Vendros Technology is in a negotiation with the Netcom Brazil with the intention of getting a licensing agreement. This proposal will assist the Vendros Technology as a guide to their actions in the next phase of resolving the above conflicts and emerge as the ultimate winner in the negotiations with the Brazilian company.
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|Interests||Vendros Technology/Celtic||Netcom Brazil|
|Technology ownership||The Celtic company has challenges of allowing its partner Vendros to assume ownership of the CashFlow |
Billing system. The challenge is that Celtic is not comfortable with the integration of the program in the technology licensing negations with the Netcom on the premise of service a large customer base.
|Netcom Brazil wants the negotiations to be with the Vendros Technology. Besides, the negotiations should include integration of the Cash Flow |
Billing system within its spectra of operations.
|Rights to source code||Vendros Technology wants to retain the right to source code after successful technology contract with the giant Netcom Company. The rationale for this is to maintain the autonomy of operations and maximize returns.||Netcom is interested in acquiring the right to source code in order to gain from the technology leasing negotiations. Besides, this will make the company be better off in the dynamic Brazilian technology sector.|
|Operational guarantees||The Vendros Technology would want the Netcom accept the integral use of the CashFlow billing system without gaining full ownership since the program creators would find it difficult to function after the transition.||The Netcom wants the Vendros Technology to formalize the operational guarantee since there appears to be a conflict of interests with the contractor who created the Cash Flow billing system.|
Main Areas of Interest
|Areas of interest||Vendros Technology||Netcom Brazil|
|Currency risk/payment||The Vendros Technology would want the payment to be made in the US currency to cushion its business from the unpredictable currency fluctuations within the Brazilian currency.||Netcom wants the payment to be made within the 1:1 ratio between the US and Brazilian currency.|
|Terms of agreements||The Vendros Technology wants the terms of agreements to be formalized and integrated in the proposed technology licensing proposal before the negotiations are closed. This has made the Vendros Technology to draft the ambitious letter of intent (LOI) to the Netcom negotiation table.||The Netcom operates within the legal system of Brazil and finds the LOI too restrictive since the terms of an agreement may not be revised after signing.|
|Scope and use of technology||The Vendros/Celtic wants to retain control of the Cash Flow billing system in the leasing agreement to ensure that its customers are not inconvenienced by any future dynamic in the Brazilian market.||Netcom wants a complete integration of the CashFlow billing system into its business model, where it is proposing to assume ownership after the integration.|
Prime Cultural Differences Affecting Negotiations
Communication (Professional culture)
Pragmatic communication competence is achievable when parties involved in business process appreciate deep rooted cultural symbolism for expression of satisfaction, dissatisfaction, preference, and loyalty to minimize misunderstanding. The communication environment in Brazil environment is too informal and casual as compared to the communication environment in the US.
Specifically, the negotiation team of the US based Vendros Technology finds it insulting the way the communication dynamics in the negotiation environment are operating. For instance, the negotiation room is a beach house where there are a lot of distractions from the traditional music and open sea.
In addition, there negotiation environment consists of many people who frequently air their views even when another party is speaking. The informal communication in all aspects of the Brazilian business culture, including the legal elements, is affecting the negotiation process since the Vendros team is used to formal communication within the scope of legal requirements.
Punctuality (Corporate culture)
Despite the strict deadline of 15 days set by the Netcom negotiation team, the Vendros team found it unrealistic, considering the frequent lateness in attending meetings, frequent breaks, and constant absenteeism on the side of the legal team representing the interests of Netcom. In nearly all the meeting, there is always a case of absenteeism with or without permission.
as little as 3 hours
To make the matters worse, the absent party is often represented by a new face who would want the process to be slowed down or back rolled for him or her to be at par with other members of the negotiation team.
The challenge of punctuality could be associated with the free lifestyle in the Rio city. Lack of punctuality within the proposed fixed deadline for the negotiations may not work for the team would be under constant pressure and may make irrational decisions just to meet the deadline. At present, the challenge of punctuality between the two cultures (US and Brazilian) is affecting the negotiation process.
Degree of formality (Individual culture)
Business environment in the US is very formal. Among the outstanding features of personal culture the US business environment include aspects of embracing diversity, affirming position, and re-energizing operations through efficient and satisfying use of management and control skills. Unlike the formal negotiators of the US based Vendros Technology Company, the representative of the Netcom Brazil are informal in their way of interaction, negotiation, and legal interpretation of the proposed technology leasing contract.
For instance, the letter of intent drafted by the Vendros negotiators is interpreted as being too formal in the Brazilian business environment. As a result, the difference in perspective of formal business interaction, the current negotiation between the Vendros Technology and Netcom Brazil is affected by this cultural difference.
