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Page 1: Negotiation Journal
Page 2: Negotiation Journal

Negotiation Journal

Dear ma’am’

These are the report which has been collect by me. During the span of time provided by you.

Page 3: Negotiation Journal

Bruce Willis Enters Negotiations to Play the Original Joe in 'G.I. Joe 2'

8 th September 2011

Bruce Willis enters in a negotiation with the director Jon M. Chu. Bruce Willis will a part of Paramount’s G.I. Joe 2: Retaliation, with the veteran action actor marked to play the original Joe. Bruce, if a negotiation deal comes together between them, would play General Joe Colton, the character who in 1980’s comic books starts the G.I. Joe strike team, called the ultimate freedom fighting force, and use to handle all the details of the G.I. Joe.

Jon M. Chu is directing the movie, Lorenzo di Bonaventura-produced action movie, which is bringing a mostly new cast to the franchise. Along with Bruce Willis, Dwayne Johnson, Adrianne Palicki, Ray Stevenson and RZA are among the new casts for the second film.

The movie had began the shooting later the month of October, in New Orleans. Paramount has said to release out the movie on June 29, 2012.

Page 4: Negotiation Journal

CROSS-BORDER NEGOTIATIONS

Cross cultural negotiation is one of many specialized areas within the wider

field of cross cultural communications. By taking cross cultural negotiation

training, negotiators and sales personnel give themselves an advantage over

competitors. There is an argument that proposes that culture is inconsequential

to cross cultural negotiation. It maintains that as long as a proposal is financially

attractive it will succeed. However, this is a naïve way of approaching

international business.

Cultural differences also affect the business negotiations significantly. They

define the deal consistency and help in maintain long term relations thus making

such negotiations is a challenge which any negotiator comes across in his/her

life frequently to have requisite knowledge about the same due to the emerging

factor of globalisation. These are basically implicit in nature and are prone to up

gradation. But due to extensive globalisation the societies around the world are

becoming increasingly interdependent so managing commerce across border is

a must to learn.

Factors affecting the Process of Negotiation:-

The law system-

The laws are different in different countries and setting up any deal would

require a proper knowledge of the judiciary system of that nation as compliance

with the same is a must for a successful negotiation. For e.g. a negotiation deal

between an American company and a Chinese company came to a standstill due

to differences of the judiciary notion considering the intellectual property rights

which were resolved by intervention of an intermediary.

Government policies-

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The influence of government policies cannot be overlooked in a cross border

negotiation. Due to difference in cultural background, the level of development,

the needs of people government policies are different in different nations and

considerable influence of the same guides all the cross-border negotiation.

Environment policies-

They are very important aspect of cross-border negotiation as certain nations are

very actively awake about the current environment problems and have

complimentary policies which are to be abided by all the businesses aiming

towards the betterment of the environment but on other hand some other nations

do not follow even the basic environment protection laws.

Economy/monetary value-

The economic condition of the nation affects the negotiations as well as the

monetary value of the currency of that nation determines the business

susceptibility of the nation thereby affecting the negotiation process.

DIFFERENCE IN THE SOCIETIES AND THEIR AFFECT ON

NEGOTIATION

Individualistic society-

“I for myself” is the best explanation of this kind of society. In such societies

the individuals make their own decisions and are liable for the output of the

same. The person is attached with only his immediate family. The best example

of such societies is U.S.A. and FRANCE being more self-centred with an

absolute emphasis on their own individual goals. These societies when undergo

the process of negotiation they prefer clarity in conversations to communicate

effectively and believe in coming directly to the point.

Collectivistic society-

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This type of a society is more closely linked and interdependent. Here people

from birth onwards are linked in strong cohesive groups which they continue to

protect their lifetime without questioning forming a deep loyal base.

They lay emphasis on groups and think more in terms of “we”. In organisations

prevailing in such societies harmony and loyalty are a must and prevention of

any kind of confrontation is laid emphasis on. The best example of such a

society is China, India (especially Indian congress) etc.

This society focuses on standing behind the leader and following him and thus

follows a culture of joint families where the male/female head of the family

takes all the decision and everybody else abides by the rules and accepts the

decisions made whether right or wrong. Israel is also one such society.

Transition from a society to an individualistic-

Importance of hierarchy-

An individualistic society is hierarchy oriented so the respect for the topmost

person in the hierarchy is something to always keep in mind. Moreover

following the protocol with the hierarchy is a must.

No disagreement publically-

As stated above any disagreement or difference of opinion is supposed to be

shared in private rather than in public and an individualistic society considers it

lack of manners.

