and comprehend it in a summary or document to pass one another and keep it for
future reference.
Execute: This is the last stage where the agreement prepared come into existence when
the decided action will be executed. In this both the company of home country will start it work
for expanding business in host country.
Q2 What are the five (5) common main objectives of firms?
An organisation mainly operates over certain objectives which provide them direction to
perform operations in order to achieve those goals. The organisational goals help a business to
set a criteria or direction to plan their course of actions so that they can perform their work
efficient and be able to perform purpose for which it actually exists. There are some main
common objectives that each firm mainly have which are explained below:
Profit maximisation: The principle objective of a business firm is to increase its profit
generation. Under this principle the organisation focuses over managing taste, price, technology,
output etc, of a given product for creating a perfect competition as a sole objective for
maximising the profit (Ansoff and et. al., 2019). The organisation mainly focuses over offering
the product or service that more effectively satisfy the needs and demand of consumers as
compare to other companies’ market for achieving maximum profit.
Long term survival: The main aim of a business is to reach at a stage where it can
sustain in marketplace for longer period of time. The businesses that are operating at this
objective are always take their decisions with due care that are mainly remain safety oriented.
Along with this such organisation more focused toward performing ethical practices to maintain
good image in marketplace.
Sales maximisation: The another main objective of a firm is to increase the volume of its
sales of product or services by improving the operations or quality of offering in such a manner
that they product or services get superior to the other rivalry present in marketplace.
Increase market share: The another objective of a firm is to increase its customers base
in order to achieve the growth in market share. For this firms mainly adopt several strategies like
lowering the level of profit by discounting price to attract customers, enhancing features of
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offering, providing additional benefits etc. in order to increase the emperor of an organisation by
expanding its approach of business operations.
Growth maximisation: Similar to sale maximisation, growth maximisation is also a
crucial objective over which firm operates (Selvam and et. al., 2016). Here this objective means
to expand the business by either entering into new market, performing merger and acquisition
etc.
Q3 Explain the four (4) key factors for the “success of cross-border alliances”. Provide
examples in your response.
Ans. A cross border alliance is mainly defined as the strategic partnership which is formed
between the two or more organisations belongs to different country in order to pursue a mutual
interest through the sharing of capabilities as well as resources. There are four key factors that
must be consider in order to achieve success within the cross border alliance which is explained
below:
Government policies: In order to make strategic alliance work it is crucial for both the
partners to create their agreement while considering all the legal and political policies and must
try to involve them in agreement. Though it may create certain restriction but ensure in forming
the formal as well as legally fair agreement.
Partner selection: Another critical factor that leads to success of strategic alliance is to
choose a right strategic partner that have more reliable background history so that business’s
internal operation details only get disclosed in front of a trustworthy partner (Khan, Rao-
Nicholson, Akhtar and He, 2017). For this a larger amount of investigation is required to firstly
analyse the background history so that the viability of deal can be identified that help in
achieving future success. For example, an organisation can access the past financial record of
company to determine its economic condition and past pattern relation with others.
Compatibility: This is one of the most crucial factor that leads to the success of a
strategic alliance. It is about the degree of integration that both organisation can manage with one
another in term of capacity, activities etc. For instance, an organisation must try to integrate its
operation within eth culture, talent and practices of its strategic partner in order to achieve
success.
Control and power: The dominance of one partner may leads to loss of interest by
another party in strategic alliance. Mainly strategic alliance is performed by large firm with small
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firms and try to control them with their power. But it may leads to loss of interest by small firm
which in turn may affect their degree of engagement in work that may leads to downturn in their
performance or failure. So, there must be limit for the control of both the firms so that business
can be maintained fluently without any hurdles. As a strategic alliance partnership only get
successful when both the parties willing put their total efforts in making it work and for this
mutual control and collaboration is crucial.
Q4 Discuss some of the key factors which may indicate to a manager that it’s time for
structural changes to a MNC’s organisation?