Cultural Bridge Building Strategy
In the case of the Vendros Technology’s position in the negotiation with the Netcom Brazil, the US based company has a huge potential of emerging the winner if it can integrate a strategic cultural building strategy to transform the above cultural differences into opportunities for a competitive advantage in the final outcome. In order to achieve this, the proposal presents the cultural bridge building strategy below.
Steps in building the cross cultural strategy
In order to lead successful negotiation in the multi-cultural group as in the case between the Vendros-Netcom Brazil, the Vendros team should strive to balance the dimension of power/distance to minimize the degree of stereotyping attitude when handling the Netcom negotiators. In order to achieve this, the negotiation leadership approach of the Vendros team should embrace the low power/distance score to make the bridge between itself and other negotiators accommodative.
As a result, there will be continuous teamwork that involves as many people of different cultures as possible, without creating a feeling of stereotyping the personal cultures involved. The decision made in such environment will not only be friendly to a larger percentage of the negotiators, but also accommodating to different cultures involved in the actual negotiation.
Reflectively, applying individualism dimension as the leader of negotiation the multi-cultural team will create a conducive organizational cultural and feign a common communal connection among the negotiators. In order to make the individualism dimension as dynamic as possible, it will be critical to introduce strategies that will ensure that the score is very low. For instance, the strategies will emphasize on skill building, systematic communication within set time limits, and harmony among the negotiators.
Therefore, the proposed negotiation leadership approach for the Vendros team will revolve around showing respect to all, promoting harmony through suppressing negative feelings, and introducing changes progressively without having to interfere with the existing traditions of the Brazilian counterparts.
As the third cultural dimension, applying masculinity in multi-cultural negotiations between the two companies would involve creating a leadership system that balances the roles between the representatives of the Vendros and the agents of Netcom Company. The system will embrace the diverse roles and provide a structure for leadership based on skills and not just cultural differences as is the current case.
For instance, through the creation of a skills training program for the negotiation team, it will be easy to balance the discontent as a result of inferiority or superiority complex between the two cultures. The skills training program will ensure that the Vendros Technology has a low score in the masculinity dimension. Therefore, the elements of agent equality, job design, and collectiveness will become ideal for a positive outcome for the Vendros Technology.
The last dimension is the balance of the uncertainty/avoidance index within the multi-cultural negotiation team. This strategy is achievable through creating systems that address the sources of stressors and provide coping instruments, especially for the Vendros negotiation team. Therefore, a low score is ideal for this index to ensure that the representatives of the Vendros engages on the content of the negotiation rather that the personalities in the negotiation team.
This is achievable through minimal interference with the organizational structure, limited emotional response to personalized criticism, and proactive expression of an otherwise situation that might complicate the interaction between the negotiators. In order to balance the pros and cons of a lower score, within this index, the proposed cultural bridge building strategy will concentrate on the long term benefits of the successful negotiation, rather than the challenges in executing the negation process.
The last cultural dimension is the long term orientation in balancing the cultural differences and the content of the negotiation. It is important to implement strategies that are critical in maintaining a low score in this dimension. A low score dimension translates into novel ideas and creative expression among the negotiators, especially for the US based negotiators of the Vendros Technology, despite the varietyof cultures.
This is achievable through the promotion of equality, creativity, and self-actualization. Therefore, the leadership approach should create a uniform behavior standard between the negotiators of the two teams. In summary, the elements of respect, proactive attitude, and freedom of expression will create a steady negotiation process when the above dimensions are balanced.
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Based on the above cultural and content dynamics, implementing the cultural bridge building strategy for the success of the Vendros Technology in the negotiation is achievable through adhering to the following recommendations.
For the Vendros Technology to emerge as the winner in the negotiation, its representatives should be properly prepared in terms of the best negotiation practices. This will give the Vendros Technology advantages such as effective and efficient analysis of the offers by Netcom, mastering the dynamics of concession making, and proactively achieving all the negotiation goals without much strain.
Diagnose the structure of the negotiation
Since the negotiation with the Netcom Brazil operates within the border of distributive and integrative conciliation, the Vendros team should be conscious in unanimous use of matching decision on what to say and course of action in each stage of the negotiation. As a result, the balance in the distributive and integrative negotiation will give the Vendros Technology a competitive edge and a sure path to success.
Identify and work with the BATNA
The Vendros’ negotiators should explore the Best Alternative to Negotiated Agreement (BATNA) to ensure that the company remains in the best-off position. This will guide the negotiators on the best approach or plan b should the first approach fail. However, the BATNA should be aligned to the primary goal of winning rather than serving the egos of the representing agents.
Actively manage the coalitions
In the case of the negotiation between the Netcom and Vendros, it is important for the Vendros representatives to manage the effects of the collisions that support and collisions that are against them. The Vendros negotiators should capitalize on the company’s strong organization culture to capitalize on the collisions for the overall befits and positive outcome at the end of the negotiation.