Maintaining interpersonal relationships-

While sealing a deal maintaining interpersonal relationship even with the

families and the people out of the working place and maintaining them for a

prolonged period is considered a +ve trait in individualistic societies thereby

giving an edge over a competitor dealer who isn’t aware of the same.

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THE DOHA ROUND

The Doha Round is the latest round of trade negotiations among the WTO

membership. Its aim is to achieve major reform of the international trading

system through the introduction of lower trade barriers and revised trade rules.

The work programme covers about 20 areas of trade. The Round is also known

semi-officially as the Doha Development Agenda as a fundamental objective is

to improve the trading prospects of developing countries. The Round was

officially launched at the WTO’s Fourth Ministerial Conference in Doha, Qatar,

in November 2001. The Doha Ministerial Declaration provided the mandate for

the negotiations, including on agriculture, services and an intellectual property

topic, which began earlier.

The world trade organisation:

The World Trade Organization (WTO) deals with the global rules of trade

between nations. Its main function is to ensure that trade flows as smoothly,

predictably and freely as possible.

Topics covered in Doha negotiation are:-

Agriculture

Rules

Services

Intellectual property: geographical indications and

biodiversity

Trade and environment

Trade facilitation

Dispute settlement

E-commerce

 

Page 8: Negotiation Journal

Jargon buster

Country groupings

Special and differential treatment

 The story so far 

1997–2000: Talks start in agriculture, services, and intellectual property

2001: Doha Development Agenda launched

2003: Cancún ministerial mid-term review: no agreement

2004: “Framework” agreed (August)

2005: Further agreements in Hong Kong Ministerial Conference (December)

2008: The July 2008 package: attempt to break deadlock, some differences

narrowed

2008: Revised draft modalities in agriculture and non-agricultural products

The talks are nicknamed the Doha Round after the city where they were

launched even though they mainly take place in Geneva. They are also called

the Doha Development Agenda, partly to emphasize that development is a

main objective, and partly to underscore that negotiations are one half of the

work programme — the other half deals with problems that developing

countries face in the implementation of the present agreements.

However, also reproduced here are some major decisions that follow on from

the original Doha declarations, even though they are not part of the Doha

Round and its “single undertaking”. Until the Doha Round decides this

collection remains in dilemma.

 

Page 9: Negotiation Journal

Facebook enters into a Negotiation with Twitter

Recently the famous social networking site, Facebook has come into a negotiation with Twitter. As Facebook is rapidly increased it signing up with media companies to use its plug-in, not only this site is also the advertisers use its performance ad system to advertise. Before June, Twitter has failed to work out business partnership with Facebook over how the company can use the user data of the company.

Twitter is releasing an upgrade version of Facebook application, if the user had the application installed, it can show the user all the Facebook friends of the user with the Twitter account. But Facebook is requiring that all its partnership terms be in place for all big partners, and Twitter apparently didn’t have that when it launched the application. It can be possible only when there is some sort of legal or some technical short-term reason for the shut-down or Facebook didn’t wanted to make it so easy for its users to go off and start building their social graph on Twitter.

Twitter’s status has been pending last few months, and recently replied back to Facebook application from a broken message for the friends follow features, it tries to work out the deal with Facebook.

There were few way through this negotiation could go. Twitter could launch a meaningful integration with Facebook soon as in the couple of months which could show that Facebook is more in the details of the agreement than the concept giving competitors access to its users. Facebook could also do to keep its friends connect and also their privacy and security issues. The problem with that it could encourage other potential partners to be more cautious about business deals with Facebook.

Facebook’s official response

“Facebook believes in connecting people with their interests and we’ve partnered with innovative developers around the world who share this vision. Facebook and Twitter have cooperated successfully in the past to offer people great social experiences and we look forward to doing so in the future”

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THE CHINESE NEGOTIATION

Negotiations in China are important social events used to foster relationships.

The Chinese generally negotiate in an unhurried manner. They usually open

proceedings with a discussion of general principles of mutual interests. They do

not like the western eagerness to sign a contract and this typically means that

you will be dealing with people who place values and principles above money

and expediency.

Deeply rooted cultural differences have created incompatible contrasts between

the individualistic societies and the collectivistic society’s style of negotiation

and thus have made it a mandate to understand and study the extensive cultural

needs so as to make a successful deal. For e.g. considering the most extreme

individualistic society i.e. U.S.A. and comparing its style of negotiation with an

extreme individualistic one i.e. China we can see the difference in perception of

Chinese business people who consider Americans aggressive, impersonal and

excitable whereas the westerns may see Chinese negotiators as inefficient,

Indirect and even dishonest.

