Business Negotiations (Essay Sample)

Case Study: System Modification for Japan
Mohammed Alhajri
University of Potomac
Instructor: James Booker
International Negotiation
Abstract
The impact of external business in the local markets is challenge to many organizations when it comes to surviving in the global playing field. The current market demands that business of all sizes seek customers and supplies on the global level. The global business environment expects the organizations to approach the process the negotiation with global partners form their own global point of view differences across cultures. There is a conflict of culture during such negotiations, hence the negotiators are expected to open minded while dealing with any arising difference during negotiations. This paper is out to illustrate the cultural differences in the manner in which businesses are conducted in India and Japan. Based on fictitious events, the paper covers a business negotiation between Nippon Tele Communication (NTC) and Infosys
System Modification for Japan
1. Usually, business opportunities come up when one party is interested in the services of another party, or when a service provider successfully bids for an advertised project. However, this was not the case in this project, however, since on realizing that Nippon Tele Communication (NTC) had issued Nippon Information System Processing (NISP) with a Request for Proposal, and NISP being the organization preferred for the Japanese localization work instead of Infosys Japan, Tanaka-san, representing Infosys, approached NTC to secure the contract. When informed that the contract had been awarded to another company, he uses a third party with influence over NTC to win the contract. This approach was unethical and unusual on the part of Infosys because it hijacked another company’s contract.
2. The contract negotiations in this project did not meet the standards of a contract between two business parties. In the first place, Tanaka-san asks for a consultant from its headquarters in India to come and assist in developing a proposal, meaning that the negotiator knew very little about the nature of the contract. In addition, Infosys sent a junior engineer who was not experienced with high-profile contract negotiations, and who did not have all the relevant information. The communication during the negotiation was challenging characterized by language barriers, some parties were not well prepared, while others had to break from the negotiations to make calls before they come up with answers.
Business contract negotiations are also carried out in a planned manner, and both parties are given time to prepare for a meeting (Pruitt, & Lewis, 2005). In this case, however, the negotiators met within a short notice. Consequently, they failed to prepare and have all the information that the other party may need. This was seen from brief interruptions during which the negotiators sought answers from their bosses.
3. Despite the 20 percent being higher than that of the competing price, Infosys had agreed to reduce the time from sixteen weeks to fourteen weeks. NTC may have projected that the two weeks difference will give it a competitive advantage over its rivals by introducing a new service into the market earlier. The other explanation is that NTC may have been under pressure from ATC, Infosys’ business partner, to award the contract to Infosys at all costs.
4. Infosys should have asked to retain the regulatory risk changes. This is because the client has the choice to engage in a regulatory environment as the regulatory change is borne by the client before outsourcing considering there is no way of quantifying such risks and including it in the outsourcing price. This came to haunt them later as Sachin had assumed that most of the issues were cosmetic now that they failed to block users from using their system. They later realized that there were more issues than they had anticipated and to fix them adversely affected the schedule and cost of the project.
5. Infosys was negotiation with Nippon Tele Communication to award the contract/project to them. After giving in to both of NTC demands, it was the time for Infosys to ask for any amendments it wished to effect on the contract. In any negotiation, each party should be given an equal playing ground and the deal should remain fair to each participating party.
6. In most contracts, problems arise due to lack of flexibility in the negotiation process. Such problems do not allow for open and free discussion. This is common in competitive procurements where one of the parties simply drafts a contract that includes statements of service and work level agreements, and expects the bidders to disagree or agree with the contract language, implicitly threatening to disqualify the bidder who tries to engage in a dialogue. Where the parties have no or little opportunity to actually negotiate on how each is reading or using the contract language and their own real expectations, they either fail to understand each other or the most willing bidder is treated unfairly (Pruitt, & Lewis, 2005).
Considering the disparities in communication styles, language and culture, inherent in most negotiations, it is not enough for the discussions to take place among procurement specialists and lawyers. Accounting and technical management teams who understand the nature of the service or product being negotiated over should be given the chance to be part of the negotiation team so as to help in coming up with statements of work that are not ambiguous, or contradict management rules (Pruitt, & Lewis, 2005). Therefore, Infosys should have included exper...