Ans Multinational companies hold several similarities in themselves and also go through several
challenges that indicate the sign for brining changes in organisation, its policies and practices in
order to cooperate with the changes in external environment to perform well (Tolbert and Hall,
2015). As different countries having varies customer demand, taste, market policies, regulatory
requirement etc. which affect the operations executed by an MNC in particular country which act
as a sign of change in structure. Following are certain factors that leads to structural change in
MNC,
Differing accounting practices: There are mainly two type of accounting practices that
are adopted by countries such as GAAP and IFRS. So, the organisations start operations in new
country are required to adopt accounting principal followed in that particular country to maintain
the reliability on its financial report in front of stakeholders. This call for a change in
organisational procedures as financial reporting is one of the major proof regarding ethical and
fair practices of a firm which it required to represent in front of stakeholder to sustain in market
and be able to develop positive image in front of them.
Regulations and rules: The regulations mainly vary from country to country and are
crucial for the business operating in particular country to adopt such legislator requirement in
order to sustain in marketplace and remain free from legal compliances. Hence, for this
organisation is required to bring changes in its organisational policies to later and adjust it
according to set practices of particular country (Factor that affect a multinational corporation,
2019). This may be related with the policies for performing trade in a particular market or
policies related with the internal organisational policies related with the employment, health and
safety, compensation etc.
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Q5 Discuss the key factors that influence the employment policies of international firms in
the host country.
Ans. The organisations operating at international level are required to formulate policies related
with employment as per the standards and guidelines fixed by the legislator authority of
particular country as each nation varying in term of their policies and practices. An organisation
cannot adopt its home country employment policies in host country as there are certain factor
which influence it. These are discussed below:
Legal and political factor: The HR regulations and laws mainly vary from country to
country and it also depends over the political situation of the country (Thite, Budhwar and
Wilkinson, 2014). As the political power decide the policies as well as rights to grant employees
and according to it the organisation have to create its HR policies in order to operate over the
standards of particular country.
Economic factor: The economy of a country also influences the employment [policies
for the firms operating in a particular country. As MNC also expand business to developing
countries in order to leverage the benefit of economies of scale and in such countries the labour
rates are low, employment conditions are also different as compare to developed countries. On
the other hand, if a company expand business to developed countries, then the wages system are
also different (Factors Affecting Global HR Management. 2020). Other than this the restrictions
or guidelines for employment conditions are relatively strict as such country has high skilled
employees and low unemployment rate.
Culture factor: This is the another factor which affected the employment policy of
international firm operating in host country. As the working culture prevailing in a host country,
an international firm is required to formulate its organisational policies accordingly to keep its
operations align with the standard as well as working practices of the country, as employees can
perform best when they are easily get adjusted to the working environment of the company. For
instance, some of the countries adopt a working culture of individualism, so in such case the
working arrangement, job delegation etc. are consider while formulating working policies.
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REFERENCES
Books & Journals
Ansoff, H.I., and et. al., 2019. Societal strategy for the business firm. In Implanting Strategic
Management (pp. 285-310). Palgrave Macmillan, Cham.
Garcia, I. and Sebastia, L., 2014. A negotiation framework for heterogeneous group
recommendation. Expert Systems with Applications, 41(4), pp.1245-1261.
Khan, Z., Rao-Nicholson, R., Akhtar, P. and He, S., 2017. Cross-border mergers and acquisitions
of emerging economies' multinational enterprises—The mediating role of socialization
integration mechanisms for successful integration. Human Resource Management
Review.
Paelinck, J.H.P., 2015. Representing negotiation space. In Regional Science Matters (pp. 273-
286). Springer, Cham.
Selvam, M., and et. al., 2016. Determinants of firm performance: A Subjective Model. Int'l J.
Soc. Sci. Stud., 4, p.90.
Thite, M., Budhwar, P. and Wilkinson, A., 2014. Global HR roles and factors influencing their
development: Evidence from emerging Indian IT services multinationals. Human
Resource Management, 53(6), pp.921-946.
Tolbert, P.S. and Hall, R.H., 2015. Organizations: Structures, processes and outcomes.
Routledge.
Online
Factors Affecting Global HR Management. 2020. [Online] available through:
<http://www.whatishumanresource.com/factors-affecting-global-hr-management>.
Factor that affect a multinational corporation. 2019. [Online] available through: <
https://smallbusiness.chron.com/factors-affect-multinational-corporation-75252.html>.
Negotiation Stages. 2020. [Online] available through: <
https://www.watershedassociates.com/learning-center-item/negotiation-stages-
introduction.html>.
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