The Four cultural threads

There are four cultural threads that bound the Chinese people and affect every

part of their life whether it is their studies, their relationships or their work.

These threads are:-

Agrarianism

In contrast to the developed world two-thirds of Chinese population lives in

rural society that has agriculture as their main mean of livelihood. The

traditional Chinese agriculture is peasant farming which is characterised by

communal, non individualistic ideas where survival depends upon group

cooperation and harmony. Loyalty and obedience to hierarchy are the two

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binding factors of the labour groups. So the Chinese rural population that has its

roots embedded in the rural society retains its agrarian values and thus their

means of negotiation are similar to their values wherein respect and obedience

towards hierarchy, compliance with the ultimate decision making elders and

working with the community not individually are the prime focus points.

Morality

The second thread of morality is as important as the first one because the

teaching of Confucius that made the base of Chinese culture stated the

conditions of a prosperous and politically stable society as “a society abiding a

benevolent moral code”. This again includes compliance with the hierarchy as

per stated in the extreme example of 1865 where a Chinese housewife has

beaten her mother-in-law and in punishment for that she and her husband were

skinned alive and their flesh was displayed at the gates of the cities.

A pictographic language

As a result of the pictorial language that the Chinese have they are more into the

interpretation of pictures rather than sequences of letters as in rest of the

languages (mostly) thus making the Chinese thinking a more holistic processing

of information. Proven by Michael Harris is a fact that the Chinese children are

better seeing the big picture while the American children have an easier time

focussing on the details.

Wariness of foreigners

The country has a long history of attacks from all around the world making it a

victim of squabbling, civil wars and the ebb and flow of empires causing a

cynicism about the rule of law and the rules in general thereby causing

obstruction by creating an opinion against the negotiation with Western people

and the process involved.

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The negotiation elements

Guanxi

Chinese are the people who know to prize relationships among friends, relatives

and close associates. They know how to value relations and they consider them

their priority. So if you have any friendly terms with any Chinese businessmen

you can always count on him for favours that you would be wanting and along

with it comes the binding necessity of returning that favour sooner or later. If

you don’t know how to value relations and return favours then you are not

moralistic enough to be treasured.

Zhongjian ren (The Intermediary)

The utmost need of intermediary through meetings is emphasised in the Chinese

culture. Any meeting with a stranger requires an intermediary. This

intermediary should be trusted personnel of the other party so that he can help

the stranger to develop his connection with the Chinese party thus creating a

personal link to the target organisation through his experience of trusted

relationship with them.

The intermediaries are the one who first raise issues for discussion and help in

settling differences.

Shehui (Social Status)

As stated earlier obedience and reverence to hierarchy is a principle that cannot

be overlooked in Chinese culture so its complimentary characteristic that arises

is the disregard of the lower level representative to a high level negotiation deal.

Renji hexie (Interpersonal Harmony)

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Months of home visits and long duration contacts lead to the development of

friendship and positive feeling thereby cementing the relationship of equal

status persons. If a person attempts to establish a deep relationship without this

process he/she is consider rude and inappropriate.

Jhejian (Thrift)

Chinese bargains a lot over price. Initially belonging o rural backgrounds and

still having their roots attached with the rural community they know the value

for money and are usually thrifty in making deals. They tactfully complete the

deal with the great amount of patience that they have.

Mianzi (Face or Social Capital)

This refers to the value of face discussed in earlier article of cross border

negotiation which explained that any detail regarding the expected changes to

be made should be retaliated personally rather than on a public note. The respect

of promise and the discontent that the person receives on the display of an act of

anger or aggression are the basic topics under this pointer.

These were the elements of the negotiation in Chinese Negotiation.

The cultural influences outlined above have given rise to a clearly defined set of

elements that underpins the Chinese negotiation style. Most American

businesspeople we have worked with often find those elements mysterious and

confusing. But if Americans ignore them at any time during the negotiation

process, the deal can easily fall apart.

Dilemma of Sales Manager

Philips India Limited

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Philips India Ltd. Was set up in the year of 1935 in Kolkata. Philips India Ltd.

was an Indian subsidiary of NV Philips Gloelampenfabrieken. Later the Head

office of the company shifted to Mumbai. The company initially started with the

production and distribution of Electric Lamps and Radio Receivers. Gradually

the product range increased to the electric components, scientific, medical and

professional equipments. The company enjoyed the brand name and the market

presence; company had an approx. Rs 400 cr. in the year of 1980’s. Philips

extended strongly in television in both Black and White and Coloured set.

The company faced some problems such as the Department of Electronic issued

a letter that no multinational company operating in India which is in production

of T.V. sets can use the brand name. In this company came out with an

alternative that the name of the sets can be changed to “Philivision” and can be

sold in India after it has been produced by the local vendor, the sets which were

made had were of standards and specification of the Philips. By this time in

1991 the company had an approx. turnover of Rs 320 cr.

DISTRIBUTUION SET UP OF THE COMPANY:

Initially the company had 3 way distribution channel system: Manufacturer -

Distributer (Wholesaler) – Dealer (Retailer or Sub-dealer) – End Consumer.

The Distributer provided the after sale services to the Sub-Dealer after they had

sold the product to them. The company had also set up regional office with their

regional head-quarters at Delhi (Northern region), Kolkata (Eastern Region),

Mumbai (Western Region) and Chennai (Southern Region) and had warehouses

all over India.

COMPETITION FACED BY THE COMPANY:

The Company faced competition from different parts:

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Indian Company : The Company faced competition from Indian

Companies such as BPL, Nelco, Murphy, Bush from the organized sector

and also from small scale sector.

Grey Market : The products were brought in India from the unauthorised

sector to save the custom duty at that time, Imported products such as

Sony , National etc. were brought.

Television made by Indian Company: Indian Companies such as

Onida, Dyanora, Crown, Nelco. These were the company which were

giving a hard time to the Philips.

Year 1991 and After:

By the year 1991 the removal of the restriction allowed more brand to enter

India and to set up. The companies such as Panasonic, Sony, Samsung, L.G. and

other came. And slowly they became the competition of the Philips. Seeing this

management decide to re-structure the methods. They initially removed one of

the channels from the distribution; company removed the distributor from the

channel therefore making it a 2 way distribution channel.

Most of the regional offices had six to eight distributors in each state. The

company was able to understand these distributors, most of the distributors

could not fulfil the terms of the company so they gave up and rest of the

distributors who were left were given an option of direct dealer. By this most of

the dealers in India gave up except the state of Kerala where the only two

distributors dominant namely M/s Quilon Radio Service which dominant the

south of the Kerala and M/s Ernakulam Radio Company which dominant the

north of Kerala.

M/s Quilon Radio Service: Kollam (QRS) – Wholesalers from South of

Kerala:

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Head: Mr. Arunachalam

Headquarters: Kollam

Sub Dealers were dependent of the QRS

Marked up Distribution margin there by eating up the sub-dealer’s share

Sub-dealers were unhappy and thus addressed letter of complain to the

Philips headquarters.

M/s Ernakulam Radio Company (ERC):

Head: Mr. Menon

Headquarter: Ernakulam

Amiable relation with the sub-dealers leading to the good growth

Decreasing sales trend of southern India

The southern market which contributed the maximum to the revenue had now

decreased calling for the conversion of three-tier system to two-tier system.

Reaction of ERC: They had submitted the dealers to the company and

they provide assistance to logistics and after service at subsidised rate.

Reaction of QRS: It did not agreed to submit any of its dealer

Mr. Abhijit Sen the head of Philips India now had to move forth an intelligent

negotiation wherein he should be able to yield a win-win situation for both QRS

and the Philips headquarters which is the only profitable way out.

EDF looking to complete business negotiations with Alpiq

Alpiq has given EDF exclusivity in negotiations until January 15th 2012.

26 October 2011

Page 17: Negotiation Journal

Business negotiations are continuing on a deal that will see energy company EDF take over Alpiq's 20 per cent stake in Edipower.

A preliminary agreement has been settled on and now talks will take place to try and secure a final price, which is expected to be anywhere between €150 million (£130 million) and €200 million.

Numerous negotiation strategies could be used by both parties as they seek to get the best deal for their respective groups.

Under the terms of the arrangement, Alpiq has given EDF until January 15th 2012 to finalise the details of any acquisition, after which it will listen to other interested parties.

At present, EDF owns a 25 per cent stake in Edipower and so any deal would see this rise to 45 per cent.

Negotiations are now at a crucial stage for EDF - which is the largest producer of low-carbon electricity in the UK.

Posted by David Gleck

Source: Reuters, Dow Jones, Financial Times, October 25th

Scotiabank seals partial acquisition of Banco Colpatria

Scotiabank will take a 51 per cent share in Banco Colpatria.

20 October 2011

Page 18: Negotiation Journal

Scotiabank has completed international business negotiations on a deal that will see it take a controlling stake in Banco Colpatria.

Under the terms of the agreement, the former will get a 51 per cent stake in the latter for $500 million (£317 million) and 10 million common shares in its firm.

It means Scotiabank - which is Canada's most international financial institution - will be able to increase its presence in Colombia.

Rick Waugh, president and chief executive officer of Scotiabank - an establishment that has history stretching back to the 1670s - noted he is happy to be partnering with a "well-established and well-regarded Colombian conglomerate".

He added the relative strengths of the two companies will be able to come together to create growth.

President of Mercantil Colpatria Eduardo Pacheco noted the transaction will allow his organisation to take advantage of Scotiabank's expertise in the field of risk and capital management.

Posted by David Gleck

Source: Scotiabank press release, October 20th

Union bargaining to prevent public sector strikes?

Individuals are to be balloted about whether to take strike action.

24 October 2011

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Public sector workers are set to be balloted about whether or not they want to pursue strike action.

Among the bodies who are asking their members about the situation are the Trades Union Congress, FDA and the University and College Union, the Press Association reports.

At the heart of the problem is the government's decision to increase their pension provisions by 3.2 per cent and so union bargaining may be required to prevent protests.

Sally Hunt, general secretary of the University and College Union, told the news provider, said: "Much nonsense has been spun about gold-plated pensions and the scheme's affordability."

She added there is still no "proper valuation" of the scheme and so increases should not be made.

A day of action is to be arranged for November 30th and there could be millions present.

It comes after PricewaterhouseCooper predicted up to 600,000 public sector jobs could go in the next four years.

Energy negotiations between EU and Russia 'at critical stage'

Russia and the EU Commission are struggling to come to an agreement over energy.

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25 October 2011

Russia is continuing to negotiate with the EU Commission as it looks to agree a way forward for energy cooperation.

Russian energy minister Sergei Shmatko - who has been in office since 2008 - noted the country has chosen to "work towards a diversification of our activities", Murmansk and Shtokman News reports.

Sales negotiations over reaching an agreement are at a crucial stage, with Mr Shmatko saying his nation is "calm" about the fact talks have yet to yield a solution.

He continued by saying that Europe is a "particularly important market" and he is still hopeful a solution that is "mutually beneficial" can be found.

Mr Shmatko stated providers are on the lookout for new business partners in the east as they try to improve the current transport infrastructure.

With talks seemingly reaching a deadlock, negotiation skill may be required by both parties in order to reach a compromise.

Sony Ericsson becomes wholly-owned subsidiary of Sony

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Key negotiations have been completed and have opened up the way for Sony to take complete control of Sony Ericsson.

27 October 2011

The completion of business negotiations will see Sony buy out Ericsson's share in their Sony Ericsson venture.

As a result of the deal, the organisation will now become a wholly-owned subsidiary of Sony, while Ericsson will receive over €1 billion (£869 million).

The thinking behind the arrangement is that Sony - which employs 170,000 people worldwide - is trying to expand its smartphone offerings as it looks to develop a range of network-connected customer electronics devices.

Sir Howard Stringer, chairman of the organisation, stated: "This acquisition makes sense for Sony and Ericsson and it will make the difference for consumers."

He added customers will now be able to get smartphones, laptops, tablets and televisions that can connect with each other "seamlessly".

The Sony Ericsson development has been running for the past ten years and has been very successful during this time, but both parties believe that it makes sense to move forward.

DragonWave completes business negotiations for Nokia group

A deal has been agreed for DragonWave to take over Nokia Siemens Network.

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04 November 2011

DragonWave has unveiled plans to acquire Nokia Siemens Networks' microwave transport business.

Significant sales negotiations may be underway, as the two parties look to agree a deal that is suitable for both of them.

As well as taking ownership of the firm, DragonWave - which is a leading provider of high-capacity packet microwave solutions - will become the preferred strategic supplier to Nokia Siemens Networks.

PPR acquires Brioni after completing business negotiations

A deal has been agreed that will see PPR take over Brioni.

08 November 2011

International business negotiations have been completed on a deal that will see retail group PPR take over Brioni.

PPR - whose revenue was €14.6 billion (£12.5 billion) in 2010 - is hoping to complete the deal by the end of 2011.

The terms and conditions of the sales negotiations have not been disclosed, but PPR is set to acquire a 100 per cent stake in the former.

Francois-Henri Pinault, chairman and chief executive officer of the organisation, stated: "I am delighted that it is joining our magnificent portfolio of luxury brands. We have great ambitions for this fashion house."

He added that with the proper use of expertise Brioni - which is the top-rated men's fashion brand in the US - will be able "write a new page" in its history.

The deal increases PPR's interest in the luxury brand market both financially and geographically as it looks to establish itself as one of the major players.